Question

Are US exporters subject to income tax in importing countries? How does taxation of a branch firm differ from that of a subsidiary? Provide examples.

Answer 1

Hello,

Basing on the above question,the below answer is given:

A. Are US exporters subject to income tax in importing countries?

1. Foreign country income taxation of US exporter's export profits varies based on

   whether a US exporter exports on a direct basis or through an intermediary.

2. Generally speaking, foreign countries will tax a US exporter's export profits if the

    US exporter is considered to be trading or doing business in the country.

B. How does taxation of a branch firm differ from that of a subsidiary? Provide examples.

                                     Differences Between Branch and Subsidary

Example for difference between Branch and subsidary:

**Google is a subsidary company of Alphabet. Alphabet has more than 50% stake in google.

   Google and Alphabet have seperate Legal Status & Liabilities.Google is not liable to report to Alphabet.

**Walmart has branches at various places such as Best Price in India etc..Best Price doesn't have seperate

legal status & liabilities.Best Price is responsible to report to Walmart which is it's Head Office.

Thank You.....