McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 27

USCo, a U..corporation, has decided to set up a headquarters subsidiary in Europe.Management has narrowed its location choice to either Spain, Ireland, or Switzerland.The company has asked you to research some of the income tax implications of setting up a corporation in these three countries.In particular, management wants to know what tax rate will be imposed on corporate income earned in the country and the withholding rates applied to interest, dividends, and royalty payments from the subsidiary to USCo.To answer the tax rate question, consult KPMG's Corporate and Indirect Tax Rate Survey 2010 , which you can access at http://www.pmg.om/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Corp-and-Indirect-Tax-Oct12-2010.df.To answer the withholding tax questions, consult the treaties between the United States and Spain, Ireland, and Switzerland, which you can access at http://www.rs.ov (type in "treaties" as your searchword).