ARBUS301 Lecture Notes - Lecture 8: Foreign Exchange Spot, Ethnocentrism, The Confusion
Document Summary
Thus, monetary items such as cash, receivables, and payables are translated at the current exchange rate. Each business in a product"s value chain is required to bill the vat to its customers and pay the tax on its purchases, crediting the amounts paid against the amounts due on its own activities. The net result is a tax on the added value of the good: tax havens are countries hospitable to business and inward investment because of their low corporate income taxes, bahamas, luxembourg, monaco, singapore, and switzerland are examples. Tax havens exist in part because tax systems vary greatly worldwide. Thus, mnes have an incentive to structure their global activities to minimize taxes: mnes take advantage of tax havens either by establishing operations in them or by funneling business transactions through them. Challenges of international human resource management: recruiting, managing, and retaining human resources at a firm with extensive global operations are especially challenging.