Which of the Following Would Qualify as a Permanent Establishment

question 84

Multiple Choice

Which of the following would qualify as a permanent establishment for income tax treaty purposes?

• A)The presence of corporate employees in the host country for a limited time period.
• B)Shipment of goods by the foreign corporation to customers in the host country.
• C)Maintenance of a sales office in the host country.
• D)All of the above would qualify as a permanent establishment.

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Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs. It represents the portion of sales that helps to cover fixed costs.

Bottleneck Hour

The time period in a production process where the flow is constricted due to limitations in capacity or resources, causing delays.

Variable Cost Method

An accounting approach where variable costs are expensed as incurred and fixed costs are systematically allocated over time, typically used in costing and decision-making.

Cost-Plus Approach

A pricing strategy where the selling price is determined by adding a specific markup to a product's cost.