Publish On: 2019-04-24
Total Post: 416
Question: Explain the differences in tax rates.
Reply On: 2013-07-04
Total Post: 8
ANS: Explain the differences in tax rates.
There may be differences in the tax rates in the parent’s country and the country where the subsidiary operates. The earnings may be taxed in the host country, but not in the parent’ country alternatively, if the tax rate in the parent’s country is higher, on the remitted earnings the parent may have to pay differential tax. In some cases, there is not tax treaty between two countries and earnings of the subsidiaries are taxed twice – once by the host government and ten by the parent’s government if these are remitted to the parent.
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