Reply to post: Re: Just change the current tax laws.

Hi Amazon, Google, Apple we might tax you on revenue rather than profit – love, Europe

John Riddoch

Re: Just change the current tax laws.

"I think you meant "that profit accrues" but that's the problem - you sell some software for 100 Euros in France and the French subsidiary internally pays it's Irish subsidiary 99.99 Euros because the company says the software IP is "owned" by the Irish subsidiary."

That's basically the issue - what is the "fair" reimbursement to the "parent" company. If I, as a UK resident, invented some cool widget which I sold through my UK company and a French subsiduary, it's entirely legitimate that some of the French profits should accrue to the UK company as the owner of the IP rights. In contrast, my accountants would recommend setting up an Irish subsiduary, "sell" the IP rights to it and funnel profits via Ireland, possibly also via some Caribbean tax haven as well. It would be legal (if done right) but doesn't make any logical business sense or reflect the true flow of money or profits and it's frankly taking the piss.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

SUBSCRIBE TO OUR WEEKLY TECH NEWSLETTER

Biting the hand that feeds IT © 1998–2019