Royalties and fees have certain tax advantages over ________, particularly when the corporate tax rate is higher in the host country than in the parent's home country.

Question

Quizplus · Accepted Answer

Royalties and fees have certain tax advantages over dividends, particularly when the corporate tax rate is higher in the host country than in the parent's home country. Royalties and fees are often tax deductible locally (because they are viewed as an expense), so arranging for payment in royalties and fees will reduce the foreign subsidiary's tax liability.

Royalties and Fees Have Certain Tax Advantages Over ________, Particularly