3 ms·

European software companies don't go broke and AFAIK they have 0% tax credit for salaries (in most countries, I know there are some R&D schemes in UK).

kgwgk 4y ago
> 0% tax credit for salaries I don't think that's what's being discussed here. The question is whether salaries are (completely) expensed immediately (reducing profits) or whether they are (partly) capitalised (which will reduce profits later but not now).
l33tman 4y ago
In Sweden, salaries are 100% deductible. You pay company taxes on the profit you make. There is an option to capitalize some R&D expenses if you can show that they are directly responsible for a future asset that you can set a value on (like, a startup where all engineers work on a single product).
aarondf 4y ago
We're not talking about a tax credit at all though... We're talking about being able to deduct salaries paid. A tax credit is usually an incentive, like if you spend 10k on solar panels you get to deduct the 10k and then the government might say "hey thanks for pushing renewable energy, deduct an extra 2k from your tax bill." That's a credit, which we're not discussing here.
coldtea 4y ago
>European software companies don't go broke They don't do that well either. Which is perhaps why the biggest ones are all American >they have 0% tax credit for salaries At least in some countries I know that's totally wrong, but depends what you mean by "credit". Salaries are expenses, are not counted in profit.
- ricardobayes 4y ago
  Ever heard of that small German company called SAP?
  - achenet 4y ago
    they're more the exception than the rule. The biggest software companies (Facebook/Meta, Google/Alphabet, Microsoft, Apple) are all American.
JamesBarney 4y ago
You think European software companies count software engineering salary expenses as profit that they are taxed on?
foobarbazetc 4y ago
No one is talking about tax credits. The expense of salaries isn’t deductible against income.

kgwgk 4y ago

> 0% tax credit for salaries I don't think that's what's being discussed here. The question is whether salaries are (completely) expensed immediately (reducing profits) or whether they are (partly) capitalised (which will reduce profits later but not now).

l33tman 4y ago

In Sweden, salaries are 100% deductible. You pay company taxes on the profit you make. There is an option to capitalize some R&D expenses if you can show that they are directly responsible for a future asset that you can set a value on (like, a startup where all engineers work on a single product).

aarondf 4y ago

We're not talking about a tax credit at all though... We're talking about being able to deduct salaries paid. A tax credit is usually an incentive, like if you spend 10k on solar panels you get to deduct the 10k and then the government might say "hey thanks for pushing renewable energy, deduct an extra 2k from your tax bill." That's a credit, which we're not discussing here.

coldtea 4y ago

>European software companies don't go broke They don't do that well either. Which is perhaps why the biggest ones are all American >they have 0% tax credit for salaries At least in some countries I know that's totally wrong, but depends what you mean by "credit". Salaries are expenses, are not counted in profit.

ricardobayes 4y ago
Ever heard of that small German company called SAP?
- achenet 4y ago
  they're more the exception than the rule. The biggest software companies (Facebook/Meta, Google/Alphabet, Microsoft, Apple) are all American.

JamesBarney 4y ago

You think European software companies count software engineering salary expenses as profit that they are taxed on?

foobarbazetc 4y ago

No one is talking about tax credits. The expense of salaries isn’t deductible against income.