Implementing Capital Import Neutrality Means That

question 28

Multiple Choice

Implementing capital import neutrality means that

• A)a sovereign government follows the taxation policies of foreign tax authorities on the foreign-source income of its resident MNCs.
• B)the tax burden a host country imposes on the foreign subsidiary of a MNC should be the same regardless of the country in which the MNC is incorporated.
• C)the tax burden a host country imposes on the foreign subsidiary of a MNC should be the same as that placed on domestic firms.
• D)all of the above

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Definitions:

American Company

A business organization that is registered and operates in the United States, adhering to the laws and regulations of the country.

Foreign Official

A representative or an employee of a government or governmental body of another country.

Nontariff Barriers

Restrictions that countries use to control the amount of trade across their borders, not including the use of tariffs, such as quotas and embargoes.

Competitive Advantage

A condition that allows a company or country to produce goods or services at a lower price or in a more desirable fashion for customers than competitors.