U.S. tax liabilities are ________ until the foreign subsidiary profits are repatriated to the United States.

Question

Quizplus · Accepted Answer

U.S. tax liabilities are not incurred until the foreign subsidiary profits are repatriated to the United States. This is because the U.S. operates on a worldwide tax system, which means that the U.S. taxes its citizens and resident aliens on their worldwide income. However, because the U.S. tax code allows for deferral of taxation on foreign earnings until they are repatriated to the U.S., taxes are not incurred until the profits are brought back to the U.S.

US Tax Liabilities Are ________ Until the Foreign Subsidiary Profits