question: When huge companies don’t pay tax, is it illegal? If not, what are they doing wrong?
comment: The tax code is utterly, incomprehensively, massive. And as with anything that complex, there's a huge variety of what you may think of as loopholes to pay less in taxes. Many of these are intentional, but it's not uncommon to find a way that fits the letter of the law, but not in the way it was intended. For a made-up example, let's say there's a law that says any money you spend on uniforms for employees is not taxed, and a uniform is defined as something for business use by employees that brands them as part of the company. Mega Corp Inc sees this law and decides that company vehicles, which have the Mega Corp logo on them, fit the definition, and then writes off their $20 million fleet as tax exempt. It fits the letter of the law, so they get away with it (at least until a new law is passed to fix the loophole). Now most loopholes are not nearly this large, but for a company that's big enough, it still becomes cost-effective to pay someone to look through the thousands of pages of tax codes, exceptions, exemptions, etc to find similar ways to exploit it in dozens of small ways that add up quickly. Another way to avoid taxes is to lobby legislators to pass laws specifically in your favor. If your product is medical software, maybe you lobby Congress to pass a law that gives a tax break to medical software producers. Both of the above are types of tax avoidance - legal methods of paying fewer taxes. And almost everybody does this - if you claim student loan or mortgage interest, that's a a legitimate method of tax avoidance. But people get upset about large companies doing it because they begin to stretch what the laws are intended for, and do it in ways that only they benefit from. There's also a belief that corporations are morally obliged to pay more in taxes than individuals because corporations see a higher net return on how those taxes are used. It's also important to distinguish between tax avoidance (legal) and tax evasion (illegal). It becomes tax evasion when you actually break the law rather than simply finding loopholes within the confines of the law. So tax avoidance is when you put money into an IRA to avoid paying taxes on it for now. Tax evasion is when you don't report that income altogether to avoid ever paying taxes on it.
passages: BULLET::::- the subsidiary is an active company, and
  
  BULLET::::- the Dutch parent company holds an interest of at least 5% of such company.
  
  Section::::Exemptions.:Foreign branch.
  
  Any income received by a Dutch company from a foreign branch is exempt from Dutch corporate tax, provided such branch is a permanent establishment or representative.
  
  Section::::Tax haven.
   A controlled company is a controlled foreign company if it is tax resident outside the UK and it is subject to a charge to tax less than it would have been were it a UK resident company. This is determined by comparing the actual charge to tax to a corresponding UK tax. In computing the corresponding tax, lower UK rates of tax on small companies are considered. Further, there are taken into account certain adjustments to income and fiscal years.
   There is a risk of double taxation whenever a company receives income that has already been taxed. This could be dividend income, which will have been paid out of the post-tax profits of another company and which may have suffered withholding tax. Or it could be because the company itself has suffered foreign tax, perhaps because it conducts part of its trade through an overseas permanent establishment, or because it receives other types of foreign income.
   BULLET::::2. A Controlled Foreign Company ("CFC") is a company controlled by a UK resident that is not itself UK resident and is subject to a lower rate of tax in the territory in which it is resident. Under certain circumstances, UK resident companies that control a CFC pay corporation tax on what the UK tax profits of that CFC would have been. However, because of a wide range of exemptions, very few companies suffer a CFC charge.
  
  BULLET::::3. Schedules B, C and E used to, but no longer, exist.
   The company receiving the losses may offset them against their own taxable profits. Exceptions include that a company in the oil and gas extraction industry may not accept group relief against the profits arising on its oil and gas extraction business, and a life assurance company may only accept group relief against its profits chargeable to tax at the standard shareholder rate applicable to that company. Separate rules apply for dual resident companies.
   In a debate on Corporate Tax Avoidance on 7 January 2013, MPs highlighted companies who accepted UK Government contracts but paid little or no tax. Elphicke singled out technology companies Oracle, Xerox, Dell, CSC and Symantec who – with a combined turnover of £7 billion – earned almost £0.5 billion from Government contracts and yet paid no corporation tax whatsoever. Overall he said 10 technology companies receiving over £1.8 billion from the taxpayer paid £78 million in taxes on UK earnings of just over £17.5 billion of turnover. This was "unacceptable, unethical and irresponsible."
   Most jurisdictions tax foreign corporations differently from domestic corporations. No international laws limit the ability of a country to tax its nationals and residents (individuals and entities). However, treaties and practicality impose limits on taxation of those outside its borders, even on income from sources within the country.
  
  Most jurisdictions tax foreign corporations on business income within the jurisdiction when earned through a branch or permanent establishment in the jurisdiction. This tax may be imposed at the same rate as the tax on business income of a resident corporation or at a different rate.
   Effective for accounting periods beginning on or after 1 April 2015, the "Finance Act 2015" imposes a levy on company profitsexcluding those of small and medium-sized enterprisesthat are routed via "contrived arrangements" to tax havens. The arrangements can concern either those that involve entities or transactions lacking economic substance, or efforts by a non-UK company to avoid a UK taxable presence. Companies that determine that they are subject to the tax have a statutory duty to notify Her Majesty's Revenue and Customs of that fact within three months after the end of the accounting period in question.
   Jurisdictions often impose different income-based levies on enterprises than on individuals. Entities are often taxed in a unified manner on all types of income while individuals are taxed in differing manners depending on the nature or source of the income. Many jurisdictions impose tax at both an entity level and at the owner level on one or more types of enterprises. These jurisdictions often rely on the company law of that jurisdiction or other jurisdictions in determining whether an entity's owners are to be taxed directly on the entity income. However, there are notable exceptions, including U.S. rules characterizing entities independently of legal form.
   Tax avoidance by corporations came to national attention in 2012, when MPs singled out Google, Amazon.com and Starbucks for criticism. Following accusations that the three companies were diverting hundreds of millions of pounds in UK profits to secretive tax havens, there was widespread outrage across the UK, followed by boycotts of products by Google, Amazon.com and Starbucks. 
  
  Following the boycotts and damage to brand image, Starbucks promised to move its tax base from the Netherlands to London and to pay HMRC £20million., but executives from Amazon.com and Google defended their tax avoidance as being within the law.
   Section::::Transfer pricing.
  
  Transactions between a corporation and related parties are subject to potential adjustment by tax authorities. These adjustments may be applied to both U.S. and foreign related parties, and to individuals, corporations, partnerships, estates, and trusts.
  
  Section::::Alternative taxes.
  
  The United States federal Alternative Minimum Tax was eliminated in 2018.
  
  Corporations may also be subject to additional taxes in certain circumstances. These include taxes on excess accumulated undistributed earnings and personal holding companies and restrictions on graduated rates for personal service corporations.
   Amazon announced in May 2015 that it will start paying tax in the UK on British retail sales rather than booking sales through Luxembourg, this will mean the group will not have to pay the diverted profit tax.
  
  Section::::Diverted profits tax.:Australia.
   Corporate tax is imposed in the United States at the federal, most state, and some local levels on the income of entities treated for tax purposes as corporations. Since January 1, 2018, the nominal federal corporate tax rate in the United States of America is a flat 21% due to the passage of the Tax Cuts and Jobs Act of 2017. State and local taxes and rules vary by jurisdiction, though many are based on federal concepts and definitions. Taxable income may differ from book income both as to timing of income and tax deductions and as to what is taxable. The corporate Alternative Minimum Tax was also eliminated by the 2017 reform, but some states have alternative taxes. Like individuals, corporations must file tax returns every year. They must make quarterly estimated tax payments. Groups of corporations controlled by the same owners may file a consolidated return.
   Income from LTCs is taxed after deducting the expenses of the company. The share of these revenues and expenses is transferred to shareholders according to their share in the company. Earnings from the company are taxed at the personal tax rate, even if it is more or less than the standard income tax rate for New Zealand companies. This is a significant point of difference with the LAQC. The rule limits the amount of damages similar to those that apply to limited liability companies. Owners can take into account only the economically justified costs. Losses that can not be claimed in the current period can be extended to subsequent years (periods), but only within the amount of participation of the shareholder. LTCs deliver declarations showing the distribution of income and expenses to shareholders.
   Tim Waterstone and James Daunt have been critical of tax avoidance by Amazon.com in the British press. Amazon has received sustained scrutiny for the amount of its overall sales that are reported by its UK subsidiary, in comparison to those 'processed offshore in Luxembourg to avoid UK tax'. In the 2012-13 financial year, Amazon paid £3.2 million in tax on sales of £4.2 billion and received £2.5 million in grants from the government. In the same period, it was revealed that Waterstones paid £11.9 million in tax, despite an operating loss of £25.4 million and sales of £410.4 million.
   Some jurisdictions, such as Swiss cantons and certain states within the United States, impose taxes based on capital. These may be based on total equity per audited financial statements, a computed amount of assets less liabilities or quantity of shares outstanding. In some jurisdictions, capital based taxes are imposed in addition to the income tax. In other jurisdictions, the capital taxes function as alternative taxes.
  
  Mexico imposes an alternative tax on corporations, the IETU. The tax rate is lower than the regular rate, and there are adjustments for salaries and wages, interest and royalties, and depreciable assets.
  
  Section::::Tax returns.
   Caffè Nero has not paid any corporation tax in the UK since 2007 and has been subject to ongoing criticism., however, the [BBC]] reported that "there is no suggestion that Caffe Nero has done anything illegal." and that "Caffe Nero has previously rejected accusations that its complex corporate structure involving various holding companies is designed to avoid corporation tax." 
   As of 1992, the United States and most OECD countries have legal authority to tax a domiciled parent corporation on its worldwide revenue, including subsidiaries; as of 2019, the US applies its corporate taxation "extraterritorially", which has motivated tax inversions to change the home state. By 2019, most OECD nations, with the notable exception of the US, had moved to territorial tax in which only revenue inside the border was taxed; however, these nations typically scrutinize foreign income with controlled foreign corporation (CFC) rules to avoid base erosion and profit shifting. 
   BULLET::::3. A controlled foreign company ("CFC") is a company controlled by a UK resident that is not itself UK resident and is subject to a lower rate of tax in the territory in which it is resident. Under certain circumstances, UK resident companies that control a CFC pay corporation tax on what the UK tax profits of that CFC would have been. However, because of a wide range of exemptions, very few companies suffer a CFC charge.
   Corporate tax rates vary between tax jurisdictions. The national rates of Organisation for Economic Co-operation and Development (OECD) countries vary from a low of 8.5% in Switzerland to a high of 35% in the United States, with an average of 22%. In addition to the federal tax rates, provincial, state and local taxes may also apply in most jurisdictions. For example, the 2015 provincial corporate tax rates in Canada range from 11.5% to 16% in addition to the federal tax rate of 15%, unless taxable profits of small corporations are low enough to qualify for a lower tax rate.
   Section::::Other corporate events.:Acquisitions.
  
  Corporations may merge or acquire other corporations in a manner a particular tax system treats as nontaxable to either of the corporations and/or to their shareholders. Generally, significant restrictions apply if tax free treatment is to be obtained. For example, Bigco acquires all of the shares of Smallco from Smallco shareholders in exchange solely for Bigco shares. This acquisition is not taxable to Smallco or its shareholders under U.S. or Canadian tax law if certain requirements are met, even if Smallco is then liquidated into or merged or amalgamated with Bigco.
  
  Section::::Other corporate events.:Reorganizations.
   Many systems additionally tax shareholders of those entities on dividends or other distributions by the corporation. A few systems provide for partial integration of entity and member taxation. This may be accomplished by "imputation systems" or franking credits. In the past, mechanisms have existed for advance payment of member tax by corporations, with such payment offsetting entity level tax.
   Controlled foreign company rules in the UK do not apply to individual shareholders, but otherwise they are similar to the U.S. rules. UK resident companies are subject to a charge for tax on undistributed income of low tax controlled foreign companies of which they are shareholders. Control for this purpose is not a mechanical test, rather one of factual control. However, control is considered to exist if the shareholder (or shareholder group of companies) owns 40% or more of voting interests.
   BULLET::::- foreign corporations who have a permanent establishment in the country, or
  
  BULLET::::- corporations deemed to be resident for tax purposes in the country.
  
  Company income subject to tax is often determined much like taxable income for individual taxpayers. Generally, the tax is imposed on net profits. In some jurisdictions, rules for taxing companies may differ significantly from rules for taxing individuals. Certain corporate acts, like reorganizations, may not be taxed. Some types of entities may be exempt from tax.
   Section::::Corporate tax.
  
  The corporate tax in Slovakia stood at 22% for 2014. Resident companies are those which have their legal seat or place of effective management in the Slovak Republic.
  
  Section::::Corporate tax.:Corporate Income Tax.
  
  Corporate income tax stands at a rate of 21%. This is the final tax on 2019 profits of a corporate because dividends paid in 2019 are not taxed to shareholder if the shareholders are corporate. 
  
  When setting up a business, there are some points that should be ensured:
  
  -Prepare the registration for company income tax
  
  -Record accounting
  
  -Prepare company tax return for income tax
  