Unit 7 Discussion
Sometimes companies move their corporate headquarters out of their home countries to countries with more favorable tax treatment. Which duty do you believe is higher, the duty of corporations to pay tax to government or the duty of corporations to pay dividends to shareholders?
I believe that corporations have the duty to pay dividends to the shareholders. Corporations incur in double taxation; therefore, the government will tax the corporations since the taxing authorities consider the entity as taxable persons. The corporations will pay federal, state, and local tax based on the net income. Then, when the shareholders get their dividends from the corporate profit, the shareholder’s dividends will be taxed again. Some corporations
Sometimes companies move their corporate headquarters out of their home countries to countries with more favorable tax treatment. Which duty do you believe is higher, the duty of corporations to pay tax to government or the duty of corporations to pay dividends to shareholders?
I believe that corporations have the duty to pay dividends to the shareholders. Corporations incur in double taxation; therefore, the government will tax the corporations since the taxing authorities consider the entity as taxable persons. The corporations will pay federal, state, and local tax based on the net income. Then, when the shareholders get their dividends from the corporate profit, the shareholder’s dividends will be taxed again. Some corporations