I would think that on the forum for a startup accelerator, people would be more finely tuned to what this means for startups. Guess who can not evade taxes through complicated international arrangements? Startups.
It is overall a terrible thing for the economy. It is an incentive for bigger companies to get even bigger, and it is horrendous for small companies that have to pay full taxes and carry the burden of a tremendously complicated tax system that meanwhile fails spectacularly at taxing their orders of magnitude bigger competition.
(I guess it tells you a lot about the political system that we are happy to invade big countries but apparently powerless at regulating small ones that have specialized as tax havens)
> Guess who can not evade taxes through complicated international arrangements? Startups.
Startups, almost by definition, are generally not profitable. Almost all revenue above costs will be more or less immediately reinvested into growth. Taxes for companies which are not profitable are very nominal.
The basic problem is that tax systems are inherently complicated, and big companies with operations in numerous countries have many legitimate reasons for not paying "full taxes." There are two simple, common-sense, principles:
1) Income earned in a particular country should be taxed there and not elsewhere;
2) Taxes should be incurred on net income, not gross income.
In the context of a multi-national, there is no simple way to implement these two simple principles. When Google earned a Euro for an ad shown in the U.K. from a server in Ireland using technology developed in Ireland and the U.S. how do you divy up the income and the expenses?
It seems like this is the Delaware Corporation of the 21st century. And I see a YC startup to help the little guy evade taxes completely legally in the making.
I would invest and use a product like this. I've always wondered why I look for ways to lower my tax bill when I'm doing my taxes instead of getting proactive guidance throughout the year on my expected tax liability and things I should do to minimize my tax exposure, etc.
While I don't support this double dutch or other kind of tax avoidance schemes, I can honestly say for about 25k USD you can get one of the top consulting firms (McKinsey, Deloitte, etc) to create a good tax avoiding scheme and for 5k or so more to implement all the documentation needed.
It isn't that big of a expense if you really want to try and avoid taxes as much as possible for your company.
source: I saw various of these reports for a few firms I consulted with
Well you could move to another country only taxes income from inside it's territory and start your internet startup there. They tend to be small countries where you will not derive much if any income from, so almost all of your profits will be literally tax free. One often cited example is Panama.
It is overall a terrible thing for the economy. It is an incentive for bigger companies to get even bigger, and it is horrendous for small companies that have to pay full taxes and carry the burden of a tremendously complicated tax system that meanwhile fails spectacularly at taxing their orders of magnitude bigger competition.
(I guess it tells you a lot about the political system that we are happy to invade big countries but apparently powerless at regulating small ones that have specialized as tax havens)