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Unit 14: Management Control of MNC’s
Sukhpreet Kaur, Lovely Professional University

Unit 14: Management Control of MNC’s Notes

CONTENTS
Objectives
Introduction
14.1 International Taxation

14.1.1 Income Tax
14.1.2 Withholding Tax
14.1.3 Value Added Tax
14.1.4 Worldwide Taxation
14.1.5 Territorial Taxation

14.1.6 Foreign Tax Credits
14.2 Alternative Organisation Structures to Plan Tax Liabilities
14.2.1 Branch and Subsidiary Income
14.3 Transfer Pricing – Payments to and from Foreign Affiliates
14.3.1 Tax Haven
14.3.2 Fronting Loans

14.3.3 Tax Treaties: The Elimination of Double Taxation
14.4 Control Strategies
14.4.1 Planning
14.4.2 Organisation Structure
14.5 Matrix Organization Structure and the Multinational Firm

14.5.1 Location of Decision-making
14.5.2 Control in the Internationalization Process
14.6 Exchange Risk Management
14.6.1 How Distinguished from Business Risk
14.6.2 Defining Exposure and Risk
14.6.3 Transaction Exposure
14.6.4 Translation Exposure

14.6.5 Operating Exposure (also known as Economic Exposure)
14.6.6 Strategic Exposure
14.6.7 Management of Exchange Risk
14.7 Summary
14.8 Keywords

14.9 Review Questions
14.10 Further Readings

LOVELY PROFESSIONAL UNIVERSITY 255