Will Big Corporations finally pay taxes?

Until now, large business corporations (most of them North American) barely paid taxes on the profits they obtained, since they were dedicated to “transferring” their profits from one country to other countries with a lower tax level.

They call that “profit shifting” and it’s very simple. The big company creates a branch in a country where taxes are hardly paid (in Bermuda or elsewhere) and the intellectual property is registered there. Later, from there, charges for this concept are made to the other companies of theirs that are operating in other countries, with which these companies will obtain fewer benefits (hardly any) and will pay less taxes.

Then the money received from these royalties in the low-tax country is declared as profits, and that money is left “clean” for the big company. Simpler impossible.

This is something that everyone knows and that is how companies such as Facebook, Amazon and others pay only around 11% in taxes, when other companies pay close to 30%.

With the change of Biden in the North American presidency, this may be about to change, as Mr. Biden has proposed to the OECD that companies pay for the benefits they obtain in each country. Finally !!! ?

As I am somewhat older and I have a natural distrust of what politicians say, we will have to give time to see what these negotiations come to, and I am sure that companies will move their “influences” (they say “lobby”) to delay and reduce the amount of taxes to be paid.

And to complicate things a bit in Europe there is a significant discrepancy between the regulations of the various countries, with taxes varying between 30% in France and 12.5% ​​in Ireland.

It is also time that in Europe and among ourselves we do not “steal” from each other and have harmonized taxes.

Maybe Mr. Biden helps get us to agree.

Be that as it may, it is urgent that tax systems are fairer and those who earn the most contribute more, without cheating of any kind.

But we must not forget that the current traps have been accepted for dozens of years by the leaders that we have had and that we have.

This tax injustice costs hundreds of billions of dollars annually according to data from the Tax Justice Network, and it is time for that injustice to end. Without delay.

Will they do it ?

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Amador Palacios

I am an electronic engineer with more than 40 years working in industry. I like to reflect on Technological and Social issues