Tax haven subsidiaries are typically established in a country that can meet which of the following requirements?
A)A low tax on foreign investment or sales income earned by resident corporations and a low dividend withholding tax on dividends paid to the parent firm.
B)A stable currency to permit easy conversion of funds into and out of the local currency.
C)The facilities to support financial services such as good communications, professional qualified office workers, and reputable banking services.
D)Tax haven countries have all of the above characteristics.

Question

Quizplus · Accepted Answer

Tax haven countries typically have all the characteristics listed in options A, B, and C. Lower tax rates on foreign investment or sales income earned by resident corporations and low dividend withholding tax on dividends paid to the parent firm are essential reasons why many firms choose to establish subsidiaries in tax haven countries. A stable currency allows easy conversion of funds, while facilities to support financial services such as good communications, professional qualified office workers, and reputable banking services are crucial for any company wishing to conduct international business.

Tax Haven Subsidiaries Are Typically Established in a Country That