Running Head: Multinational Firms Name University Course Tutor Date Introduction The United States federal government imposes income tax on individuals and corporate that generate income within the United States and outside the United States. This follows from the nature of the taxation system that has been adapted in the United States that stretches to reach the United States citizens generating income outside the United States. The federal government, through the Internal Revenue Service (IRS), it applies a progressive tax on the taxable income. The taxable entities include individual persons residing in the United States both citizens and non citizens, and the American citizens who are generating income outside the country. The other entities that are liable to pay income tax include the partnerships, both limited and unlimited companies, corporations, trusts and estates. Income tax policies in the US can be traced back to 1890`s under the United States Constitution, that is, Article one, section 1., as given in clause one. This was during the time of the civil war. At the current times, the income tax provisions are contained in the United States constitution and also provisions that are given in the Internal Revenue Service Code. The Internal Revenue Service is the agency that is responsible for the US tax income collection and also the enforcing of the taxation rules. The main aim of the rules is to define the scope of taxation and the also ensure that there are minimum tax evasion cases reported in the United States. Tax Considerations of Doing Business in Puerto Rico In Puerto Rico, a company is regarded domestic firm in the case that it is governed by laws in Puerto Rico and when governed by laws from anther country it is viewed as foreign company. In this case, taxation is carried out based on its global income. In addition, a company uses the calendar or financial year in computing its tax. A company is taxed a constant rate of 22%. Surta...