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A company in country T is considering either exporting its product directly to customers in country P or establishing a manufacturing subsidiary in country P.
The corporate tax rate in country T is 20% and 25% tax depreciation allowances are available
Which TIIRCC of the following would be considered advantages of establishing a subsidiary in country T?
Suggested Answer: A, B, E
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40 comments · newest first
BR
Brigette
11 months ago
Restrictions on profit remittance could be a dealbreaker.
ER
Erasmo
11 months ago
High customs duties definitely make a subsidiary more appealing.
YE
Yen
11 months ago
100% depreciation in Year 1? Really?
MA
Mary
12 months ago
Double tax treaty sounds like a big plus!
DE
Delmy
12 months ago
Country P's corporate tax rate is 40%.
RE
Rebbecca
1 year ago
I feel like the customs duties could be a factor too, especially if exporting is more expensive due to those fees.
AL
Albina
1 year ago
The 100% tax depreciation in country P sounds like it could really benefit the subsidiary, but I can't remember if that outweighs the higher tax rate.
SA
Sarah
1 year ago
I think the double tax treaty could be a significant advantage, but I need to recall how it specifically impacts profit repatriation.
LI
Lindsey
1 year ago
I remember discussing how a higher corporate tax rate in country P could make establishing a subsidiary more appealing, but I'm not sure if that's the main advantage.
SH
Shanda
1 year ago
I'm not sure about the double tax treaty between the countries - that could be an advantage or a disadvantage depending on how it's structured. I'll need to think that one through more.
RE
Reuben
1 year ago
Okay, I think I've got it. They're asking which of the given options would be considered advantages of establishing a subsidiary in country P, not country T. I'll need to carefully evaluate each option.
HU
Huey
1 year ago
Hmm, I'm a bit confused about what exactly they're asking for. Do they want us to analyze the advantages of establishing a subsidiary versus exporting directly? I'll need to read the question more carefully.
ES
Estrella
1 year ago
This question seems straightforward, I just need to identify the advantages of establishing a subsidiary in country P based on the information provided.
LY
Lynette
1 year ago
The corporate tax rate in country P being higher than in country T seems like a clear advantage for setting up a subsidiary. And the restrictions on remitting profits from country P could also be an advantage if you want to keep the profits there.
AN
Angelyn
1 year ago
Hmm, the key seems to be getting the chart to display the values as a pop-up when the user hovers over it. I think options B and C are the way to go.
OR
Orville
1 year ago
I'm just picturing the accountant trying to navigate all these tax treaties and depreciation allowances. Someone get this person a calculator and a strong cup of coffee!
LA
Lavonda
1 year ago
I'm sure the accountant will figure it out with some caffeine!
EM
Emile
1 year ago
D) There is a double tax treaty between country T and country P.
CO
Cornell
1 year ago
A) The corporate tax rate in country P is 40%.
CL
Clemencia
2 years ago
You know what they say, 'When in Rome, do as the Romans do.' But in this case, it's more like, 'When in country P, pay the piper!'
WH
Whitney
1 year ago
A: Definitely, it would make a big difference compared to the 25% tax depreciation allowances in country T.
DO
Dominque
1 year ago
B: Yeah, having 100% tax depreciation allowances in Year 1 would definitely help with initial costs.
LA
Latanya
1 year ago
A: I think option C would be a big advantage for establishing a subsidiary in country P.
JA
Jarod
2 years ago
Hold up, did you say the corporate tax rate in country P is 40%? That's highway robbery! I'm with Daron on this one.
DA
Daron
2 years ago
Hmm, I'm not sure. The high customs duties payable on products entering country P (option E) could be a dealbreaker. Who wants to deal with that hassle?
IR
Iraida
1 year ago
C) Year 1 tax depreciation allowances of 100% are available in country P.
ER
Ernest
1 year ago
Hmm, I'm not sure. The high customs duties payable on products entering country P (option E) could be a dealbreaker. Who wants to deal with that hassle?
TA
Tasia
1 year ago
D) There is a double tax treaty between country T and country P.
FR
France
1 year ago
A) The corporate tax rate in country P is 40%.
AL
Alida
2 years ago
I disagree. The double tax treaty between country T and country P (option D) seems like the better choice. That would help avoid double taxation.
KI
Kimberlie
1 year ago
I agree, avoiding double taxation is crucial for maximizing profits. Option D is a strong argument for establishing a subsidiary in country P.
SE
Serita
1 year ago
Option D would definitely be a good advantage to consider. Double tax treaty can save a lot of money.
SA
Salley
2 years ago
I think option C is the correct answer. The year 1 tax depreciation allowances of 100% in country P would be a significant advantage for establishing a subsidiary there.
LU
Lura
1 year ago
I still think option C is the best choice, the 100% tax depreciation allowances in year 1 can really help with initial costs.
ST
Stephen
1 year ago
That's true, option D could help avoid double taxation and make the subsidiary more profitable in the long run.
KR
Kris
2 years ago
But what about option D? Having a double tax treaty between country T and country P could also be very beneficial.
HE
Heike
2 years ago
I agree, option C would definitely be a major advantage for setting up a subsidiary in country P.
CA
Carlota
2 years ago
But what about the restrictions on remitting profit from country P? That could be a drawback.
KA
Kati
2 years ago
I agree, the lower corporate tax rate in country P is definitely a plus.
NI
Nickolas
2 years ago
I think establishing a subsidiary in country P could be advantageous.