Tax-Haven Subsidiaries Categorically Referred to as International Offshore Financial Centers,have

question 30

Multiple Choice

Tax-haven subsidiaries categorically referred to as International Offshore Financial Centers,have the following characteristics EXCEPT ________.

• 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) A stable currency to permit easy conversion of funds into and out of the local currency. This requirement can be met by permitting and facilitating the use of Eurocurrencies.
• C) A stable government that encourages the establishment of foreign-owned financial and service facilities within its borders.
• D) All of the above are tax-haven subsidiary characteristics.

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Definitions:

Accounts Testing

The evaluation and verification of financial account records through various audit procedures to ensure the accuracy and reliability of financial statements.

Illegal Act

An action that is forbidden by law and subject to criminal or civil penalties.

Auditors

Professionals who examine financial records to ensure their accuracy and compliance with applicable rules and regulations.

Sarbanes-Oxley Act

A law passed in 2002 by the U.S. government aimed at safeguarding investors by enhancing the truthfulness and consistency of corporate reporting.