Determining the worldwide tax system

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Reference no: EM132505825

A Slabovia-based MNC has a subsidiary in Fenwick, a small country in Central Europe. The Slabovian parent's pre-tax income for 2000 was $500m, while the Fenwick subsidiary's pre-tax income was $200m. The Slabovian tax rate is 30%, while Fenwick's tax rate is 40%. Slabovia has a worldwide tax system.

a. If the MNC paid full taxes in both countries, its tax rate would be _________; it would pay a total of _________ in taxes.

b. If the MNC received full tax credit for the Fenwick tax, its tax rate would be ________ and would pay a total of ___________ in taxes.

c. If the MNC received full deduction for the Fenwick tax, its tax rate would be ________ and would pay a total of _________ in taxes.

Reference no: EM132505825

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