ABC Inc., a U.S.-based company, has a subsidiary in Country A. The subsidiary has a profit of
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ABC Inc., a U.S.-based company, has a subsidiary in Country A. The subsidiary has a profit of $5 million, and ABC Inc. wants to repatriate the profit to the U.S. To avoid double taxation, ABC Inc. plans to use a dividend-received deduction (DRD) and a foreign tax credit (FTC). The corporate tax rate in Country A is 30%, and the U.S. corporate tax rate is 21%. The subsidiary paid $1.5 million in taxes in Country A. What is the maximum amount of profit that ABC Inc. can repatriate to the U.S. without incurring any additional U.S. tax liability?
Related Book For
Principles Of Taxation For Business And Investment Planning 2019 Edition
ISBN: 9781260161472
22nd Edition
Authors: Sally Jones, Shelley C. Rhoades Catanach, Sandra R Callaghan
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