Certified Meeting Professional (CMP) Practice Exam

Which tax obligation may arise for attendees or companies due to an international event?

1. Payment of sales tax in the event's host country

2. Income tax liability in their home country

3. Property tax on rented event space

4. Excise tax on event-related purchases

The correct answer is: Income tax liability in their home country

The correct answer is that attendees or companies may face income tax liability in their home country due to participation in an international event. When individuals or businesses engage in activities that generate income or are considered business transactions while attending an event in another country, they can often be subject to taxation in their home country based on their income tax laws. This obligation arises because many jurisdictions tax their residents on global income, regardless of where the income is earned. Additionally, tax treaties between countries may affect how this liability operates, but the fundamental principle is that one’s home country may require reporting and taxation on income earned internationally. In this context, while the other options may relate to various tax considerations, they do not directly pertain to the income tax liabilities that can arise specifically from an international event for attendees or companies. For instance, sales tax typically applies to purchases made within a jurisdiction, property tax is connected to ownership or renting property, and excise taxes are usually applied to specific goods or services, rather than overall income situations that are most relevant here.