Advance Taxation

Assignment
Name : Muhammad Mohsin
O1-112171-016
BS A&F -7A
Q1. How effective has Peter Vyas been as a front line manager?

Peter Vyas is a very ambitious and tenacious manager who has never given up even if his credibility
was damaged. Peter was able to recruit skilled human resources and encourage his colleagues and
the vice-president to pursue the abandoned project.

Q2. How effective has Cynthia Jackson been as a division vice President at ART.

Cynthia Jackson was highly effective in her role as ART division Vice President. She does a very
diligent job of analysing and understanding every detail she is presented. She was very critical of the
proposal that Vyas and his team delivered to her. Jackson looks at situations from not only the
business level, but also at the practical and technical level. She encouraged the team to go back and
review the solution to make sure it addressed overlooked areas such as the resourcefulness and
marketability. She was very careful and articulate in her concerns about the project and made very
good suggestions to Vyas and his team.

Q3. How effective has Vyas managed the global dimensions of his challenge to revive the Filtration
Unit?

Vyas was able to successfully solve global challenges that occurred within the corporation. He
coordinated the third launch of the mini-oxidation system by assembling a single six-person
development team with representatives from various functions located in the United States and
India. When misunderstandings surfaced between team members in the United States and India,
(when the Indian team repeatedly missed design deadlines), Vyas mediated the disagreement by
crafting a compromise that gave the Indian technical team a formal schedule allowing them two
weeks of extra testing time. Vyas utilized multiple resources to ensure the team was fully utilizing
the internal expertise available at the ART.

Q4. Keeping the case study in mind how can one manage the tensions between culture of
innovative learning and a culture of performance and profits?

ART is able to encourage development of innovation and entrepreneurial by investing huge amount
in innovation and giving employees time or half day leave for thinking something innovative.

Q5. Identify the challenges faced by companies across borders

a. As an organization

 Compliance with labor laws.

 Talent acquisition.
  Developing agile leaders.

 Balancing local and home issues.

 Building capability.

 Efficient coordination and collaboration.

 Retaining critical talent.

 Sharing knowledge across borders.

b. Profitability

Setting the price for your products and services can present challenges when doing business
overseas and should be another major consideration of your strategy. You must consider costs to
remain competitive, while still ensuring profit. Researching the prices of direct, local-market
competitors can give you a benchmark, however, it remains essential to ensure the math still works
in your favor. For instance, the cost of production and shipping, labor, marketing, and distribution, as
well as your margin, must be a taken into account for your business to be viable.

c. In terms of taxation

One Of the main legal areas to consider when it comes to doing international business, tax
compliance is perhaps the most crucial. Accounting can present a challenge to multinational
businesses who may be liable for corporation tax abroad. Different tax systems, rates, and
compliance requirements can make the accounting function of a multinational organization
significantly challenging.

Accounting strategy is key to maximizing revenue, and the location where your business is registered
can impact your tax liability. Mitigating the risk of multiple layers of taxation makes good business
sense for any organization trading abroad. Being aware of tax treaties between countries where your
business is trading will help to ensure you’re not paying double taxes unnecessarily.

Q6. How does international market respond to taxes.

International taxation is the study or determination of tax on a person or business subject to the tax
laws of different countries, or the international aspects of an individual country's tax laws as the case
may be. Governments usually limit the scope of their income taxation in some manner territorially or
provide for offsets to taxation relating to extraterritorial income. The manner of limitation generally
takes the form of a territorial, residence-based, or exclusionary system. Some governments have
attempted to mitigate the differing limitations of each of these three broad systems by enacting a
hybrid system with characteristics of two or more

a. What foreign taxes and global taxes will be applicable in ART

Other than research and development tax incentives ART has to file all applicable taxes, as there
are some exemption on R&D while working internationally.

b. Will it be a profitable business in terms of taxation in the foreign market to corporations

There are three main channels that multinationals can use to shift profits out of high-tax countries:
debt shifting, registering intangible assets such as copyright or trademarks in tax havens, and a
technique known as “strategic transfer pricing”.

To see how these channels work, imagine that a multinational is composed of two companies, one
located in a high-tax jurisdiction like Australia (company A) and one located in a low-tax jurisdiction
like Bermuda (company B). Company B is a holding company and fully owns company A.

While both companies should pay tax on the profit they make in their respective countries, one of
the three channels is used to shift profits from the high-tax country (Australia in our case, with a
corporate income tax rate of 30%) to the low-tax country (Bermuda, with a corporate income tax
rate of 0%). For every dollar shifted in this way, the multinational avoids paying 30 cents of tax.