Question 1

Value-added tax is

Accepted Answer

A) a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country 
B) a direct tax on personal and corporate income 
C) an indirect national tax levied on the value added in the production of a good or service 
D) an indirect national tax levied on personal and corporate income 
A) a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country 
B) a direct tax on personal and corporate income 
C) an indirect national tax levied on the value added in the production of a good or service 
D) an indirect national tax levied on personal and corporate income C

Question 2

A product sells for EUYR 1,6000 in the first production stage,EUR2,000 the second and EUR2,700 in the third and last production stage.If the value-added tax (VAT)rate is 20%,what would be the incremental VAT at each state of production?

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(Essay)

4.9/5

(80)

Question 2

Correct Answer:

Verified

Stage 1: 1,600*.2 = 320
Stage 2: 400*.2 = 80
Stage 3: 700*.2 = 140

Accepted Answer

Stage 1: 1,600*.2 = 320
Stage 2: 400*.2 = 80
Stage 3: 700*.2 = 140

Question 3

Withholding tax is

Accepted Answer

A) a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country 
B) a direct tax on personal and corporate income 
C) an indirect national tax levied on the value added in the production of a good or service 
D) an indirect national tax levied on personal and corporate income 
A) a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country 
B) a direct tax on personal and corporate income 
C) an indirect national tax levied on the value added in the production of a good or service 
D) an indirect national tax levied on personal and corporate income A

Question 4

A product sells in the first stage of production for EUR600,the second stage of production for EUR 1,400 and the third stage of production for EUR 1,700.If the value-added tax (VAT)rate is 15%,what would be the total VAT?

Accepted Answer

A) EUR 90 
B) EUR120 
C) EUR210 
D) EUR255 
A) EUR 90 
B) EUR120 
C) EUR210 
D) EUR255

Question 5

Two fundamental policy objectives in international taxation are

Accepted Answer

A) tax neutrality and international treatment 
B) tax revenues and national treatment 
C) tax neutrality and national treatment 
D) tax revenues and international treatment 
A) tax neutrality and international treatment 
B) tax revenues and national treatment 
C) tax neutrality and national treatment 
D) tax revenues and international treatment

Question 6

How can double taxation result out of the two major ways to determine who has to pay taxes?

Accepted Answer

If a firm has a subsidiary in a foreign

Question 7

What are the major ways in which countries levy taxes?

Accepted Answer

The worldwide or residential method of d

Question 8

A foreign branch is:

Accepted Answer

A) an extension of the parent and is not an independently incorporated firm separate from the parent 
B) an affiliate organization of the MNC that is independently incorporated in the foreign country, and one in which the U.S.MNC owns at least 10 percent of the voting equity stock 
C) either a minority foreign subsidiary (an uncontrolled foreign corporation) or a controlled foreign corporation 
D) b and c 
A) an extension of the parent and is not an independently incorporated firm separate from the parent 
B) an affiliate organization of the MNC that is independently incorporated in the foreign country, and one in which the U.S.MNC owns at least 10 percent of the voting equity stock 
C) either a minority foreign subsidiary (an uncontrolled foreign corporation) or a controlled foreign corporation 
D) b and c

Question 9

A product has the following stages of production:   If the value-added tax (VAT)rate is 20%,what would be the incremental VAT at the final stage of production?

Accepted Answer

A) EUR50 
B) EUR100 
C) EUR200 
D) EUR400 
A) EUR50 
B) EUR100 
C) EUR200 
D) EUR400

Question 10

To tax national residents of a country on their worldwide income is called

Accepted Answer

A) worldwide or residential taxation 
B) worldwide or source taxation 
C) territorial or residential taxation 
D) territorial or source taxation 
A) worldwide or residential taxation 
B) worldwide or source taxation 
C) territorial or residential taxation 
D) territorial or source taxation

Question 11

A controlled foreign corporation (CFC)is:

Accepted Answer

A) a foreign corporation established as an affiliate of a U.S.corporation for the purpose of "buying" from the U.S.corporation property for resale and use abroad 
B) a foreign subsidiary that has more than 50 percent of its voting equity owned by U.S.shareholders 
C) is a separate domestic U.S.corporation actively engaged in business in a U.S.possession (Puerto Rico and the U.S.Virgin Islands) 
D) one that has no "overall limitation" as regards to its foreign tax credits 
A) a foreign corporation established as an affiliate of a U.S.corporation for the purpose of "buying" from the U.S.corporation property for resale and use abroad 
B) a foreign subsidiary that has more than 50 percent of its voting equity owned by U.S.shareholders 
C) is a separate domestic U.S.corporation actively engaged in business in a U.S.possession (Puerto Rico and the U.S.Virgin Islands) 
D) one that has no "overall limitation" as regards to its foreign tax credits

Question 12

Value-added tax (VAT)is:

Accepted Answer

A) a direct national tax levied on the value added in the production of a good (or service) as it moves through various stages of production 
B) an indirect national tax levied on the value added in the production of a good (or service) as it moves through various stages of production 
C) the equivalent of imposing a national sales tax 
D) b and c 
A) a direct national tax levied on the value added in the production of a good (or service) as it moves through various stages of production 
B) an indirect national tax levied on the value added in the production of a good (or service) as it moves through various stages of production 
C) the equivalent of imposing a national sales tax 
D) b and c

Question 13

Which of the following is true about the taxes paid by Canadian-based MNC to Canadian government on the foreign-source income:

Accepted Answer

A) They are equal to the firm's ordinal income tax rate times the amount of foreign-source income 
B) They are equal to half of the firm's ordinal income tax rate times the amount of foreign-source income 
C) They are equal to the firm's ordinal income tax rate times the amount of foreign-source income minus tax credits on taxes paid abroad 
D) They are equal to zero 
A) They are equal to the firm's ordinal income tax rate times the amount of foreign-source income 
B) They are equal to half of the firm's ordinal income tax rate times the amount of foreign-source income 
C) They are equal to the firm's ordinal income tax rate times the amount of foreign-source income minus tax credits on taxes paid abroad 
D) They are equal to zero

Question 14

The three basic types of taxation are:

Accepted Answer

A) income tax, withholding tax, and value-added tax 
B) income tax, withholding tax, business tax 
C) withholding tax, value-added tax, corporate tax 
D) personal tax, corporate tax, and operating tax 
A) income tax, withholding tax, and value-added tax 
B) income tax, withholding tax, business tax 
C) withholding tax, value-added tax, corporate tax 
D) personal tax, corporate tax, and operating tax

Question 15

To tax all income earned with the country by any taxpaper is called

Accepted Answer

A) worldwide or residential taxation 
B) worldwide or source taxation 
C) territorial or residential taxation 
D) territorial or source taxation 
A) worldwide or residential taxation 
B) worldwide or source taxation 
C) territorial or residential taxation 
D) territorial or source taxation

Question 16

A foreign subsidiary is:

Accepted Answer

A) an extension of the parent and is not an independently incorporated firm separate from the parent 
B) an affiliate organization of the MNC that is independently incorporated in the foreign country, and one in which the U.S.MNC owns at least 10 percent of the voting equity stock 
C) either a minority foreign subsidiary (an uncontrolled foreign corporation) or a controlled foreign corporation 
D) b and c 
A) an extension of the parent and is not an independently incorporated firm separate from the parent 
B) an affiliate organization of the MNC that is independently incorporated in the foreign country, and one in which the U.S.MNC owns at least 10 percent of the voting equity stock 
C) either a minority foreign subsidiary (an uncontrolled foreign corporation) or a controlled foreign corporation 
D) b and c

Question 17

The foreign tax credit method followed by the United States is:

Accepted Answer

A) to grant the parent firm credit against its U.S.tax liability for taxes paid to foreign tax authorities on foreign-source income 
B) for the purpose of avoiding double taxation 
C) a and b 
D) none of these 
A) to grant the parent firm credit against its U.S.tax liability for taxes paid to foreign tax authorities on foreign-source income 
B) for the purpose of avoiding double taxation 
C) a and b 
D) none of these

Question 18

Calculate the American foreign tax credit for a subsidiary in Germany.Assume that the German income tax rate is 50%,the American income tax rate is 35%,and the withholding tax rate is 10%.The taxable income in Germany is 500.Assume that all income is remitted to the parent immediately.

Accepted Answer

@#IMG-DLM& The firm

Question 19

Income tax is

Accepted Answer

A) a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country 
B) a direct tax on personal and corporate income 
C) an indirect national tax levied on the value added in the production of a good or service 
D) an indirect national tax levied on personal and corporate income 
A) a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country 
B) a direct tax on personal and corporate income 
C) an indirect national tax levied on the value added in the production of a good or service 
D) an indirect national tax levied on personal and corporate income

Question 20

A "tax haven" country is one that has a low,or zero percent,national tax rates.Some of the countries that fall into this category are:

Accepted Answer

A) Bahamas, Bahrain, Bermuda, and the Cayman Islands 
B) Denmark, Norway, Switzerland, and Sweden 
C) Bulgaria, Canada, Saudi Arabia, and South Africa 
D) Congo, Egypt, Kuwait, and Zaire 
A) Bahamas, Bahrain, Bermuda, and the Cayman Islands 
B) Denmark, Norway, Switzerland, and Sweden 
C) Bulgaria, Canada, Saudi Arabia, and South Africa 
D) Congo, Egypt, Kuwait, and Zaire

Exam 20: International Trade Finance

Value-added tax is

A product sells for EUYR 1,6000 in the first production stage,EUR2,000 the second and EUR2,700 in the third and last production stage.If the value-added tax (VAT)rate is 20%,what would be the incremental VAT at each state of production?

Withholding tax is

A product sells in the first stage of production for EUR600,the second stage of production for EUR 1,400 and the third stage of production for EUR 1,700.If the value-added tax (VAT)rate is 15%,what would be the total VAT?

Two fundamental policy objectives in international taxation are

How can double taxation result out of the two major ways to determine who has to pay taxes?

What are the major ways in which countries levy taxes?

A foreign branch is:

A product has the following stages of production: If the value-added tax (VAT)rate is 20%,what would be the incremental VAT at the final stage of production?

To tax national residents of a country on their worldwide income is called

A controlled foreign corporation (CFC)is:

Value-added tax (VAT)is:

Which of the following is true about the taxes paid by Canadian-based MNC to Canadian government on the foreign-source income:

The three basic types of taxation are:

To tax all income earned with the country by any taxpaper is called

A foreign subsidiary is:

The foreign tax credit method followed by the United States is:

Calculate the American foreign tax credit for a subsidiary in Germany.Assume that the German income tax rate is 50%,the American income tax rate is 35%,and the withholding tax rate is 10%.The taxable income in Germany is 500.Assume that all income is remitted to the parent immediately.

Income tax is

A "tax haven" country is one that has a low,or zero percent,national tax rates.Some of the countries that fall into this category are:

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Tax Environment and Transfer Pricing

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