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HopefullyFunny69 t1_jbe8a5p wrote

Why the fuck does Nvidia not pay taxes?


goldcakes t1_jbemuq9 wrote

Because semiconductors are a national security matter.


si3rra_7 t1_jbeu07k wrote

yep. if china wakes up cranky and "special military operations" Taiwan, let's just say that your next Iphone is gonna be delayed


Torontogamer t1_jbfzwct wrote

Lets just say your next... most everything is going to be delayed...


[deleted] t1_jbgsggj wrote

let's just say there's isn't gonna be a "next"


Obvious_Chapter2082 t1_jbesfa9 wrote

Go look at their 10-K, they paid around $2 billion, or a 50% tax rate. The reason their income tax expense is negative is due to R&D getting capitalized this year, so they get a large deferred foreign benefit, but that doesn’t reduce the actual tax they owe


the_fart_king_farts t1_jbeca4x wrote

Wait till you hear about how Ireland uses this to fuck over every other country in the EU.


Obvious_Chapter2082 t1_jbesgvv wrote

Nvidia’s situation has nothing to do with Ireland though


the_fart_king_farts t1_jbeu641 wrote

I guess; every company does this. My point was that it isn't only them doing horrible things.


Cakeking7878 t1_jbh3f62 wrote

Yeah here in the ol’ US of A, it’s Delaware, not Ireland


Obvious_Chapter2082 t1_jbh46g2 wrote

Eh, it doesn’t really have to do with Delaware either, that’s mainly for legal reasons anyways


Cakeking7878 t1_jbh9vjb wrote

If your not aware, Delaware is a tax haven. One address in deleware has a few hundred thousand odd companies are registered at it

A video on it as well


Obvious_Chapter2082 t1_jbhazs9 wrote

Most companies incorporate in Delaware for the ease of it and the legal protection, since they have a chancery court for corps

It can help tax-wise, but only with state taxes. And enough states have combined reporting laws at this point that the benefit is pretty thin anyways

In either case, Nvidia’s state taxes here are a very negligible portion of their tax expense


Fit-Plant-306 t1_jbg2qzv wrote

There are many charts like this on Genuine Impact’s app and are all similar. Corporations barely pay any tax. Good ol trickle down…


Obvious_Chapter2082 t1_jbg3p5s wrote

This is the danger of looking at highly technical tax information and assuming it’s a simple read. If you dig into the 10-K for this company, they actually paid about 50% of their profit in tax this year. The discrepancy comes from a new R&D capitalization policy, which gives them a deferred tax benefit on their foreign derived intangible income. This benefit is only a small portion of the actual higher tax they’ll pay from this policy, but the US portion doesn’t impact effective tax rates

It’s wrong to say that corporations barely pay any tax, because income tax expense is a misleading metric that doesn’t relate to the tax a company pays


Ayemann t1_jbexv6v wrote

haha right, 4.4b in profits, meh, tax credit.


Mangalorien t1_jbem0an wrote

They likely have good tax managers, tax specialists, tax advisors and tax consultants. Keep in mind that hey will still be paying other taxes like payroll taxes, property taxes and similar.


lo_fi_ho t1_jbe0opd wrote

NVIDIA pays zero tax? TIL


EVOOhhYeah t1_jbe6csh wrote

Not only that, but received $200 million in tax benefits for all that R&D spend. Tax breaks for R&D make sense for smaller orgs, but not at this scale. NVIDIA would continue to innovate at this scale without the tax breaks to maintain their market edge.


lo_fi_ho t1_jbe9o45 wrote

Why they do not pay tax?


Big_Knife_SK t1_jbeffso wrote

I don't know what the program is called in other countries but in Canada it's called SR&ED. Basically you can claim back up to 70% of the expenses you paid into R&D, including salary.


Fleinsuppe t1_jbenony wrote

so drug companies also get these huge tax breaks? wtf are we overpaying them for then?


Torontogamer t1_jbg0f5a wrote

same reason as most places, because that's what they think you'll pay for it ...

conceptually it makes sense to promote drug development, and most development, but in practice it's very hard to implement anything 'fairly' when they are billions of dollars at stake.


Cakeking7878 t1_jbh3tu5 wrote

Wtf. I keep hearing the whole point of capitalism “but they take risks when they invest, we can’t take away their profits. How will they innovate???”

Mean while they get tax breaks on this “risk”

Privatize profits, socialize the losses, bs is what it is


A_Doormat t1_jbg9f7r wrote

They do, its just not shown in this particular graph.


Obvious_Chapter2082 t1_jbes8mq wrote

That’s not true at all. The reason their rate is low is due to R&D getting capitalized this year, which increases the amount of FDII they pay.

If you look at the actual tax they paid this year, it’s around $2 billion, or a 50% tax rate


Obvious_Chapter2082 t1_jbernzc wrote

That’s their income tax expense, which isn’t the same thing as the tax they pay. Judging from their 10-K, they did pay tax at around a 50% tax rate for 2022


nope_nic_tesla t1_jbfiszl wrote

According to their 10-K filing they owe over $2 billion in deferred income taxes.


mev_one t1_jbe35pg wrote

What is the definition of "cost of revenue "?


Nexustar t1_jbe466x wrote

It's the "real" bit of the costs involved in delivering product. Materials, manufacturing & distribution. But I think it's a bit flexible (can differ company to company) - but in essence should involve costs that directly mirror production quantity.


mev_one t1_jbe4j24 wrote

Ok. I understand. At my company (car parts) it would be "direct cost". Labor, production expenses, and materials.


Gunra t1_jbec7ac wrote

Zero $ in taxes and getting money for R&D? It must be sick to live outside of the system.


Obvious_Chapter2082 t1_jbesk70 wrote

>Zero $ in taxes

They paid around $2 billion


gusofk t1_jbf3yn6 wrote

Where is that indicated on the graphic? It sure looks like they got a net tax benefit of $200 million


nope_nic_tesla t1_jbf9zf8 wrote

It's not, it's in their actual financial filings which one should look at before making erroneous conclusions from an infographic.


Obvious_Chapter2082 t1_jbfaw75 wrote

It’s in their 10-K. Their total tax expense is a benefit of $200M, but their current tax expense is $200B. It’s just that their deferred tax expense is a benefit of $202B


hawklost t1_jbfht33 wrote

Because we all know people on Reddit never make mistakes and/or intentionally misleading graphs /s


giteam OP t1_jbdxrev wrote

The price of graphics cards has now fallen from the super-inflated prices of 2021 to more 'normal' prices, and NVIDIA's FY22 revenue is actually flat from FY21 as a result



Tools: Figma


Nathanondorf t1_jbe4rsv wrote

I bought a 1070 Ti around 6 months after the 20 series came out. I paid roughly $250 $500* at that time. Today the 3070 Ti would be the equivalent. I don’t know if the 40 series has been out for 6 months, but one 3070 Ti is currently going for about $700, and I’m supposed to believe these prices are “normal”? I guess those prices aren’t too far off, considering inflation. Still higher than ideal though.

Edit: I looked up my receipt for said purchase of 1070 Ti in 2018. Looks like I actually paid around $500. I thought I purchased two cards for that price, but I guess my wife bought her own and I remembered wrong.


abusedporpoise t1_jbf54bj wrote

Depends what you mean by equivalent. The equivalent hardware performance would roughly be a 3050Ti


danielv123 t1_jbfpef3 wrote

Yep. And you might argue that 70 makes it the same skew, but you could also argue that they just shifted their lineup a step upwards with 70 series replacing 80 series.


Daniferd t1_jbe537z wrote

I saw new 3080s being on sale for $700 back in November. Some of them had Newegg gift cards in the tune of like $150 on top.


SBAWTA t1_jbijemq wrote

Anf 4070ti goes for $900, at least where I live.


georgewesker97 t1_jbeczc4 wrote

Prices are definitely not normal, in fact, NVIDIA is trying to maintain those cryptoboom prices. Id wagger that the flat revenue is because people are having none of that.


MichaelMJTH t1_jbe5lla wrote

The word ‘normal’ definitely deserves to be in quotation marks. Graphics card prices are in a weird spot. Manufacturing bottleneck have now loosened post the covid era electronics supply shortage. And the crypto mining crash has lead to demand decreasing dramatically, right as Nvidia had stock ready for the cards. So price deflation has happened, but it’s most noticeable mainly in the resellers/ 2nd hand markets where used stock is flooding.

However, Nvidia and their competitor AMD has on the other hand increased the prices for each tier of its latest generation flagship GPUs. This has led to a lack of the same enthusiasm for the latest GPU launch when compared to the previous generation launch in 2020. Couple that with the flood of prior generation used cards on the market, new graphics card sales in units and revenue were down year on year in 2022.


asclepiannoble t1_jbfm4xd wrote

Inflation-adjusted and tier-matched, GPU prices are definitely not normal :) But I suppose it's true that crypto-driven price inflation at least is no longer the concern now.

Now, it looks more like NVIDIA itself is adjusting the prices to match those at some points of 2021.


Deus_Novi5 t1_jbe0g8u wrote

Whats data center?


giteam OP t1_jbe19xd wrote

NVIDIA provides hardware and software solutions to businesses that need high-power computing for things like rendering, data analytics, AI training etc.


Deus_Novi5 t1_jbe1c3s wrote

Ah so like customer support


danielv123 t1_jbfqexn wrote

No, like licenses, A100 and H100 cards. H100 is 33k pre tax, each.

They sell them in pre built machines with 8x H100, 8Tbps bidirectional networking, 112 cores, 30TB of nvme storage and 2TB memory. That is 640gb VRAM per machine.

Oh, and they are linked together. They sell hundreds of these machines at a time.


The_Cultured_Freak t1_jbe1heh wrote

Apparently you need specialized hardware(and software) to store large chunks of data which should be easily accessible.


FormerKarmaKing t1_jbe49it wrote

Data center is a generic term for renting out the hardware needed to run services on the internet. Amazon’s AWS is the largest provider in the world with Microsoft and Google behind them. Competing against companies like those is obviously very hard.

NVIDIA, however, has a massive advantage when it comes to hosting software that requires a lot of GPUs. This includes graphics programs but also AI software.


markhc t1_jbfs8u8 wrote

I think the data center on this chart refers to the sales of GPU to big data centers like those you mentioned.

Or, in other words, the revenue from sales of their data-center cards like A100, V100, etc.


FormerKarmaKing t1_jbg0a4d wrote

Yeah, you’re probably right in terms of breaking out the revenue. The software services likely roll up under OEM & Other because they’re so tiny at this point.


Wind_14 t1_jbeda7j wrote

It's more like special server that is not only used to store stuff but also to do heavy-work jobs like AI, simulation (especially near real-life one) rendering animation etc.


magnora7 t1_jbfnkiv wrote

I think it's funny how the salaries of everyone but the owners is seen as a fixed asset to be minimized, part of the expense, but the "net profit" is only enjoyed by those at the top of the company. As if human beings who aren't management are a tool like a lathe or a computer that you just buy.

It honestly cracks me up how normalized this is, and how basically no one questions it.


proactiveplatypus t1_jbgkequ wrote

It’s not going straight into the pocket of Jensen Huang.

The net profit would be paid out either by investing in the company (ie, hiring more or retaining existing talent), paying down debt, or paying dividends to the shareholders.

Nvidia pays a pretty paltry dividend, but those fixed salary employees you mentioned also receive stock as compensation, so they would see some of that profit.


silenceisbetter1 t1_jbhr3jj wrote

Not only that, Executive pay especially in tech has increased every year for a decade on the % of compensation given in equity

There is some merit in my opinion to be willing as the CEO to bet your own earnings on the company and your ability to lead it, and then they profit when their employees do too because as you mentioned equity is almost a given in tech


Ericgzg t1_jbi0ozu wrote

Nvidia is a public company. Do you know what public company means?


magnora7 t1_jbjigi0 wrote

That stockholders are a part of management, and my point still stands?


Ericgzg t1_jbjn9g3 wrote

Nobody in management even owns 1/4 of 1 percent of shares. Not even the founder. Go read a book or something yeah.


magnora7 t1_jbjnfoe wrote

My point is still true, that profit is kept largely by management and stockholders. It's literally the definition of the word.


Ericgzg t1_jbmvkgm wrote

The profit is kept by the shareholders and only the shareholders. I own nvidia. If you own any large mutual funds, you own nvidia too. I think you don’t understand the structure of public companies.


girl_mourns_bro t1_jbfuc4e wrote

what does nvidia provide for automotive industry? 900 million $ is a lot of money...


garry4321 t1_jbfddt0 wrote

What I see is that if all of us gamers banded together and boycotted their proce gouging, we could make them either lower their prices or face a 4+ billion dollar loss.


bumblyburg t1_jbfhvft wrote

Why am I not seeing depreciation & amortization costs?


Obvious_Chapter2082 t1_jbfvewq wrote

It’s included in SG&A


bumblyburg t1_jbfzwch wrote

Got it. Is “SG&A” a category that typically includes depreciation/amortization?

(I can tell I didn’t pay proper attention in my accounting class)


vou_discordar t1_jbgnv5b wrote

I hate these graphs. You lose the relation between the parts. Beautiful but useless.


jep5680jep t1_jbgx6rq wrote

Can someone explain the difference between cost of revenue vs operating expenses?


Zombery t1_jbhq0so wrote

The fact that their net income is higher than their pre-tax income is truly impressive


rito-pIz t1_jbgspg9 wrote

Am I reading that "tax" right?


mooseson t1_jbh5y4b wrote

$200million tax benefit must feel nice every year.


[deleted] t1_jbi76vm wrote

I’m getting really tired of this visualization method


rusself t1_jbghq5f wrote

Instead of paying taxes.. they actually get more paid.. this fucken bullshit gotta stop


ctaylor0128 t1_jbgtluy wrote

PRE-TAX: $4.2 billion…. NET after taxes: $4.4 billion


mrmalort69 t1_jbh5qpn wrote

4.4b net income means they could pay out $169,000 per employee assuming about 26,000 employees. For fucks sake capitalism is messed up.


[deleted] t1_jbe88aw wrote



this_sort_of_thing t1_jbesen9 wrote

And then be dead in a few years because your product and services lineup is stagnant and your competitors are running rings around you.

It takes money to make money, and especially for high technology companies like nVidia