What are the advantages of a U.S. corporationâs conducting aforeign business through a foreign branch? Through a foreignsubsidiary?
U.S. earnings or losses can be taxed in the foreign branch if itprovides lower tax rates. The losses of U.S. earnings cannot betaxed in a foreign subsidiary but the earnings can be taxed in theforeign subsidiary.
Losses from oversees activities are deductible in the year theyare incurred and can offset the taxes due on domestic profits. Theearnings of a foreign subsidiary are generally exempt from U.S.taxation until they are remitted to the United States.
Dividends paid to a foreign corporation are exempt from U.S.taxation and profits are given preferential tax rates. A U.S.corporation receiving dividends from a foreign subsidiary aretaxable at a flat 10% rate.
What are the advantages of a U.S. corporationâs conducting aforeign business through a foreign branch? Through a foreignsubsidiary?
U.S. earnings or losses can be taxed in the foreign branch if itprovides lower tax rates. The losses of U.S. earnings cannot betaxed in a foreign subsidiary but the earnings can be taxed in theforeign subsidiary.
Losses from oversees activities are deductible in the year theyare incurred and can offset the taxes due on domestic profits. Theearnings of a foreign subsidiary are generally exempt from U.S.taxation until they are remitted to the United States.
Dividends paid to a foreign corporation are exempt from U.S.taxation and profits are given preferential tax rates. A U.S.corporation receiving dividends from a foreign subsidiary aretaxable at a flat 10% rate.
