Tax-Haven Subsidiaries Are Typically Established in a Country That Can

question 62

Multiple Choice

Tax-haven subsidiaries are typically established in a country that can meet the following requirements:

• A) a low tax on foreign investment or sales income earned by resident corporations and a low dividend withholding tax on dividends paid to the parent firm.
• B) the facilities to support financial services, for example, good communications, professional qualified office workers, and reputable banking services.
• C) a stable government that encourages the establishment of foreign-owned financial and service facilities within its borders.
• D) all of the above

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Definitions:

Formal Structures

The officially designated channels of communication and hierarchies within an organization that dictate how tasks are assigned and coordinated.

Vertical Layers

The hierarchical levels or stages within an organization or system, usually indicating positions of authority.

Management

The process of dealing with or controlling things or people, often within an organizational context.

Organizing Team

The process of bringing together a group of individuals to form a coordinated unit, aimed at achieving specific goals and objectives.