The Shape of Code

I recently bought the book Valuing Intellectual Capital by Gio Wiederhold because I thought it might provide some useful information for a book I am working on. A better title for the book might have been “How to use intellectual property tax rules to minimise corporation tax”, not what I was after but a very interesting read none the less.

If you run a high-tech company that operates internationally, don’t know anything about finance, and want to learn about the various schemes that can be used to minimise the tax your company pays to Uncle Sam this book is for you.

This book is also an indispensable resource for anybody trying to unravel the financial structure of an international company.

On the surface this book is a detailed and readable how-to on using IP tax rules to significantly reduce the total amount of corporation tax an international company pay on their profits, but its real message is the extent to which companies have to distort their business and engage in ‘unproductive’ activities to achieve this goal.

Existing tax rules are spaghetti code and we all know how much effect tweaking has on this kind of code. Gio Wiederhold’s recommended rewrite (chapter 10) is the ultimate in simplicity: set corporation tax to zero (the government will get its cut by taxing the dividends paid out to shareholders).

Software developers will appreciate the “here’s how to follow the rules to achieve this effect” approach; this book could also be read as an example of how to write good software documentation.