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Spanish authorities raid Google offices over tax

reuters.com

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Re: Spanish authorities raid Google offices over tax

#131

Post by ews »

bleepbloop22 wrote: post #121
wyager wrote: post #114

Earlier quoted context omitted.

Why are you blaming the companies for acting rationally, rather than the governments for creating absurd tax environments? I agree it's unfair, but I can't fault anyone for trying to legally minimize their tax burden. Tax law should just be simple enough that anyone can do it themselves.

Shouldn't blame the companies for lobbying and creating the tax laws either -- they're just acting rationally! Maybe we can blame people for behaving unethically instead of believing this shlock?

> Shouldn't blame the companies for lobbying and creating the tax laws either -- they're just acting rationally!

spot on. this.

Re: Spanish authorities raid Google offices over tax

#132

Post by threatofrain »

Gargoyle wrote: post #124
wyager wrote: post #114

Earlier quoted context omitted.

Why are you blaming the companies for acting rationally, rather than the governments for creating absurd tax environments? I agree it's unfair, but I can't fault anyone for trying to legally minimize their tax burden. Tax law should just be simple enough that anyone can do it themselves.

Yes, those absurd tax environments are in no way created by companies and their money. Not at all.

Do legislators not possess primary responsibility for their own actions?

Re: Spanish authorities raid Google offices over tax

#133

Post by ptaipale »

javitury wrote: post #88
defen wrote: post #74

Earlier quoted context omitted.

> Which is fine, but isn't an income tax and isn't a tax on Google. It kind of is, though, isn't it? The online ad market is theoretically super efficient - if the market clearing price for an ad is $1, and then you add a 10% sales tax, it no longer makes sense to bid / pay $1 for that ad, knowing that you will be out of pocket $1.10. Instead you would bid about 90-91 cents, knowing that it would get marked up to $1…

You forget that european VAT is cancelled with businesses upstream, that is, you can deduct the VAT charged to consumers with the VAT of your purchases so you only owe the net amount. Also there is no unified european tax rate, there are some tax havens inside the EU.

However, Google does not make very much purchases in EU, so there is not so much VAT to deduct, which means that much of the VAT is "real" tax revenue, not just a flow-through amount. This is simply because Google doesn't have a substantial part of its real operations in EU; it has sales offices, and in some countries it has data centers, but these are not such a big cost that the VAT would factor in by too much.

The actual value of Google is in its business concept, IPR and brand name, none of which are substantially developed in Europe.

Re: Spanish authorities raid Google offices over tax

#134

Post by jernfrost »

deelowe wrote: post #106
ComodoHacker wrote: post #96

IMO Google is so rich and so profitable that it could afford to pay all taxes due in all countries fairly, without any "optimization", while staying profitable and not undermining any R&D program or long-term project.

Google's infrastructure is almost all custom. There's a lot of people who would be out of a job if there was suddenly a >30% premium added to Google's infrastructure when compared to OEMs. If you want the laws to change, change the laws. The issue is the government, not the companies that are simply playing by the rules.

"Simply playing by the rules". No they aren't. They are paying a small fortune to figure out how to avoid paying taxes by following the letter of the law. However they break the spirit of the law, and hence are not playing by the rules.

This is not different from using drugs to win sports which hasn't yet been banned because it is too new. Strictly speaking it is legal, but it is both immoral and unethical.

The problem with depending on every possible behavior being described in the law and closing every loophole is that that would create a very draconian legal system nobody wants.

It is the same as with contracts between two parties. It is easy to screw each other over if one nitpicks about everything and don't follow the spirit of the contract. However the problem with such behavior is that it dramatically increases transaction costs, because one can not trust each other and have to make extremely complicated legal contracts.

I've noticed when dealing with American how the lack of any trust, makes any kind of business deal very expensive. Contracts are completely over the top.

I don't think this is how one wants society to develop. Parties in an economy have to be able to play fair with each other most of the time without resorting to ever more insane details and regulations.

Re: Spanish authorities raid Google offices over tax

#135

Post by george_ciobanu »

This is ridiculous and a form of bullying. If you want multinationals to pay tax, fix the laws. Were they really expecting Google to fake anything? No, they were looking to cause bad press. Form international alliances and create a proper incentive structure if you want to collect.

Re: Spanish authorities raid Google offices over tax

#136

Post by toyg »

jonknee wrote: post #125
jernfrost wrote: post #116

Earlier quoted context omitted.

You are presenting a completely biased and anti-european view, looking at multinationals with the most rose tinted glasses. Google, like many other multinationals pay absolutely minuscule taxes. They have eradicated large parts of national advertisement companies across Europe, who all have to pay normal tax rates, while Google pays close to zero. You are not a leftwing nutjob just because you want companies to pay t…

> You are not a leftwing nutjob just because you want companies to pay taxes for the money they earn in your country. A free market relies on a level playingfield and when multinationals can exploit loopsholes in this manner it distorts the competition. How would you decide what money they earn in your country? It's a tricky question for multinationals.

It is indeed, and the recent spat of seemingly-illogical laws commonly known as "vat-mess" is the first step in trying to clarify that.

The internet is a real mess for anything that has to do with jurisdiction, which is the underpinning of taxation. Free flow of capital could be acceptable when goods were eventually involved, since their physical presence decided jurisdiction; as goods become similarly immaterial, new parameters are required. The current "equilibrium" is anything but.

Re: Spanish authorities raid Google offices over tax

#137

Post by nitrogen »

drzaiusapelord wrote: post #120
JoshTriplett wrote: post #105

Earlier quoted context omitted.

(Off-topic meta-conversation.) HN tends to downvote any political comments, especially comments that turn the discussion more political, even in a story that already tangentially touches on politics. The HN guidelines more-or-less document the former; the latter seems like a natural consequence. In general, politics is almost always off-topic here; there are many other places to discuss politics. (Personally, I tend…

>HN tends to downvote any political comments This is, by far, the most political site I go to. The top comments are often politicized and the top stories are typical social media "outrage" stories. I think you're painting a picture of HN that really doesn't exist, but did probably long ago. HN now suffers from the 'eternal September' many popular forums do. Techy forum participants are often high school and college s…

We must not be reading the same threads because I don't see anything remotely "anti-US" when reading HN. It almost sounds like you are accusing us all of being unamerican, which is one of the sillier political epithets history has provided us.

What I do see is a realization that the US is a fairly small minority of the global population, and that globalization and automation are stampeding across labor-based economies, and discussions of solutions to the resulting societal problems.

Re: Spanish authorities raid Google offices over tax

#138

Post by StavrosK »

Bromskloss wrote: post #104
Kristine1975 wrote: post #72

Earlier quoted context omitted.

Destruction of evidence?

Maybe so. If you just want the effect, you could release smoke just for show, without actually destroying anything.

You mean if you want them to think you destroyed the evidence, and thus incurring the wrath of the law, without actually destroying the evidence that might incriminate you?

Sounds like a lose-lose scenario, to me.

Re: Spanish authorities raid Google offices over tax

#139

Post by jldugger »

collyw wrote: post #100
dluan wrote: post #82

Earlier quoted context omitted.

Tax law is a math problem. Google is a company run by math nerds. Of course they are going to solve for X.

Its also a law problem, so I would have expected Apple to have solved it first.

Well, the Double Irish was invented by Apple...

Re: Spanish authorities raid Google offices over tax

#140

Post by nickbauman »

This all points back to the Multilateral Agreement on Investment, which reveals the intention of transnational corporations to try to limit sovereignty. It didn't pass but it's terrific object lesson (especially in the aftermath of Brexit).

The irony is that the economic incompatibility thesis claims liberalization of capital tends to undermine free trade, because capital flows make very volatile markets, ultimately making it much harder for trade to take place. So what happens is the reaction to freeing up capital is increased protectionism which is what's generally happened since the '70s.

https://en.wikipedia.org/wiki/Multilateral_Agreement_on_Inve...

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