Question

. If an American corporation earns $10 million in Germany where the corporate income tax rate is 20%, how will it benefit from the new tax law (2018) when it decides to transfer these profits back to the US?

Answer 1

As per Double Taxation avoidance agreement if any corporation received from outside america then they receive a marginal relif of that tax amount which they was paid outside america (if america had notsigned an agreement of double taxation avoidance agreement with that country) otherwise if america had a DTAA with that country then taxable at rate which was precribed in agreement.so in this case american corporation received income from from germany where tax rate was 20% . so if ameriaca has agreement with germany then corporation must get marginal relif of that amount which he was paid in germany otherwise( if america has agreement with that country ) taxable at specific rate which was discribe in agreement.