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TRUMP – How will he win the Mexican shell company game?
Trump says that he will tax products that American manufacturers
produce outside of the US, after moving factories outside of the US,
that are then exported into the US for sale.
So how will Trump solve the following problem?
American Condom Co. (ACC) relocates its US factory to Mexico.
ACC in Mexico sells 10,000 condoms a month to Mexicana One.
Mexicana One sells 10,000 condoms a month to Mexicana Two.
Mexicana Two exports 10,000 condoms a month to the US.
Mexicana One & Mexicana Two are shell companies created by
ACC in Mexico and registered in Mexico.
Mexico’s govt sure won’t be eager to inform the US that ACC
registered the two Mexican companies; Mexico just won’t disclose it.
- Rona LachatLv 74 years agoFavorite Answer
An Imported ITEM is an Imported ITEM.
Customs does not have to figure it out.
The person/company IMPORTING has to provide whatever supporting documentation required.
That Company A owns B C and D so what.
Company A could be in Taiwan company B could be USA company C could be Guatemala. CUSTOMS DOES NOT CARE WHO. It does care WHERE the item is MADE.
Customs does not need to search it out. They might if they suspect fraud.
In your example #2 Needs to prove where it is made for the appropriate duty and taxes to be charged.
Many ways companies try to hide things moving stuff from one company to the next.
Usually to hide from the TAX Man. If they suspect something then the accountants go to work to follow the money. It can and does get complicated
This sort of thing is not done with just two or three companies but dozens linked to each other in many countries.
The difficulty is that the Factory might sell stuff around the world under many brand names. These might be re sold by the purchaser to many other countries before they eventually get back to USA.
TRUMP says...... a lot of stuff.
TRUMP BUSINESSES currently do this sort of thing to move money from one county to the next in their Corporate Empire. To legally avoid paying the Local Taxes.
ALL MULTINATIONAL COMPANIES DO IT.
International Trade is just that TRADE. All countries want to sell more than they buy.
Company Owners the Shareholders WANT MAXIMUM PROFIT and least amount of TAX, They operate their business to do this.
The Owners of ACC do not care WHERE OR WHO makes their stuff. They do care which way they make the most PROFIT.
Much easier to change the Tax Rules for what is considered income and just tax it accordingly.
Many TAX Loopholes the Owners use to avoid paying Taxes. GUESS who helps write the TAX rules. HINT people that OWN STOCKS.
The shell game is played in all countries including the USA.I n USA is is done state to state to avoid paying the state taxes, the country taxes in a state and local taxes by individual cites.
Head Office in one state Payroll Office in some other place and the workers somewhere else.
The states in turn tweak their laws for those getting around their tax laws.
Fuel Tax for example on a long distance truck . Which state sells the fuel? Some states require the truck to buy some before they can just drive thru. WHY did they fill up next state? LOWER PRICE hint lower taxes.
If the company has an address in the state they pay a different tax rate. If employee has an address in a state he pays a different rate. If he works in next state it can be another one lower or higher.
Accountants make a career in figuring out which way to organize a company to pay the least amount of tax. IN TOTAL. They pay some in A some in B and some in C. They do it in a way that the TOTAL amount is the least.
STUFF LIKE THIS