Sales office is profitable and distributes cash

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Reference no: EM13751939

FORco wants to open a sales office in the United States. Because FORco does not want to be subject to any withholding tax on dividends, FORco does not form a U.S. subsidiary, but instead operates in the U.S. as a branch. If the U.S. sales office is profitable and distributes cash, FORco may be subject to:

1. the withholding tax on dividends only.

2. the branch profits tax only.

3. both the withholding tax on dividends and the branch profi ts tax.

4. transfer pricing penalties.

Reference no: EM13751939

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