Global income tax

Global Income Tax – Global income tax is a tax system in which individuals or entities are taxed on their total income earned worldwide, irrespective of where the income originates. Under this system, income from foreign sources—such as wages, dividends, interest, or business profits—is subject to taxation in the taxpayer’s home country. This approach contrasts with territorial tax systems, where taxation is applied only to income generated within a country’s borders. To avoid double taxation, many countries provide foreign tax credits or exemptions for taxes already paid abroad.

Example: An Indian resident earning $50,000 from a job in the U.S. must report this income in India and may claim a foreign tax credit for any U.S. taxes paid.