Page 103 - International Taxation IRS Training Guides

Will
a Company Take Every

Opportunity
to Reduce its ETR?

No!

the benefit, vis-à-vis net earnings,
 Depending on the magnitude of
strategy may lead to a benefit that is not significant enough to
a tax
or EPS
impact ETR

 No change in ETR
doesn’t mean no tax planning

• A tax strategy
could be employed to maintain the prior year
rate such that there will
be no change in ETR
are not solely focused on reducing US tax,
 Note that companies
but also on foreign tax

strategy may not result in a sustained
 Also, a one-time tax
value and may cause a fluctuation in ETR
increase in shareholder
needs to be explained to management and/or Wall Street
that
 Note,
sometimes a company may do things for reasons other than
and those things could decrease ETR for a period
tax benefits

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