1 – What role do tax credits play in international taxation? What considerations might cause tax credits to not achieve their intended results?2. Sweden has a classical system of taxation. Calculate the
total taxes that would be paid by a company headquartered in Stockholm that
earns 750,000 swedish krona (SEK) and distributes 50% of its earnings as
divides to its share holders. Assume the company’s shareholders are in the 40%
tax bracket and that the company’s income tax rate is 28%.3. Global enterprises has a manufacturing affiliate in
country A that incurs cost of $300,000 for goods that it sells to its
salesaffiliate in country b. The sales affiliate resells these goods to final
consumers for $850,000. Both affiliates incur operating expenses of $50,000
each. Counties A and B levy a corporate income tax of 35% on taxable income in
their jurisdiction.Required If Global enterprises raises its aggregated
transfer price such that shipment form its manufacturing to its sales affiliate
increase from $500,000 to $600,000, what effect would this have on consolidated
taxes?
4. Using the facts as stated in problem 3 what would be the
tax effects of the transfer pricing action if corporate income tax rates were
30% in country A and 40% in country b?
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