Case analysis Microsoft's acquisition of Skype

Tax avoidance vs. tax evasion = Over time, these concepts have become somewhat blurred.  Define tax avoidance Define tax evasion Companies like Apple, Starbucks, etc. have enlisted the aid of CPA and law firms to assist them in minimizing their worldwide taxes.  Afterwards, it was discovered that such companies had an effective tax rate of 5 - 10% for US tax, well below the 21% tax rate.  There are numerous articles detailing what these companies did to achieve such low tax rates.  Summarize what one of these companies did to achieve such a low effective federal tax rate.  Were such actions legal? If so, why did the Organization for Economic Cooperation and Development (OECD) and various countries propose new tax rules? Please respond to all questions above.

Because of political instability in North Africa, let’s not disclose specific countries. In addition, we restructured most of our French sales and some of our U.S. sales to occur through our offices in the Cayman Islands.This allows us to avoid paying higher taxes in those countries. The Cayman Islands has a 0% corporate incometax rate. We don’t want to highlight our ability to shift profits to avoid taxes.Required:Do you perceive an ethical dilemma? What would be the likely impact of following the controller’s suggestions?Who would benefit? Who would be injured?

Suppose InBev Corporation (a non-U.S. MNC) buys Anheuser-Busch Corporation (a U.S. corporation) by paying the U.S. shareholders in cash. Which of the following can be said of the US capital account?   Group of answer choices   The acquisition of cash by US shareholders will decrease foreign ownership, which will be recorded as a debit.   The US federal reserve will increase its currency reserves.   InBev's reduction in cash will be recorded as a debit on the U.S. capital account..   InBev's increased ownership of US assets is recorded as a credit.   U.S. shareholders increased ownership in InBev will be recorded as a credit.

Multinational corporations are exposed to higher risks that primarily come from two significant sources: (1) exchange rate risk and (2) political or country risk. An example of would be having property expropriated without adequate compensation. Which of the following are steps a company can take to reduce potential loss from expropriation? Check all that apply. Finance the subsidiary with local capital which reduces the local government's incentive to expropriate the multinational company's property. O Lock in the dollar return by selling currency in the forward market. Structure operations so that the subsidiary is only valuable as a part of the integrated corporate system. This reduces the risk exposure for the integrated company.

Consider a US-based MNC with a wholly owned Italian subsidiary. Following a depreciation of the dollar against the euro, which of the following conclusions are correct?  Group of answer choices a. The cash flow in euros could be altered due a change in the firm's competitive position in the marketplace. b. A given operating cash flow in euros will be converted to a higher US dollar cash flow. c. Both A and B d. None of the above

A simple solution to the problem of high corporate tax rates on investment incomewould be to apply a different, lower corporate tax rate directly to this type of income.Instead, the Canadian tax system uses refundable taxes to lower the rate of taxationon investment income of CCPCs.  Why?  Lower rates would provide a significant deferral of taxes on investment income. refundable taxes encourage early filing of corporate tax returns. lower rates would create a situation where the payment of dividends to shareholders would result in double taxation refundable taxes provide a reason to retain funds in the corporation.

Shera Corporation has extensive liabilities denominated in pounds resulting from imports from UK. However, Shera's revenues are denominated solely in U.S. dollars. Which of the following is probably not true? A. Shera would benefit from a depreciation of the British pound. B. Shera has at least some economic exposure. C. All of the options are true. D. Shera has at least some transaction exposure. E. Shera has at least some translation exposure.

2. "It is not fair that multinational groups can plan their way out of a tax charge in Tanzania whereas Tanzanian domestic groups have to pay all their taxes. It is not an even playing field." (Anonymous). Using examples of the anti- avoidance legislation, explain how the Tanzanian tax system tries to make it an even playing field between Tanzanian domestic and multinational businesses and the extent to which you believe it is successful in this aim.

From the U.S. standpoint, a capital outflow will occur when a Japanese investor buys a portion of the U.S. government debt. True False

Your company located in the US imports raw materials from Europe. If the European Central Bank announces to lower the Euro exchange rate, what impact do you expect to see in your business?   A. Your company will pay higher US dollar costs to import from Europe.     B. Your company will pay lower US dollar costs to import from Europe.   C. The Euro exchange rate doesn't have any impact on your company.   D. It should reduce your competitiveness in your home market.

Global​ Giant, a multinational corporation, has a producing subsidiary in a low-tax rate country and a marketing subsidiary in a high-tax country. If Global Giant wants to minimize its worldwide tax​ liability, we would expect Global Giant to​ ________.   A. stop producing in the low tax rate country   B. stop marketing in the high tax rate country   C. establish a low transfer price when the producing unit sells to the marketing unit   D. establish a high transfer price when the producing unit sells to the marketing unit

Which of the following is NOT a benefit of investing in ADRs? The dividends are received in U.S. currency.     Currency risk is minimized.     ADRs are subject to anti-fraud rules.       The transactions are done in U.S. currency.

Determine the key reasons why a multinational corporation might decide to borrow in a country such as Brazil, where interest rates are high, rather than in a country like Switzerland, where interest rates are low. Provide support for your rationale. What impact does foreign investment have on the weighted average cost of capital calculations?

5. Agencies that facilitate international trade Which of the following is true about the Overseas Private Investment Corporation (OPIC)? OPIC does not provide services to exporters. OPIC insures direct U.S. investments in foreign countries against various types of risks. OPIC was formed in the later 1800's. Most OPIC loans are short-term.

IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan Stanley then resells the issue to the U.S. public. This transaction is an example of a(n) asset transformation by Morgan Stanley. primary market transaction. foreign exchange transaction. money market transaction. forward transaction.

i need the answer quickly

Following an unanticipated dollar appreciation, would you recommend that a domestic manufacturing company such as Cummins Engine sell foreign assets? Yes or No

In Chapter 14 we learned about foreign income exclusion. Find a person/company that uses it, and do the following: 1. Name the person/company 2. Give a link to the financial report/article 3. Explain what country taxes were paid in and how that translated to US income