Subsidiary A (in state with high corp tax) pays millions in "consulting fees" to same MNC's subsidiary B (in state with no corp tax), but the actual value of the consulting B delivers to A is negligible. Legal? Perhaps. But why are you so opposed to calling it "illicit"? Thanks!https://twitter.com/MForstater/status/1022821492017557504 …
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I am thinking about how it makes sense to use this language, Maya, and very grateful for your help and also for the other responses my question has elicited. I hope we can work toward a clear, useful definition that's responsive to the real-world phenomena.
You are welcome -- it is important I think that the concepts/definitions, real life case examples and numbers/estimates line up in a way that is recognisable to all concerned -- otherwise there is a danger that the words and numbers mean everything and nothing.
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Agreed. And that initial scenario on first thoughts looks like avoidance, assuming one knows for sure that the service provided is actually negligible and was always intended that way. But it might be shown openly.
Thanks. Twitter will use this to make your timeline better. UndoUndo
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