Use the following information to answer the question(s)below.
Incorporated Tool,a U.S.firm,is considering its international tax situation.The corporate tax rate in the United States is currently 21%.Incorporated Tool has major operations in Ireland,where the tax rate is 12.5%,Japan where the tax rate is 40.7%,and Mexico,where the tax rate is 30.0%.Incorporated Tool's profits,which are fully and immediately repatriated,and foreign taxes paid for the current year are as follows:
-Assuming that the Irish and Japanese subsidiaries did not exist,the U.S.tax liability on the Mexican subsidiary would be closest to:

Question

Use the following information to answer the question(s)below.
Incorporated Tool,a U.S.firm,is considering its international tax situation.The corporate tax rate in the United States is currently 21%.Incorporated Tool has major operations in Ireland,where the tax rate is 12.5%,Japan where the tax rate is 40.7%,and Mexico,where the tax rate is 30.0%.Incorporated Tool's profits,which are fully and immediately repatriated,and foreign taxes paid for the current year are as follows: 
-Assuming that the Irish and Japanese subsidiaries did not exist,the U.S.tax liability on the Mexican subsidiary would be closest to:

Quizplus · Accepted Answer

The U.S. tax liability on the Mexican subsidiary would be $0 if the Irish and Japanese subsidiaries did not exist because the Mexican subsidiary would not be able to take advantage of the tax benefits provided by the Irish and Japanese subsidiaries.

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