Chapter 11 - International taxation. After reading the material in this chapter, you should be able to: Describe differences in corporate income tax and withholding tax regimes across countries, explain how overlapping tax jurisdictions cause double taxation, show how foreign tax credits reduce the incidence of double taxation,. | Chapter 11: International Taxation Learning Objectives Describe differences in corporate income tax and withholding tax regimes across countries Explain how overlapping tax jurisdictions cause double taxation Show how foreign tax credits reduce the incidence of double taxation Demonstrate how rules related to controlled foreign corporations, subpart F income, and foreign tax credit baskets affect . taxation of foreign source income 11-2 Learning Objectives Describe some of the benefits provided by tax treaties Explain and demonstrate procedures for translating foreign currency amounts for tax purposes Describe tax incentives provided by countries to attract foreign direct investment and stimulate exports 11-3 Impact of Taxes—International Business Decisions Impact of Taxes International location decisions Legal form of operation Method of financing 11-4 Types of Taxes and Tax Rates Types of taxes Corporate income taxes Imposed by governments Tax rates vary Zero percent in tax havens Over forty percent Withholding taxes Taxes on dividends Other amounts paid to foreign citizens 11-5 Corporate Income Tax Corporate income tax rates Significant variation worldwide Provides tax planning opportunity Basis of taxability Type of activity Nationality of the company owners Variation in Methods of calculating taxable income Differences Deductibility of expenses 11-6 Corporate Income Tax Tax Haven Abnormally low corporate income tax rates No corporate income tax at all Minimum worldwide income taxes Bahamas and the Isle of Man No corporate income tax Liechtenstein Tax rates from percent to 15 percent 11-7 Withholding Tax Regimes Application to Dividends Interest Royalties Vary across countries Type of payment Recipient Impacts tax planning Tax-planning strategy Thin capitalization 11-8 Value-added tax Substitute for sales taxes Added into Price of product Price of service At each stage of Production Distribution Used in Australia, Canada, China, Mexico, Nigeria, . | Chapter 11: International Taxation Learning Objectives Describe differences in corporate income tax and withholding tax regimes across countries Explain how overlapping tax jurisdictions cause double taxation Show how foreign tax credits reduce the incidence of double taxation Demonstrate how rules related to controlled foreign corporations, subpart F income, and foreign tax credit baskets affect . taxation of foreign source income 11-2 Learning Objectives Describe some of the benefits provided by tax treaties Explain and demonstrate procedures for translating foreign currency amounts for tax purposes Describe tax incentives provided by countries to attract foreign direct investment and stimulate exports 11-3 Impact of Taxes—International Business Decisions Impact of Taxes International location decisions Legal form of operation Method of financing 11-4 Types of Taxes and Tax Rates Types of taxes Corporate income taxes Imposed by governments Tax rates vary Zero percent in tax
