What is the taxation of repatriated profits?
Taxation of repatriated profits in California is a complex issue that affects businesses of all sizes. Repatriated profits are profits earned by a company outside of the United States that are then brought back to the United States. Depending on certain factors such as the year the profits were earned and the location of the money when it was earned, the taxation of repatriated profits in California can vary. In general, California follows the same tax laws as the Internal Revenue Service. One example is a provision called Subpart F, which determines how companies should treat repatriated profits. Under Subpart F, repatriated profits that were earned in the United States are taxed at the U.S. corporate tax rate of 21%. Additionally, repatriated profits earned abroad by a U.S. company are taxed the same as domestic profits, except that a lower tax rate of 15% is applied on certain passive and active income types. In addition, any repatriated profits that are not regular income may also be subject to certain state income taxes in California. Specifically, California taxes repatriated profits as any other income. Depending on the cell type, an additional 3.33% tax may be applied. Overall, the taxation of repatriated profits in California is a complicated process that is subject to many factors. For the most up-to-date information, businesses should consult a qualified tax expert or accountant.
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