Reply to post: Related entities

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


Related entities

These little tax scams are all organised so that the end owner ends up paying no tax. Almost always is that company A buys from Company B and somewhere amount a convoluted chain is that both are owned by Company C. Often there are directors and executives in common. Additionally, there is more than a hint of transfer pricing involved too (eg, Inflated prices for the use of intellectual property such as trademarks and patents).

All it needs is for a revision of the tax code. If the two parties are related to "X" degree, then certain charges and expenses are not recognised for tax purposes. And you can make companies register with your tax authorities ... just don't permit deduction against unregistered foreign domiciled entities.

Books might show a small loss for profit, but tax authorities will see a much different, taxable, picture.

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