To avoid paying U.S. taxes on income made in other countries, many U.S. companies are ________ outside the United States but ________ inside the United States.

Question

Quizplus · Accepted Answer

By incorporating outside the United States, U.S. companies can take advantage of lower tax rates in other countries. This allows them to accumulate cash in those countries without being subject to high U.S. taxes. However, to access that money, they may need to bring it back to the United States and pay taxes on it. By being cash-poor inside the U.S., they can reduce their U.S. tax liability.

To Avoid Paying U