>If you're opening a location in another country, and that location takes X in revenue, the tax should be paid in that country. It all hinges on how "location

>If you're opening a location in another country, and that location takes X in revenue, the tax should be paid in that country. It all hinges on how "location takes x in revenue" is defined. The simplified version of how all these transfer pricing tax avoidance schemes work is this: The good is produced in Country X (e.g., US) then sold to a subsidiary in the tax haven Country Y (e.g., Ireland or some Caribbean Island) for just a tiny amount of profit over cost, and so they owe taxes to Country X on that de minimis profit. The subsidiary in Country Y then sells the good to Country Z (e.g., the rest of the world) for the retail price, and so they earn almost all their profit in Country Y and so pay taxes there, but it's a tax haven so the actual tax rate is minimal. Logic would dictate that the profit should be recognized in the jurisdiction where the good was produced or the one where it was sold to the end customer or some combination of both, but logic does not prevail when it comes to tax law.