China
Africa
Explore chapters and articles related to this topic
Identifying, analysing and managing construction project risk
Published in J.C. Edison, Infrastructure Development and Construction Management, 2020
Changes in the economic environment of a host country, e.g. changes in inflation, exchange rates, tax rates and tax regimes, have direct effects on the profitability of project exporters. High inflation rates reduce the attractiveness of foreign investment owing to a country’s currency depreciation on the foreign exchange market and have an effect on cost overruns in construction projects (Zhi, 1995; Gunhan and Arditi, 2005) and can cause financial and payment-related risks of currency exposure for foreign investors (Han and Diekmann, 2001; Hastak and Shaked, 2000). Tax rate changes have a direct and immediate financial impact. Firms often have to pay taxes both to the host country and to their parent country owing to the tax regimes of the host country (Kapila and Hendrickson, 2001). Sharply decreasing GDP causes a crisis for the local economy which affects the performance of international contracting companies (Zhi, 1995).
Engineering entrepreneurship
Published in Riadh Habash, Green Engineering, 2017
As discussed in Chapter 4, policies provide guidance for the implementation of government programs. They guide the thinking of government in the execution of programs and define its objective. Among the most successful strategies for encouraging entrepreneurship and small business, are changes in tax and regulatory policies, access to capital, and the legal protection of property rights. Tax mechanisms including tax rate reductions, tax credits for investment and education, and tax deductions for businesses are all proven approaches for encouraging business growth.
*
Published in Barney L. Capehart, Wayne C. Turner, William J. Kennedy, Guide to Energy Management, 2020
Barney L. Capehart, Wayne C. Turner, William J. Kennedy
Federal taxes are determined based on a tax rate multiplied by a taxable income. The tax rate depends on the corporation’s income range, and varies from 15% to 39% of taxable income (as of December 2010). Taxable income is calculated by subtracting allowable deductions from gross income. Allowable deductions include salaries and wages, materials, interest payments, and depreciation, as well as other “costs of doing business.”
Inventory control under corporate income tax and accrual accounting
Published in IISE Transactions, 2023
First, a tax function is characterized by its tax base (i.e., the amount of taxable income to which a tax rate is applied), tax rate, and how the tax rate varies with the tax base (Krugman and Wells, 2017). Although tax structure varies across countries (see, e.g., Deloitte, 2018), it can be classified as being progressive, proportional, or regressive in general. In a progressive tax system (e.g., France, Brazil and India), the tax rate increases as the taxable income increases. Progressive tax is most commonly adopted worldwide and is often justified by the ability-to-pay principle. In a proportional or flat-rate tax system (e.g., Hong Kong, Australia and now US), the tax rate is fixed, with no change as the amount of taxable income increases or decreases. Since a firm does not pay tax when the taxable income is negative (i.e., the firm incurs a loss), the proportional tax is a piecewise linear and convex function of the taxable income. The tax function convexity provides incentives for firms to reduce the variation of taxable income in order to reduce expected tax liabilities (see, e.g., Smith and Stulz, 1985; Graham and Smith, 1999).
Modeling international facility location under uncertainty: A review, analysis, and insights
Published in IISE Transactions, 2018
Mouna Kchaou Boujelben, Youssef Boulaksil
With globalization, the need for facility location models has become more and more evident, due to the increasing complexity of supply chains. Different regulations, financial conditions, and political situations make it difficult to make the right decisions on where to locate. These new features related to the international context have not received sufficient attention considering that multinational companies face the challenge of where to locate new facilities in an international context (a summary of these features is proposed in MacCarthy and Atthirawong (2003)). Obviously, not all international factors can be easily modeled (Schmidt and Wilhelm, 2000), but many of them can be incorporated in models in order to account for any impact on the strategic location decisions. One of the international factors that should be considered is the tax rate, which might significantly vary from one country to another. In this category, we distinguish two main types of taxes: the corporate income tax and the tariff rate. The corporate income tax is the tax required by governments when the company makes profit and is often paid on a yearly basis. The tariff rate is charged whenever products are imported; it is used by governments not only as a source of revenue but also as a protection mechanism for local companies. Another international factor that may be important when designing a supply chain network is the currency exchange rate. Many costs have to be paid in local currencies and must be converted to the currency of the home country when calculating the consolidated profit. High variations in exchange rates can have a significant impact on total costs; hence, integrating this parameter in international facility location models is crucial. On the other hand, multinational companies should also consider the transfer prices (Vidal and Goetschalckx, 2001) and the incentives offered by governments when defining their international strategies. Examples of incentives are cash grants, free land, loans with reduced interest rates, etc. The transfer price is the purchase price of products when the transaction occurs between two affiliates of the same company. It is fixed by the mother company but should be carefully selected in order to minimize tax payments in the countries of location.