European Union leaders will consider imposing 25 percent tariffs on a range of US imports, including steel, clothes, and food, but not bourbon or other alcoholic drinks, following US President Trump’s decision to impose tariffs on imports from the EU.
Ok. Let’s take a step back
You have companies in Poland. Let’s call them A, B and C.
And we have company D in USA.
One of those A,B,C is a “child” of company D. Other two simply do business with company D.
Company D in they finacial statmet - that is a 3rd party statment that you have no rights to audit in any way, in some cases it want even be avaible to you - claim that they earned $10M from each A, B and C. (This is the “hearsay” becouse it’s an information form outside your bouble of control. You have no way of verifying it. US gov have, but they are 3rd party to you and company A, B and C)
A, B, and C each in their tax reports created for you claim that those $10M is their cost.
In case of one you say “no, it’s not your cost, it’s your profit”.
What specific difference between A, B, C makes you say that? One is similarly named to D? It won’t be, by next tax year. All all registered in Poland. All have polish board. All spand money at company D. What’s the difference? What parameter would you choose to tax one of those but not the other?
Let’s go with what you are saying, even though you didn’t address a single point that I mentioned. Define what you mean by “rule of law”, be clear and specific, don’t hide behind polemics! What is your definition of rule of law? You brought it up, define it. I never acted high and mighty and brought up “rule of law”. I said the Americans need a taste of their medicine.
Back to your example.
You have 3 polish companies that interact with a US corp. One is the actual subsidiary and two other are clients.
You’re saying you can audit ABC, but you can’t figure out which one is the subsidiary and which ones are clients? Are you serious? I have zero professional experience in accounting and even I would be able to tell the difference between a client and subsidiary if I had access to their internal accounts (P&L, balance sheet, cash flow statement over multiple quarters).
I am not an expert on tax scamming methods, but I would argue I may have more knowledge than the average person (or not).
Why would Corp D even use the model you describe? Why would they try and hide within Polish ABC? Why not just openly say C is our subsidiary, make it a cost centre and redirect the actual money to Company E in Luxembourg or Isle of Mann. Subsidiary C always fails to make any profit. Top American brand D that everyone in the world knows, has a poor subsidiary C in Poland that is never able to make a profit. The crocodiles are crying about poor Polish subsidiary C. You ask a crocodile about subsidiary C and the crocodile says “it is such a gross oversimplification that subsidiary C’s losses are a tax scam. We are trying to develop professional experience in Poland via subsidiary C. Don’t you believe in the rule of law?”
This is where your lack of imagination and inability to think beyond rules set by American oligarchs comes into play.
Let’s say we made a thought experiment and assumed your ABC model is viable (it is not viable because the profits will be re-directed to a tax shelter jurisdiction and Company D won’t bother with local-only schemes because they are not efficient). Nevertheless, you do have a way of verifying the total sales by company D in Poland. This applies to both B2C (shipments into channel, POS data) and B2B sales (VAT calculations, government stats agency research).
What you are arguing is nothing can change, nothing should change and we should always kiss the feet of the oligarchs that run company D.
I am saying the arguments by the army of lawyers are bullshit and if you really want to, you can make their jobs redundant. It’s all about gumption and willingness to rock the boat.