How do legal residents deal with personal taxation?
Almost every country regulates tax treatment for residents working abroad and foreign nationals employed domestically. These laws vary from nation to nation, but many possess striking similarities. Generally, countries exercise tax jurisdiction based on nationality or territoriality, claiming taxes on gains of their nationals regardless of location, as well as on gains earned within their territories. Thus, one individual can be subject to taxes for the same income in his or her home country and country of residence. To decrease the possibility of double taxation on these individuals, many countries use tax treaties to simplify international tax treatment. Most of these treaties concern only two negotiating countries (“bilateral” treaties); the United States alone honors over fifty individual bilateral tax treaties. The treaties reduce taxation barriers to trade in order to encourage trade and investment. These treaties sort out tax authority for certain types of income and gain earned
