also called remittance basis of taxation
A tax treatment where foreign income is taxed only if and when it is brought into the country of residence.
The remittance basis taxes foreign income only when you bring it into the country. Earn abroad and leave the money abroad, and it stays untaxed; wire it into a local account or spend it locally and it becomes taxable. A few places run this as a special regime for foreigners, usually with conditions attached.
You base yourself somewhere with a remittance regime, keep client payments in a foreign account, and move over only what you spend. The month you transfer a large amount into a local account for an apartment deposit, that transfer is the taxable event, not the day you earned the money.
Keeping foreign income offshore can legally defer or avoid local tax under a remittance regime, but rules and charges vary.
The difference is the whole point, so here is each one in a line.
These are the systems for deciding which of your income a country can tax.
Worldwide taxation taxes residents on income from everywhere, territorial taxation only on income earned inside the country, and the remittance basis only on foreign income you actually bring in.
Citizenship-based taxation is the rare system, used by very few countries, that taxes citizens wherever they live.
Citizenship-based taxation · Territorial taxation · Worldwide taxation
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