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AFP CTP Question # 305 Topic 31 Discussion

CTP Exam Topic 31 Question 305 Discussion:
Question #: 305
Topic #: 31

A multinational corporation has a successful subsidiary in a country that taxes cross-border dividend payments at 72%. Collections on accounts receivable average 90% per month, and the average rate on local government bond investments is 2.5%. What would be the BEST method for the company to repatriate local profits?

A.

The company charges the subsidiary negotiated licensing fees on proprietary software.

B.

The subsidiary sets up a re-invoicing center in another, tax-friendly country to manage a transfer pricing program.

C.

The subsidiary lends funds to the parent. The loan is not repaid and the subsidiary writes it off.

D.

Set up an in-house bank program at the successful subsidiary to make use of the excess liquidity in-country.

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Actual exam question for AFP CTP exam by Onyx1066 at Apr 27, 2026, 6:30:17 AM

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