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Tax consequences of WIN95 team members keeping a piece of software for testing

devblogs.microsoft.com

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Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#111

Post by fransje26 »

kazinator wrote: post #96
fransje26 wrote: post #41

Earlier quoted context omitted.

> Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income. I actually fail to see what is logical here. And I would go further by saying it is neither logical, nor fair. First the basic point. Why should an employee be taxed for a service he is not making use of.…

Taxing people for having access to something is like a restaurateur taking a beggar to court, accusing him of smelling his cooking outside the inn, without paying. That is the subject of a legendary Japanese story about judge Ōoka Tadasuke, pretty well known in Europe, and something Swedish children probably know. Ōoka hears the case, and then rules that the jingling sound of the beggar's coins is enough compensation…

That's a nice legend.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#112

Post by fragmede »

kazinator wrote: post #96
fransje26 wrote: post #41

Earlier quoted context omitted.

> Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income. I actually fail to see what is logical here. And I would go further by saying it is neither logical, nor fair. First the basic point. Why should an employee be taxed for a service he is not making use of.…

Taxing people for having access to something is like a restaurateur taking a beggar to court, accusing him of smelling his cooking outside the inn, without paying. That is the subject of a legendary Japanese story about judge Ōoka Tadasuke, pretty well known in Europe, and something Swedish children probably know. Ōoka hears the case, and then rules that the jingling sound of the beggar's coins is enough compensation…

How'd the story crossover to Sweden from Japan?

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#113

Post by fransje26 »

bunabhucan wrote: post #98
fransje26 wrote: post #41

Earlier quoted context omitted.

> Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income. I actually fail to see what is logical here. And I would go further by saying it is neither logical, nor fair. First the basic point. Why should an employee be taxed for a service he is not making use of.…

It sounds similar to the faang employee buses in SF. If the company provides cheap food it undercuts the local competition and the town as a whole suffers. Making the tax punitive like this would make the "price" of a subsidized company canteen very high. Either the employer would have to pay to subsidize and pay the employees more (so pay twice) or the policy would be unpopular. Or it's Sweden and everyone is fine w…

> If the company provides cheap food it undercuts the local competition and the town as a whole suffers.

I disagree with that take as an argument for taxation.

Let's assume, for the sake of a counter argument, that a company stops providing their canteen service, and, instead, all employees bring their own lunch from home. The local "competition" is still not getting the hypothetical customers they had hoped for. So should the employees be taxed because, by bringing their own lunch, they are not bringing business to the local restaurants and the town is suffering? Or should we tax the supermarkets because they are undermining the local restaurants by allowing the employees to eat cheaply?

My argument is that imposing a tax because some hypothetical other scenario is potentially not happening is wrong. At best, it's an excuse to levy an extra tax, by bringing forward the fallacy that other business are being hurt. Or worse, it is forcefully coercing employees to participate in the economy at a higher cost than what they were prepared to pay, and determining for them what the cost of the lunch of an employed person should be. (Either by forcing them to eat out, or by taxing them so that the cost of canteen+tax is similar to eating out).

Where there could be room for taxation is if the food is provided below cost price, as the employees are then having an advantage in nature that could be considered part of a salary. But even if the food was provided for free, if we estimate an average meal to cost $5, and for 20 days of work a month, that would be $100 of equivalent salary. Is that really worth the administrative hassle?

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#114

Post by fransje26 »

kazinator wrote: post #82
fransje26 wrote: post #41

Earlier quoted context omitted.

> Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income. I actually fail to see what is logical here. And I would go further by saying it is neither logical, nor fair. First the basic point. Why should an employee be taxed for a service he is not making use of.…

A company could fix the situation by implementing an access method for the canteen. Not necessarily a fob to get inside, but say, a card needed in order order the food there. At the end of the tax year, the company could issue a boilerplate letter to each employee who doesn't have the card for the canteen food discounts. For that matter, for each employee who has a card, their purchases could be detailed and the belo…

Yes, that would be a fairer way to determine a tax, if the idea of taxation is really justified.

Or you could consider a canteen an improvement of the working conditions for the employees, which will help boosting productivity, and therefore revenue, and, consequently, tax incomes. After all, are we taxing companies with air conditioning, good office lighting, or private office space? Because they are having a competitive advantage when compared to companies without..

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#115

Post by yardstick »

balderdash wrote: post #55
yardstick wrote: post #28

Earlier quoted context omitted.

Does the IRS take into account losses by the company? Eg if A Jewellery shop gave employees a special 2-for-1 / BOGOF gold bars, I expect that’d raise lots of red flags?

Why? now the employee has a large taxable embedded gain on their gold bar when they sell it.

Capital gains still less than Income Tax?

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#116

Post by nucleardog »

criddell wrote: post #95
brewdad wrote: post #93

Earlier quoted context omitted.

Wouldn't that open you up to both similar tax implications AND potential visa issues? You can't enter Canada on as a tourist and then do work. Obviously the chances of getting caught are extremely slim but the consequences could be significant.

I don't know about Mexico, but Canada's rules seem pretty chill: https://www.canada.ca/en/immigration-refugees-citizenship/se... You need a passport and can't stay for more than 6 months.

I think that’s more or less NAFTA (or whatever the rebranding was), that’s essentially the same terms Canadians can enter the US under.

As well, between Canada and the US you’re covered under the visa waiver program, so you don’t even need to apply or anything. Just show up at the border.

It’s a fairly well known gotcha up here (at least among my circles). If you’re going to the US for meetings or conferences you are _only_ going for meetings and conferences. You will not be working at your hotel in the evening. You’ve set your auto responder and will not be responding to work emails.

Generally it’s fine, but sometimes you get the CBP guy that wants to ruin someone’s day or is a stickler for the rules and you’re told to apply for a full work visa and sent back home.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#117

Post by balderdash »

yardstick wrote: post #115
balderdash wrote: post #55

Earlier quoted context omitted.

Why? now the employee has a large taxable embedded gain on their gold bar when they sell it.

Capital gains still less than Income Tax?

But you have to hold if for a year and take the price risk, if you sell it the next day to arb the price you pay ordinary income
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