The Resource Taking advantage of a loophole in the high-tech industry

Taking advantage of a loophole in the high-tech industry

Label
Taking advantage of a loophole in the high-tech industry
Title
Taking advantage of a loophole in the high-tech industry
Creator
Subject
Language
  • eng
  • eng
Summary
In the last few years alone there have been a rash of tax disputes between the European Commission and several multinational corporations. This triggered the European Commission to call for an agreement among countries to prevent the abuses of tax loopholes and shifting income, and prompted the discussion of revising U.S. tax policy. This article discusses the tax loopholes and the ways they are employed by the high-tech industry. Further, this article points out that a tax loophole can be used by exploiting the differences in various countries' tax policies. A country may adopt the worldwide tax system or territorial tax system; its taxing entity may be a domestic corporation or a foreign corporation; and its taxable income may come from the domestic source or foreign source. The combination of these elements can allow for the use of a tax loophole. Given that the U.S. uses the worldwide tax system, the most beneficial tax loophole is a combination of a foreign corporation with foreign source income. The high-tech industry has fully exploited this advantage, most famously, Apple and Google. This article investigates the strategies these companies employed to receive the greatest tax advantage. They claim a new taxation principle that the source income is the country where the high-tech product is invented, not the country where the product is sold
Citation source
In: Practical tax strategies. - Hoboken. - Vol. 99 (2017), no. 6 ; p. 22-30
http://library.link/vocab/creatorName
  • Yang, J.G.S
  • Aquilino, F.J
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • tax policy
  • foreign source income
  • source of income
  • worldwide income
  • MNE
  • e-commerce
Label
Taking advantage of a loophole in the high-tech industry
Link
https://library.ibfd.org/custom/web/SD_PDF/scans/2017/O-Q/PRACTAST/6_22-30.pdf
Publication
Note
20171215

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