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Comment by varispeed | Hacker News Reader

Some tax havens banned IP holding companies. Why is this not written in international law and closed once and for all?

> Why is this not written in international law and closed once and for all?

Because there is no single document for "international law" that you can just change. International law is basically word-of-mouth agreements and norms bunch of countries have, of what they agree to follow, without anyone actually being responsible for creating, maintaining and enforcing them.

Basically, international law is as far away from "law" as you can get in the traditional sense, and a bit of a gentlemen agreement today.

As far as I know the One World Government has not yet passed such legislation.

The main reason for that is because there is no One World Government yet, and no such thing as international law.

Or at least just eu regulations.

Because the vote needs to unanimous and some countries don't want to give up their revenue stream.

The laws come from EC and they can keep pushing it until it passes as with many things. There must be a conflict of interest in the EC if they don't do it. Such changes should be a no brainer - the famous levelling of the playing field.

Its pretty much pointless though, if you can't move all your revenue to an ip holding company, you just have to make it slightly more realistic.

In case of Starbucks: they move a ton of their profit to a coffee bean exporter from Switzerland which they own themselves. And how should a government say how expensive those beans can be?

Any company can outsource part of their revenue to a subsidiary in a different country like that and it would be extremely hard to encode in law when they wouldn't be allowed to do this "because of taxation". Uber could for example move their cloud management costs to some company in a low tax country, or maybe have their developers outsourced to some low tax country. How would you decide that is "valid" outsourcing vs "tax cheating" outsourcing?

I think for companies that big, they should be required to launch a tender just like public sector e.g. for a supply of beans. This means their own beans company would be excluded because of conflict of interest. It won't stop them from delivering beans to other companies though, but it will make a tax fiddle much more difficult.

EU doesn't touch taxation, as far as I know. That's up to the individual member states.

They do, for example there are limits on how low VAT can be.

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