Countries differ in how they tax foreign-source income of their domestic MNCs.

Question

Quizplus · Accepted Answer

This statement is true as countries have different taxation systems for foreign-source income of their domestic MNCs. The way a multinational organization is structured within a country can significantly affect its tax liability.

Answer: B
 This statement is also true as tax treaties and foreign tax credits provide relief to a U.S.-based MNC from double taxation, i.e., the taxation of the same income in two different countries.

Answer: C
 This statement is false as countries may have different tax laws and regulations for their domestic MNCs' domestic income, depending on factors such as industry, size, and ownership structure.

Therefore, the correct answer is:

Answer: A, B

Countries Differ in How They Tax Foreign-Source Income of Their