Types of Taxes and Tax Rates
Foreign Tax Credit
Double Taxation
Tax Treaties
100
The country with the second highest corporate income tax rate.
What is the United States?
100
This credit helps to reduce double taxation on foreign earned income.
What is the foreign tax credit?
100
When various bases of taxation lead to over lapping tax jurisdictions
What is double taxation?
100
Bilateral agreements between two countries regarding how companies and individuals from one country will be taxed when earning income in the other country.
What are tax treaties?
200
Tax jurisdictions with abnormally low corpoate income tax rates (or no corporate income tax at all) that companies and individuals have found useful in minimizing their worldwide income taxes.
What are tax havens?
200
A credit that is created when a foreign operation pays a higher rate of income tax in a foreign country then they would of in the US. This may be used to offset additional taxes paid to the United States on foreign source income.
What is Excess foreign tax credit?
200
Which is not a method of eliminating double taxation? A. Exempt foreign source income. B. Allow the parent company to deduct the taxes paid to the foreign government from its taxable income. C. Provide the parent company with a credit for taxes paid to the foreign government. D. Trick question they all are used.
D. Trick question they all are used.
200
A process in which a resident of country A uses a corporation in country B to get the benefit of country B's tax treaty with country C.
What is treaty shopping?
300
This type of tax is levied on the value added at each stage in the production or distribution of a product or service.
What is value-added tax or (VAT)?
300
How many years can excess foreign tax credits be carried forward and carried back?
Carried back 1 year, carried forward 10 years.
300
For US companies which is not a method of eliminating double taxation? A. Exempt foreign source income. B. Deduct all foreign taxes paid C. Take a credit for foreign income taxes paid D. Trick question they all are used.
A. Exempt foreign source income.
300
This model was designed to be used between developed and developing countries, assumes an inbalance.
What is UN model or United Nations model?
400
To keep foreign citizens who invest in US companies from not paying taxes on dividends, US companies keep a portion of the dividend and give it to the US government. This what type of tax?
What is withholding tax.
400
The 2004 American Jobs Creation Act reduced the amount of baskets to two. Name these two baskets.
A general income basket and a passive income basket.
400
Under this approach that deals with tax jurisdiction issues, all income of a resident of a country or a company incorporated in a country is taxed by that country regardless of where the income is earned.
What is World wide approach?
400
Most income tax treaties signed by the major industirial countries are based on this model. This model also assumes that countries are economic equals.
What is OECD model or Organization for Economic Cooperation and Development?
500
This organization has established tax regimes to ensure that they cannot be used to avoid taxation in other countries.
What is Organization for Economic Cooperation and Development?
500
If you have foreign source income of $100,000. Foreign income taxes of $32,000 and a U.S. Income tax rate of 35 %. How much foreign tax credit could you claim?
$32,000
500
Under this approach dealing with tax jurisdiction issues, only the income earned within the borders of the country (domestic source income) is taxed.
What is Territorial approach?
500
This is any foreign corporation in which U.S. shareholders hold more than 50 percent of the combined voting power or fair market value of the stock.
What is controlled foreign corporation or CFC?
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