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What about the salesman in Europe ? Or you consider that code is the only value in a company?

• derriz 9y ago
  I’m on my phone now so excuse sloppiness in my reply. Also I’m the very opposite of a tax lawyer but my understanding is that the salesman’s added value is determined by transfer pricing rules. It works as if he bought the good or service from the Californian developers at a certain price. The profit is then calculated in each country deducting local costs and taxed accordingly in each country. The tricky bit is in agreeing the transfer price but there are decades of complex internationally agreed rules to determine a price if the transfer isn’t at “arms length” - for example between related subsidiaries. The picture is muddied by the weird US tax rule that allows companies to defer paying their US split of the corporation tax by keeping the cash out of the US. But the tax is due - this is why the US authorities were aghast at the EU’s Apple ruling. It was viewed as a European raid on money that was theirs (the US government’s) to tax.