Tax
Double taxation
Double taxation is when the same income is taxed twice. It occurs economically when a C-Corporation pays tax on profit and shareholders pay again on dividends, and internationally when two countries tax the same income. Treaties and foreign tax credits exist to relieve the international form.
In plain terms: Paying tax twice on the same money.
Why it matters
The corporate form is the trade-off C-Corp founders accept for access to venture capital. The international form is the one that catches founders who assume a US LLC removes their home-country liability — it usually does not.
Read the full guideUS business taxes