Posted: February 24th, 2023
VCU-INTL 416-How do segmentation of global financial markets
How do segmentation of global financial markets, government incentives to attract direct foreign investment and variation in national tax rates allow MNCs to lower their cost of capital compared to single country corporations?Describe how the “parent company-subsidiary” structure of US based MNCs combined with the ability to file either “standalone returns” for subsidiaries or to consolidate subsidiary results into the parent company’s tax return facilitate delaying or avoiding US taxation of foreign earnings. Give a simple example. At what point would payment of US income tax on foreign earnings become mandatory?
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