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Exam 11: International Taxation

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Question 31

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If a company is unable to use all its foreign tax credit in a tax year,what happens to the excess?

A) It is carried forward until it is used up.
B) It is carried back 3 years and forward 5 years.
C) It is carried back 1 year and forward 10 years.
D) It is lost forever.

E) B) and D)
F) All of the above

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Question 32

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What is a primary difference between the OECD and UN model tax treaties?

A) The model espoused by the UN assumes all countries are equals,whereas the OECD model does not.
B) The model treaty advocated by the UN grants more taxing rights to the host country than does the OECD model when income repatriation is out of developing countries.
C) The model treaty of the UN gives more taxing rights to well-developed countries than developing countries.
D) All of the above are differences between the OECD and UN models.

E) All of the above
F) A) and B)

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Question 33

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What is the optimal tax objective for multinational corporations?

There are two primary taxes imposed on profits earned by corporations in international trade. One is the corporate income tax. What is the other type of tax on earnings of multinational corporations?

The definition of a "permanent establishment" is a key article of the OECD's model tax treaty. Which of the following would NOT be considered a permanent establishment by the OECD?

The Organization for Economic Cooperation and Development (OECD) has established guidelines to eliminate tax havens. Why,then,can the OECD (as of 2004) still identify over 30 countries as tax havens?

Controlled foreign corporations (CFC) will not be taxed on their foreign income currently if:

In following the international norm concerning tax jurisdiction,how would double taxation be eliminated?

How does the U.S.government tax controlled foreign corporations (CFC) differently from other subsidiaries?

What is a withholding tax?

Jane,a citizen of Country X,received a corporate dividend in the amount of £10,000 from a company in the U.K. Country X taxed Jane's dividend as ordinary income. Country X is using what kind of approach toward foreign source income?

The exchange gain or loss on repatriated funds from a foreign branch is calculated by multiplying the nominal amount of the funds by:

Under U.S.tax law,what happens to excess foreign tax credit?

While the U.S.has tax treaties with more than 50 countries,it does not have a treaty with Brazil,which is a major recipient of U.S.foreign direct investment. What is the reason for a lack of a U.S.-Brazil treaty regarding withholding taxes?

A U.S.corporation is subject to an income tax rate of 35% and has a branch in the U.K.,which paid the national corporate tax rate of 30% on its earnings there. The branch generated taxable income from operations in the U.K.equivalent to $2,000,000. What is the amount of the taxes owed to the U.S.government on the income generated in the U.K.?

Use the following to answer questions : A Japanese branch of a U.S.corporation paid $4,200,000 in taxes to the government of Japan on income it generated there. The corporation is subject to a 35% tax rate in the U.S. -How much foreign tax credit can be taken in calculating the taxes owed to the U.S.on $10,000,000 of Japanese branch income?

Under U.S.tax law,what is the basis for the overall foreign tax credit limitation?

What is a value added tax (VAT) ?

Which of the following statements about China is correct?

How is a foreign subsidiary different from a foreign branch of a domestic corporation?