Tax arbitrage
A)arises when subsidiary profits vary due to local regulations
B)occurs when firms move funds to lower tax jurisdictions
C)arises when barriers to trade exist
D)occurs due to the incidence of capital flight

Question

Quizplus · Accepted Answer

Tax arbitrage occurs when firms move funds to lower tax jurisdictions to take advantage of the differencing tax rates. This can be done legally through tax planning and structuring, but some may find ways to do this through illegal means such as tax evasion.

Tax Arbitrage