Payroll taxes, income taxes on the employees, property taxes, and VAT on the employee's spending. Just saying generally that it's fine to have a business with e

Payroll taxes, income taxes on the employees, property taxes, and VAT on the employee's spending. Just saying generally that it's fine to have a business with employees in a jurisdiction even if the company is doing business elsewhere. Outside of this context, it's also a net win for the state if the business operates, employs people, and pays above said taxes, but doesn't manage to turn a profit provided it is a continuing operation. Now, all that said, I don't think subsidiaries should be able to use licensing agreements and other loopholes to move revenue to eliminate profit and reduce corporate tax. To me the solution is just to disallow any movement money related to intangibles (payments or license fees) unless the exchange is a bona fide transaction between unrelated parties. These subsidiaries in different jurisdictions are all entities owned by the same holding co's. It's like selling your brother a house for $1 (or more like the use of your last name for $1 Billion).