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Are US exporters subject to income tax in importing countries? How does taxation of a branch...

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

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Expert Solution

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.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.

Difference between branch and sibsidary

  • Branch implies an establishment setup by parent company ,to perform the same bussiness operation At different location where as Subsidiary company as understood as the company whose full or partial controlling interest is held by another company.
  • Branch reports to head office where as sibsidary company reports to holding company
  • Branch conduct same bissiness as parent organisation but subsidiary may or may not conduct same bussiness.

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.

ekkarill92 answered 1 year ago
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