Theta Corporation is a U$.$S$.$ based multinational firm in the electronics industry. It has wholly

owned subsidiaries in Ireland, where sales and profits for the world outside of the U$.$S are

booked, and in Bermuda, which owns the intellectual property rights for the technology used in

Omega products. Below are the tax rates applicable in each country.

U$.$S$.$ basic corporate tax rate: $21\%$

Tax on declared dividends of a foreign subsidiary: $0\%$

Tax on undeclared foreign earnings: $21\%$ with credit for foreign taxes paid

Tax on intangible income $($GILTI$)$: $13\mathrm{.}125\%$

Irish corporate tax rate: $12\mathrm{.}5\%$

Bermuda corporate tax rate: $0\%$

In $2020$ Theta Corp. reported these operating profits for its foreign subsidiaries:

Ireland: $$6$ b with half declared as dividends

Bermuda: $$5$ b with no dividends declared

a$.$ What would be Theta$$s U$.$S$.$ tax liability and effective tax rate on this foreign source income?

B$.$ If the Irish subsidiary declared $100\%$ of its profits as dividends, what would be the U$.$S$.$ tax

liability and effective tax rate?Theta Corporation is a U$.$S$.$ based multinational firm in the electronics industry. It has wholly

owned subsidiaries in Ireland, where sales and profits for the world outside of the U$.$S are

booked, and in Bermuda, which owns the intellectual property rights for the technology used in

Omega products. Below are the tax rates applicable in each country.

U$.$S$.$ basic corporate tax rate: $21\%$

Tax on declared dividends of a foreign subsidiary: $0\%$

Tax on undeclared foreign earnings: $21\%$ with credit for foreign taxes paid

Tax on intangible income $($GILTI$)$: $13\mathrm{.}125\%$

Irish corporate tax rate: $12\mathrm{.}5\%$

Bermuda corporate tax rate: $0\%$

In $2020$ Theta Corp. reported these operating profits for its foreign subsidiaries:

Ireland: $$6$ b with half declared as dividends

Bermuda: $$5$ b with no dividends declared

a$.$ What would be Theta$$s U$.$S$.$ tax liability and effective tax rate on this foreign source income?

B$.$ If the Irish subsidiary declared $100\%$ of its profits as dividends, what would be the U$.$S$.$ tax

liability and effective tax rate?