5 ms·
>> Startups and small businesses in the United States organized as "S corporations" also pay zero taxes This is a misleading statement. S corporations are pass
by arbuge 11y ago
>> Startups and small businesses in the United States organized as "S corporations" also pay zero taxes
This is a misleading statement. S corporations are pass-through entities. In other words, all profits they make get passed through to their shareholders as income, who then pay taxes on their personal tax returns at their personal income tax rates. So technically the S corp is paying zero taxes, but only because they're being paid elsewhere by the owners.
- winter_blue 11y agoWouldn't the owners/shareholders of companies in countries with low/zero corporate taxes still have to pay taxes on their individual income? So how would this (S Corp) be different from what Albania is offering?
- arbuge 11y agoI am not familiar with Albanian tax laws, so I can't answer that. I would imagine they are not offering pass-through entities though, since those just shift the point of taxation, not remove it.
- winter_blue 11y ago"shift the point of taxation" implies that there is only 1 point of taxation. That's wrong. With regular corporations, there are 2 points of taxation: the owner/shareholder, the corporation. S Corps eliminate the 2nd point of taxation. It doesn't simply "shift" the tax burden, it eliminates an entire additional class of taxes.