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Comment by mamon | Hacker News Reader

There is no such thing as "double taxation", because tax rates are not additive, thanks to tax treaties. So, if the tax rate is 30% in US and 20% in EU and you've already paid EU tax, you only owe IRS the difference (10%) not full US rate.

Since, thanks to Trump, US tax rate is now almost equal to European, then you pay almost no additional tax for bringing your profits back to US.

The only remaining issue is additional accounting required, meaning you have to hire accountants both in EU and in States.

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When I hear about “double taxation” in the U.S. I think of the taxation of corporate profits combined with income taxes. For capital invested in stocks, I am taxed twice on any income derived.

Once at 0% in Ireland and once at 15% for capital gains. Where can I sign up to have my income double taxed like this?

My understanding is that this is only possible for very profitable corporations. Can smaller entities get away with this?

You are taxed only once: with income tax. Company is also taxed only once: with corporate profit tax. The reason why that makes sense is because corporation is treated a separate legal entity (person), and that's a good thing for you, because you are not responsible for company's mistakes (that's why they are called "limited liability companies". Publicly traded companies also have limited liability).

Also, if, as a majority shareholder you appoint yourself as the CEO and pay yourself a salary, it is tax deductible for your company, so money that goes to your salary is taxed only once.

That's a reasonable first thought.

When I hear "double taxation" in the US I usually think first of self-employed people sometimes having to pay both income and payroll tax compared to an otherwise employed person only paying income tax.

Then maybe I think about places like Missouri where after you take your post-tax income and buy a car with sales tax on the purchase, you pay yearly for that car as a personal property tax (which does not include your license plate, or inspection, or the city sticker some local places require).

That's true for most countries. For the USA those tax treaties for some reason didn't work like that and double taxation of corporate profits does occur.

https://hbr.org/2012/07/a-better-way-to-tax-us-businesses

Under its current system the United States taxes the worldwide income of its citizens, including corporations. Foreign income is taxed by the source country and then taxed again by the U.S. upon repatriation

Because there are credits against the double taxation, if US tax rates = the tax rate in that jurisdiction then it cancels out. But many places have different rates and then the double taxation kicks in again - they get taxed on their income once abroad, and again if they bring the money back to the USA, so they don't do it. Changing the rates is a band-aid: most countries don't do this kind of double taxation to begin with.

> most countries don't do this kind of double taxation to begin with.

They would if they could, but they don't have ICBMs or aircraft carrier fleet to support their claims.

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