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Originally posted by HarmlessRabbit
[B]USA-based operational expense (say, a tech-support callcenter):
- Cost of making the product: $100
- Cost of callcenter per unit: $10
- USA tax rate on revenue (say 20%)
- USA tax: $20
- Foreign VAT: 10%
- Foreign VAT for selling the product $10
Gross profit: $100 - $20 - $10 - $10 = $60
(vastly oversimplified, I know)
Foreign-based operation expense (say, a tech-support callcenter):
- Cost of making the product: $100
- Cost of callcenter per unit: $10
- USA tax rate on revenue (say 20%)
- USA tax: $18 (only paying on $90 since the $10 is written off)
- Foreign VAT: 10%
- Foreign VAT for selling the product $10
Gross profit: $100 - $18 - $10 - $10 = $62
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What? "Gross Profit" equals "Cost of making the product" minus taxes? And taxes are assessed on revenues? And VATs are paid by the producers of the product? Um, your example is flawed, rabbit. Nice try though
Try it again, except this time define profit as revenue minus expenses, assume income taxes are imposed not upon revenues but on profits, and assume that VATs are paid by the consumer of the product. Got that?
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What's so hard to understand?
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You tell me, genius.
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Tell me, apechild, how long have you been beating your wife?
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WTF???