4 ms·

I must admit that my knowledge is lacking in this area. Can someone offer a high-level explanation to one of the people who don't understand corporate taxes in

by rocgf 7y ago

I must admit that my knowledge is lacking in this area. Can someone offer a high-level explanation to one of the people who don't understand corporate taxes in the US? As far as my understanding goes, the bulk of taxes are paid on profit (to be more precise, operating income), and not revenue. As far as I understand, big companies do everything possible to make it seem like they are not profitable from an accounting perspective. As an example, this might mean that they'd pay some subsidiary in Ireland, where corporation taxes are smaller. What am I missing?

TomMarius 7y ago
You're missing that Amazon is reinvesting, not hiding profit.
- Beldin 7y ago
  "Margrethe Vestager, the EU commissioner in charge of competition, said Luxembourg’s “illegal tax advantages to Amazon” had allowed almost three-quarters of the company’s profits to go untaxed, allowing it to pay four times less tax than local rivals." https://www.theguardian.com/technology/2017/oct/04/amazon-eu-tax-irish-government-apple https://www.theguardian.com/technology/2017/oct/04/amazon-eu...
  - TomMarius 7y ago
    That is in EU, we're talking about the USA corporation.
    - notacoward 7y ago
      The fact that they're not so neatly distinguishable is very much at the heart of the problem. One of the main ways companies avoid tax is by making it appear that their revenue, profits, and (to a lesser extent) costs are somewhere other than where they really are. Amazon in the US is very much aware of the tax implications of hiring or locating assets in the EU, whether legitimately or as a pure dodge, and depends on the difference.