What Is Double Taxation in the Context of FDI

question 95

Multiple Choice

What is double taxation in the context of FDI?

• A) Taxation at twice the normal rate for foreign companies
• B) Taxing the producers as well as suppliers
• C) Taxation of income in both home and host country
• D) Taxation of both income as well as dividends paid

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Definitions:

Compounding

The process in which the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes.

Effective Annual Rates

The interest rate on a loan or financial product restated from the nominal rate as an annual rate that accounts for compounding over a given period.

Compounding Periods

The frequency with which interest is added to the principal balance of an investment, affecting the total interest earned or paid.

Annual Percentage Rates

The annual rate charged for borrowing or earned through an investment, inclusive of any fees or additional costs associated with the transaction.