Originally Posted By: OneEyeJack
Not only are exports taxed but overseas operations are also taxed. There's a whole industry in setting up token companies to avoid taxes and keeping the cash offshore.
I think you are conflating the two.
Overseas operations are subject to the tax regimes of the overseas tax authorities.
A German company operating in the US is taxed according to US tax law.
An American company operating in Germany is taxed according to German tax law.
There will be regulations on transfer pricing etc to make sure multi nationals do not manipulate intercompany transactions to lower tax. However, this does not stop a company from setting up manufacturing in countries that help them from a cost and taxation basis.
The one major difference between the US and the rest of the world is with regards to lack of import duties or quotas. That puts foreign manufacturers at an advantage but if you see what has happened, Japanese and German manufacturers nevertheless manufacture vehicles in the US probably partially due to a lower cost of doing business.
But if you take say GM as a worldwide entity and VW as a worldwide entity, you would have to conclude that neither one could really outdo the other when it comes to using various tax systems to their advantage. For example, for sales to China, both will look to take advantage of any Chinese regulations, and China is now the biggest or second biggest vehicle market in the world. And as far as European markets are concerned, GM & Ford and Japanese manufacturers have manufactured vehicles in the same countries that European manufacturers have, so again are subject to a level playing field in terms of market conditions and tax.