4 ms·

That is not a fictional example, in case any might still be wondering. I worked many years for an american/canadian/global company in europe. The software WE

That is not a fictional example, in case any might still be wondering. I worked many years for an american/canadian/global company in europe. The software WE developed would be owned by a separate company entity. Whenever we sold "OUR" software systems to our real local customers, "we" would 'borrow/rent' OUR software from that separate entity, at a hefty silly price. Incidentally, that silly price was so high, that "we" (our company entity) would consistently produce a loss each year (even though our parent entity was raking it in, through that separate entity and the silly-price money we were transferring to them). Those losses of course are tax deductible, so our company would consistently pay zero taxes or worse (I don't know if they were also able to trigger things like the state having to reimburse them..) It is/was, as far as I know, totally legal and totally disgusting :-/. The irony as I see it, was that the software was developed by us locally and used by local clients, but somehow ended up being "owned" by carribean islands.

piltdownman 2y ago
That's basically how Hollywood accounting works, with some of the highest grossing films and franchises in history not paying a penny in tax due to showing a 'loss' on paper. Harry Potter and the Order of the Phoenix (2007) ended up with a $167 million loss on paper after grossing nearly $1 billion. According to New Line's accounts, the LOTR trilogy made "horrendous losses" and no profit at all. Same as Forrest Gump, Men in Black, and Return of the Jedi. The Music industry is far worse in its financial machinations. With some minor exceptions, the companies involved in this are all American.
zoobab 2y ago
Ikea does the same with everything they sell in their stores, the stores have to licence design rights from the Netherlands, where royalties are only taxed a few percent. All the stores imposable amount are reduced to zero.

piltdownman 2y ago

That's basically how Hollywood accounting works, with some of the highest grossing films and franchises in history not paying a penny in tax due to showing a 'loss' on paper. Harry Potter and the Order of the Phoenix (2007) ended up with a $167 million loss on paper after grossing nearly $1 billion. According to New Line's accounts, the LOTR trilogy made "horrendous losses" and no profit at all. Same as Forrest Gump, Men in Black, and Return of the Jedi. The Music industry is far worse in its financial machinations. With some minor exceptions, the companies involved in this are all American.

zoobab 2y ago

Ikea does the same with everything they sell in their stores, the stores have to licence design rights from the Netherlands, where royalties are only taxed a few percent. All the stores imposable amount are reduced to zero.