| >>It's not as if these companies couldn't just move their headquarters off-shore to avoid the issue altogether. Which is always the risk when you call for something like the parent wants. Huge companies, like Microsoft, have offices all over the world. Microsoft has about equal numbers of workers, and revenue, inside and outside the US. The same could be said for Apple. That makes the US a huge market, and it makes sense they are based there. But if being based in the US put them at a disadvantage in the rest of the world (e.g. they had to pay tax twice), it is likely they would move, at least notionally. There is a big problem with companies that don't pay tax anywhere, or nominate very low tax countries. A coffee company in Europe famously buys coffee cheap with a subsidiary in a low tax country, then sells it to its other business units for so much that those units claim to run at a loss. No coffee ever passes through its small but extremely profitable office in the low tax country. That's annoying, as it puts the burden of subsidizing welfare salary top ups for its underpaid workers on me. To suggest a solution - The answer here is to tax sales in the country the buyer is in, rather than taxing profit. Sure, it'll kill some low margin companies, but the overall economy will work better because it won't be so skewed by how easily a particular industry can dodge tax. I suspect financial services would do particularly badly. In terms of this merger, if the tax was on transactions between companies (and I think it should be, though smaller), if Microsoft France funded the deal, it should pay tax in France. |