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Because of different service and intellectual property agreements between different subsidiaries of the company, the subsidiaries almost never generate substanc
by tomp 11y ago
Because of different service and intellectual property agreements between different subsidiaries of the company, the subsidiaries almost never generate substancial (accounting) profit.
IMO, that's perfectly fair. E.g. Apple isn't generating profit in the UK; it's generating sales in the UK (which are taxed as all sales are), but most of its profit was generated in the US (design, research, strategy, innovation, ...). I think it's a huge problem that the US doesn't force companies to pay tax on profits.
- 3pt14159 11y agoThat isn't exactly profit. As long as things are sold at realistic prices (ie, bulk iPhones are sold to the subsidiary at the same price they would be sold to a domestic buyer) then it should all be fine. It generally works out for multinationals headquartered in Canada, but granted there are far fewer tax loopholes here.