Corporations vs Individual

[Nobert]

I was reading this article, in a local bussines paper, where it stated, that US Corporations, are investing abroad, and the profits that they earn, are taxable only in those off shore countries.

While a single individual has to pay taxes both in US and the country, that he made investments in ?

 

[smallfil]

I was reading this article, in a local bussines paper, where it stated, that US Corporations, are investing abroad, and the profits that they earn, are taxable only in those off shore countries.

While a single individual has to pay taxes both in US and the country, that he made investments in ?

As a US citizen, you are taxed wherever you earn that income. That said, you get to deduct certain expenses if you live in another country like rent you paid, a good amount is exempt from taxes, not sure of the amount, was it $200,000 or so. Unless, you are making millions of your job, you probably, will not pay extra taxes. As for US corporations, if you are in a foreign country, they tax your income. The United States will also, tax your corporate earnings once, you repatriate it back to the US. Is is a misconception that US corporations do not pay taxes on income from abroad. There would be more monies coming back to the US if our greedy politicians just become reasonable. CEOs have asked the taxes on repatriation of income be reasonable, like 10%, Bernie Sanders and all the RINO liberals want to tax the US companies much more. Let us get real. US companies can leave those monies abroad and invest it there if our no good politicians will not give them a fair tax break. Now those monies are creating jobs in the host countries instead. Also, the taxes on them will be deferred until they bring those monies into the US. It is all about greed of your no good, do nothing politicians in Congress.

 

[Sig]

I was reading this article, in a local bussines paper, where it stated, that US Corporations, are investing abroad, and the profits that they earn, are taxable only in those off shore countries.

While a single individual has to pay taxes both in US and the country, that he made investments in ?

Corporations and individuals are taxes differently in a myriad of ways in the U.S. so not sure what the point is?

 

[PintoFire]

Look up "transfer pricing". It's a tax loophole for multinational corporations. Smallfil is only semi-correct.

Additionally, you have to understand that multinational companies are directly and/or indirectly funded by the state (tax payers). Either through subsidies, tax deductions, ...etc. The money is recouped by the state(s) through employee tax dollars. Lots of people don't understand this.

 

[tiddlywinks]

"transfer pricing". It's a tax loophole

It is not a loophole. It is a deterrent and/or preventative measure to ensure reasonably priced transactions between same ownership or parties under the same control.

The only way it can be considered a loophole is by placing a bet that the government or taxing authorities will NOT find it. When they do find it, both parties are required to take some officiated price, bear all the tax consequence of that new price, and possibly pay additional fines and penalties. Hardly a way to effectively operate a profitable business, let alone do any type of forecasting.

A similar exists in the USA for individuals too... go sell or transfer some real property to an in-law for $100 before you file for bankruptcy and see what happens.

 

[PintoFire]

Sorry, I'll just post links to the definition. Then let Nobert decide what to call it. I think this is what he was referring to in his original post.

https://www.investopedia.com/terms/t/transferprice.asp
https://www.economicsonline.co.uk/Business_economics/Transfer_pricing.html
https://economictimes.indiatimes.co...ng-loophole/articleshow/57467536.cms?from=mdr
https://www.networkworld.com/articl...-fraud-the-whole-tech-industry-is-guilty.html

https://www.issuelab.org/resources/5323/5323.pdf

This was on the Federal Government website as "tax avoidance"
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=2ahUKEwj5lZPDkfXlAhXBv54KHcv_ClQQFjACegQIBBAC&url=https://www.aeaweb.org/conference/2019/preliminary/paper/3N2tfz3E&usg=AOvVaw395-J8fIbF62VyC0NVOaRA

This one goes through the math - "Vehicle in Corporate Tax Avoidance"
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=17&cad=rja&uact=8&ved=2ahUKEwiwto20jvXlAhWMnp4KHZiSD8oQFjAQegQICRAC&url=https://www.clutejournals.com/index.php/JABR/article/download/9863/9983&usg=AOvVaw15r1qtMNUDkj3ilcGgxr_0

 

[Nobert]

Corporations and individuals are taxes differently in a myriad of ways in the U.S. so not sure what the point is?

Yes, it's not that much of rationality, to compere those two, as if it was a single body.

The newspaper, brought it though a perspective, as if it was a loophole, and as much as i would agree with that, we live in a world of free financial markets and any drastic/dramatic attempts to change that, would slowly push the country/region to the far left side, and extreme-strange laws and things, would start to happen.

So, as far as it is, within the laws, then fine by me. Especially wheres in my country you pay only 15% of trading taxes.

Thanks to everyone for replies.