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Most companies have negative profit. All the revenue is offset against r&d and expansion
by ganeshkrishnan 9y ago
Most companies have negative profit. All the revenue is offset against r&d and expansion
- themihai 9y agoyeah...they are non-profit right? :)) Let's take Amazon for example, or Google or Facebook...how much do they invest in R&D? Last time I've checked they reported billions in profit every quarter.
- laurencerowe 9y agoAmazon is notorious for reporting approximately zero profit.
- themihai 9y agoyou are right.. I got it wrong with Amazon but I don't think it's the case with FB and many others
- tonyedgecombe 9y agoThe problem they are trying to resolve is companies shifting the profit to another country with lower corporation tax.
- ganeshkrishnan 9y agoProfits are always shifted legally. For example Google Australia is separate entity from Google Ireland. What Google au might do is 'lease' trademarks, copyrights, logo etc from Google Ireland and pay them for it. The amount paid varies year to year but all of it is legal and money this changes countries legally. This is Google au expense that's tax deductible. Also, I chose Ireland as an example because it offers tax concessions to industries ( at least it did in 2006 when I was in the valley)
- saas_co_de 9y ago> Profits are always shifted legally That is highly debatable. Companies and wealthy individuals obtain "legal opinions" from lawyers stating that these schemes are legal, but that is just cover from criminal prosecution. Any government can declare any of these schemes invalid at will and impose any tax they want. Taxation at this level is a complicated business though. These corporations are larger than most of the world's governments and their owners are permanent not elected.
- tonyedgecombe 9y ago>Profits are always shifted legally. That doesn't mean it isn't a problem.