Question: Tax-Haven Subsidiary. Answer the following questions:
a. What is meant by the term "tax haven"?
b. What are the desired characteristics for a country if it expects to be used as a tax haven?
c. Identify five tax havens.
d. What are the advantages leading an MNE to use a tax-haven subsidiary?
e. What are the potential distortions of an MNE's taxable income that are opposed by tax authorities in non-tax-haven countries?