How to Stop Turning U.S. Corporations into Tax Exiles

Post by [deleted] » Mon, Dec 14, 2015, 1:18 PM UTC

geomark wrote: post #41

deciplex wrote: post #16

Earlier quoted context omitted.

Everything over the deduction (currently just shy of $100k) is taxed, minus a further deduction for tax paid to a foreign government on the earnings. Basically, you will pay the higher of US tax or local tax, on earnings over $100k. And you're right, most people don't pay. Really the bigger pain in the ass is that you even have to file . I've filed tax returns to the IRS for the last 10 years despite not paying a cen…

Actually, it's been a requirement to file a FBAR for many years if you have a foreign bank account with more than equivalent of US$10,000 in it. So that filing requirement isn't exactly new, just that it's gotten more attention lately and now with FATCA you might not get away with ignoring it. And yes, expats just love that requirement to file a tax return on your world wide income regardless of where it was earned o…

Post by DennisP » Mon, Dec 14, 2015, 1:21 PM UTC

princeb wrote: post #18

I am trying to think of companies that should rightfully repatriate cash back to the states, and companies that should not. Why is it that it is repulsive that Google or Apple chooses to keep their cash overseas, whereas it is fine for Budweiser to do so (ignoring magnitudes for a second)? Because AB Inbev is Belgian? This is a difficult example for me to think of, because the US is one of the interesting countries w…

Post by seanmcdirmid » Mon, Dec 14, 2015, 1:34 PM UTC

geomark wrote: post #44

seanmcdirmid wrote: post #36

Earlier quoted context omitted.

So there is ambiguity: what if your Chinese company sends you to the states on a biz trip? The Chinese and U.S. governments both feel like they have exclusive taxation rights, so you just pay tax to both (and no, even the taxes paid are not deductible). Or what a of health insurance, if it counted as taxable income in your host country, is it taxable in the U.S. also? And then there are "expenses" that I have no clue…

It's messy and expensive to pay an accountant who knows how to get it right, which makes for a big disincentive to take any work abroad. Small jobs are money losers after accounting and filing costs.

Post by lazyjones » Mon, Dec 14, 2015, 2:45 PM UTC

yc1010 wrote: post #31

lazyjones wrote: post #22

Earlier quoted context omitted.

> In Germany, our constitution says in §14.2: "Eigentum verpflichtet. You can tax the property of people without taxing corporations. The former can be done with reasonable effort and effectiveness because the location of someone and their home's can be determined. Taxing corporations has proven unreliable and ineffective because they're often just a mailbox in s tax haven and profits are moved to other entities easi…

> There's also no real need to tax them, as you can tax their owners. Thats what happens in Ireland, corporation tax is lowish (12.5%) and theres not that many loopholes/concessions as in other EU states where companies can reduce their corporate tax to near nothing already BUT personal taxes are a murder Lets say you are a director of startup and the company has€100000 left after costs and taxes etc, lets say as dir…

Post by muzz » Mon, Dec 14, 2015, 5:55 PM UTC

pzone wrote: post #15

deciplex wrote: post #12

Is the end to double taxation for the corporate tax only? Human Americans are also double-taxed on income earned abroad.

Yes. The reason is that corporations vote with their feet quite readily, as seen here.