4 ms·

Don't many companies pay nothing? IE if my company earns $100k and I pay out $100k in salaries and overhead, there is nothing left to tax as all my expenses we

• camz 15y ago
  Well in this circumstance that's not true because thy aren't paying any tax on more than 95 percent ifthe income because it sits outside the united states jurisdiction in a foreign Corp in the caymans. Until they decide to repatriate the income or bring it back into US territories then it is legal untaxable.
• redsymbol 15y ago
  In the first paragraph, yes the tax due would be zero, in general (certain industries and/or countries could harbor exceptions). The final amount paid is independent of the tax rate on profits, though: if revenues are offset completely by expenses, it doesn't matter if the effective rate is 2.4%, 40% or 90%, it still comes to 0. But you want the former if your company is highly profitable. For your second point, I don't know the specifics in this case. But even if it's just deferring taxes that have to be paid eventually, that can be a huge win, since it lets you collect interest or store funds for an emergency. There are probably other financial benefits too though; maybe someone who knows can comment.