International taxation is the determination of tax incidence on cross-border economic transactions subject to taxation laws of different countries. The countries around the globe follow residence-based taxation rules and source-based taxation rules. Under residence-based taxation rule, a country levies tax on the worldwide income of its resident or citizen, and under source-based taxation rule, a country levies tax on the income that originates from the source, which is present in that country namely a business activity, a capital asset, etc.