Chapter 1969 Tax Avoidance

Kirilenko went back to China to participate in the big event that made him show his face, and Feng Yu, accompanied by Ralph, went to inspect a circle of his properties in North America.

Recently, both Ralph and Masao Kameda mentioned one thing to Feng Yu, that is, Amazon, Facebook, Guge, MGM and other subsidiaries all have an idea to set up a family in the "tax haven" Cayman Islands The company, and then transfer the profits or something, can reasonably avoid taxes.

Because of the scale and impact involved, they were unable to relocate the company's headquarters there. Many multinational companies do this.

For example, Fengfeng Holdings is registered here.

Amazon and others have calculated it, so that they can save hundreds of millions of dollars in taxes every year, and even more in the future. Companies like Microsoft and Coca-Cola do this.

If those companies can, why can't they? In particular, their overseas subsidiaries can be included in the name of the Cayman Islands subsidiary, so that they can also reasonably avoid taxes abroad.

Every country has different taxation for enterprises, especially the taxation gap between state-owned enterprises, private enterprises and foreign enterprises, and the same is true for personal income.

To give a simple example, Pierce and Dayao of the Storm team have completely different tax rates. Because Pierce is a native of the United States, he enjoys more public benefits in the United States, so the tax amount will be higher.

Dayao is from Huaxia, and he only works in the United States, and he has to pay taxes to Huaxia, so the tax here is relatively low.

The same is true among enterprises. Foreign enterprises must not pay the same amount of tax as domestic enterprises. Otherwise, how can they guarantee profits if they pay double taxation?

There is no money to make, so I am stupid to start a company with you.

If Amazon is not a listed company, then the operation is much simpler, the finances do not need to be disclosed, and many accounts are easier to operate.

But they are listed companies, and these operations are more troublesome.

They hope to use the channel of the parent company Fengyu Holdings to help them avoid taxes reasonably. In this way, the company's net profit will increase in disguise, and each shareholder will get more money.

Feng Yu remembered that this method was banned by the United States in his previous life, especially for listed companies, which can still be clearly detected.

This kind of thing happens not only in the United States, but also in many countries such as the United Kingdom.

For example, in the previous life, Facebook's subsidiary in the UK had an annual income of more than 100 million pounds, but after transferring profits to the Cayman Islands, the tax paid by Facebook was only a few thousand pounds. That's right, it's a few thousand pounds, and an individual with an annual income of 26,000 pounds in the UK pays higher taxes than this.

For example, Microsoft also played this game in China, but it was not discovered later, and then they paid back taxes, not to mention late fees and high fines.

The reason is that there are loopholes in this taxation method. If you exploit it and no one finds out, then it will be fine. If someone finds out and the amount is small, it's probably fine. For a little money, there's no need to work hard to check the accounts or something.

But if the amount is large, it is worth it. For example, Microsoft and Coca-Cola are often audited. Who makes them big taxpayers?

Amazon and Guge have also grown into large taxpayers, and they are still listed companies. It is too difficult to operate.

Feng Yu also came to see this time, how they want to operate. It is easy to say, but not easy to do.

Bezos introduced his plan to Feng Yu, which was the idea of ​​the company's chief financial officer, who had worked for Coca-Cola before.

But this method, Coca-Cola uses is different.

Because Amazon is not only a retail company, but also a cultural company, but most importantly, they are a network technology company.

Amazon also owns many patents, such as the current cloud technology, Amazon is the best in the world.

There are also some big data analysis, which is also very valuable.

Amazon's main consideration is the transfer pricing of intangible assets.

The intangible assets that Amazon wants to transfer,

It’s not a trademark or something, that can’t be transferred, what they want to transfer is patented technology, intellectual property rights, trade secrets, etc.

These are difficult to price because they are intangible.

They simply allow subsidiaries or affiliated companies to obtain some technologies or intellectual property rights through low-cost licensing or selling out, and then the subsidiaries license them to other companies to use them for profit.

In this way, the company that originally developed the technology will not have such a high profit, and the subsidiaries or affiliated companies can obtain the profits that originally belonged to the company that developed these technologies, but they can pay a lot less tax in the Cayman Islands, so that not only It retains high profits, pays less taxes, and is still legal, although everyone knows that there must be tricks in it.

This is why many large companies have hired many lawyers, not only to litigate possible problems with other partners, but also to provide legal support for these tax avoidance and so on, proving that these are legal trades, not tax evasion.

There is another simple way, that is, Amazon, Guge and other companies all have research and development centers, and technology research and development is one of their largest expenditure items.

If these R&D centers are placed in areas with higher corporate income tax rates, the corporate profits in these areas will be reduced due to the high expenditure on technology research and development, and the amount of income tax that needs to be paid will naturally be reduced.

With revenue and expenses unchanged, less tax is paid, and the net profit will naturally be higher.

However, all countries are now improving these legal provisions. Once they are found out, they will also need to pay back taxes. Of course Feng Yu is happy to pay less tax to the United States, and he is not from the United States.

However, he also made it clear to Bezos and the others that these are means of tax avoidance. Hefty fines.

Many times, the fine can be more than the back tax you need to pay.

Bezos and the others heard that Feng Yu agreed, and immediately arranged for people to implement it. Ralph also notified Guge Company, etc., to operate as he pleases, and the boss agreed.

Bezos and the others want to increase profits and distribute more money, but Feng Yu doesn't care about how much more money will be distributed. He simply doesn't want to pay more taxes to the US government.

Feng Yu's enterprises in Huaxia don't consider these things at all. Pay taxes as you want, and it doesn't matter if the taxes are high. Anyway, Feng Yu is not short of money, and no one from other shareholders will object to Feng Yu's decision.

After going around and returning to New York, Bloomberg, the boss of the New York Times, came to Feng Yu's office to talk about a major event in the media industry.

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