Spanish authorities raid Google offices over tax • Hacker News Board

Re: Spanish authorities raid Google offices over tax

#41

Post by charlesdm » Thu, Jun 30, 2016, 1:57 PM UTC

slv77 wrote: post #29

Kristine1975 wrote: post #7

Earlier quoted context omitted.

If Google paid €8.8b in fees to avoid paying taxes, just how much taxes are we talking about? Also seconding vmateixeira: Thanks for your research!

Typically the firm creates a subsidiary that holds its intellectual property like patents, software and trademarks in a tax haven like Bermuda. Since there is no operations or R&D in those locations they may have little or no employees. The subsidiaries in the high tax jurisdictions then license the IP from the Bermuda entity which siphons off profits. Without the IP cross licensing deals the French subsidiary would…

But how does not licensing IP make sense? That creates a whole set of new problems, i.e. why should affiliated parties allow IP to be licensed for free, where the same expenses would be tax deductible for unaffiliated parties?

Re: Spanish authorities raid Google offices over tax

#42

Post by adrianN » Thu, Jun 30, 2016, 1:57 PM UTC

conradfr wrote: post #8

I heard someone related to the Paris office raid comment when that happened. She was saying that multinational corporations always say that their organization and tax schemes are legal but that in reality it's so complex and spread in multiple countries that nobody really knows for sure and so it's only legal by default.

Isn't that true for almost everything though? The laws are so complex that no normal citizen can understand them. Even lawyers seem to disagree now and then.

Re: Spanish authorities raid Google offices over tax

#43

Post by axlee » Thu, Jun 30, 2016, 1:58 PM UTC

conradfr wrote: post #8

I heard someone related to the Paris office raid comment when that happened. She was saying that multinational corporations always say that their organization and tax schemes are legal but that in reality it's so complex and spread in multiple countries that nobody really knows for sure and so it's only legal by default.

Every company says what they are doing is legal until someone figures out it's actually not...

Re: Spanish authorities raid Google offices over tax

#44

Post by AnthonyMouse » Thu, Jun 30, 2016, 1:59 PM UTC

saalweachter wrote: post #31

tobias3 wrote: post #18

Earlier quoted context omitted.

Just yesterday they put a whistleblower which published such tax evasion schemes in connection with Luxembourg into prison (LuxLeaks). They ruled that illegal state aid, because the Luxembourg tax authorities actively helped the companies setting up this scheme. The then prime minister and ex-finance minister of Luxembourg Jean-Claude Juncker is now EU Commision president. So either he is incompetent and did not know…

There's also the huge "problem" that the countries in the EU want to maintain sovereignty. France and Spain can't really stop Ireland from doing whatever the hell it wants without giving up some of their own sovereignty. In the United States, one of the biggest powers of the Federal government is its power to regulate interstate commerce. No one in the EU is willing to give it so much authority.

> In the United States, one of the biggest powers of the Federal government is its power to regulate interstate commerce. No one in the EU is willing to give it so much authority.

To be fair, if the US is the model, you can imagine why they wouldn't want that. I don't think the people who wrote the commerce clause were imagining federal micromanagement of local schools or the War on Drugs.

Re: Spanish authorities raid Google offices over tax

#45

Post by ocdtrekkie » Thu, Jun 30, 2016, 1:59 PM UTC

Kristine1975 wrote: post #17

josephg wrote: post #16

I would expect google to keep all financial documents inside Google Drive. In doing so, I wonder what is left in the office for the Spanish authorities to find in a raid? (Google is ruthlessly paperless internally.)

>Google is ruthlessly paperless internally. Not if they have to keep information on paper to comply with the law.

I would also not be surprised to find that some of the financial department sorts of people Google employs are exceedingly old school or ordinary.

Re: Spanish authorities raid Google offices over tax

#46

Post by comboy » Thu, Jun 30, 2016, 1:59 PM UTC

dspillett wrote: post #11

chvid wrote: post #6

I wonder what they expect to find? Or whether it is just a display of force.

> I wonder what they expect to find? Paperwork that contradicts statements the company has made, which would be shredded long before an inspector's arrival should a more formal appointment be arranged. > Or whether it is just a display of force. This is usually a factor in such raids too, but it only works if there is a chance something might be found so they wouldn't do it purely as a show of force.

So, I'm not an expert in tax evasion, but if you give false statements to the tax office, why would you keep statements that can bring you down on paper in your office?

Re: Spanish authorities raid Google offices over tax

#47

Post by moron4hire » Thu, Jun 30, 2016, 2:00 PM UTC

AnthonyMouse wrote: post #33

alkonaut wrote: post #10

Earlier quoted context omitted.

How can this still be possible? Shouldn't all tax legislation be such that if you break the spirit of it by having internal transfers (royalties, fees, interest) to a low-tax area, then you are still taxed based on the business that you had in the country in question, and not based on the net sum (i.e. zero). The current state of tax law is that a billion dollar company pays almost no taxes but a million dollar compa…

> How can this still be possible? Shouldn't all tax legislation be such that if you break the spirit of it by having internal transfers (royalties, fees, interest) to a low-tax area, then you are still taxed based on the business that you had in the country in question, and based on the net sum (i.e. zero). How would that even work? The costs are actually costs. Imagine it was actually a dozen different companies. On…

I see no reason they shouldn't be arranged as such separate companies and I think the multinational corporation should be banned.

Re: Spanish authorities raid Google offices over tax

#48

Post by jordanb » Thu, Jun 30, 2016, 2:02 PM UTC

Why can't Spanish (and French) authorities simply subpoena any info they need from Google? Is Google able to shield relevant data by keeping it in Ireland or the US?

Re: Spanish authorities raid Google offices over tax

#49

Post by Bromskloss » Thu, Jun 30, 2016, 2:02 PM UTC

ForHackernews wrote: post #22

josephg wrote: post #16

I would expect google to keep all financial documents inside Google Drive. In doing so, I wonder what is left in the office for the Spanish authorities to find in a raid? (Google is ruthlessly paperless internally.)

Google Docs sets browser cookies. If you have a surprise raid with logged-in workstations, you have access to Drive documents as well.

I would love to see a police force bursting in, and smoke immediately starting to rise from every computer.

I mean, you could do it it software too, but it would look cool and send a signal to the officers. :-)

Or you could keep the door locked.

Re: Spanish authorities raid Google offices over tax

#50

Post by [deleted] » Thu, Jun 30, 2016, 2:03 PM UTC

merb wrote: post #19

SixSigma wrote: post #2

Google uses Bermuda (a British overseas territory) to avoid tax liability in the EU “Google has paid €8.8 billion in fees to Bermuda,” S&D group MEP Peter Simon complained. [1] The irony being that the current president of the European Commission, Jean-Claude Juncker, was Prime Minister of Luxembourg when his administration was organising the low tax environment. [2] [3] And now the EU claims that "the Anti Tax Avoid…

Exactly the same man makes speeches that these agreements are bad. And that tax ways needs to be public. I only have german articles but this guy is really really akward.

[deleted]