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 ?
overlaying a "territorial tax system," which exempts certain
According to the territorial tax system applicable in Gibraltar, companies should pay corporate taxes on income accrued in or derived from Gibraltar.
Instead, the Trump administration shifted to a territorial tax system, under which income moved abroad will be largely outside the reach of the U.S.
"The Act changes the taxation of domestic corporations from a worldwide tax system to a hybrid territorial tax system by establishing a limited participation exemption system.
Says US tax reform significantly changes US corporate income tax laws by, among other things, reducing the US corporate income tax rate to 21% starting in 2018 and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of US subsidiaries.
The good news is that the recently passed Republican tax reform package partially shifted the country to a territorial tax system. The bad news is that it only benefits companies; lawmakers have expressed no intention of fixing the individual side of the code.
This credit has been modified to reflect a move toward a territorial tax system.
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.
The move to a territorial tax system is likely to end Apple's practice of including potential federal taxes due on 50 percent of foreign earnings, according to KeyBanc.