Which of the Following Statements Is FALSE

question 36

Multiple Choice

Which of the following statements is FALSE?

• A)When the foreign tax rate is less than the U.S.tax rate,deferral can provide significant benefits.
• B)The U.S.tax liability is not incurred until the profits are brought back home if the foreign operation is set up as a foreign branch rather than as a separately incorporated subsidiary.
• C)If a company chooses not to repatriate £12.5 million in pre-tax earnings,for example,it effectively reinvests those earnings abroad and defers its U.S.tax liability.
• D)When the foreign tax rates exceed the U.S.tax rates,there are no benefits to deferral because in such a case there is no additional U.S.tax liability.

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Definitions:

Form 1099

A type of tax form used in the United States to report various types of income other than wages, salaries, and tips to the IRS.

IRS Regulations

Rules and guidelines issued by the Internal Revenue Service that interpret and enforce federal tax code.

Vendor Payment

Vendor payment refers to the process of paying suppliers or vendors for goods or services received by a business.

Journal Entries

Records of financial transactions in the accounting system, detailing the accounts and amounts affected by each transaction.