3 ms·
How is the tax dodged? If business A doesn't show a profit because it pays business B, then business B has a profit on which to pay tax. The point is the reve
by lotsofpulp 1y ago
How is the tax dodged? If business A doesn't show a profit because it pays business B, then business B has a profit on which to pay tax.
The point is the revenue and expenses for an individual film can be altered, for the purposes of screwing someone who agreed to a share of the profit, but the revenue and expenses for all of the businesses put together cannot.
If a business made money, it has to show up somewhere, in someone's account.
- deleted 1y ago[deleted]
- throwup238 1y agoYes the money has to show up in someone's account but where and when it is taxed is very important. The profit is shifted to entities with tax credits or industry specific tax incentives, timed net operating losses, lower rates altogether, or different state/foreign rules so the total cash taxes fall in absolute number. If you want more info on how this all works look into single-purpose production LLCs (aka SPVs, which is where the accounting happens) and federal consolidated groups for how its taxed. That this all allows screwing over anyone ignorant enough to accept points net in their contract is just a bonus that happens to have cemented itself in Hollywood pop-history.