18. Daisan Company is in the process of deciding where to establish a European manufacturing operation: France, Spain, or Sweden. Daisan's home country does not have a tax treaty with any of these countries. Regardless of location, the operation is expected to generate pretax income of 1 million euros annually. The operation will distribute 100 percent of its after-tax income to Daisan Company as a dividend each year. Required: a. Using the information on effective income tax rates and withholding tax rates provided in Exhibits 8.1 and 8.3, determine the net amount of dividend that Daisan would receive annually from an investment in each of these three countries. b. If maximizing after-tax dividends is the sole criterion, in which of the three countries should Daisan locate its European operation? EXHIBIT 8.1 International Corporate Tax Rates, 2017 Country Effective Tax Rate (%) Country Effective Tax Rate (%) Argentina 35 Italy 24 Australia 30 Japan 30.860 Austria 25 Korea (South) 22 Belgium 33.99 Malaysia 24 Brazil 34a Mexico 30 Canada 26.5b Netherlands 25 Chile 25.5 New Zealand 28 China 25 Russia 20 Czech Republic 19 Singapore 17 Denmark 22 Spain 25 France 33.33 Sweden 22 Germany 29.79 Switzerland 17.77 Greece 30 Taiwan 17 Hong Kong 16.5 Thailand 20 Hungary 9 Turkey 20 India 30 United Kingdom 19 Indonesia 25 United States 40f Ireland 12.5 Venezuela 34 Israel 24 Global Average 24.25 EXHIBIT 8.3 Nontreaty Withholding Rates in Selected Countries, 2017 Country Dividends Interest Royalties Australia 30% 10% 30% Austria 27.5 27.5 20 Brazil 0 15 15 Canada 25 25 25 Chile 35 35 30 France 30 0 33.33 Germany 25 0 15 Hong Kong 0 0 4.95 Hungary 0 0 0 India 0 20 10 Indonesia 20 20 20 Italy 26 26 30 Japan 20 20 20 Malaysia 0 15 10 Mexico 10 35 35 New Zealand 0 15 15 Philippines 15 20 30 Russia 15 20 20 Singapore 0 15 10 South Korea 20 20 20 Spain 19 19 24 Sweden 30 0 0 Switzerland 35 0 0 Taiwan 20 20 20 Thailand 10 15 15 United Kingdom 0 20 20 United States 30 30 30