LearCo, a non-U.S. conglomerate, generates $4 billion in gross receipts annually. Its U.S. subsidiary, KingCo, accounts for $750 million of the annual gross receipts (and its average annual gross receipts for the last three years is $820 million). KingCo generates U.S. taxable income income of $180 million, after deducting a $350 million management fee that it pays to LearCo. KingCo reports no U.S. tax credits. The corporate income tax rate in LearCo’s country is 14%.

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What are the tax implications (if any) of this arrangement?