[chongli]

a business does not pay any tax on profit that it does not distribute as dividents

Can a business get around this by re-purchasing shares from the open market?

[skeletal88]

Yes, but how long can you do that? Also, our local stock exchange has listed only a few dozen companies.

[stonemetal12]

As long as you want really. Say you have 100M shares outstanding. You do stock buy backs over the years now there is only 50M shares outstanding. You do a two way stock split, now there are 100M shares outstanding again.

[lalos]

You would still pay taxes when selling the stock for profit.

[jungturk]

Yes, though in the US the capital gains tax (for investments held over a year) is quite often lower than the tax on dividends (which are treated as income).

[chongli]

As long as you want. When the share prices go up you do stock splits.

[skeletal88]

Private persons have to pay income tax when they sell their shares for a profit. So there is no way to avoid the income tax and getmoney out of the company without taxes.

[Scoundreller]

But the stock buyback is at capital gains rates. And non-income personal revenue can have other advantages like avoiding various payroll taxes.

[skeletal88]

There is no such thing as "capital gains" tax, everything is covered by income tax, at the same rate. You can't use the US tax system to cheat Estonian taxes:)