The ________ is the taxation technique that increases the U.S. income of an MNC by the amount of foreign income (before foreign taxes). The U.S. tax calculation is then based on that higher level.
A) unitary tax law
B) grossing up procedure
C) GmbH
D) nationalization procedure

Question

Quizplus · Accepted Answer

The grossing up procedure is a taxation technique used by the U.S. Government to tax MNCs on their foreign income. It involves increasing the MNC's U.S. income by the amount of foreign income (before foreign taxes), and then calculating the U.S. tax based on the higher income level. This is intended to prevent MNCs from avoiding U.S. taxes by shifting income to foreign subsidiaries with lower tax rates.

The ________ Is the Taxation Technique That Increases the U