6 ms·

Doesn't America already have a corporate tax rate well above 15%? What would we have to do to "adopt" these rules?

Jensson 4y ago
Tax companies that are currently hiding profits in tax havens. The idea is basically that companies headquartering in tax havens will get taxed anyway, until they pay 15% total global tax on those profits. No single country can do this, but when almost all countries agree to do it then companies can no longer hide.
- dahfizz 4y ago
  > Tax companies that are currently hiding profits in tax havens. > No single country can do this I don't understand. If America already has a >15% tax rate, then it already abides by these rules. America is not a tax haven.
  - Jensson 4y ago
    USA needs to tax companies that are headquartered in tax havens, to ensure that those companies can't enjoy less than 15% global taxes. I don't think that USA is doing that right now.
    - splix 4y ago
      If those companies are controller by a US person then they do tax them in US. See https://en.wikipedia.org/wiki/Controlled_foreign_corporation https://en.wikipedia.org/wiki/Controlled_foreign_corporation
    - csomar 4y ago
      They already do. If you are selling from a tax haven (especially services), there is a 15-30% withholding. Of course, you might be able to recover some of that. But it's a defacto tax. Nobody here seems to understand that this is not about taxes but rather about re-shoring trade power back to the Western world (which is why it concerns the EU the most). EU/US and other developed countries offloaded a part of their industries 20-30 years ago to under-developing countries to save up on some costs. These countries (evil 0% tax countries) reduced taxes, wages and regulation to attract these offshores companies. Not because these countries like to play games, but because that's their only attraction point. And here we are, 30 years later or something like that, and the EU/US have lost a significant portion of their industrial base. Now, they want it back. Either because they have a high unemployment rate (ie: France, Italy) and they have actually people who can do these jobs; or because they think the balance has swift too much in favor of these "international" companies and zero-tax countries. Some of them have become too powerful and one of them even downright dangerous to the world order. Of course, I'm not holding my breath for the "developing" world. It still lacks lots of the infrastructure and many key industries that the EU/US can pressure with. The place to look at will be South East Asia. Europe seems to have lost here to US/Japan and China. I think Europe is going to come to a dark realization real soon. The US might emerge, again ugh, as the winner. China is hated by pretty much all its neighbors.
  - carlosjobim 4y ago
    As one of the states in the USA, Delaware is probably the largest tax haven in the world.
    - rsj_hn 4y ago
      Why do you think Delaware is a tax haven? Many business incorporate there because they have the legal infrastructure so that you are not in court in some boondocks with poorly established corporate case law if there is a lawsuit. But you don't pay less taxes by incorporating in Delaware, you reduce legal uncertainty. If you want an example of tax haven, Montana's a better bet.
      - carlosjobim 4y ago
        If you do your business outside the United States, Delaware has practically no tax for you. The legal infrastructure argument is also true, but probably more important for some companies than for others.
    - dahfizz 4y ago
      Companies in Delaware still have to pay the 21% federal corporate tax rate. Well above the EU rate this article is lauding. Delaware is popular to incorporate in for legal reasons. It is not a tax shelter.
- nszceta 4y ago
  Please educate us how companies are hiding profits in tax havens. Asking for a friend.
  - andsoitis 4y ago
    One mechanism is via a Double Irish with a Dutch Sandwich https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp https://www.investopedia.com/terms/d/double-irish-with-a-dut... Another example is leveraging the secrecy provided by states such as South Dakota, Nevada, Delaware, etc. via anonymous shell companies: https://en.wikipedia.org/wiki/United_States_as_a_tax_haven https://en.wikipedia.org/wiki/United_States_as_a_tax_haven
    - nszceta 4y ago
      U.S.-controlled foreign corporations have to pay "global intangible low-taxed income" (GILTI)
    - NoboruWataya 4y ago
      The double Irish has been phased out.
  - fragmede 4y ago
    https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven

Tax companies that are currently hiding profits in tax havens. The idea is basically that companies headquartering in tax havens will get taxed anyway, until they pay 15% total global tax on those profits. No single country can do this, but when almost all countries agree to do it then companies can no longer hide.

dahfizz 4y ago
> Tax companies that are currently hiding profits in tax havens. > No single country can do this I don't understand. If America already has a >15% tax rate, then it already abides by these rules. America is not a tax haven.
- Jensson 4y ago
  USA needs to tax companies that are headquartered in tax havens, to ensure that those companies can't enjoy less than 15% global taxes. I don't think that USA is doing that right now.
  - splix 4y ago
    If those companies are controller by a US person then they do tax them in US. See https://en.wikipedia.org/wiki/Controlled_foreign_corporation https://en.wikipedia.org/wiki/Controlled_foreign_corporation
  - csomar 4y ago
    They already do. If you are selling from a tax haven (especially services), there is a 15-30% withholding. Of course, you might be able to recover some of that. But it's a defacto tax. Nobody here seems to understand that this is not about taxes but rather about re-shoring trade power back to the Western world (which is why it concerns the EU the most). EU/US and other developed countries offloaded a part of their industries 20-30 years ago to under-developing countries to save up on some costs. These countries (evil 0% tax countries) reduced taxes, wages and regulation to attract these offshores companies. Not because these countries like to play games, but because that's their only attraction point. And here we are, 30 years later or something like that, and the EU/US have lost a significant portion of their industrial base. Now, they want it back. Either because they have a high unemployment rate (ie: France, Italy) and they have actually people who can do these jobs; or because they think the balance has swift too much in favor of these "international" companies and zero-tax countries. Some of them have become too powerful and one of them even downright dangerous to the world order. Of course, I'm not holding my breath for the "developing" world. It still lacks lots of the infrastructure and many key industries that the EU/US can pressure with. The place to look at will be South East Asia. Europe seems to have lost here to US/Japan and China. I think Europe is going to come to a dark realization real soon. The US might emerge, again ugh, as the winner. China is hated by pretty much all its neighbors.
- carlosjobim 4y ago
  As one of the states in the USA, Delaware is probably the largest tax haven in the world.
  - rsj_hn 4y ago
    Why do you think Delaware is a tax haven? Many business incorporate there because they have the legal infrastructure so that you are not in court in some boondocks with poorly established corporate case law if there is a lawsuit. But you don't pay less taxes by incorporating in Delaware, you reduce legal uncertainty. If you want an example of tax haven, Montana's a better bet.
    - carlosjobim 4y ago
      If you do your business outside the United States, Delaware has practically no tax for you. The legal infrastructure argument is also true, but probably more important for some companies than for others.
  - dahfizz 4y ago
    Companies in Delaware still have to pay the 21% federal corporate tax rate. Well above the EU rate this article is lauding. Delaware is popular to incorporate in for legal reasons. It is not a tax shelter.
nszceta 4y ago
Please educate us how companies are hiding profits in tax havens. Asking for a friend.
- andsoitis 4y ago
  One mechanism is via a Double Irish with a Dutch Sandwich https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp https://www.investopedia.com/terms/d/double-irish-with-a-dut... Another example is leveraging the secrecy provided by states such as South Dakota, Nevada, Delaware, etc. via anonymous shell companies: https://en.wikipedia.org/wiki/United_States_as_a_tax_haven https://en.wikipedia.org/wiki/United_States_as_a_tax_haven
  - nszceta 4y ago
    U.S.-controlled foreign corporations have to pay "global intangible low-taxed income" (GILTI)
  - NoboruWataya 4y ago
    The double Irish has been phased out.
- fragmede 4y ago
  https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven