For USMNEs,the Tax-Deferral Privilege Operating Through a Foreign Subsidiary Was Not

question 46

True/False

For U.S.MNEs,the tax-deferral privilege operating through a foreign subsidiary was not originally a tax loophole.On the contrary,it was granted by the U.S.government to allow U.S.firms to expand overseas and place them on a par with foreign competitors,which also enjoy similar types of tax deferral and export subsidies of one type or another.

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Definitions:

Step-Down Method

An allocation technique used in cost accounting to assign overhead costs to various cost objects based on a hierarchical order.

Service Department Costs

Expenses associated with the departments that do not directly produce goods but provide support services to production departments, influencing the overall cost of operations.

Geriatric Medicine

A branch of medicine focusing on health care for elderly people, aiming to promote health by preventing and treating diseases and disabilities in older adults.

Personnel Costs

Personnel costs refer to the expenses associated with employing staff, including wages, benefits, training, and other related costs.