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RE: Open AI is gradually becoming a money business

in Cent5 months ago

There are all kinds of ways a company can be pulling in huge revenues and still make a loss. No profits means no tax to pay (well, apart from things like VAT and employment taxes), and a multinational corporation has the advantage over smaller businesses that it can cross-charge costs internally to move profits to the lowest tax jurisdictions.

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Wait for real.... Crossing charge -cost 🤔🤔🤔 this is a pretty brilliant move.... I'm thinking most of the companies do this

The multinationals definitely all do it. When a company as big as Amazon turns round to the Turks & Caicos Islands or Luxembourg (a country so small they could re-carpet it for a tenner - it's cute, I've been there 😆), the company's profits are more than the country's GPD. They can ask for special tax rates and get them.

Then Amazon Luxembourg charges a "management fee" to (for example) Amazon UK that just happens to match the UK subsidiary's profit. So no tax paid in the UK (where the Corporation tax rate is 25%), and a special rate (often zero) paid on those profits now they've been moved to Luxembourg.

For smaller businesses, it often isn't worth the cost to set up the company structure and pay the expensive accountants to make it all work seamlessly.

My goodness what a smart strategy, it'll save millions 😳😳😳