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True or False Quiz
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1
When expanding a business in Canada, it is possible to structure the expansion to obtain the benefit of a separate small business deduction (SBD).
A)True
B)False
2
If a new corporation is used to expand existing business activity, any losses from the new business cannot be immediately used against the profits of the existing business.
A)True
B)False
3
If an expansion crosses provincial borders, the amount of tax paid on the expansion activity profits would be the same whether a division or a new corporation was established.
A)True
B)False
4
The repatriation of the original invested capital results in the same amount of tax under either an internal expansion, or the creation of a subsidiary corporation.
A)True
B)False
5
The foreign tax credit rules always avoid double taxation of the foreign source income.
A)True
B)False
6
The profits of a Canadian corporation selling directly into a foreign market are only taxed in the foreign jurisdiction as business income.
A)True
B)False
7
A storage facility in the United States (US) used by a Canadian corporation (Canco) is deemed to be a permanent establishment and subjects Canco to US tax.
A)True
B)False
8
If a Canadian corporation maintains a foreign branch, it would pay foreign taxes on the income generated by the branch and also pay taxes in Canada on its world income which would include the branch's income.
A)True
B)False
9
If foreign branch income is taxed at 30% in the foreign jurisdiction, and the Canadian corporation is taxed at 40% in Canada, the corporation would pay less overall tax because of its foreign operations.
A)True
B)False
10
Intercompany transfer prices should be based on the cost of the product plus an appropriate profit margin.
A)True
B)False





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