Which of the Following Statements Best Characterizes the Taxation of Returns

question 3

Multiple Choice

Which of the following statements best characterizes the taxation of returns on international investments in an investor's country and/or the country where the investment is made?

• A) Capital gains normally are taxed only by the country where the investment is made.
• B) Tax-exempt investors normally must pay taxes to the country where the investment is made.
• C) Investors in non-U.S. common stock normally avoid double taxation on dividend income by receiving a tax credit for taxes withheld by the country where the investment is made.
• D) The investor's country normally withholds taxes on dividend payments.

---

Definitions:

Maintain Current Operations

The ongoing efforts to keep a business's regular activities running smoothly and efficiently.

Multidomestic Strategy

A strategy used by companies that involves customizing products and marketing strategies to specific national conditions to gain local market share.

Market Diversity

The variety and heterogeneity of products, services, consumers, and entities within a market, enhancing competition and innovation.

Polycentric View

Refers to a perspective in international business where a company adapts its strategies and operations to the local conditions of the countries it operates in, often giving significant autonomy to each local branch.