What would be the total tax payment and effective tax rate

Reference no: EM13275200

Avon' foreign Source income. Avon is a US based direct seller of a wide array of products. Avon markets leading beauty, fashion, and home products in more than 100 countries. As part of the training in its corporate treasury offices, it has its interns build a s spread sheet analysis of the following hypothetical subsidiary earnings/distribution analysis. Use the spread sheet presented in Exhibit 14.6 for your basic structure Base Values Case 1 Case 2 A Foreign corporate income tax rate 28% 45% B US Corporate income tax rate 35% 35% C. Foreign dividend withholding tax rate 15% 0% d. US ownership in foreign firm 100% 100% E. Dividend payout rate of foreign firm 100% 100% A. What is the total tax payment, foreign and domestic combined, for this income? B. What is the effective tax rate paid on this income by the US based parent company? C. What would be the total tax payment and effective tax rate if the foreign corporate rate was 45% and there were no withholding taxes on dividend? D. What would be the total tax payment and effective tax rate if the income was earned by a branch of the US Corporation?

Reference no: EM13275200

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