Income Taxation and Tax Optimization in Transnational Corporations
Journal Title: Zeszyty Naukowe Wyższej Szkoły Bankowej w Poznaniu - Year 2017, Vol 72, Issue 1
Abstract
One of the basic aims of the transnational corporation’s (TC) financial activity is maximization of profits after tax, that is minimization of taxes. Because profits after tax in particular countries vary, then tax optimization poses a challenge. If the TC runs its activity in the form of a “permanent establishment” or a subsidiary, they are subject to two different tax systems, i.e. that of the host country and home country. Bilateral agreements on double tax avoidance enable tax payments only in one country. Avoidance of double tax remittances can take place in the form of tax credit, i.e. deduction from home tax, the tax paid abroad or in the form of exclusion, i.e. exemption of foreign income from home-country tax.
Authors and Affiliations
Jan Rymarczyk
Keywords
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