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Australian Govt Pledges Action On Google Tax Evasion

samzenpus posted about a year and a half ago | from the pay-up dept.

Google 331

daria42 writes "Looks like Google's habit of funneling billions of dollars in revenue through its Irish and Bermuda subsidiaries continues to attract unfavorable government attention globally. France has already announced plans to take on the search giant's tax evasion habits, and the Australian Government, to which Google paid just $74,000 in tax last year despite having Australian revenues close to $1 billion, has now confirmed plans to do the same."

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Avoidance vs Evasion (4, Insightful)

HungryHobo (1314109) | about a year and a half ago | (#42072303)

have they actually been charged with tax evasion?

TFA doesn't mention evasion(not paying the tax you owe and illegal) and it's very different to avoidance which is just using legal means to pay as little tax as you legally can.

It isn't very different (3, Insightful)

Kupfernigk (1190345) | about a year and a half ago | (#42072335)

Actually, you are wrong. Companies freely admit that they sail as close to the legal wind as possible. Whether they are over the line or not depends on a case coming to court. Avoidance is merely evasion that has not yet been shown to be illegal.

Re:It isn't very different (-1)

Anonymous Coward | about a year and a half ago | (#42072455)

Is English your native language?

Re:It isn't very different (4, Informative)

Anonymous Coward | about a year and a half ago | (#42072929)

Avoidance is merely evasion that has not yet been shown to be illegal.

Is English your native language?

What's your point? Regardless of whether the words "evasion" and "avoidance" are synonymous or similar in general usage, the distinction between "tax evasion" and "tax avoidance" as referring to illegal and legal activities respectively is widely accepted and standard terminology.

If you don't know this, perhaps it says more about *your* ignorance of the language.

Re:It isn't very different (4, Insightful)

HungryHobo (1314109) | about a year and a half ago | (#42072475)

lots of forms of tax avoidance have gone to court and been declared perfectly legal. so no, it's not a matter of "Yet"

If you do your own taxes then whenever you do anything legal to keep your tax bill down then you're avoiding taxes.
Ever put your money into a government saving scheme to which DIRT isn't applied? tax avoidance.

and sometimes the lawyers are wrong, they've missed a comma in the law or the judge decides that some interpretation of the law isn't correct.

Re:It isn't very different (3, Insightful)

Xest (935314) | about a year and a half ago | (#42072723)

It doesn't matter either way. Here in the UK for example the government has a corporate tax rate of something like 21%, yet Amazon paid no corporation tax on £7bn worth of sales.

It doesn't matter how they managed to do it, the point is the intention is clearly that they pay 21% of that in tax so the government has every right to collect that from them retroactively even if it means they technically did nothing wrong at the time.

As Ian Hislop put it on have I got news for you a few weeks ago he was spot on, stating something along the lines of:

"Okay yes, very funny, you're very clever, you found a loophole, now just pay us what you owe" ...and that's the attitude governments are now taking over this, quite rightly too. Nice to see Australia following France's lead, hopefully the UK and others will also join in now where this has come to light. You can't justify a situation where small businesses and most citizens pay the taxes it's intended that they pay and larger companies and individuals with more money don't because they have enough money to pay people to find loopholes.

People and companies can disagree with taxes and that's fine, but if you think they're extortionate then get them changed through political means, don't evade them and leave everyone else to foot the bill and subsidise your existence because you're too selfish to contribute your fair share to society.

Yes, yes, I know these tax dodger companies claim they still produce tax in other ways, like VAT paid, employees taxes and so forth, but they're still subsidised. The amount they pay isn't enough to cover healthcare to keep their workers healthy enough to work, the education system the rest of us paid for to give them an educated workforce to even make money in the first place, the highways they use to transport their products, the police, military, and fire brigade to protect their premises and so forth. That's why corporation tax is there in the first place - to help pay for this sort of thing. If they don't pay it perhaps the alternative is to remove services like police protection from them or something and let people steal from them at will making it a fair playing field.

Re:It isn't very different (4, Insightful)

HungryHobo (1314109) | about a year and a half ago | (#42072823)

You still don't seem to understand the difference between "evade" and "avoid"

so, the government starts a saving scheme to encourage people to save.

they offer to not charge you tax on the interest on money you save. the rate is a little worse than other saving accounts but you go with that one since without the tax you make a little more interest.

then a few years later some self righteous clown comes along and says to you "very funny, you're very clever, you found a loophole, now just pay us what you owe" and gives you a bill for 5 years back taxes on the account along with interest and penalties as if they'd never offered the origional deal.

is that remotely fair?

or the government wants to encourage the building of low income housing. so they offer to only charge a lower rate of tax or no tax. you invest your money into building low income houses.

then a few years later some self righteous clown comes along and says to you "very funny, you're very clever, you found a loophole, now just pay us what you owe" and gives you a bill for 5 years back taxes on the account along with interest and penalties as if they'd never offered the origional deal.

is that remotely fair?

You're morally obliged to pay every penny of tax you owe but not a penny more.

you don't want rule of law, you want an autocracy where even if you follow the law to the letter someone can swoop in and punish you or declare that you owe them money.

Re:It isn't very different (5, Interesting)

Custard Horse (1527495) | about a year and a half ago | (#42072881)

Quite right.

Where there is an flaw in tax law, it will eventually be written out and that loophole closed. Google has avoided tax thus far but now is the time to pay up and for that to occur the law needs to be changed.

Of course, Google isn't the only entity using such tactics - it is the extent of the avoidance that is causing uproar. Every multinational company will have similar tax plans in place (or their accountants atrn't doing their jobs properly) and they will all be concerned about any tax developments.

Remember, it's not a Google Tax people want, it is a prevention of tax avoidance which might affect the decision of of large companies to move into or out of the countries where they have a physical presence. Catastrophic financial consequences may well occur.

Revision of tax law is not the work of a moment...

Re:It isn't very different (1)

RaceProUK (1137575) | about a year and a half ago | (#42072911)

so, the government starts a saving scheme to encourage people to save.

they offer to not charge you tax on the interest on money you save. the rate is a little worse than other saving accounts but you go with that one since without the tax you make a little more interest.

then a few years later some self righteous clown comes along and says to you "very funny, you're very clever, you found a loophole, now just pay us what you owe" and gives you a bill for 5 years back taxes on the account along with interest and penalties as if they'd never offered the original deal.

is that remotely fair?

Of course not. It's also irrelevant, as it's a concrete invite by the government. Also, that money doesn't leave the national economy. Not to mention the real-world amount of tax relief is tiny.

Re:It isn't very different (1)

dbIII (701233) | about a year and a half ago | (#42072949)

is that remotely fair?

Have you met a tax man that cares about that?
Rule of law hits might makes right when the state's revenue is on the line.

I think you've got confused here about what we want (a fair system) and what we observe (lots of adhoc patches on a system to get as much as easily possible). Also it's the Australian Tax Department, still clinging on like a terrier to Paul Hogan to try to get the money from "Crocodile Dundee" from 1986. That film made a fortune tax free due to the rules at the time, and also gave it's investors a 150% tax credit. The rules changed because of the success of that film and the Australian Tax Department has been trying to get the money back retrospectively ever since. Pointing out what is going on does not mean approval.

Re:It isn't very different (2)

Stuarticus (1205322) | about a year and a half ago | (#42072951)

If you can't tell the difference between technically legal and moral then you are likely well qualified to be a CFO.

Re:It isn't very different (2, Insightful)

Xest (935314) | about a year and a half ago | (#42072953)

"You still don't seem to understand the difference between "evade" and "avoid""

No, I fully understand it, I just also recognise it's being used as a poor excuse for avoiding intended taxes.

"is that remotely fair?"

No because that's not what we're talking about here is it? The example you cited is one where the government intended something be tax free, in the cases we're talking about the exact opposite is true - the government in the UK for example never intended that Amazon avoid paying the 21% corporation tax on their $7bn in revenue, quite the opposite.

"You're morally obliged to pay every penny of tax you owe but not a penny more."

For some value of owe. To most decent people owed tax means tax that the spirit of the law intended you to pay, not "the bare minimum tax you can legally get away with paying by using complex methods of cheating the system, and outright lying about losses".

"you don't want rule of law, you want an autocracy where even if you follow the law to the letter someone can swoop in and punish you or declare that you owe them money."

I want companies to follow both the letter AND the spirit of the law. You only think people should have to follow the letter of the law, that's the difference. When the government sets a rate of 21% corporation tax, it's pretty clear that the government intends that companies pay 21% corporation tax on their revenues. There's nothing arbitrary or autocratic about enforcing that even if some companies and individuals feel they should be able to dodge it by trying to exploit loopholes in other laws.

Look, as the public accounts committee in the UK pointed out the other day - companies like Amazon on one hand are dodging taxes by creating fabricated losses and telling the government they made a loss in the UK so owe no tax, and on the other telling investors they've made record profits in the UK. This is called lying.

Yes in some cases you can argue they've found a legal loophole that means what they've technically done isn't illegal, but then, as I pointed out, it's not illegal for the UK government to withdraw public service support such as police and fire protection from companies like Amazon. As a sovereign nation the UK has every right to do that, just as they can enact laws to retroactively collect these taxes.

The best you can argue is that these companies did nothing illegal at the time. It doesn't change the fact that the taxes are both owed, and can be legally and legitimately collected by the authorities even if that means retroactive enforcement.

Re:It isn't very different (0)

Anonymous Coward | about a year and a half ago | (#42072481)

Actually, you are wrong. Companies freely admit that they sail as close to the legal wind as possible. Whether they are over the line or not depends on a case coming to court. Avoidance is merely evasion that has not yet been shown to be illegal.

Of course, the same way that a threat to kill someone is merely a murder which simply has not yet been shown to be fatal.

As in, they're two different things.

Re:It isn't very different (1)

Anonymous Coward | about a year and a half ago | (#42072485)

Actually, you are wrong.

No he isn't.

Avoidance is merely evasion that has not yet been shown to be illegal.

This may surprise you, but in many countries plans for tax schemes have to be submitted to the tax office, who can then approve or deny the scheme as valid & legal. Most schemes are not just legal, they've been rubber stamped by the very tax collection agencies who are supposedly now up in arms about it, as though they didn't know.

For the record, I believe that tax avoidance is at least morally wrong, and that we should clamp down on avoidance schemes.

Re:It isn't very different (2)

clickclickdrone (964164) | about a year and a half ago | (#42072545)

Most schemes are not just legal, they've been rubber stamped by the very tax collection agencies who are supposedly now up in arms about it, as though they didn't know.

Indeed. The company I work for was in the press a while back for fairly creative tax affairs. The government kicked off when it entered the public domain and then it was disclosed the Inland Revenue had been fully briefed on it and signed it off in writing as OK.

Re:It isn't very different (2)

Joce640k (829181) | about a year and a half ago | (#42072667)

Inland Revenue had been fully briefed on it and signed it off in writing as OK.

ie. There's a lot of MPs using the exact same loophole so they don't want to close it.

I expect this scandalous behavior by Google to meet the same fate. It'll be hushed up/buried in a couple of months when the people behind this figure out their own income will go down if they fix the law.

Re:It isn't very different (0)

Anonymous Coward | about a year and a half ago | (#42072879)

If I get caught cheating on taxes I'll be pilloried. If Vodafone, Goldman or similar get caught, the nice HMRC girl will fill her mouth with honey to fellate them while her colleague assures them that Her Majesty's Government is willing to settle for far less than they could possibly have imagined. All of this kept under wraps.

How is this shit working. It's like poor guy gets caught robbing a bank, and gets tackled and sent inside. Rich guy manipulates the system, holds his hands "it's a fair cop guv", and is asked to give back a portion of what he took.

Re:It isn't very different (3, Insightful)

Anonymous Coward | about a year and a half ago | (#42072671)

Understand that "tax avoidance" is merely a loaded term targeted at uneducated public for "tax compliance". Google in this instance is being used as a scapegoat for it's "tax compliance" in order to deflect anger about unneccessary and inefficient "stimulus" schemes that have left the country in fiscal deficit.

Huge difference (2)

DrYak (748999) | about a year and a half ago | (#42072801)

There's a practical difference (at least that's how it's defined in Switzerland - which is one of the possible tax avoidance place, although far less attractive than the ones in the summary).

- One is *lying*, giving false information and not paying the taxes you're required by law to pay. You pretend you don't have money and try to hide it (in order not to pay taxes. But according to the law you should be paying taxes). This is illegal. A person or a company doing so should be persecuted.

- The other is just shifting money around. You're absolutely honest and give any needed information out. You simply move the money to another place, where the tax happen to be lower than the first place. Once there, you openly collaborate with the local tax institution, declare all the money you have and pay all the taxes you're required to pay. It just happens that said taxes are lower than in the country of origin. But nothing is hidden, all money is openly accounted for. No one pretends anything false. This *IS LEGAL*. A person or a company doing so is just cleverly playing the system. WHAT NEEDS TO BE DONE is collaborating with the local government so some tax money is funneled back to the original country.

Ireland, for example, has almost no taxes. There's nothing wrong in the law about storing your money there. There's nothing wrong about paying almost no taxes (as long as you declare everything and don't hide anything). If you're unhappy with this, you should bring to court the company putting their money there. you should instead write to your politician asking that the European Union finally comes up with a solution for EU-level taxes (so money is shared between Ireland and the other countries where the money was prior transfer but were the company isn't paying taxes).

Re:Huge difference (0)

Anonymous Coward | about a year and a half ago | (#42072907)

I can't see how you can get enough money out of local government whose tax is a lot lower than yours. The money shifting is quite legal, they just pay the company in the lower tax region for "service" and runs the company in the higher tax region at zero profit. Since zero profit means zero tax, I don't see how the scheme can be countered without some global tax scheme/agreement. Trouble is, it is highly unlikely tax haven countries will go for such scheme.

Re:It isn't very different (0)

Anonymous Coward | about a year and a half ago | (#42072961)

The key question is. Do they hide something; then it's their fault for cheating. If not then it's the governments for not adjusting the rules.

Re:Avoidance vs Evasion (1)

Bearhouse (1034238) | about a year and a half ago | (#42072337)

Good point. I'm sure that Google has enough money to ensure that its lawyers will have structured things legally, in which case it's avoidance. Governments, however, and especially the French one, are very good at leaning on people when they think they can screw some cash out of them.

Re:Avoidance vs Evasion (1)

crafty.munchkin (1220528) | about a year and a half ago | (#42072345)

No they haven't been charged with tax evasion. However, as the Australian Taxation Office has seen claims of AU$1b in payments including GST to Google through the quarterly business activity statements that every registered business has to make, there is a very large discrepancy in how much Google are paying taxwise and how much they are earning in Australia. Whilst legally they are financially providing the services from Ireland at the moment and physically providing them in Australia, these measures are being taken to ensure that in future they pay far more in Australian taxes on income earned in Australia, instead of siphoning all this money out of the country.

Re:Avoidance vs Evasion (4, Interesting)

ccguy (1116865) | about a year and a half ago | (#42072413)

No they haven't been charged with tax evasion. However, as the Australian Taxation Office has seen claims of AU$1b in payments including GST to Google through the quarterly business activity statements that every registered business has to make, there is a very large discrepancy in how much Google are paying taxwise and how much they are earning in Australia.

Well, the thing is - you can easily put your earnings in any country you want. For example, here's what Apple does for Spain: Apple Ireland sells (all) devices to Apple Spain (however its legal form is) pretty much at the same price the devices are sold to consumers. Therefore Apple Spain makes no profit - in fact it can easily be at a loss they since have to pay to employees, leases and so on. All the profit is legally produced in Ireland where the taxes are a lot lower.
Problem here is that the European Union doesn't really want to fix it. If they wanted to, the problem would be solved rather quickly.
Ireland (and a few others) are just parasite states - their tax system is based on 'let's have foreign companies here by lowering their taxes a lot' even if they just means they're fucking the European partners which whom they share a market and a lot of other things. The day there's an unified tax law over Europe these problems will cease to exist.

Re:Avoidance vs Evasion (1)

crafty.munchkin (1220528) | about a year and a half ago | (#42072483)

Just because they can do that, doesn't make it right, especially when the services are provided in Australia (such as advertising on Google's sites, delivered via Google's equipment in Australia, as one example of many), and it's only the billing which is handled in Ireland, which it most definitely is in the case with Google. I'm not a mathematical genius, but the standard company tax rate in Australia is 30% - and when the ATO can see $1 billion of declared payments (including GST) to Google, and then a total payment of tax of less than 0.0007 of that income earned in Australia, they are right to ask questions. Google's laywers and accountants are taking the piss out of the ATO by avoiding to this extent.

Re:Avoidance vs Evasion (1)

HungryHobo (1314109) | about a year and a half ago | (#42072535)

then they need to rewrite their tax law to prevent such things.

that doesn't mean that what's happening now is actually illegal.

Re:Avoidance vs Evasion (1)

crafty.munchkin (1220528) | about a year and a half ago | (#42072649)

... which is exactly the point of TFA! ;)

Re:Avoidance vs Evasion (1)

HungryHobo (1314109) | about a year and a half ago | (#42072677)

no, TFA seemed focused on trying to demonise the company in question.

the problem isn't that companies take the best deal they can get. the problem is that they get offered deals which are too good by governments.

Re:Avoidance vs Evasion (1)

Anonymous Coward | about a year and a half ago | (#42072707)

then they need to rewrite their tax law to prevent such things.

that doesn't mean that what's happening now is actually illegal.

Harmonization of tax legislation and rates has been suggested in the EU but it brings it's own problems. For one thing there are countries that earn a lot of money by acting as parasitic low tax gateways into the EU (Ireland, Luxembourg, and increasingly the UK). Secondly having a common tax rate can really suck for a member country (especially the smaller ones) if it is in recession and needs to lower taxes to attract investment but the big three Germany/France/Britain keep the rate too high

Re:Avoidance vs Evasion (1)

ccguy (1116865) | about a year and a half ago | (#42072555)

Just because they can do that, doesn't make it right, .

It it isn't right it should be made illegal, period. Don't blame companies for trying to minimize their taxes, we all do that using whatever legal means (deductions, etc) are made available to us.
Plus of course a US company probably doesn't care much about the effects of paying less taxes in Australia. Hell, all these IT companies are based on a state with brownouts due to financial stress :-)

Re:Avoidance vs Evasion (1)

Anonymous Coward | about a year and a half ago | (#42072621)

It it isn't right it should be made illegal, period. Don't blame companies for trying to minimize their taxes

You'd better fucking believe I'm going to blame the people abusing the system.

Of course, I'm also going to blame the laws, but I'm so tired of people acting as if the people directly abusing the system can't be blamed.

Re:Avoidance vs Evasion (1)

Captain Hook (923766) | about a year and a half ago | (#42072867)

Of course, I'm also going to blame the laws, but I'm so tired of people acting as if the people directly abusing the system can't be blamed.

There is a lot of hypocrisy around this sort of issue.

If companies use the law to minimise taxes paid, stretching the definitions to limit and going way beyond the spirit of the law then it's the lawmakers at fault.

If a benefit claimant uses the law to increase the benefits he recieves, , claiming for everything possible but never making a false statement, it's the claimants fault.

Re:Avoidance vs Evasion (-1)

Anonymous Coward | about a year and a half ago | (#42072703)

Google has not reported or collected $1B worth of GST. Australia is a small backwater banana republic, it's simply not possible that $10B (the amount for which $1B of "declared payments including GST" would be worth) worth of ad sales has taken place.

You're lying and making up your numbers, or you're lying and making up your numbers. Those are the only two posibilities.

Re:Avoidance vs Evasion (1)

Joce640k (829181) | about a year and a half ago | (#42072493)

The day there's an unified tax law over Europe some non-European company will step up to replace Ireland.

Re:Avoidance vs Evasion (2)

Kergan (780543) | about a year and a half ago | (#42072557)

The day there's an unified tax law over Europe some non-European company will step up to replace Ireland.

Unlikely. They could tax capital before it enters or leaves the EU. They cannot do so between EU countries.

Re:Avoidance vs Evasion (4, Insightful)

ccguy (1116865) | about a year and a half ago | (#42072583)

The day there's an unified tax law over Europe some non-European company will step up to replace Ireland.

That's fine. But there will be import taxes and duties, same as with anything that comes from say, China.

The problem here is that Ireland is distorting tax income in other European Union countries and these countries can't do anything about it.

Say you pay now a 30% income tax. I -legally- offer you to pay just 10% over here (but you still live wherever you are, and use the infrastructures and services over there). Do you take the offer or not? If you do, then you pay 1/3 of the taxes you should pay, you still get all the benefits (at someone else's expense), and I get 1/3 of your taxes for nothing.

That's what Ireland is doing.

Re:Avoidance vs Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072877)

That's why the current post-Subprimes crisis isn't limited to Greece or even the €. It's the existence of the UE itself which is at stake. And if European banks go out of business, the shockwave won't stop at the European borders...

Fiscal havens like the City of London or Luxembourg will obviously do nothing about the tax evasion and the corporate tax breaks which mostly explain why governments have had to go deeper and deeper into debt since the 70's due to lack of resources.

Re:Avoidance vs Evasion (1)

Intrepid imaginaut (1970940) | about a year and a half ago | (#42072633)

Ireland is still recovering to mid nineteenth century population levels courtesy of one of its "European partners". Its a country that needs every advantage it can get, and as a result of its policies around 20-25% of the workforce gains employment through foreign direct investment or its subsidiary industries. Maybe Spain with its massive unemployment should start looking at its own house before criticising others?

Re:Avoidance vs Evasion (2)

ccguy (1116865) | about a year and a half ago | (#42072695)

Maybe Spain with its massive unemployment should start looking at its own house before criticising others?

No, why? Ireland is a partner of Spain, and their tax policy is extremely hurtful to all (and all other European taxes). And not only it's hurtful, it's plain stupid because it's not even Irish companies that are saving money - it's mostly American.

And of course those companies are setting there just offices, that they take elsewhere as soon as it's convenient. It's not the kind of investment you want to bet on, knowing that once they're there they won't leave.

As for the massive unemployment over here, I fail to see the relevance on this discussion. Does our unemployment hurt Ireland or someone else in Europe? Doesn't seem that way, considering that our brightest people are going to Germany, France...

But since you mention it: If our European partners are annoyed about our unemployment, debt, or whatever they should just tell our gov. "Go fuck yourself and don't ask for help until there's no a single corrupt politician in office". Really, that's what would help. Not giving a lot of money to our banks who will in turn use it to pay their debts to German banks.

Re:Avoidance vs Evasion (1)

Intrepid imaginaut (1970940) | about a year and a half ago | (#42072791)

No, why? Ireland is a partner of Spain, and their tax policy is extremely hurtful to all (and all other European taxes). And not only it's hurtful, it's plain stupid because it's not even Irish companies that are saving money - it's mostly American.

Did you miss the part where FDI creates large amounts of skilled employment in Ireland? All of those workers pay taxes too.

And of course those companies are setting there just offices, that they take elsewhere as soon as it's convenient. It's not the kind of investment you want to bet on, knowing that once they're there they won't leave.

http://www.williamfry.ie/Libraries/test/Maintaining-the-_12_5-Corporation-Tax-Rate-on-Irish-Trading-Profits.sflb.ashx [williamfry.ie]
"Since 1 January 2003, corporate income has been characterised into two distinct streams: trading or active
income which is taxed at the 12.5% corporation tax rate and non-trading or passive income which is taxed
at the 25% corporation tax rate. Since that date, the distinction between a company’s activities (i.e. whether
the activities constitute trading activities or whether they constitute passive activities) is an important one,
as the Irish Revenue Commissioners (“Revenue”) are cognisant of and will prevent low substance
businesses (otherwise known as “brass plate operations”) availing of the lower rate."

Once again did you miss the part where FDI creates large amounts of skilled employment in Ireland?

As for the massive unemployment over here, I fail to see the relevance on this discussion. Does our unemployment hurt Ireland or someone else in Europe? Doesn't seem that way, considering that our brightest people are going to Germany, France...

Oh yeah, its not like Spain's poor economic performance threatens the very existence of the Eurozone or anything. http://www.bbc.co.uk/news/world-europe-19797656 [bbc.co.uk]

But since you mention it: If our European partners are annoyed about our unemployment, debt, or whatever they should just tell our gov. "Go fuck yourself and don't ask for help until there's no a single corrupt politician in office". Really, that's what would help. Not giving a lot of money to our banks who will in turn use it to pay their debts to German banks.

Oh hey I agree. Fuck the banks first last and forever. But don't hold up Ireland as some sort of villain - the country is doing what it must to compete, with very few assets, and is doing it successfully. The Dutch, French, UK and other countries have tax havens of their own, probably Spain too.

Re:Avoidance vs Evasion (1)

ccguy (1116865) | about a year and a half ago | (#42072947)

Did you miss the part where FDI creates large amounts of skilled employment in Ireland? All of those workers pay taxes too.

So? We're discussing corporate taxes here. Of course workers pay taxes. They would pay them anywhere in the Union.

Oh yeah, its not like Spain's poor economic performance threatens the very existence of the Eurozone or anything.

Well, you need to see why our debt could affect other countries. All this crap began with banks lending money to people who wouldn't pay them. But these (Spanish) banks took the money from other banks (mostly German it seems) which would now have a serious problem if we didn't pay.

Our (very corrupt) gov. wants to take European money (the famous bail out) to give it to the banks so they don't default. So they're converting private debt into public debt, rather than tell banks to fuck themselves since they accepted a risk when loaning money. But no, rather than take the hit instantly they prefer to keep the ball rolling and making the problem a lot worse by taking more and more money.

Oh hey I agree. Fuck the banks first last and forever. But don't hold up Ireland as some sort of villain - the country is doing what it must to compete, with very few assets, and is doing it successfully.

How is Ireland successful?

The Dutch, French, UK and other countries have tax havens of their own, probably Spain too.

We don't that I know of. But if we did, I'd be saying the exact same thing. I have nothing against the Irish themselves, just against their tax policies and the fact that we don't have any way to counteract them.

Re:Avoidance vs Evasion (1)

Anonymous Coward | about a year and a half ago | (#42072359)

Not having read the article, I will still comment...

Where are their employees located? The business may be spread out over the world, but let's say 10% of their employees are in country X, then they should really pay some sort of 10% of taxable income to country X. Ethically speaking, of course.

Re:Avoidance vs Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072411)

First, do no evil....

Re:Avoidance vs Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072573)

They have employees in Australia... I'm curious if the $700,000 odd figure represents their payroll tax or something else. If that isn't even enough to pay their payroll tax then they're seriously doing dodgy shit.

Re:Avoidance vs Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072735)

"Payroll tax" (payg witholding, hecs, medicare, super) is paid on behalf of the employee, not by the employer. It is not included in this figure.

Re:Avoidance vs Evasion (1)

clickclickdrone (964164) | about a year and a half ago | (#42072393)

There's been a lot on this in the UK news. Yes, they are avoiding rather than evading but to take Starbucks as an example, in the UK, when asked by the government, stated that they paid GBP8.6m in total UK tax over 13 years during which it recorded sales of GBP3.1bn. At the same time, they told investors the UK had been a successful venture for them. Ermm...

Google's filings show it had GBP2.5bn of UK sales last year, but despite having a group-wide profit margin of 33%, its main UK unit had a tax charge of GBP3.4m in 2011.
br> Yes there are tax loopholes BUT this sort of behaviour is immoral.

Re:Avoidance vs Evasion (1, Interesting)

HungryHobo (1314109) | about a year and a half ago | (#42072519)

sure. it's as immoral as when you avoid tax yourself.

If you put money into a government saving scheme to encourage saving where the government doesn't charge tax on the interest then you're avoiding tax.

if you're a sole trader and you buy things for the company(expense) when taxes are high rather than leaving it as profit and taking that money out to spend on shoes then you're avoiding tax.

most of the "loopholes" are intentional. they're there to encourage people to put money into things the government wants them to put money into like forrestry or low income housing.

sometimes the government screws up and gives people too good a deal. that's not the fault of the people being given a good deal.

Re:Avoidance vs Evasion (1)

Captain Hook (923766) | about a year and a half ago | (#42072769)

If you put money into a government saving scheme to encourage saving where the government doesn't charge tax on the interest then you're avoiding tax.

Thats true, but ISAs and Pensions tax relief is a benefit to the government/country

The whole point of tax relief on ISA and Pensions is to encourage long term savings by individuals in the expectation of reducing the likely hood of needing government support in the medium to long term.The ISA's and Pensions are specifically enabled by law makers as they see a benefit to the country.

In theory, taxing profit, rather than turn over is meant to be a benefit as well, it allows a company time to build a business by minimizing costs while they aren't profitable, thus providing jobs to the economy. This is paid for by a larger tax percentage on profitable companies and a larger percentage tax on VAT and individual incomes. The trouble is large multinationals have found a way to never paid tax because they have found away to make it look like they never make a profit in any given tax regime. As Multinations starts taking an ever increasing percentage of the money changing hands within a country, the effects of the tax avoidance they can undertake becomes every greater forcing ever greater tax rates on everyone else, it's unsustainable.

This behaviour of tax avoidance by counting cost to companies outside the country but within the same group of companies is within the letter of the law but certainly not within the spirit of the law, as this issue started gaining in public exposure and everyone started looking for tax avoidance, the scale of tax avoidance has shocked everyone... including governments, even the tory gits in power in the UK at the moment.

Re:Avoidance vs Evasion (1)

HungryHobo (1314109) | about a year and a half ago | (#42072839)

And many of the "loopholes" are there for the same reason.
they're there to encourage some behaviour the government wants to encourage.

you can bet it didn't really shock them one bit and they knew damn well it was going on.

there are countries where their tax authorities don't make it so easy.

ever notice how it's only googles income outside the US which is funneled through ireland? that's because the IRS don't piss around nearly as much as they UK government when it comes to multinationals.

Re:Avoidance vs Evasion (1)

Anonymous Coward | about a year and a half ago | (#42072825)

Are you being wilfully ignorant here or just incredibly naive? The money is being moved around internationally in shell games of high complexity. Starbucks don't avoid taxes by opening savings accounts or funding low-income housing. They avoid taxes by funnelling the money completely outside of the country in question. If you think hiring expensive accountants to save huge amounts of tax by exploiting loopholes in international tax law is just as moral as having a 401k, you're a fucking idiot.

tax minimisation (-1)

Anonymous Coward | about a year and a half ago | (#42072319)

seems fair to me

Re:tax minimisation (1)

Walterk (124748) | about a year and a half ago | (#42072427)

Depends on one's definition of fair. If all multi-national companies in the UK paid the tax they are supposed to*, the UK deficit would vanish. That in turn means benefits for the poor wouldn't need to be cut, nor a squeeze on the health care system, education, investment in science wouldn't need to be reduced. Hey, and maybe everyone could pay fewer taxes if everyone paid what they ought to.

*: By this I mean the corporation tax based on their profit margin as reported to their investors and their regional sales.

Re:tax minimisation (0)

Anonymous Coward | about a year and a half ago | (#42072477)

Yes and the companies will simply pass the cost along to the consumer, including poor people.

Re:tax minimisation (2)

mwvdlee (775178) | about a year and a half ago | (#42072829)

At which point economy of scale becomes less of an issue and smaller competitors will see their chances improve.

Re:tax minimisation (2)

Attila Dimedici (1036002) | about a year and a half ago | (#42072499)

If all multi-national companies in the UK paid the tax they are supposed to*...

What you mean by that is that they should not take the deductions that the UK government has written into its tax code. It seems perfectly fair to me for a company to take advantage of every tax deduction it is legally eligible for. Now whether or not those deductions should exist is another question entirely, but the people to hold responsible for that are the members of Parliament who voted for those deductions in the first place (or failed to vote to eliminate them).

How are they legally allowed to do this? (1)

Anonymous Coward | about a year and a half ago | (#42072323)

Don't Apple own all the patents on tax evasion techniques?

Re:How are they legally allowed to do this? (4, Informative)

WindBourne (631190) | about a year and a half ago | (#42072377)

If so, then loads of prior art. MS, IBM, GE, etc come quickly to mind.

Re:How are they legally allowed to do this? (1)

chthon (580889) | about a year and a half ago | (#42072435)

Not to mention Mittal and and other multi-nationals.

Let the rich bleed!

Re:How are they legally allowed to do this? (1)

serviscope_minor (664417) | about a year and a half ago | (#42072785)

If so, then loads of prior art.

Yeah, but Apple's tax evasion has rounded corners so it's completely new.

Re:How are they legally allowed to do this? (1)

Kergan (780543) | about a year and a half ago | (#42072569)

Try Wall Street and the City.

Re:How are they legally allowed to do this? (1)

shentino (1139071) | about a year and a half ago | (#42072653)

Re:How are they legally allowed to do this? (1)

mwvdlee (775178) | about a year and a half ago | (#42072843)

Now there's a patent type I can support!
Second step will be to include a tax law that forbids use of patented tax strategies.

Imaginary property (1)

Anonymous Coward | about a year and a half ago | (#42072395)

this is a fairly simple story of the risk of treating restrictions on freedom of speech as property. if you have to shift screws around the world to evade taxes it costs real money and the tax authorities can easily see if the value is wrong. When it comes to Google's trademark the value is whatever someone is willing to pay. Something that Google happily and legally adjusts to get the best tax benefit. They also don't need to do anything to make the sale to themselves.

Simply stop tax deductions for "intellectual property" whilst charging corporation tax in the place where the customer lives and this would go away.

Avoidance != Evasion (-1)

Anonymous Coward | about a year and a half ago | (#42072417)

Good on any company for minimizing their tax liability.

Re:Avoidance != Evasion (4, Insightful)

clickclickdrone (964164) | about a year and a half ago | (#42072467)

Good on any company for minimizing their tax liability.

Even if that tax is used to provide healthcare, schools, roads and benefits for those on low wages or unable to work? Or does that crazy idea make me a commie?

Re:Avoidance != Evasion (0)

Attila Dimedici (1036002) | about a year and a half ago | (#42072511)

So, do you not take the deductions you are eligible for? Or are you a hypocrite?

Re:Avoidance != Evasion (2)

clickclickdrone (964164) | about a year and a half ago | (#42072527)

I pay 40% tax plus National Insurance. I also used to work freelance and yes, deducted reasonable expenses. I did not claim for stuff that wasn't directly related to my work so no, not really a hypocrite. Being crazy, I tend to think of the wider picture, not just myself.

Re:Avoidance != Evasion (1)

HungryHobo (1314109) | about a year and a half ago | (#42072547)

"I also used to work freelance and yes, deducted reasonable expenses."

So you avoided taxes.

Re:Avoidance != Evasion (3, Insightful)

clickclickdrone (964164) | about a year and a half ago | (#42072563)

So you avoided taxes.

Yep, from 40% to about 35%. Not quite the same as reducing it to 0.0007% is it? it's the sheer scale that people object to. Is that so hard to understand?

Re:Avoidance != Evasion (2)

HungryHobo (1314109) | about a year and a half ago | (#42072657)

then change the law.

I'm 100% in favor of making such schemes harder.

what you don't seem to be paying attention to is that most of these are signed off on by the local countries tax authorities.

if one of your friends was a good accountant/lawyer who showed you how you could have cut your tax bill to, say 20% you wouldn't have done it?

it's as immoral as buying your grocery shopping for 1 cent when the supermarket offers to sell it to you for 1 cent and the owner of the supermarket has reviewed your shopping and agreed that he's ok with selling it to you for 1 cent.

him offering you an insanely good deal doens't make you an immoral person.

Re:Avoidance != Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072729)

Actually it does, if you get your shopping for 1c, if you think about it for even half a second it's not hard to realise that someone somewhere is getting screwed over, and, unless the supermarket has made an error and is absorbing it themselves, it's usually the farmers.

Re:Avoidance != Evasion (1)

HungryHobo (1314109) | about a year and a half ago | (#42072779)

or that he's getting something else out of the deal.

perhaps it's stock he can't shift and would have to pay to dump.

perhaps you're a celebrity and he wants it to be seen that you shop there.

perhaps he's just incompetent.

and all 3 situations are common. they want the company in employing people more than they want a cut of their profits, they want some task done, they want prestige or the people writing the laws are just morons.

Re:Avoidance != Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072683)

In other words, is their contribution to the local segment of civilization a net positive for all beings subscribed to it's gaze?

Re:Avoidance != Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072689)

You stole 5% from poor and needy people. Go fuck yourself you thieving greedy bastard.

Re:Avoidance != Evasion (1)

bickerdyke (670000) | about a year and a half ago | (#42072809)

So you paid as much as you had to and as few as you could.

That's the same those here are doing, too.

Your wrath should be directed at the politicians worldwide who take care of that Google's "as much as they had to" is so insanely low.

Re:Avoidance != Evasion (1)

Eightbitgnosis (1571875) | about a year and a half ago | (#42072603)

Commie? Can't say

At the very least I'd imagine it makes you a poor tax account though

Re:Avoidance != Evasion (1)

FortuneoSarcasm (1612401) | about a year and a half ago | (#42072767)

Good on any company for minimizing their tax liability.

Even if that tax is used to provide healthcare, schools, roads and benefits for those on low wages or unable to work? Or does that crazy idea make me a commie?

Actually, it's everyone. Our corporate Tax rate is 12.5% for trading income and 25% for non-trading income. That benefits our companies too.

Political solution (1)

DrYak (748999) | about a year and a half ago | (#42072813)

So the long-terme solution would be a european law, asking ireland to reshare part of its income to other countries depending on how much money they store, so that healthcare, education, public transportation, etc. can be also produced there.

Re:Avoidance != Evasion (0)

Anonymous Coward | about a year and a half ago | (#42072817)

Even if that tax is used to provide healthcare, schools, roads and benefits for those on low wages or unable to work? Or does that crazy idea make me a commie?

Nope. Make you naive.

Fuck that... (0)

Anonymous Coward | about a year and a half ago | (#42072461)

Fuck that, I personally paid more than $75k in tax last year and I sure as hell didn't have revenues anywhere near $1B.

Do no evil, my ass (0, Redundant)

thetoadwarrior (1268702) | about a year and a half ago | (#42072491)

Good luck to France and Australia. I hope the gets tough and does something similar rather than just waste our money talking about their taxes.

Re:Do no evil, my ass (3, Informative)

Xest (935314) | about a year and a half ago | (#42072733)

Just to be clear it isn't only Google that's implicated in this, the summary is probably just a typical attempt at defaming just Google by the usual culprits (i.e. Microsoft shills). That's not to defend Google in this, there's no doubt they're in the wrong, but most well known US multi-nationals are guilty of the exact same thing - some even more so. In the UK the companies exposed for this have included Amazon, Apple, Starbucks, and many others.

Hungary (0)

Anonymous Coward | about a year and a half ago | (#42072539)

We proud hungarians would also like to have our share of this Great Internet Money you talk about. Our 1000 year old history surely puts us way ahead in tax collection rights from big faceless international corporations.

Re:Hungary (1)

Elbart (1233584) | about a year and a half ago | (#42072747)

The only thing Hungarians need is to get their asses kicked for turning fascist. "Internet Money" is way down the to-do-list.

Tax incidence (0)

Anonymous Coward | about a year and a half ago | (#42072589)

Tax 'paid' by corporations isn't paid out of some magic free money pot. It is paid by a combination of their employees, customers and shareholders (frequently pension funds). In addition, we are talking here about tax on profits. Google will have paid plenty of tax on its employees salaries, as well as business rates, VAT etc.

Re:Tax incidence (3, Insightful)

clickclickdrone (964164) | about a year and a half ago | (#42072617)

Google will have paid plenty of tax on its employees salaries,

Nice try. Google's employees pay tax on their salaries, not Google.

Payroll tax. (0)

Anonymous Coward | about a year and a half ago | (#42072685)

Companies are obliged to pay something called "payroll tax", which is linked to the salaries of the workers but separate to the income tax that is taken out of employees' pay.

http://en.wikipedia.org/wiki/Payroll_tax

Re:Tax incidence (1)

Anonymous Coward | about a year and a half ago | (#42072799)

In the Uk we have Employers National Insurance. This tax is theoretically paid by companies (really by employees). It is almost impossible to avoid unless your employees are all one person companies themselves

Has anyone here ever paid more taxes than they owe (2)

Eightbitgnosis (1571875) | about a year and a half ago | (#42072615)

Why would you expect a company to pay more than they have to when individuals do not?

Re:Has anyone here ever paid more taxes than they (1)

xlsior (524145) | about a year and a half ago | (#42072629)

Why would you expect a company to pay more than they have to when individuals do not?

Most individuals don't funnel their money through foreign tax shelters.

Re:Has anyone here ever paid more taxes than they (1)

Rockoon (1252108) | about a year and a half ago | (#42072793)

No, they funnel their money through domestic tax shelters.

Pretty much any 'fringe benefit' you get at work is not counted as gross income and thus not taxable from the employees perspective. At the same time the cost of these fringe benefits is tax deductible by the employer.

Drive a company car? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.
Use the companies daycare? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.
Does your company provide food and/or beverages? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.
Does your company have a fitness center, or contract out for preferred rates at the local gym? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.

The fact is that individuals do not consider these benefits 'income' but they are, none-the-less, part of your compensation package and should be taxable under your fucked up sense of morality.

Re:Has anyone here ever paid more taxes than they (1)

bickerdyke (670000) | about a year and a half ago | (#42072821)

Most individuals can't funnel their money through foreign tax shelters.

There.. fixed that for you.

Re:Has anyone here ever paid more taxes than they (1)

hcs_$reboot (1536101) | about a year and a half ago | (#42072717)

Has anyone here ever paid more taxes than they owe

Probably not. But while paying 75k out of a 1B revenue is probably/certainly legal... that shows there is a problem with nowadays local and international laws / rules. The problem is that most of our economy rules are based on a system designed long ago, from a time where a man in a company did matter.

Google is using the General Electric model (3, Interesting)

Ritz_Just_Ritz (883997) | about a year and a half ago | (#42072855)

"Tax avoidance" doesn't appear to phase General Electric. They're definitely not an "internet company," have physical plants around the globe, and they pay a vanishingly small amount of corporate tax by using the same sort of schemes.

Imagine that....large corporations with armies of lawyers using lobbying to help them skirt tax payments to ultimately benefit their shareholders. And I guess it helps to have friends in high places. Guess who is Barack Obama's "jobs czar?" That's right, Jeff Immelt...CEO of GE. In 2010 GE made a global profit of US$14.2 billion. US$5.1 billion of that was attributable to operations in the US. How much did GE pay in taxes to the US government you ask? Well, zero. They actually had the balls to claim a tax benefit (billed against future earnings) of US$3.2 billion.

I'm all for companies being able to make a profit, but c'mon.

Re:Has anyone here ever paid more taxes than they (0)

Anonymous Coward | about a year and a half ago | (#42072913)

How many individuals do you know that pay 0.1% tax? You might want to reflect on why that is before claiming the two situations are remotely equivalent.

Google is an internet company (1)

Hentes (2461350) | about a year and a half ago | (#42072743)

They don't need to be in every country in the world. If their taxes go up, they can just as well decide to pack up and leave.

Re:Google is an internet company (0)

Anonymous Coward | about a year and a half ago | (#42072755)

OK then.

Tax need to be paid only once on every revenue (1)

aglider (2435074) | about a year and a half ago | (#42072773)

The point is whether Google issues invoices from the USA company or from the natcos. In the former case, it's OK they don't pay tax to other nations' governments. In the latter Google has been evading the tax.

Re:Tax need to be paid only once on every revenue (0)

Anonymous Coward | about a year and a half ago | (#42072899)

You mean from the Irish company, right? Because Google sure as hell isn't paying all those taxes in the US.

Boycott Amazon, Starbucks, Google (2)

hughbar (579555) | about a year and a half ago | (#42072891)

Actually, there's a very sensible approach to this, somewhat started in the UK already. We, as citizens, decide that we dislike this kind of behaviour and we boycott the worst 'offenders'. As an old-skool Brit, I'm a tea drinker anyway, there's nothing that I like in Starbucks and I dislike the appalling value for money too.

There's a genuine problem here in that a) it's their fiduciary duty of corporations to maximise profit at all costs, to hell with social infrastructure, the environment and other minor details so this is one of the results b) in the UK the so-called Tax Code runs to about 10K pages of useless complexity, so there's always a decent sized hole somewhere c) If the holes aren't closed everywhere, there'll usually be a new opportunity or place to do this, it's called fiscal dumping.

Finally some socially aware sharefolder activism would help, in some of these cases, but since shareholders are usually large investment funds and insurance companies, there's no pressure from there either. So consumer boycott and sustained negative commentary is a good start, then profits decrease and shareholders begin to wake up and take a mild interest.
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