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One problem is that this would effectively distribute tax revenue from a company by the citizenship of the owners (6 and especially 7) but most countries think

One problem is that this would effectively distribute tax revenue from a company by the citizenship of the owners (6 and especially 7) but most countries think they are entitled to some tax revenue from companies operating in their nations even if the company is wholly owned by foreigners.

sudhirj 5y ago
That’s usually the case of any kind of operation, no? If you use the infrastructure and services of a particular country its seems reasonable to pay taxes on your profits there.
- bradleyjg 5y ago
  It does seem like a reasonable principle, which makes abolishing the corporate tax unpersuasive. If there were only a single jurisdiction the argument would be more compelling.
  - zemvpferreira 5y ago
    It certainly isn't impossible for nations to tax foreign individuals operating companies locally without a corporate tax. A way would be: a) similar to KYC laws, make knowing all persons who own part of a company mandatory, regardless of how many structures (corporations, trusts, whatever) you have to go through. b) preemptively tax every individual on profits/salaries/perks/payments from the company at some established rate. c) come tax season, ask for a global income statement from everyone taxed. Adjust their taxes based on whatever bracket they land in.
- magila 5y ago
  Even without a corporate income tax companies would still generate tax income in foreign countries where they sell goods and services, e.g. VAT/sales tax. They would also pay property tax on any physical presence they maintain and probably a myriad of other taxes depending on the country.
  - bradleyjg 5y ago
    While the tax incidence (where the burden lands) of various taxes is a thorny question subject to much debate in the literature I don’t think it’s especially controversial to say that sales, property, and wage taxes are likely to have different incidences than a tax on profits.
TacticalCoder 5y ago
> ... but most countries think they are entitled to some tax revenue from companies operating in their nations even if the company is wholly owned by foreigners. Any individual in the EU buying anything from a foreign company operating in their EU nation pays the VAT on the good or service. That's usually 21% and up to 25%. And that's not on the profits. That's already quite something.

sudhirj 5y ago

That’s usually the case of any kind of operation, no? If you use the infrastructure and services of a particular country its seems reasonable to pay taxes on your profits there.

bradleyjg 5y ago
It does seem like a reasonable principle, which makes abolishing the corporate tax unpersuasive. If there were only a single jurisdiction the argument would be more compelling.
- zemvpferreira 5y ago
  It certainly isn't impossible for nations to tax foreign individuals operating companies locally without a corporate tax. A way would be: a) similar to KYC laws, make knowing all persons who own part of a company mandatory, regardless of how many structures (corporations, trusts, whatever) you have to go through. b) preemptively tax every individual on profits/salaries/perks/payments from the company at some established rate. c) come tax season, ask for a global income statement from everyone taxed. Adjust their taxes based on whatever bracket they land in.
magila 5y ago
Even without a corporate income tax companies would still generate tax income in foreign countries where they sell goods and services, e.g. VAT/sales tax. They would also pay property tax on any physical presence they maintain and probably a myriad of other taxes depending on the country.
- bradleyjg 5y ago
  While the tax incidence (where the burden lands) of various taxes is a thorny question subject to much debate in the literature I don’t think it’s especially controversial to say that sales, property, and wage taxes are likely to have different incidences than a tax on profits.

TacticalCoder 5y ago

> ... but most countries think they are entitled to some tax revenue from companies operating in their nations even if the company is wholly owned by foreigners. Any individual in the EU buying anything from a foreign company operating in their EU nation pays the VAT on the good or service. That's usually 21% and up to 25%. And that's not on the profits. That's already quite something.