Question

Which of the following occur when a company repatriates foreign earnings and repatriates cash? (Select all that apply.)

a) Higher tax bill
b) Lower tax bill
c) Higher tax expense
d) Lower tax expense
e) Higher effective tax rate

Answer 1

When a company repatriates foreign earnings and cash, it can result in a higher tax bill and a higher effective tax rate.

Step-by-step explanation:

When a company repatriates foreign earnings and repatriates cash, two of the possible consequences are a higher tax bill and a higher effective tax rate.

Repatriating foreign earnings refers to bringing back profits earned in overseas markets to the home country. This is usually subject to taxation by the government. Additionally, repatriating cash can also lead to higher taxes as the company may need to pay taxes on the amount being repatriated.

However, it's important to note that the specific tax effects of repatriation can vary depending on the country's tax laws and regulations.