International Taxation国际税收 试卷1

试题一I. True or false (10 marks, 2marks/each)1. The direct credit is a credit granted to a domestic corporation for the foreign income taxes paid by a foreign affiliated company.( )2. Generally, many countries use the presence period criterion to identify the residence of legal entity.( )3. The international double taxation can be divided into systematic double Taxation and juridical double Taxation.( )4. Source country may take methods of exemption or credit to its resident foreign income. ( )5. According to the UN model treaty, contracting states may adopt tie-breaker rules to identify the residence of legal entity.( )Ⅱ．Please explain the following key terms. (12 marks,3 marks for each key term )1. deduction method2. withholding tax3. Treaty shopping4. Source tax jurisdictionⅢ. Questions ( 28 marks )1. Please explain the traditional and additional methods under Arm’s Length Principle.(5marks)2.What factors are used by OECD to identify whether a jurisdiction is a tax haven ornot?(3 marks)3. Please explain the differences between tax evasion and tax avoidance.(6 marks)4.Please explain the operation of a direct conduit company by a figure.(6 marks)5.Please explain the main features of arm’s length principle and p rinciple of GlobalApportionment. (8 marks)Ⅳ. Case Study ( 20 marks )1.XCo. is a corporation organized in State A and YCo is a corporation organized in State B. Both XCo and YCo are controlled by ZCo which is organized in State C. The corporate income tax rates of State A and State B are 50% and 16% respectively. In some given year, XCo produces a batch of goods at a cost of USD5,000,000 and sells the goods to YCo at USD5,000,000. The arm’s length price of the above goods is USD8,000,000 in State A’s market. YCo resells the goods to unrelated con sumers at USD8,2000,000 in State B. ZCo has no income this year. Please answer the following questions:(1) Which kind of tax avoidance technique has been used in the above case? ( 5 marks)(2) Compare the transnational corporation’s income tax burden und er market price and transfer price. ( 5 marks)(3) Which kind of anti-avoidance measure could be taken? ( 5 marks)2、An American company sold its properties in some taxable year, the transfer businesses are as the followings:(1)transferred a house property situated in China to a Japanese company(1 marks)(2)transferred the right to use a plot of land in China to a Chinese residentcompany(1 marks)(3)transferred a sales centre located in China to a Singapore company(1 marks)(4)transferred its share of a Chinese resident company and derived gains, its sharewas 30% of company’s equity (2 marks)Could Chinese government exercise its tax jurisdiction over the above transactions? V. Computation ( 30 marks)1. Assume M, a taxpayer in country A, has 9000 of domestic-source income and 8000 of income from country B, and 3000 from country C . Country B levies tax at the rate of 20%, country C at the rate of 40%, Country A levies income tax at a extra- progressivehow many taxes M should pay?(6marks)2) If country A adopts deduction method, how many taxes M should pay to country A? (6marks)3) If country A adopts full exemption method, how many taxes M should pay to country A? (4marks)4) If country A adopts the method of exemption with progression, how many taxes M should pay to country A? (4marks)2. Corporation RCo is established in country A, and earns 20 in some taxable year, the income tax in country A is 40%. RCo has a branch in country B, which has the income of 10 and country B’s normal tax rate is 30%. Country B offers halved tax rate to the branch. Country A is willing to give a tax sparing credit to Rco. Please calculate the tax RCo should pay to Country A.(10marks)答案及评分标准I.True and False ( 10marks, 2points/each): ××√√×Ⅱ．Please explain the following key terms. (12 marks,3 marks for each key term ) 1. Deduction method: The residence country allows its taxpayers to claim a deduction for taxes, including income taxes(2 marks), paid to a foreign government in respect of foreign-source income(1 mark).2.Withholding tax : a tax levied by the source country at a flat rate on the gross amount of dividends(1marks) ,royalities,interest,or other payments made by residents to nonresidents(1marks). The tax is collected and paid to the government by the resident payer.(1marks)3. Treaty shopping occurs when a person who is not a resident of either country (1 mark) seeks certain benefits (1 mark )under the income tax treaty between the two countries(1 mark) .4. Source tax jurisdiction：Income may be taxable under the tax laws of a country because of a nexus between that country and the activies that generated the income.(2 marks) A jurisdiction claim based on such a nexus is called source tax jurisdiction.(1 marks)Ⅲ. Questions ( 28 marks )1. Traditional methods include comparable uncontrolled price method, resale price method, cost plus method (2.5method) and additional methods include profit-split method, transactional net margin method and comparable profit method (2.5 marks)2.No or only nominal taxes (1 mark);Protection of personal financial information(1 mark); Lack of transparency(1 mark).3. Tax evasion is illegal, and uses criminal means, and there are punishments on the taxpayer (3 marks). Tax avoidance is legal,and uses acceptable tax planning and it requires improvements on tax laws (3 marks)4. (6 marks)5.ALP is set according to the market economy theory and its price is the real market price, which reflects the principle of equity(1 mark).It often imposes unreasonable burdens of proof on taxpayers(1 mark).It is extremely time-consuming and expensive to enforces(1 mark). ALP is likely to continue to be the internationally accepted and the most objective approach for resolving transfer pricing issues except in special circumstances(1 mark).FA is more easily to enforces and it also avoids some of the difficult audit problems.The arbitrariness of the predetermined formulas makes it difficult to reflect the particular circumstances of each multinational enterprises(1 mark).It relies heavily on access to foreign-based information.Substantial cooperation among governments would be needed to solve these problems(1 mark).FA is used by some subnational jurisdictions(1 mark). And it is likely to continue to be an important part of the international tax scene(1 mark). Ⅳ. Case Study ( 20 marks )一. (1) transfer pricing (2 mark)(2) Taxable income under transfer price:XCo’s taxable income = 8000000- 5000000 = 3000000 (1 mark)YCo’s taxable income = 8200000 -8000000 = 200000; (1 mark)Income tax paid under transfer price:XCo’s income tax = 3000000x 50% = 1500000; (1 mark)YCo’s income tax = 200000 x 16% = 32000; (1 mark)Total income tax=1532000 (1 mark)Taxable income under transfer price:XCo’s taxable income = 5000000- 5000000 = 0 (1 mark)YCo’s taxable income = 8200000 -5000000 = 3200000; (1 mark)Income tax paid under transfer price:XCo’s income t ax = 0 x 50% = 0; (1 mark)YCo’s income tax = 3200000 x 16% = 512000; (1 mark)Total tax=512000 (1 mark)Tax difference=1532000-512000=1020000 (1 mark)(3) transfer pricing rules ( 2 marks) or Arm’s length principle ( 2 marks)二．(1)Yes, Chinese government has the priority to exercise its tax jurisdiction. (1mark)(2)Yes, Chinese government has the priority to exercise its tax jurisdiction.(1mark)(3)Yes, Chinese government has the priority to exercise its tax jurisdiction.(1mark)(4) Yes, Chinese government can exercise its tax jurisdiction since the share holding exceeds 25%.(2 marks)Ⅴ. Computation (30 marks)一. 1 If country A doesn’t adopt any method to eliminate the double taxation,Foreign-source income from country B: 8 000Foreign tax(B country) : 8 000×20%=1600(1 mark)Foreign-source income from country C: 3 000Foreign tax(C country) : 3 000×40%=1200(1 mark)Net Domestic income:9 000+8 000+3 000=20 000(1mark)Domestic tax: 5000×10%+10 000×20%+5000×30% = 4000(2 mark)The total domestic and foreign tax:4000+1600+1200=6800(1 mark)2 If country A adopts deduction method,Foreign-source income from country B: 8 000Foreign tax(B country) : 8 000×20%=1600Foreign-source income from country C: 3 000Foreign tax(C country) : 3 000×40%=1200Net Domestic income:20 000－1600－1200= 16400(2 mark) Domestic tax: 5000×10%+10000×20%+1400×30% =2920(2 mark)The total domestic and foreign tax:2920+1600+1200= 5720 (2 mark)3 If country A adopts the full exemption method,Foreign-source income from country B: 8 000Foreign tax(B country) : 8 000×20%=1600Foreign-source income from country C: 3 000Foreign tax(C country) : 3 000×40%=1200Net Domestic income: 9000Domestic tax: 5000×10%+4000×20% = 1300(2 mark)The total domestic and foreign tax:1300+1600+1200= 4100(2 mark)4 If country A adopts the method of exemption with progression,Foreign-source income from country B: 8 000Foreign tax(B country) : 8 000×20%=1600Foreign-source income from country C: 3 000Foreign tax(C country) : 3 000×40%=1200Net Domestic income: 9000Domestic tax: (5000×10%+10 000×20%+5000×30% ) ×9000/20000=1800(2 mark) The total domestic and foreign tax:1800+1600+1200= 4600(2 mark) 二．1)Foreign tax (10x30%x50%) 1.5 (2marks)2）tax relief treated as foreign tax paid (10x30x50%) =1.5(2marks)3）Credit limitation (10x40%) 4(2marks)Credit (1.5+1.5)] 3(2marks)4）Tax paid by R [(20+10)x40%-3] 9(2marks)。