For U.S. MNEs, the tax-deferral privilege operating through a foreign subsidiary was not originally a tax loophole. On the contrary, it was granted by the U.S. government to allow U.S. firms to expand overseas and place them on a par with foreign competitors, that also enjoy similar types of tax deferral and export subsidies of one type or another.

Question

Quizplus · Accepted Answer

The tax-deferral privilege operating through a foreign subsidiary was granted by the U.S. government to enable U.S. firms to expand overseas and compete on the same level as foreign counterparts.

For US MNEs, the Tax-Deferral Privilege Operating Through a Foreign Subsidiary