Here's an interesting truth that many of you might not know. When you're a large multinational company or a very high net worth individual, then taxes aren't really an objective calculation.
The tax code in most countries, despite being tens of thousands of pages of legalese, are extremely subjective. This subjective and loose language allow for innumerable loopholes and tax dodges.
If you're using these creative methods, the chances are that you'll get audited every single year by the IRS or local equivalent. Trump famously gets audited every year. Your tax lawyers & accountants will then negotiate a tax payment with the tax office. I used the word negotiate because there is no one true formula for tax owed. It doesn't exist, especially not for corporations.
When you add in 'creative' intellectual property ownership and royalty payments, then the tax office basically has no idea where money is flowing. This is why EU countries commonly lob these huge penalties. Facebook tries to pay X in tax, and the tax office says they should pay X2, and then after negotiation they pay X1.5.
Carried interest is a share of a private equity or fund's profits that serve as compensation for fund managers.
Because carried interest is considered a return on investment, it is taxed at a capital gains rate, and not an income rate.
Critics argue that this is a tax loophole since portfolio managers get paid from that money, which is not taxed as income.
Advocates of carried interest argue that it incentivizes the management of companies and funds to profitability.
They will get it from your bank account. That's what happened to me over a parking ticket a few years ago as I parked in a spot reserved to the national train company. I refused to pay as the amount was 4 times over what it would cost to park in a disable spot which I did find unfair from a morale standpoint. After some time, they took the money from my bank account.
Because there are a lot of reasons you could have a lot of cash on hand. You may have a big upcoming expense. Or that cash might even be from a bank loan that you will need to pay back.
The tax code in most countries, despite being tens of thousands of pages of legalese, are extremely subjective. This subjective and loose language allow for innumerable loopholes and tax dodges.
If you're using these creative methods, the chances are that you'll get audited every single year by the IRS or local equivalent. Trump famously gets audited every year. Your tax lawyers & accountants will then negotiate a tax payment with the tax office. I used the word negotiate because there is no one true formula for tax owed. It doesn't exist, especially not for corporations.
When you add in 'creative' intellectual property ownership and royalty payments, then the tax office basically has no idea where money is flowing. This is why EU countries commonly lob these huge penalties. Facebook tries to pay X in tax, and the tax office says they should pay X2, and then after negotiation they pay X1.5.