Understanding Corporate Tax Avoidance Strategies

What is the primary difference between tax evasion and tax avoidance?

• Tax evasion is legal, while tax avoidance is illegal.

• Tax evasion is encouraged by the government, while tax avoidance is not.

• Tax evasion is illegal, while tax avoidance is legal.

• Tax evasion involves using loopholes, while tax avoidance is straightforward.

How do tax credits help companies reduce their tax bills?

• By eliminating the need to pay taxes altogether.

• By directly reducing the amount of taxes owed.

• By increasing their overall revenue.

• By allowing them to pay taxes in installments.

What is a potential downside of companies overusing tax credits?

• It can shift the tax burden onto ordinary taxpayers.

• It can make small businesses more competitive.

• It can lead to increased government revenue.

• It can result in more innovation and clean energy adoption.

Which company is mentioned as using the R&D tax credit to significantly reduce its tax bill?

• Apple

• Amazon

• Tesla

• Google

What is accelerated depreciation?

• A way to claim large portions of asset costs early.

• A method to increase the lifespan of company assets.

• A strategy to defer tax payments indefinitely.

• A technique to avoid paying any taxes.

Which industries are noted for benefiting from accelerated depreciation?

• Healthcare and education

• Oil, gas, and tech

• Agriculture and fisheries

• Retail and hospitality

How does profit shifting to tax havens work?

• By moving all company operations to another country.

• By transferring profits to branches in low-tax countries.

• By avoiding all forms of taxation globally.

• By paying taxes in multiple countries simultaneously.

Which company used the 'Double Irish with a Dutch sandwich' strategy?

• Tesla

• Microsoft

• Google

• Amazon

What is a societal impact of profit shifting?

• It increases public trust in corporations.

• It encourages more companies to pay full taxes.

• It reduces government revenue for public services.

• It levels the playing field for small businesses.

What was a goal of the 2017 tax cuts in jobs act?

• To eliminate all corporate taxes.

• To introduce a minimum tax on foreign earnings.

• To increase taxes on small businesses.

• To provide tax credits for all companies.