3 ms·
> There's no "trick" involved Well we can argue on the meaning of trick I guess. Share buybacks are essentially a way to achieve the same effect as dividends,
by Galanwe 11mo ago
> There's no "trick" involved
Well we can argue on the meaning of trick I guess.
Share buybacks are essentially a way to achieve the same effect as dividends, but in a non-obvious way, which has the benefit of avoiding taxation. That's a "trick" in my book, but I guess terminology doesn't matter that much.
> They'll still pay tax on it when they sell it.
Not but it's not _equivalent_. The tax paid on capital gains is not the same as the withholding tax. And paying tax _after_ compounding is not the same as paying it _before_.
Share buybacks are _effectively_ a trick to circumvent withholding tax for investors not willing to divest.
- philipallstar 11mo ago> which has the benefit of avoiding taxation. That's a "trick" in my book But why? Minimising tax legally is...legal, and not a trick. That's all tax avoidance is. > The tax paid on capital gains is not the same as the withholding tax. That seems totally fine - if the rules are different then that's up to the people who write the rules. It's not a trick to choose to be paid via one method or another.
- Galanwe 11mo ago> But why? Minimising tax legally is...legal, and not a trick. That's all tax avoidance is. I think we are lost in translation here. I am not a native English speaker, so there may be a subtle implication in "trick" that you see and I don't. I meant "trick" as in "trick of the trade", a clever/crafty way of achieving something that may not be obvious for less experienced individuals. Re-phrasing my original comment for clarity: "Share buybacks are just a technique to lower WH tax, why do you see this as anything related to round tripping as related in this article?".