Thursday, 25 October 2012

Death and taxes?

Now, it seems, it's just death, at least for international corporations.

We have to remember that the tax base for a company is always based on the profits it reports. And the reported profit in each and every case is that of each individual company within a group, and not for the group as a whole. There is no such thing (at present) as group tax accounting. Whilst it's not quite true we ignore groups for tax we do start from an assumption that they don't exist and then tweak the system to allow for them. Accounting, on the other hand, fundamentally works the other way round: the group accounts are more important than the individual accounts.

See here.