Profits earned by subsidiary are taxed even if it is not repatriated to the parent company as dividends because they are considered as income for the parent company.

Question

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Profits earned by a subsidiary are not automatically considered income for the parent company and taxed at the parent level unless they are repatriated as dividends. Taxation depends on the tax laws of the countries involved and the corporate structure.

Profits Earned by Subsidiary Are Taxed Even If It Is