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> Some companies apparently have already been amortizing salaries for a while in anticipation of this (eg: Google) > Given that this also greatly punishes out

> Some companies apparently have already been amortizing salaries for a while in anticipation of this (eg: Google) > Given that this also greatly punishes outsourcing Anyone help me understand these more? My understanding was that instead of deducting the costs of paying software devs the year it happened, it will be spread over 5 years. Which leads to a bigger tax bill now, and benefits bigger companies with deeper pockets as opposed to smaller businesses which have to raise moneny to pay taxes (or lower costs, potentially lower hiring). This should also push companies towards outsourcing, since not all places have similar laws? Is my understanding wrong?

moron4hire 3y ago
It won't push people to outsourcing, because the same code change requires 15 year amortization for foreign R&D expenditures.
- jdjskiaka 3y ago
  Perhaps not as straight forward, outsourcing is generally lot cheaper.
  - MattRix 3y ago
    This applies to all foreign R&D, not just where it is much cheaper… and unless it is many times less expensive, it will not be worth it. Only being able to deduct 1/15th per year is absurd.
  - hobofan 3y ago
    If you believe the Accenture pitches from 2010, sure.
the_mitsuhiko 3y ago
For foreign contractors the time frame is 15 years instead of 5.
- wait_a_minute 3y ago
  Wouldn't this improve things for domestic contractors and domestic developers?
  - the_mitsuhiko 3y ago
    Yes. Which is why I’m guessing that at least certain elements of this change won’t be rolled back.
wrsh07 3y ago
If you're not yet profitable it doesn't matter, so you can do this accounting and once you are profitable (in five years) you'll be caught up What the (possibly temporary) temporary law probably actually does is decrease the incentive to become profitable for the next couple of years (assuming your business is strong and you can raise another round)

moron4hire 3y ago

It won't push people to outsourcing, because the same code change requires 15 year amortization for foreign R&D expenditures.

jdjskiaka 3y ago
Perhaps not as straight forward, outsourcing is generally lot cheaper.
- MattRix 3y ago
  This applies to all foreign R&D, not just where it is much cheaper… and unless it is many times less expensive, it will not be worth it. Only being able to deduct 1/15th per year is absurd.
- hobofan 3y ago
  If you believe the Accenture pitches from 2010, sure.

the_mitsuhiko 3y ago

For foreign contractors the time frame is 15 years instead of 5.

wait_a_minute 3y ago
Wouldn't this improve things for domestic contractors and domestic developers?
- the_mitsuhiko 3y ago
  Yes. Which is why I’m guessing that at least certain elements of this change won’t be rolled back.

wrsh07 3y ago

If you're not yet profitable it doesn't matter, so you can do this accounting and once you are profitable (in five years) you'll be caught up What the (possibly temporary) temporary law probably actually does is decrease the incentive to become profitable for the next couple of years (assuming your business is strong and you can raise another round)