How do governments assess repatriated profits for taxation?

When a foreign company brings profits earned abroad back to their domestic country, this is known as repatriation. Governments assess repatriated profits for taxation in order to generate revenue to support domestic programs and services. In New Hampshire, the process for assessing taxes on repatriated profits is relatively straightforward. The company must first file a U.S. federal income tax return, and provide evidence of how much profit they earned abroad. From there, the company must calculate the foreign tax rate paid, and determine the applicable U.S. tax rate. The difference between the two is the repatriation tax and this must be paid to Uncle Sam. The repatriation tax can be paid in one of two ways - either up-front, or spread over a number of years. If the company chooses the former, they pay the full amount up-front and are allowed a deduction equivalent to the foreign tax rate paid. If the company chooses the latter, they pay the repatriation tax in installments over a set period of time, but are not allowed a deduction. By assessing repatriated profits for taxation, governments are able to generate revenue to fund domestic programs and services, while ensuring that foreign companies are in compliance with U.S. tax laws. It is important to note however, that in order to ensure compliance, the U.S. government also imposes a variety of other taxes and penalties on repatriated profits.

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How do governments assess repatriated profits for taxation?

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