Which of These Statements Is Incorrect

question 25

Multiple Choice

Which of these statements is incorrect?

• A) U.S corporations are exempt from taxes on profits they repatriate back to the United States from overseas.
• B) TNCs can lower their taxes by shifting control of their intellectual property to a shell company in a tax haven.
• C) Transfer pricing is a means for TNCs to lower their global tax bill.
• D) The OECD has for years tried to tackle base erosion and profit shifting (BEPS).

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Definitions:

Noncontrolling Interest

Represents the equity interest in a portion of a subsidiary's net assets that is not attributable directly or indirectly to the parent company.

Common Stock

A type of equity security that represents ownership in a corporation, with holders usually having a vote in corporate decisions but in the last in line during liquidation.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often receiving dividends before common shareholders and having a fixed dividend rate.

Intra-Entity Transaction

Transactions that occur between two segments within the same company.