also called residence-based taxation · global taxation
A system where a country taxes residents on all income wherever in the world it is earned.
Under worldwide taxation, once a country counts you as a tax resident it wants tax on everything you earn, wherever the money comes from. The local salary, the foreign client, the dividend from a broker abroad all go on the same return. Most wealthy countries work this way, softened by treaties and credits so the same income is not fully taxed twice.
You move to Spain and keep your American clients. Once you cross into tax residency, Spain does not care that the invoices are foreign; it taxes your worldwide income, and the treaty only decides who collects first, not whether you pay.
If your country taxes worldwide income, leaving physically is not enough; you must break tax residency to escape it.
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 · Remittance basis · Territorial taxation
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