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They also make boatloads of profits. Somehow they argue that those profits are largely happening in the Bermuda's, not in the EU and also not in the US. How con

They also make boatloads of profits. Somehow they argue that those profits are largely happening in the Bermuda's, not in the EU and also not in the US. How convenient for them, that there's no corporate tax in the Bermuda's, and also no transparency. Everyone can see that these are all tax avoidance tricks that may or may not be legal, but they certainly are not based on economic reality, they are not in line with the intentions of law and can't be defended to public opinion. These companies get access to markets, use public infrastructure and get support of the US and EU governments. They should simply pay the taxes where they are due, mostly in the US and also in the EU.

bluecalm 10y ago
Then introduce a tax they will pay. Otherwise you will always be in the business of "how much that investment strategy/brand/trips" to Bermuda were really worth. It's the game that can't be won. It's frustrating to me that this point is missed. I suspect it's because people who write tax law rarely has any meaningful business experience and little understanding of economic reality.
- Maarten88 10y ago
  > It's the game that can't be won. Only as long as countries and politicians don't really try you are right. Giving up on trying to make corporations pay taxes they should pay because "you can't win" seems like a very weak way to handle this. Corporations will immediately start discussing income tax or VAT and invent avoidance schemes on that, playing countries against each other, and that game also can't be won. There's no end. The big economic regions like EU and US should completely stop accepting all these transfer pricing and IP deals, and tax these multinational companies on something that is based on the profit that they report to their shareholders, divided by the approximate regional share of the company's total market.
caminante 10y ago
Insurance companies keep re-domiciling to Bermuda and Ireland. Hedge funds have preserved material gains via Bermudan tax laws for years. They park money in Bermudan insurance companies whose investment arms manage the funds, while deferring tax payment on trading profits. Eye-opening to learn about...
coredog64 10y ago
I worked for an employer who used the Bermuda shell corporation trick. To keep the IRS happy they had to actually do some real work in Bermuda -- it wasn't just a PO box. And let me tell you, it probably cost as much as it saved in terms of yahoos doing things suboptimally based on misunderstandings. It might have been something that could be cleared up with frequent trips to Bermuda for business stakeholders, but that would have cost some money too.

bluecalm 10y ago

Then introduce a tax they will pay. Otherwise you will always be in the business of "how much that investment strategy/brand/trips" to Bermuda were really worth. It's the game that can't be won. It's frustrating to me that this point is missed. I suspect it's because people who write tax law rarely has any meaningful business experience and little understanding of economic reality.

Maarten88 10y ago
> It's the game that can't be won. Only as long as countries and politicians don't really try you are right. Giving up on trying to make corporations pay taxes they should pay because "you can't win" seems like a very weak way to handle this. Corporations will immediately start discussing income tax or VAT and invent avoidance schemes on that, playing countries against each other, and that game also can't be won. There's no end. The big economic regions like EU and US should completely stop accepting all these transfer pricing and IP deals, and tax these multinational companies on something that is based on the profit that they report to their shareholders, divided by the approximate regional share of the company's total market.

caminante 10y ago

Insurance companies keep re-domiciling to Bermuda and Ireland. Hedge funds have preserved material gains via Bermudan tax laws for years. They park money in Bermudan insurance companies whose investment arms manage the funds, while deferring tax payment on trading profits. Eye-opening to learn about...

coredog64 10y ago

I worked for an employer who used the Bermuda shell corporation trick. To keep the IRS happy they had to actually do some real work in Bermuda -- it wasn't just a PO box. And let me tell you, it probably cost as much as it saved in terms of yahoos doing things suboptimally based on misunderstandings. It might have been something that could be cleared up with frequent trips to Bermuda for business stakeholders, but that would have cost some money too.