Facebook paid £4,327 corporation tax in the UK in 2014 • Hacker News Board

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#351

Post by caskance » Mon, Oct 12, 2015, 4:21 PM UTC

kuschku wrote: post #312

caskance wrote: post #284

Earlier quoted context omitted.

"Investigations in the EU" means jack shit. There have also been "investigations in the EU" about whether Google is an illegal monopoly and whether Facebook needs to segregate all its data on European entities into separate European data centers.

And one of those led to Facebook being charged billions, and the others will lead to the same outcome. "Investigations in the EU" means you’re fucked.

From the perspective of someone who actually understands modern technology, they actually mean the EU is fucked.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#352

Post by bluecalm » Mon, Oct 12, 2015, 4:22 PM UTC

byroot wrote: post #228

guard-of-terra wrote: post #139

Earlier quoted context omitted.

Why not finance helping quadriplegics from increased VAT? If it comes to that, why not finance helping quadriplegics from charity?

> Why not finance helping quadriplegics from increased VAT? Because VAT, beside being a very effective tax (it's the biggest source of income of most countries), is the most unfair one. Say a country have a 20% VAT Low income household need to use the entirety of their income to survive (food, housing, etc). So effectively 20% of their income is collected as VAT. Now a upper class household, let's say they save 25% o…

You can mitigate that effect by some kind of basic income or return of paid VAT (you collect receipts or something and get the money back up to certain amount or 100% up to certain amount, 50% up to another step etc.). You can make VAT progressive this way.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#353

Post by bluecalm » Mon, Oct 12, 2015, 4:24 PM UTC

Frondo wrote: post #330

forrestthewoods wrote: post #289

Earlier quoted context omitted.

The best possible tax scheme for poor people would be a simple flat tax that is impossible for rich people to avoid. I've always felt your definition of "most unfair" to be a great fallacy. Yes poor people pay a higher percentage of their income. They also receive more in benefits than they give and the flat tax ensures the rich pay their share. The more complicated you make the system the more it will benefit the ri…

The best possible tax scheme for poor people would be a wealth tax. Make it a flat wealth tax, and I'm with you: 10% (or whatever) of what you possess, into the community coffers every year. Don't muck around with income, it's too easy to game.

Wealth tax is obviously (I think!) the best kind of tax but the problem with it is it's hard to collect (you would need to assess wealth of everyone and that is a problem).

Re: Facebook paid £4,327 corporation tax in the UK in 2014

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Post by lsaferite » Mon, Oct 12, 2015, 4:25 PM UTC

tobltobs wrote: post #116

lsaferite wrote: post #106

Earlier quoted context omitted.

As much as the minuscule corp tax bills infuriate me, my logical half laughs and says income tax is silly, just use sales tax. I know we'll never pass something along the lines of FairTax, but I daydream about it all the time. And yes, I've heard all the arguments against it and I still think it's a much better solution than taxing income.

A sale tax only system would be a nice gift for the wealthy.

I did say something along the lines of FairTax. They proposed a yearly 'prebate' check of the taxes paid on base level spending. That is to combat the regressive tax situation.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#355

Post by Karunamon » Mon, Oct 12, 2015, 4:26 PM UTC

justincormack wrote: post #311

Karunamon wrote: post #286

Earlier quoted context omitted.

And if they didn't, they'll be fined and be forced to pay whatever they didn't, which will probably not happen again in the future as a way to avoid being fined. If they did? You seem to be dancing around the central point, which is, these numbers, while absurd, are generally completely above board and legal. Nobody is going to pay more tax than they're obligated to, and it's absurd to expect otherwise.

Thats actually not the case. Starbucks voluntarily paid tax in the UK, even though it was apparently not obliged to as it has never managed to make any money(!). The problem about prosecuting these cases is that transfer pricing and IP "costs" are difficult to demonstrate as faked, and some of the loopholes may be legal, although Apple is now dismantling its double Irish Dutch sandwich, one of the tax avoidance strat…

Read "nobody" in the colloquial, rather than linguistic sense. In the same way that nobody uses Blackberries anymore :)

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#356

Post by lsaferite » Mon, Oct 12, 2015, 4:28 PM UTC

tobltobs wrote: post #156

plouc wrote: post #137

Earlier quoted context omitted.

Could you develop? I am genuinely curious.

If you have a low income and need all the money to buy food you get taxed on 100% of your income. If you have a lot of income and can save or invest 90% you only get taxed on 10% of your income.

If you are low income and they give everyone a tax refund on the first 30k or so of spending, then you perhaps pay 0% in taxes while the person spending over 30k starts paying a tax.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#357

Post by triangleman » Mon, Oct 12, 2015, 4:29 PM UTC

newjersey wrote: post #320

crazy1van wrote: post #297

Earlier quoted context omitted.

How can this loophole get fixed? My (admittedly minimal) understanding is that these companies don't have to pay taxes on the money until they repatriate it. From the perspective of countries like the US or UK, Apple earns very little in "profits" because they have expenses in licensing fees between their own companies that effectively pushes the profit to countries with very low corporate tax rates. This all sounds…

a very heavy handed approach that will almost certainly fail in the real world would be to tax corporate revenue, not profit. This is VERY invasive and I would not recommend it at all but I don't see an approach that is simple enough like this that does not require international co-operation. In my simple mind, the failure is in defining profits. How do we define profit? The devil is probably in the details. * If Wal…

How is taxing revenue more invasive than taxing profit? In the former scenario you have half as many things to audit than in the latter.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#358

Post by phlo » Mon, Oct 12, 2015, 4:34 PM UTC

bduerst wrote: post #342

phlo wrote: post #339

Earlier quoted context omitted.

Either (as the parent comment proposes) force them to pay dividends. Or don't: in order to profit from the higher share price, investors either have to sell some of their shares (realizing their capital gains) or use them as collateral for a loan (which should be treated as a capital gains realization event).

There are entire industries with thin margins (e.g. grocery, airline, blue collar services) that would be destroyed if you forced them to pay the same dividends as others. Why are you fixating on share price? Now how are you going to tax LLC, LLP, etc.? Privately traded corps that don't have a market price?

As I said, forcing companies to pay dividends was the parent poster's idea. If anything like that were to be entertained, I'm sure the forced dividends would be in relation to the corporation's profit.

As for privately traded corps and partnerships: My proposal was to tax capital gains. This could be done at each realization event, and at that point your transaction will usually have a market price. If you are exchanging stock in two privately traded corps, some way to determine fair market value will have to be found, but that seems to be an edge case to me.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#359

Post by vijayr » Mon, Oct 12, 2015, 4:35 PM UTC

TomGullen wrote: post #17

TIL we pay 10-20x more corp tax than Facebook. Sometimes I feel like a fool, but we've always said from day 1 try to do things as honestly as possible which I'm quite proud of, but there really doesn't seem to be much practical upside apart from not being outed and shamed. First world problem I guess, at least we're turning a profit. It is starting to make me a bit bitter though. For example, we've spent a LOT of tim…

It is not just the tax code - one can be honest in everything, but the most likely result would be the person is left behind and becomes bitter and unhappy. Because others will break, it at least bend the rules if they can get away with it.

In this case it kinda becomes a competitive advantage - all things being the same, if one company does "creative" accounting and the other doesn't, chances are the latter can't compete effectively.

Th worst in all of this is that the general public views these companies as smart for exploring loopholes rather than getting annoyed with them.

None of this is to say that one shouldn't be honest. Just be aware of what it costs to be honest, in a system full of loopholes

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#360

Post by MagnumOpus » Mon, Oct 12, 2015, 4:44 PM UTC

iheartmemcache wrote: post #300

speleding wrote: post #136

Earlier quoted context omitted.

The corporate tax rate in the US is actually higher than in many EU countries. The reverse is actually true, US companies choosing to base their "head quarters" in Ireland and the Netherlands.

So can some tax attorney (we used to have a few on here) or CPA/CA break down how exactly this happened and how other people with corporations can do similar things? If Apple isn't going to be paying their "fair share" (yeah, that's a contentious term I'm throwing around) might as well benefit from the money they spent on lobbying and do the same thing they're doing. I'm in that limbo region where Julius Baer won't a…

You need to have "intellectual property" of some sort (patents, brands for franchising, copyrighted software). You create a number of corporations - one that is tax resident in a tax haven like the Cayman Islands and domiciled in Ireland, one that is tax resident in Ireland, one in the Netherlands, and one in each country where you sell your goods or services.

You then go and hire a good tax accountant who has experience with the Double Irish tax dodge (look it up on Wikipedia), and Bob's your uncle. (Though a double irish is harder to create for new firms since 2015 - you might have to acquire a ready-made shell corporation.)

Of course all this only makes sense if you have profits in the tens or hundreds of millions, so that paying for the shell companies, your Irish headquarters, your tax accountants and your lawyers is cheaper than actually paying tax.