contestada

Amy is a U.S. citizen. During the year she earned income from an investment in a French company. Amy will be subject to U.S. taxation on her income under the principle of source-based taxation.

Respuesta :

Answer: false

Explanation: Source based taxation of income is based on the principle that the country that provides the opportunity to generate income or profits should have the right to tax it. Source based tax gives importance is to the source (country) where income is generated.

In the case of Amy, according to the principle of source based taxation Amy is expected to pay tax to France and not subject to U.S taxation.