Knock-on effects of tax planning shifts

Multiple-choice questions. In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please reread the article before attempting the questions again.

How much is the OECD's initiative to tax country-level income of the largest multinational companies at the minimum rate forecast to increase governmental tax take?

USD220bn a year

USD220m a year

USD2.2bn a year

USD22bn a year

How is the EBIT financial performance metric used by companies?

Both internally for evaluating performance and externally for tax calculations

Externally, for local tax calculations

None of the other answers

Internally, for evaluating the performance of affiliate managers

Which of the following statements is true? Statement 1, affiliates' financial targets are ideally set after income-shifting activities have already been incorporated into their income, or Statement 2, using EBIT internally will help to prevent inflated targets

Neither statement

Statement 2

Statement 1

Both statements

Which of the following countries has a corporate tax rate of 25 per cent?

Germany

None of the other answers

Ireland

France

Which of the following statements is true? Statement 1, within a performance assessment system, once affiliate-level targets are approved, they are rarely modified, or Statement 2, limited information flows from the tax group to the assessment group make it difficult to modify targets

Statement 2

Statement 1

Both statements

Neither statement

According to the authors' research, which jurisdictions report higher EBIT on average?

High-tax jurisdictions

Low-tax jurisdictions

The level of tax makes no difference

The research did not consider the level of EBIT

What could happen if affiliate targets are not adapted when tax plans change?

None of the other answers

Managers in countries with reduced income shifting will be penalised for not reaching targets

Managers in countries with reduced income shifting might artificially inflate local earnings to reach targets

Managers in countries with reduced income shifting might artificially deflate local earnings to reach targets

How many jurisdictions are implementing the OECD's initiative to tax the largest multinational companies at a minimum rate globally?

Around 22

Around 155

Around 220

Around 55

Where did the researchers in the study draw their affiliate data from?

OECD member countries

Multinational companies headquartered in France with affiliates in Ireland

European countries

US multinational companies

Which of the following statements is correct? Statement 1, the types of internal reporting decisions studied contributed to overall earnings management, or Statement 2, the types of internal reporting decisions studied were eliminated with consolidation

Both statements

Statement 2

Neither statement

Statement 1

1 Unit

Knock-on effects of tax planning shifts

How much is the OECD's initiative to tax country-level income of the largest multinational companies at the minimum rate forecast to increase governmental tax take?

How is the EBIT financial performance metric used by companies?

Which of the following statements is true? Statement 1, affiliates' financial targets are ideally set after income-shifting activities have already been incorporated into their income, or Statement 2, using EBIT internally will help to prevent inflated targets

Which of the following countries has a corporate tax rate of 25 per cent?

Which of the following statements is true? Statement 1, within a performance assessment system, once affiliate-level targets are approved, they are rarely modified, or Statement 2, limited information flows from the tax group to the assessment group make it difficult to modify targets

According to the authors' research, which jurisdictions report higher EBIT on average?

What could happen if affiliate targets are not adapted when tax plans change?

How many jurisdictions are implementing the OECD's initiative to tax the largest multinational companies at a minimum rate globally?

Where did the researchers in the study draw their affiliate data from?

Which of the following statements is correct? Statement 1, the types of internal reporting decisions studied contributed to overall earnings management, or Statement 2, the types of internal reporting decisions studied were eliminated with consolidation

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