rhodyri
May 26, 2011, 10:25 PM
Suppose a firm earns $2.5 million before tax in China. It pays Chinese tax of $1.3 million and remits the remaining $1.2 million as a dividend to its U.S. parent. The Chinese dividend withholding tax is 5%. Under current U.S. tax law, the parent will owe U.S. tax on this dividend equal to what?