SkipCaptcha, Automoderated users, edit
2,592
edits
Changes
Jump to navigation
Jump to search
Line 6:
Line 6: + + + + + + + +
→United States: new section on multinational corporations
"The [[United States]] has the highest corporate [[tax]] rate in the world at 35 percent, which puts U.S. companies at a competitive disadvantage with other countries that have lower rates (e.g. [[Canada]] at 15 percent, [[Ireland]] at 12 percent, [[Bulgaria]] at 10 percent and so on). As a result, U.S. companies are forced to move some of their operations into other countries in order to remain competitive." <ref>[http://www.washingtontimes.com/news/2012/aug/27/democrats-hypocrisy-with-the-rich/#ixzz26sd5UxcT "Democrats' hypocrisy with the rich," editorial by Richard W. Rahn (a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth) in the ''Washington Times'' 27 August, 2012.]</ref>
"The [[United States]] has the highest corporate [[tax]] rate in the world at 35 percent, which puts U.S. companies at a competitive disadvantage with other countries that have lower rates (e.g. [[Canada]] at 15 percent, [[Ireland]] at 12 percent, [[Bulgaria]] at 10 percent and so on). As a result, U.S. companies are forced to move some of their operations into other countries in order to remain competitive." <ref>[http://www.washingtontimes.com/news/2012/aug/27/democrats-hypocrisy-with-the-rich/#ixzz26sd5UxcT "Democrats' hypocrisy with the rich," editorial by Richard W. Rahn (a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth) in the ''Washington Times'' 27 August, 2012.]</ref>
==Multinational corporations==
When a company operates in several different countries, complicated rules apply to determine what taxes are owed in each country and when they are due. In general, countries agree to [[tax treaties]] to address enforcement details.
The United States takes the approach that a U.S. company owes taxes on all of its operations, even if the operations are overseas. However, the U.S. tax laws allow a company to defer paying taxes on its foreign profits until the year that the company brings the foreign profits back to the United States. Some other countries tax only the profits made within their own borders and disregard profits that a company makes in foreign countries.
In 2012, the United States Senate conducted an investigation into how high technology companies are able to evade paying United Staets taxes on their foreign earnings. A Senate report said that from 2009 to 2011, [[Microsoft]] shifted $21 billion in profts to an offshore subsidiary that allowed it to avoid paying $4.5 billion in U.S. corporate income taxes. Microsoft had moved "intangible property" such as some of its patents to the overseas subsidiary company to shift the income away from the United States. Similarly, [[Hewett-Packard Co.]] reduced its tax bill by sending $9 billion annually of offshore profits back to the United States as a "loan" so that no U.S. taxes would be due on those profits. Senator Carl Levin said, "Major U.S. corporations are increasingly earning their profits here but shipping them overseas to avid paying the taxes they owe."<ref>{{cite news|title=Corporate Loopholes in Tax Law Targeted|work=Wall Street Journal|date=September 21, 2012|page=B1|author=John D. McKinnon and Shira Ovide}}</ref>
When a United States citizen invests in a foreign company, he must pay foreign taxes on the dividend income that he receives from that company. But the U.S. tax laws allow the citizen to either deduct or get a credit on his U.S. tax bill for any foreign taxes paid.
==Notes==
==Notes==
<references/>
<references/>