Territorial tax system

Territorial tax system

A tax system that taxes domestic income but not foreign income. Territorial tax regimes are found in Hong Kong, France, Belgium, and the Netherlands.

Territorial Tax System

Any tax system that only taxes income earned in that country. For example, if one lives in Belgium, one only owes taxes on income earned in Belgium. If one conducts a great deal of business in Great Britain, income from that business is not taxed in Belgium (though it may be taxed by the UK). Only a few countries have territorial tax systems; prominent examples include Hong Kong and France.
References in periodicals archive ?
The good news is that the recently passed Republican tax reform package partially shifted the country to a territorial tax system.
international tax system into the 21st century by replacing our outdated worldwide system with a modernized territorial tax system, so that American businesses are not operating at a disadvantage next to their foreign competitors.
This credit has been modified to reflect a move toward a territorial tax system.
Juniper expects the new territorial tax system to provide lower cost access to nearly all global free cash flow on an ongoing basis.
The business community has long called for lower rates for all businesses, full and immediate expensing, and a territorial tax system because we know these elements are the pro-growth reforms our economy needs to thrive.
The remainder includes the effects of the implementation of the territorial tax system and the remeasurement of US deferred tax assets at lower enacted corporate tax rates", Goldman said in a Securities and Exchange Commission filing yesterday.
In addition, as most OECD nations have moved to a territorial tax system, the United States has continued to tax the worldwide profits of its domestic corporations.
One major feature of the tax bills moving through Congress at the end of 2017, as well as the proposals of all major Republican presidential candidates in recent years, is a provision that would create a territorial tax system for the United States.
The Republicans also dream of a territorial tax system, whereby American corporations are taxed only on the income they generate in the US.
This behavior implies that a shift to a territorial tax system will cause multinational corporations to repatriate more of the profits of their foreign subsidiaries rather than investing them abroad.
Among the potential winners are companies that could repatriate overseas profits if the proposal to switch from a global to a territorial tax system is adopted, as outlined in the framework.