Check Your Understanding
1. Which of the following is an example of an international accounting standard?
(a) GAAP (b) IFRS
(c) ISA (d) SEC
2. Which of the following is not a major component of international taxation?
(a) Income tax treaties
(b) Transfer pricing
(c) Value-added tax (VAT)
(d) Generally Accepted Accounting Principles (GAAP)
3. Which of the following is an example of an international tax treaty?
(a) NAFTA
(b) EU Directive
(c) OECD Model Convention
(d) ASEAN Free Trade Agreement
4. Which of the following is not a common method of resolving international tax
disputes?
(a) Arbitration (b) Litigation
(c) Mediation (d) Negotiation
5. Which of the following is a common method of avoiding double taxation in
international taxation?
(a) Transfer pricing (b) Tax treaties
(c) Tax havens (d) Foreign tax credits
6. Which of the following is an example of an Indian accounting standard?
(a) GAAP (b) IFRS
(c) ISA (d) AS
What is the primary role of the Institute of Chartered Accountants of India (ICAI)? Notes
(a) To develop and maintain accounting standards in India
(b) To regulate the accounting profession in India
(c) To provide training and education to aspiring accountants in India
(d) All of the above
8. Which of the following is not a major component of Indian GAAP?
(a) Accounting Standards
(b) Companies Act, 2013
(c) Securities and Exchange Board of India (SEBI) regulations
(d) International Financial Reporting Standards (IFRS)
9. What is the tax residency status of a foreign company in India?
(a) Non-resident
(b) Resident
(c) Not applicable
(d) Depends on the duration of its stay in India
10. What is the tax rate applicable to foreign companies for income earned in India?
(a) 30% (b) 40%
(c) 50% (d) 20%
11. Which of the following is an example of a tax haven country?
(a) Germany (b) Switzerland
(c) Japan (d) China
12. What is the tax rate applicable to royalties and fees for technical services paid
by an Indian company to a foreign company?
(a) 10% (b) 15%
(c) 20% (d) 25%
13. Which of the following taxes are applicable to a foreign company doing business
in India?
(a) Income tax (b) Goods and Services Tax (GST)
(c) Both (a) and (b) (d) None of the above
14. What is the withholding tax rate for interest paid by an Indian company to a
foreign company?
(a) 10% (b) 15%
(c) 20% (d) 30%
15. What does IAS stand for?
(a) International Accounting Standards
(b) International Financial Reporting Standards
(c) International Standards on Auditing
(d) International Standards of Accounting
16. Which of the following organisations sets IAS?
(a) International Accounting Standards Board (IASB)
(b) International Auditing and Assurance Standards Board (IAASB)
(c) International Federation of Accountants (IFAC)
(d) International Financial Reporting Standards Foundation (IFRSF)
17. Which of the following is an example of an asset that is not recognised under
IFRS?
(a) Goodwill (b) Trademarks
(c) Patents (d) Development costs
18. What is the purpose of transfer pricing?
(a) To reduce taxes paid by a company
(b) To increase profits of a company
(c) To comply with tax laws and regulations
(d) To ensure fairness and accuracy in pricing between related parties
19. What is a tax haven?
(a) A country with low tax rates
(b) A country with high tax rates
(c) A country with strict tax laws
(d) A country with a large economy
20. Which of the following is not a common tax haven?
(a) Switzerland (b) Ireland
(c) Cayman Islands (d) Bermuda
Answer
1.(b) 11. (b)
2. (d) 12. (b)
3. (c) 13. (c)
4. (b) 14. (a)
5. (d). 15. (a)
6. (d) 16. (a)
7. (d). 17. (d)
8. (d). 18. (d)
9. (a) 19. (a)
10. (a). 20. (b)
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