CIMA Exam CIMAPRA19-F03-1 Topic 1 Question 92 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 92
Topic #: 1

A company in country T is considering either exporting its product directly to customers in country P or establishing a manufacturing subsidiary in country P.

The corporate tax rate in country T is 20% and 25% tax depreciation allowances are available

Which TIIRCC of the following would be considered advantages of establishing a subsidiary in country T?

AThe corporate tsx rate in country P is 40%.

BThere are restrictions on companies wishing to remit profit from country P

CYear 1 tax depreciation allowances of 100% are available in country P.

DThere is a double tax treaty between country T and country P.

EThere are high customs cuties payable of products entering country P.

Show Suggested Answer

Suggested Answer: A, B, E

by Kathrine at Jul 16, 2024, 03:02 PM

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Orville

1 months ago

I'm just picturing the accountant trying to navigate all these tax treaties and depreciation allowances. Someone get this person a calculator and a strong cup of coffee!

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Cornell

13 days ago

A) The corporate tax rate in country P is 40%.

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Clemencia

2 months ago

You know what they say, 'When in Rome, do as the Romans do.' But in this case, it's more like, 'When in country P, pay the piper!'

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Whitney

6 days ago

A: Definitely, it would make a big difference compared to the 25% tax depreciation allowances in country T.

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Dominque

18 days ago

B: Yeah, having 100% tax depreciation allowances in Year 1 would definitely help with initial costs.

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Latanya

1 months ago

A: I think option C would be a big advantage for establishing a subsidiary in country P.

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Jarod

2 months ago

Hold up, did you say the corporate tax rate in country P is 40%? That's highway robbery! I'm with Daron on this one.

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Daron

2 months ago

Hmm, I'm not sure. The high customs duties payable on products entering country P (option E) could be a dealbreaker. Who wants to deal with that hassle?

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Iraida

26 days ago

C) Year 1 tax depreciation allowances of 100% are available in country P.

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Ernest

1 months ago

Hmm, I'm not sure. The high customs duties payable on products entering country P (option E) could be a dealbreaker. Who wants to deal with that hassle?

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Tasia

1 months ago

D) There is a double tax treaty between country T and country P.

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France

2 months ago

A) The corporate tax rate in country P is 40%.

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Alida

2 months ago

I disagree. The double tax treaty between country T and country P (option D) seems like the better choice. That would help avoid double taxation.

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Kimberlie

1 months ago

I agree, avoiding double taxation is crucial for maximizing profits. Option D is a strong argument for establishing a subsidiary in country P.

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Serita

1 months ago

Option D would definitely be a good advantage to consider. Double tax treaty can save a lot of money.

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Salley

2 months ago

I think option C is the correct answer. The year 1 tax depreciation allowances of 100% in country P would be a significant advantage for establishing a subsidiary there.

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