4 ms·

So they'll just move to the remaining ~50 countries that didn't

nicoffeine 5y ago
"Alongside a minimum corporate tax rate, the pact includes provisions to ensure that multinational companies pay tax where they generate sales and profits, and not just where they have a physical presence. That could have major ramifications for tech companies such as Google and Amazon, which have amassed vast profits in countries where they pay relatively little tax." I share your skepticism generally, but it seems like this agreement is a good step towards getting corporations to pay taxes. There's no point in starting a shell company in the Caymans if your taxes are paid based on where your products were purchased.
- mr_toad 5y ago
  If I run an .io website selling services to the UK using AWS servers in Singapore and employ coders in India, where exactly do I generate revenue and profit? Sounds like this could devolve into record-industry accounting.
  - nicoffeine 5y ago
    In the postcode of the card used to purchase the services.
    - mr_toad 5y ago
      So if I was previously incorporated in the US, and paying taxes in the US, does anyone think that the IRS, and more importantly Congress, is going to give up that tax revenue to the UK?
      - nicoffeine 5y ago
        Sec. of Treasury Janet Yellen in a letter to Sen. Crapo, earlier this year: "Treasury also takes seriously the protection of the U.S. fisc. Our Greenbook proposals will bring corporate tax revenue as a share of our economy closer to its 21st century average before the 2017 corporate tax cut. Meanwhile, our Pillar 1 comprehensive scope proposal will be largely revenue neutral for the United States since we will be on both the receiving and giving end of the proposed profit reallocations. Indeed, one interesting feature of Pillar 1 estimates is that they demonstrate the extent to which both U.S. and foreign-headquartered corporations have managed to shift profits derived from sales to U.S. customers outside the United States for years, including under the 2017 tax act." https://mnetax.com/wp-content/uploads/2021/06/Yellen_letter_to_Crapo_on_OECD_tax_negotiations920.pdf https://mnetax.com/wp-content/uploads/2021/06/Yellen_letter_...
        mr_toad 5y ago
        Spoken like a politician: you didn’t actually answer my question.
        nicoffeine 5y ago
        I can't really answer your question because all of your premises are wrong. Your concern about the IRS is irrelevant: they enforce policy, they do not define it. Your concern about Congress is also irrelevant, since this change can be made through a different process. The quote from the Secretary of the Treasury did answer the nature of your concern. She has been on reserve boards for almost 30 years, and is head of the department that is concerned with all financial matters in regards to the federal government. If that's not good enough, I'm not sure what would be satisfactory for you.
wolverine876 5y ago
You're imagining that major corporations will move to Sri Lanka? Moving from SV to Texas is considered bold, but try persuading employees to move out of the OECD, and then finding talent there. Also, businesses actually benefit from and prefer to operate in a well-funded, well-regulated, free society. Those are the societies with freedom, customers, competent and fair legal systems, safety, money, infrastructure, etc. The corporation is part of the society they operate in - they aren't a customer of it, they are the makers of it (just like you and me). They have a stake in making it work well. That will be true wherever they go. They might observe that most leading businesses were developed in wealthy countries (wealthy localities, even) where those businesses pay taxes - more taxes than now in the US, for the most part. Even in the US - what great industry has come out of a low-tax area? Oil doesn't count.

"Alongside a minimum corporate tax rate, the pact includes provisions to ensure that multinational companies pay tax where they generate sales and profits, and not just where they have a physical presence. That could have major ramifications for tech companies such as Google and Amazon, which have amassed vast profits in countries where they pay relatively little tax." I share your skepticism generally, but it seems like this agreement is a good step towards getting corporations to pay taxes. There's no point in starting a shell company in the Caymans if your taxes are paid based on where your products were purchased.

mr_toad 5y ago
If I run an .io website selling services to the UK using AWS servers in Singapore and employ coders in India, where exactly do I generate revenue and profit? Sounds like this could devolve into record-industry accounting.
- nicoffeine 5y ago
  In the postcode of the card used to purchase the services.
  - mr_toad 5y ago
    So if I was previously incorporated in the US, and paying taxes in the US, does anyone think that the IRS, and more importantly Congress, is going to give up that tax revenue to the UK?
    - nicoffeine 5y ago
      Sec. of Treasury Janet Yellen in a letter to Sen. Crapo, earlier this year: "Treasury also takes seriously the protection of the U.S. fisc. Our Greenbook proposals will bring corporate tax revenue as a share of our economy closer to its 21st century average before the 2017 corporate tax cut. Meanwhile, our Pillar 1 comprehensive scope proposal will be largely revenue neutral for the United States since we will be on both the receiving and giving end of the proposed profit reallocations. Indeed, one interesting feature of Pillar 1 estimates is that they demonstrate the extent to which both U.S. and foreign-headquartered corporations have managed to shift profits derived from sales to U.S. customers outside the United States for years, including under the 2017 tax act." https://mnetax.com/wp-content/uploads/2021/06/Yellen_letter_to_Crapo_on_OECD_tax_negotiations920.pdf https://mnetax.com/wp-content/uploads/2021/06/Yellen_letter_...
      - mr_toad 5y ago
        Spoken like a politician: you didn’t actually answer my question.
        nicoffeine 5y ago
        I can't really answer your question because all of your premises are wrong. Your concern about the IRS is irrelevant: they enforce policy, they do not define it. Your concern about Congress is also irrelevant, since this change can be made through a different process. The quote from the Secretary of the Treasury did answer the nature of your concern. She has been on reserve boards for almost 30 years, and is head of the department that is concerned with all financial matters in regards to the federal government. If that's not good enough, I'm not sure what would be satisfactory for you.

wolverine876 5y ago

You're imagining that major corporations will move to Sri Lanka? Moving from SV to Texas is considered bold, but try persuading employees to move out of the OECD, and then finding talent there. Also, businesses actually benefit from and prefer to operate in a well-funded, well-regulated, free society. Those are the societies with freedom, customers, competent and fair legal systems, safety, money, infrastructure, etc. The corporation is part of the society they operate in - they aren't a customer of it, they are the makers of it (just like you and me). They have a stake in making it work well. That will be true wherever they go. They might observe that most leading businesses were developed in wealthy countries (wealthy localities, even) where those businesses pay taxes - more taxes than now in the US, for the most part. Even in the US - what great industry has come out of a low-tax area? Oil doesn't count.