This question is about taxation.

5. Company X is a tax resident in Country A, where the corporate income tax rate is 20%. It operates a branch in Country B, where the branch income is subject to corporate income tax rate at 30%. Company X derives $1,000 of profits in Country A and its branch derives $500 of profits in Country B. Required: Calculate (1) total tax paid (i.e. tax in Country A & B) and (2) effective tax rate (i.e. total tax/profits in A & B) with the following methods. Deduction method Exemption method Credit method Show your workings logically to arrive answers