Reply to post: Beware of False Profits

European nations told to sort out 'digital tax' on tech giants by end of year

Prof Yaffle

Beware of False Profits

You can only tax profits if they're reported, though. The problem isn't inherently the double-Dutch-Irish-malarkey, it's companies using that to shift profits to a lower-tax jurisdiction. Inside or outside of the EU, who's to say what's a fair level of payment to corporate HQ for use of the logo, or for ingredients, or as a contribution to the global advertising budget? All these (and others) can easily be used to shift gross profit out as overhead, thus reducing the level of operating profit that remains.

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