3 ms·

I don't see what is not realistic about it. We are talking about things which are incredibly difficult to value because there is no market for them to set a com

I don't see what is not realistic about it. We are talking about things which are incredibly difficult to value because there is no market for them to set a competitive price. In your Apple example the most productive employees are all in the US not island nations. If the money is being held by on overseas subsidiary then Apple can't use the money as it otherwise would if it could freely cross borders.

mariozivic 9y ago
There was an article exlaining how they get that money back in U.S. tax-free. Something along the lines of geting a loan from the bank against deposit by their pardise subsidiary. Also, the money owned by the subsidiary is allegedly in NY bansk, not some small paradise banks.
- hippich 9y ago
  I do not see how that would work. Do you imply loan is getting foreclosed at some point and bank takes collateral from the offshore bank? In that case US subsidiary will pay full-rate income tax on the foreclosed amount..
  - mariozivic 9y ago
    Unfortunately, I cannot find that article. IIRC, the loan never gets foreclosed. It's like the bank is receiving an interest as a fee for the service of tax-free repatriation. If I had time to analyze this further, I would take top 5 tech companies I compare their long term debts with their off-shore holdings (or estimates if not available).
- mercutio2 9y ago
  Where money is domiciled is orthogonal to what currency or bank the money is held in. Similarly, the ability to borrow against assets which are domiciled in a different country is pretty much how international banking works, not a loophole. The US created this quagmire by choosing (unlike all other modern countries) to tax profits in all territories. Then they combined this with only taxing the profits when they're repatriated. This legislative own-goal is the root of the problem, it seems to me.

3 ms·

I don't see what is not realistic about it. We are talking about things which are incredibly difficult to value because there is no market for them to set a com

by sseveran 9y ago

mariozivic 9y ago
There was an article exlaining how they get that money back in U.S. tax-free. Something along the lines of geting a loan from the bank against deposit by their pardise subsidiary. Also, the money owned by the subsidiary is allegedly in NY bansk, not some small paradise banks.
- hippich 9y ago
  I do not see how that would work. Do you imply loan is getting foreclosed at some point and bank takes collateral from the offshore bank? In that case US subsidiary will pay full-rate income tax on the foreclosed amount..
  - mariozivic 9y ago
    Unfortunately, I cannot find that article. IIRC, the loan never gets foreclosed. It's like the bank is receiving an interest as a fee for the service of tax-free repatriation. If I had time to analyze this further, I would take top 5 tech companies I compare their long term debts with their off-shore holdings (or estimates if not available).
- mercutio2 9y ago
  Where money is domiciled is orthogonal to what currency or bank the money is held in. Similarly, the ability to borrow against assets which are domiciled in a different country is pretty much how international banking works, not a loophole. The US created this quagmire by choosing (unlike all other modern countries) to tax profits in all territories. Then they combined this with only taxing the profits when they're repatriated. This legislative own-goal is the root of the problem, it seems to me.