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We do, no other country makes companies pay taxes on income earned outside their domicile. It's supposed to be taxed by the country where it's earned. That said

We do, no other country makes companies pay taxes on income earned outside their domicile. It's supposed to be taxed by the country where it's earned. That said, this double dutch or whatever is taking things to an extreme.

DanBC 11y ago
Google doesn't pay income in England on stuff they sell, because they claim the tax is due in the US where the IP (search, ad sense) is created. They then don't pay the tax in the US because something something.
- toast0 11y ago
  > Google doesn't pay income in England on stuff they sell If you'd like them to pay tax on what they sell, then you should be charging a sales tax, a value added tax, or a receipts tax, not an income tax.
  - DanBC 11y ago
    VAT is paid by the consumer, not by the seller.
    - deleted 11y ago
      [deleted]
    - icebraining 11y ago
      Technically, yes. In practice, what difference does that make beyond making ecommerce sales rates vary?
- justincormack 11y ago
  No they say the tax for European sales is due in Bermuda, which owns the IP. There is no tax in Bermuda, and no IP was created there.
  - sokoloff 11y ago
    As a Bermuda company, I could invest in sub-contract software engineers who create IP as a work made for hire (and that the Bermuda company would own). In that case, was the IP created in Bermuda or where the software engineers were pressing keys? In a case where the IP was created in country X and later sold to a company in country Y, is country X owed a continuing taxation revenue stream after the sale closes (and any taxes due related to the sale are paid/accounted for)?
WWLink 11y ago
I think the way the sandwich works is the US entity pays huge royalties to the foreign entity for the use of their intellectual property. I might be wrong, but I think that's how it works, and if it is, that means a lot of the money is not "earned outside their domicile" quite as much as you'd think.
_delirium 11y ago
Interestingly the U.S. does make natural persons pay tax on income earned outside their domicile. U.S. residents (of any citizenship) have to pay U.S. tax on their worldwide income, and U.S. citizens do even if nonresident. Foreign taxes paid can be taken as a tax credit, to avoid double-taxation, but you can't escape U.S. taxation by booking your income in a lower-tax jurisdiction.
- loeg 11y ago
  Yeah, and this is weird. Most countries do not do this.
  - _delirium 11y ago
    It's unusual to tax non-resident citizens (the U.S. is almost unique there), but it's common to tax foreign income of residents. For example, the UK also taxes residents on their worldwide income: https://www.gov.uk/tax-foreign-income/overview https://www.gov.uk/tax-foreign-income/overview
littletimmy 11y ago
To be fair, in no other civilized country can you exploit people like you can in the US (no paid leave, right-to-work laws), or have the government enforce your profits (TPP). Why shouldn't corporations be required to pay more for the privilege of being in a corporate-friendly state?

DanBC 11y ago

Google doesn't pay income in England on stuff they sell, because they claim the tax is due in the US where the IP (search, ad sense) is created. They then don't pay the tax in the US because something something.

toast0 11y ago
> Google doesn't pay income in England on stuff they sell If you'd like them to pay tax on what they sell, then you should be charging a sales tax, a value added tax, or a receipts tax, not an income tax.
- DanBC 11y ago
  VAT is paid by the consumer, not by the seller.
  - deleted 11y ago
    [deleted]
  - icebraining 11y ago
    Technically, yes. In practice, what difference does that make beyond making ecommerce sales rates vary?
justincormack 11y ago
No they say the tax for European sales is due in Bermuda, which owns the IP. There is no tax in Bermuda, and no IP was created there.
- sokoloff 11y ago
  As a Bermuda company, I could invest in sub-contract software engineers who create IP as a work made for hire (and that the Bermuda company would own). In that case, was the IP created in Bermuda or where the software engineers were pressing keys? In a case where the IP was created in country X and later sold to a company in country Y, is country X owed a continuing taxation revenue stream after the sale closes (and any taxes due related to the sale are paid/accounted for)?

WWLink 11y ago

I think the way the sandwich works is the US entity pays huge royalties to the foreign entity for the use of their intellectual property. I might be wrong, but I think that's how it works, and if it is, that means a lot of the money is not "earned outside their domicile" quite as much as you'd think.

_delirium 11y ago

Interestingly the U.S. does make natural persons pay tax on income earned outside their domicile. U.S. residents (of any citizenship) have to pay U.S. tax on their worldwide income, and U.S. citizens do even if nonresident. Foreign taxes paid can be taken as a tax credit, to avoid double-taxation, but you can't escape U.S. taxation by booking your income in a lower-tax jurisdiction.

loeg 11y ago
Yeah, and this is weird. Most countries do not do this.
- _delirium 11y ago
  It's unusual to tax non-resident citizens (the U.S. is almost unique there), but it's common to tax foreign income of residents. For example, the UK also taxes residents on their worldwide income: https://www.gov.uk/tax-foreign-income/overview https://www.gov.uk/tax-foreign-income/overview

littletimmy 11y ago

To be fair, in no other civilized country can you exploit people like you can in the US (no paid leave, right-to-work laws), or have the government enforce your profits (TPP). Why shouldn't corporations be required to pay more for the privilege of being in a corporate-friendly state?