Multiple choice

_____ can be one of the approach used to tax online transaction.

  1. Permanent establishment

  2. Residence - Based

  3. Income based classification

  4. All of the above

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

All three approaches can be used to tax online transactions. Permanent establishment rules determine if a business has taxable presence in a country. Residence-based taxation taxes based on where the business or income recipient is located. Income-based classification categorizes different types of digital income for tax purposes. Countries use combinations of these approaches.

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