Meaning Austrian people pay money to a US corporation, the money is lost from the Austrian circulation, and won’t be taxable either.
That issue – of global profits all being moved into the US or taxhavens – has happened for many years now, and is severely hurting the economies of many countries.
A corporation has effectively only a few things to do with their revenue which are or can be directly taxed more effectively.
It can hire more people, or pay it's employees more, which means that money is taxed as income.
It can invest the money directly which means that return on that investment can be taxed as capital gains.
It can pay out dividends to it's shareholders which means that this money can again be taxed directly as capital gains.
It can invest that money internally to expand which again can be taxed at various levels, sales tax, income tax, property tax etc.
Corporations are legal persons, and income accruing to distinct legal persons is subject to tax. E.g. I get paid by my employer, and then pay tax on that. Then I pay my nanny with post-tax dollars, and she pays tax on that. That's not "double taxation"--just the nature of an income tax.
Imagine that instead of forming a corporation, a bunch of investors nominated Bob to be the legal entity in charge of the whole business. Bob held all the bank accounts, directly employed everyone, and booked all revenue minus his expenses as his income. A series of contractual arrangements required Bob to pay out the profits to the investors. Under that circumstance, there would be no doubt that profits would be taxed when they initially accrued to Bob, then again when he paid the investors.
It should be noted that nothing precludes companies from organizing as something other than a corporation. Partnership income, for example, is only taxed when it is received by a partner.
The distinction is that the tax system does not give a deduction to individuals who are spending their money on personal "consumptive" reasons. By and large, the system does give deductions for expenses incurred for business.
In this light, the double taxation of corporations is unusual. Clearly, the dividends are to pay back investors, just as interest is part of paying back lenders. But interest is deductible; why not dividends? Many theories have been advanced to justify this double tax, but none have won wide support among scholars.
(Interestingly, in your example, what probably would happen is that Bob would essentially be the effective managing partner of a general partnership. So we would be under partnership tax rules.)
A last quibble: partnership tax actually taxes partners even while the income is held by the partnership. (Well, generally; there apparently are some odd trust schemes that sort of avoid this.) in general, Partnerships must allocate the income to the partners, who bear the burden of tax. Then, they must later distribute the income in accord with how they've allocated it.
However great and driven Elon Musk might be, he would never have made a single cent if he had started Paypal in Somalia. And what differentiates a market in Somalia from another market like, let's say, France?
Let's take this further. Zuckerberg makes a lot of money in France solely thanks to the technological infrastructure built by the society living there. Why would the French public let Facebook exploit this environment for his personal profit, while not paying its fair share to maintain the very same socio-economic environment that allows it to make money in the first place (and that everybody else is contributing towards)? Anyone would describe this behavior as parasitism.
Let's imagine you spend ten years building a shoe factory. After ten years, a stranger comes in and starts to use your factory at night to make shoes and sell them for his profit. Are you going to let him use your factory for free?
Even if your answer to this is "Well maybe there shouldn't be any public infrastructure in the first place", it simply shifts the problem somewhere else: if a private company would be managing the infrastructure, rest assured they would also ask for usage costs...which is precisely like a tax. A feodal tax.
I wouldn't say there shouldn't be public infrastructure. For the last part, though, mightn't Facebook consider charging the company managing infrastructure for the ability of their customers to access Facebook? I think people would be a lot less likely to subscribe to an ISP that didn't facilitate access to Facebook.
It would be a very drastic change, and may items would need to have their prices adjusted, as low profit items could be a problem.
The clever bit is that tax heavens are not longer possible, because it's not important where you move your profit to.
If someone in power is so stupid to do it, companies will stop operating on their country but the world will continue going around and tax heavens will continue existing.
Governments are bankrupt totally now, expending way more that what they earn, with 5% deficits or more and want to raise more and more money in taxes, but there is a limit on what they could extract, as people can stop working if they become slaves.
Take Q8, they own gas stations in Denmark. Apparently they've made no profit in Denmark, EVER. That is of cause a blatant lie. They've just moved the profit abroad. Taxing the revenue, directly at the pump, would either drive a lying company out and make room for more honest ones, or they would start paying their share.
There's ALWAYS someone who see an opportunity. Coca Cola leaving because they refuse to pay your tax? Fine Pepsi will swoop in that same day.
What you're suggestion is that companies will only ever operate in countries that makes it possible to be creative with taxes.
It depends, for we have a state level test of this, Washington State and Boeing, which has a very boom and bust pattern of profitability. Of course, political muscle was used on them when they last tried to expand outside of the state, but I'm sure that initially, when the gross receipts tax was imposed, it just cost too much for them to move their factories elsewhere.
Of course, this tax does nothing good for other companies that it hits (there's a lower threshold as I recall, otherwise few would ever start up a company in the state), that aren't so profitable.
The US already have sales taxes, at least in some places. The US generally, as is my understanding, doesn't have a VAT. VAT is a consumption tax, sales taxes are taxing the sellers purchase.
The differers is very subtle.
There's also exemptions or lower rates for things like food, and even sales tax "holidays" when certain classes of items are free of sales tax for a few days. All of this complexity is one reason Internet companies don't want to collect it.
If we have a VAT, no one's told me about it (a general one, anyway)! The concept does get mooted every once in a while.