Quote:
Originally Posted by Barry-xlovecam
When a US (or any country's) business sets up overseas operating units they are usually incorporated, and domiciled, in that country. Only repatriated earnings into the US are taxable -- you cannot repatriate losses. Earnings and losses are taxed by the 'host' country of that incorporation under the host country's tax laws.
|
sure you can - and this is the trick.
this oversea company is paid from investment money and it is active in the balance.
means: you can not take this investment of the tax because the value is still there.
now you have scenario 1: the overseas company is going bankrupt or loose value.
in this moment the value is cut out from the american books and cut from taxes.
scenario 2: the overseas company makes profit. than this profit is taxed in the country where the company is registered.
the net profit after local tax is NOT paid out to the shareholders (US mother company) and is parked in this country. than this money will never reach US ground and is NOT TAXABLE there.
this is how all that companies are working. they just do not bring the profit in the country and donīt have to pay tax on that.
this is also the background of trumps tax-reform. he thinks that this 20 trillion what are parked from us companies all over the world will reach american ground if it is taxed with a lower %. he is calculating with the (lower) tax on this 20 trillion.
and it would work short term because this trillions are collected in 20 or 30 years. it will only be a one-time effect and after it it will become worse because ALL taxes will have this lower % for ever.