Macro photo of tooth wheel mechanism with BUSINESS ETHICS concept letters

Reputational Death and Corporate Taxes

by , et al.Issue: May / June 2017

...NC that has two subsidiaries: AlphaUS and AlphaOffshore. AlphaUS sells US$100,000 of products to consumers in the United States and earns a gross profit of $30,000. AlphaUS also pays a royalty equal to 5% of gross sales to AlphaOffshore, which owns the brand name for the products that AlphaUS sells. AlphaUS has an income tax rate of 35 per cent, while AlphaOffshore is resident in a country with an income tax rate of 3 per cent. Let’s assume, for o...

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