A US firms foreign subsidiary has $100,000 of before tax foreign income that they wont...
50.1K
Verified Solution
Link Copied!
Question
Accounting
A US firms foreign subsidiary has $100,000 of before tax foreign income that they wont remit. The host country has a corporate income tax rate of 5% and the U.S. has a corporate income tax rate of 35%. There is no withholding tax on dividends remitted to U.S. investors. What is the total amount of income taxes the subsidiary will pay to their host country, and how much will they pay in U.S income taxes on the foreign earned income?
(Assume the US operates on a worldwide approach with a foreign tax credit system; while the subsidiary operates with a territorial tax approach.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
