Re:Uber's Still Not Profitable
by varispeed on Sunday August 07, 2022 @06:55AM
(#32375490)
Author hears the bells, but can't quite put a finger on it.
If a highly successful company is not profitable, then it usually means only one thing - they are very good at tax avoidance.
Profit attracts Corporation Tax, so big corporation use creative accounting techniques to transfer it somewhere where they don't have to pay tax or it is very very low.
There are other reasons why one would want to pocket the profits / hide - for instance when a salary attracts very high tax - paying a CEO level salary may seem like a waste. So what often companies do, they are signing a contract with a company indirectly controlled by a CEO level for services that sound legitimate and pay the fees. Then that company is doing it's own creative accounting.
People forget that a company does not have to have profit to be healthy. Profit comes after all obligations and investments are paid. It is actually in the company interest to not have any profit, so they reinvest money and pay good salaries.
Only people interested in profit are shareholder and usually it comes at the expense of people who actually do the work.
If a highly successful company is not profitable, then it usually means only one thing - they are very good at tax avoidance. Profit attracts Corporation Tax, so big corporation use creative accounting techniques to transfer it somewhere where they don't have to pay tax or it is very very low. There are other reasons why one would want to pocket the profits / hide - for instance when a salary attracts very high tax - paying a CEO level salary may seem like a waste. So what often companies do, they are signing a contract with a company indirectly controlled by a CEO level for services that sound legitimate and pay the fees. Then that company is doing it's own creative accounting.
People forget that a company does not have to have profit to be healthy. Profit comes after all obligations and investments are paid. It is actually in the company interest to not have any profit, so they reinvest money and pay good salaries. Only people interested in profit are shareholder and usually it comes at the expense of people who actually do the work.