People say that big corporations don’t pay their fair share in taxes by using loopholes. What exactly are these tax loopholes?
In: Economics
If a company declares a loss one year, they can count it against their taxes in following years. They can also deduct loses on assets, meaning that a company can buy an investment declare the value its lost over time against their taxes.
This is what Amazon has been doing for the most part. Despite the companies immense size and growth, on paper at least they are losing money because they keep reinvesting their profits into the company.
Giving stocks out to staff and executives is tax deductible
So is giving to charity, which is partly why all big companies are associated with a charity.
But the big one is foreign subsidiaries. Companies open up offices in countries that have very low corporate tax rates and declare their profits in that country. This is why countries like Ireland have so many Corporate headquarters located there.
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