Which of the Following Statements Is False

question 3

Multiple Choice

Which of the following statements is false?

• A) If the U.S. tax rate exceeds the combined tax rate on all foreign income, it is valid to assume that the firm pays the same tax rate on all income no matter where it is earned.
• B) Firms can lower their taxes by pooling multiple foreign projects and accelerating the repatriation of earnings.
• C) Under U.S. tax law, multinational corporations may use any excess tax credits generated in high-tax foreign countries to offset their net U.S. tax liabilities on earnings in low-tax foreign countries.
• D) If the foreign tax rate exceeds the U.S. tax rate, because the U.S. tax credit exceeds the amount of U.S. taxes owed, no tax is owed in the United States.

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Definitions:

Promissory Estoppel

A legal principle that prevents a person from going back on a promise, even if it was not a formal contract, when the other party has relied on that promise to their detriment.

Legal Detriment

A loss or disadvantage that occurs to one party in a contract, considered a necessary component for a valid contractual agreement.

UCC

Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.

Seal

A device used to impress or mark documents as a form of authentication or to signify agreement.