Question 1

If the expansion is done through a separate subsidiary, what is the tax for the Saskatchewan operation?

Accepted Answer

A) $0 
B) $2,750 
C) $3,000 
D) $5,750 
A) $0 
B) $2,750 
C) $3,000 
D) $5,750 B

Question 2

If the expansion is done through direct sales, what is the tax for the Saskatchewan operation?

Accepted Answer

A) $0 
B) $2,750 
C) $3,000 
D) $5,750 
A) $0 
B) $2,750 
C) $3,000 
D) $5,750 C

Question 3

Which of the following lists are acceptable methods for adopting a reasonable transfer price between a Canadian parent and its foreign subsidiary corporations?

Accepted Answer

A) Comparable arm's-length selling price method; cost-plus method; resale price method 
B) Cost-plus method; resale price method; profit-margin method 
C) Lowest tax rate method; resale price method; comparable arm's-length selling price method 
D) Comparable arm's-length selling price method; lowest tax rate method; profit-margin method 
A) Comparable arm's-length selling price method; cost-plus method; resale price method 
B) Cost-plus method; resale price method; profit-margin method 
C) Lowest tax rate method; resale price method; comparable arm's-length selling price method 
D) Comparable arm's-length selling price method; lowest tax rate method; profit-margin method A

Question 4

Boulder Ltd.is a Canadian corporation which plans to expand internationally.The company has decided to establish a wholly-owned foreign subsidiary corporation in another country.Which of the following statements is incorrect?

Accepted Answer

A) The subsidiary will be subject to taxes in the foreign country. 
B) The subsidiary's profits will be included in the Canadian corporation's worldwide income. 
C) Dividends received by the Canadian corporation from the foreign subsidiary are excluded from the Canadian corporation's taxable income. 
D) Dividends received by the Canadian corporation from the foreign subsidiary are most often subject to a withholding tax in the foreign jurisdiction. 
A) The subsidiary will be subject to taxes in the foreign country. 
B) The subsidiary's profits will be included in the Canadian corporation's worldwide income. 
C) Dividends received by the Canadian corporation from the foreign subsidiary are excluded from the Canadian corporation's taxable income. 
D) Dividends received by the Canadian corporation from the foreign subsidiary are most often subject to a withholding tax in the foreign jurisdiction.

Question 5

Which of the following statements is true concerning domestic expansion of a business?

Accepted Answer

A) Cash funding requirements will be lower to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses. 
B) Cash funding requirements will be higher to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses. 
C) Obligations of a new division will have no impact on the founding corporation. 
D) The main advantage of incorporating an expansion activity is the use of start-up losses from the new corporation against income from the founding corporation. 
A) Cash funding requirements will be lower to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses. 
B) Cash funding requirements will be higher to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses. 
C) Obligations of a new division will have no impact on the founding corporation. 
D) The main advantage of incorporating an expansion activity is the use of start-up losses from the new corporation against income from the founding corporation.

Question 6

If the expansion is done through a branch location in a permanent establishment run by personnel from Saskatchewan, which of the following is incorrect?

Accepted Answer

A) The profits belong to the Nova Scotia corporation. 
B) The Saskatchewan tax rate will apply. 
C) The branch profits for tax purposes may potentially be more than actually earned at the branch. 
D) The actual branch profits will be taxed as a separate entity. 
A) The profits belong to the Nova Scotia corporation. 
B) The Saskatchewan tax rate will apply. 
C) The branch profits for tax purposes may potentially be more than actually earned at the branch. 
D) The actual branch profits will be taxed as a separate entity.

Question 7

In the Canada-U.S.tax treaty, the definition of a 'permanent establishment' does not include

Accepted Answer

A) a place of management. 
B) a factory. 
C) a storage facility. 
D) an office. 
A) a place of management. 
B) a factory. 
C) a storage facility. 
D) an office.

Question 8

The Running Shoe Corp.is a Canadian corporation which plans to expand internationally.The company has decided to establish a branch in a foreign country.Which of the following is false?

Accepted Answer

A) The profits of the branch will be subject to income tax in the foreign country. 
B) The branch profits will be included in the Canadian corporation's worldwide income. 
C) A foreign tax credit can reduce the Canadian taxes payable. 
D) If the foreign country has a lower tax rate, a tax benefit will be recognized. 
A) The profits of the branch will be subject to income tax in the foreign country. 
B) The branch profits will be included in the Canadian corporation's worldwide income. 
C) A foreign tax credit can reduce the Canadian taxes payable. 
D) If the foreign country has a lower tax rate, a tax benefit will be recognized.

Question 9

Shippers Co.is considering an expansion into the United States.Kellie Sharma, the CEO, is not sure whether to structure this new venture as a branch or subsidiary, and would like some general information before meeting with the accountant and lawyer.(Kellie does not want to use the direct sales method.)
Required:
List two advantages and disadvantages for an expansion using a branch.
A.List two advantages and disadvantages for an expansion using a subsidiary.

Accepted Answer

The advantages and disadvantages of a br

If the expansion is done through a separate subsidiary, what is the tax for the Saskatchewan operation?

If the expansion is done through direct sales, what is the tax for the Saskatchewan operation?

Which of the following lists are acceptable methods for adopting a reasonable transfer price between a Canadian parent and its foreign subsidiary corporations?

Boulder Ltd.is a Canadian corporation which plans to expand internationally.The company has decided to establish a wholly-owned foreign subsidiary corporation in another country.Which of the following statements is incorrect?

Which of the following statements is true concerning domestic expansion of a business?

If the expansion is done through a branch location in a permanent establishment run by personnel from Saskatchewan, which of the following is incorrect?

In the Canada-U.S.tax treaty, the definition of a 'permanent establishment' does not include

The Running Shoe Corp.is a Canadian corporation which plans to expand internationally.The company has decided to establish a branch in a foreign country.Which of the following is false?

Taxationits Role in Decision Making

Fundamentals of Tax Planning

Liability for Tax, Income Determination, and Administration of the Income Tax System

Income From Employment

Income From Business

The Acquisition, Use, and Disposal of Depreciable Property

Income From Property

Gains and Losses on the Disposition of Capital Propertycapital Gains

Other Income, Other Deductions, and Special Rules for Completing Net Income for Tax Purposes

Individuals: Determination of Taxable Income and Taxes Payable

Corporationsan Introduction

Organization, Capital Structures, and Income Distributions of Corporations

The Canadian-Controlled Private Corporation

Multiple Corporations and Their Reorganization

Partnerships

Limited Partnerships and Joint Ventures

Trusts

Business Acquisitions and Divestituresassets Versus Shares

Business Acquisitions and Divestiturestax-Deferred Sales

Tax Aspects of Corporate Financing

GST/HST Overview

Business Valuations

Filters

Exam 20: Domestic and International Business Expansion

If the expansion is done through a separate subsidiary, what is the tax for the Saskatchewan operation?

If the expansion is done through direct sales, what is the tax for the Saskatchewan operation?

Which of the following lists are acceptable methods for adopting a reasonable transfer price between a Canadian parent and its foreign subsidiary corporations?

Boulder Ltd.is a Canadian corporation which plans to expand internationally.The company has decided to establish a wholly-owned foreign subsidiary corporation in another country.Which of the following statements is incorrect?

Which of the following statements is true concerning domestic expansion of a business?

If the expansion is done through a branch location in a permanent establishment run by personnel from Saskatchewan, which of the following is incorrect?

In the Canada-U.S.tax treaty, the definition of a 'permanent establishment' does not include

The Running Shoe Corp.is a Canadian corporation which plans to expand internationally.The company has decided to establish a branch in a foreign country.Which of the following is false?

Taxationits Role in Decision Making

Fundamentals of Tax Planning

Liability for Tax, Income Determination, and Administration of the Income Tax System

Income From Employment

Income From Business

The Acquisition, Use, and Disposal of Depreciable Property

Income From Property

Gains and Losses on the Disposition of Capital Propertycapital Gains

Other Income, Other Deductions, and Special Rules for Completing Net Income for Tax Purposes

Individuals: Determination of Taxable Income and Taxes Payable

Corporationsan Introduction

Organization, Capital Structures, and Income Distributions of Corporations

The Canadian-Controlled Private Corporation

Multiple Corporations and Their Reorganization

Partnerships

Limited Partnerships and Joint Ventures

Trusts

Business Acquisitions and Divestituresassets Versus Shares

Business Acquisitions and Divestiturestax-Deferred Sales

Tax Aspects of Corporate Financing

GST/HST Overview

Business Valuations

Filters