ELI5: Explain Like I'm 5

tax equalization

Okay kiddo, have you ever heard of taxes before? They're like fees that you have to pay to the government so they can use that money to help take care of the country and make it a better place to live.

Now, sometimes people have to work in different countries for their job, and that's where tax equalization comes in. Let's say you and your family are living in America, but your mom or dad gets a really great job offer in England. If they take the job, they would have to pay taxes to both the American and English governments, which can get really confusing and expensive.

That's where tax equalization comes in. It's basically a way for companies to make sure that their employees are treated fairly when it comes to paying taxes. The company will look at how much tax you would have to pay in both countries, and figure out a way to make sure you're not paying more than you would if you were just living in your home country.

So, if your mom or dad took that job in England, their company would use tax equalization to figure out how much they should be paying in taxes. They would then make sure that they're not paying more than they would be if they were living in America. That way, your family doesn't have to worry about paying too much in taxes, and your parent can focus on their job without any extra stress.

Does that make sense, kiddo?