Your two foreign outposts, a branch in Germany and one in Singapore, each have sales of 100. The host-country tax rates are 40 percent and 20 percent, respectively. (a) If your home country uses the credit system and has a 30 percent tax, how would you (try to) allocate total costs (120) over the two subsidiaries?…

A Belgian bank holds eur 10 billion worth of seven-year eur government bonds, with a direct yield of 10 percent (that is, its annual interest income is eur 1b). (a) Until a tax reform in 1992, the bank could transform its interest income into dividend income, which enjoyed a 90 percent exclusion privilege. Specifically, the bank…