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> you need to actively look for loopholes, and get access to tax lawyers and accountants in order to do something like a 'double-Irish' What is the alternative
by MrPowers 6y ago
> you need to actively look for loopholes, and get access to tax lawyers and accountants in order to do something like a 'double-Irish'
What is the alternative? Multinational companies have to file tax returns in tons of different jurisdictions. Tax authorities are heavily biased and don't agree how transactions should be priced (they always want more tax revenue). Tax authorities often fight over the same profits and double tax.
Listen, I'm not saying that "these poor corporations have it so tough". But complying with tax laws for multinationals is ridiculously complex. And these tax structures are needed to lower the compliance burden.
The compliance burden can be huge for smaller companies. I've seen negotiations for small amounts of profit between tax authorities draw on for years. It's can be a massive cost for smaller multinationals.
Do I think there should be something better, yes. But that feeling goes for the entire tax code. I think the US tax code is garbage. Some other countries are even worse.
- ipaddr 6y agoMultinationals have such a ridiculously complex time complying with the tax code so we should accept that they will create structures to pay little or no taxes? It is only complex because it has been setup that way. If they setup a simple structure they would pay more. So they don't.
- Kalium 6y agoI believe the point the other person is making is that multinational tax compliance is inherently complicated. Moreover, it does not become simple and easy if a company just adopts a simple structure because the forces that drive that complexity are not a result of the complexity of a company's structure.
- randoramax 6y agoThink of it as tax engineering: companies build devices to avoid paying too much taxes. It's a thing, you'd do it too if you had enough money to justify the investment in such engineering :)
- lovecg 6y agoIt sounds like what the other person is saying the primary motivation for this “engineering” is not to save money just because they could, it’s to avoid disputes and compliance risks as much possible (which incidentally results in them saving money). I can’t comment if that’s true or not, but I can easily imagine that this is the situation.