Spanish authorities raid Google offices over tax • Hacker News Board

Re: Spanish authorities raid Google offices over tax

#151

Post by qsymmachus » Thu, Jun 30, 2016, 4:09 PM UTC

wyager wrote: post #114

melenaboija wrote: post #111

I don't think there is a justification for big corporations to do what they do and they have to be pursued. I've been working for a bank in a tax haven in Europe and I've seen that financial engineering powerful people use has been a known and accepted tool for the governments for a while, and now that Europe is living a financial crisis governments start asking. These companies play in an absolutely different league…

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.

This is why abuse of rights is an important legal principle: https://en.wikipedia.org/wiki/Abuse_of_rights

Rational != Ethical

Re: Spanish authorities raid Google offices over tax

#152

Post by Ntrails » Thu, Jun 30, 2016, 4:09 PM UTC

ews wrote: post #131

bleepbloop22 wrote: post #121

Earlier quoted context omitted.

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.

Which means, and this is a big one, you're going to have to deal with the people who sell influence for favours?

But that is the political class, and they are the ones driving the train for companies to pay more tax. Which doesn't make any sense if all that is truly required is for them to fix their own laws and unethical behaviours. Right?

Re: Spanish authorities raid Google offices over tax

#153

Post by [deleted] » Thu, Jun 30, 2016, 4:09 PM UTC

AnthonyMouse wrote: post #102

alkonaut wrote: post #69

Earlier quoted context omitted.

> How would that even work? The costs are actually costs. I'm not sure how it would work. Corporate income taxes don't make much sense in itself of course. The profits could be taxed as cap gains and everyone would be happy - so long as companies weren't multinational. The problem here is that a company may be making a huge profit in some country by using resources paid for by tax money in that country (such as roads…

> The only solution to this problem if you do have corporate income tax is to establish how much profits Uber actually made in each country , and have the profits taxed correspondingly. The problem is that's not how profit works. There is no "in each country" to calculate. They paid $15B to employees in 20 countries and then made $20B in revenue from 20 countries. There is then $5B of international profit, but how mu…

[deleted]

Re: Spanish authorities raid Google offices over tax

#154

Post by ComodoHacker » Thu, Jun 30, 2016, 4:10 PM UTC

zig wrote: post #126

ComodoHacker wrote: post #108

Earlier quoted context omitted.

Monsters of such scale should be viewed from different points, including social responsibility. BTW why do you bother as a shareholder, do you receive any dividends?

It's very easy to look at Alphabet's financials and see that there are no preferred or common shareholder dividends. Since you haven't done that, I presume you are genuinely curious. There are probably a lot of reasons that people invest in corporations that don't pay a dividend. The "most obvious" is that you believe the company is growing. The organization will reinvest in itself -- instead of paying you a dividend…

Yes I haven't looked but I supposed there's no dividends, only growing shares value.

Re: Spanish authorities raid Google offices over tax

#155

Post by ptaipale » Thu, Jun 30, 2016, 4:10 PM UTC

tvanantwerp wrote: post #123

Trombone12 wrote: post #61

Earlier quoted context omitted.

No, the laws are complex when dealing with complex situations and ownership graphs of companies can be basically any finite directed graph. But obviously most ownership is a simple two node thing with a single directed edge connecting the nodes. These are simple to decide if they are legal.

Unfortunately, law can still be complex in what seems like a simple situation. Statutes aren't exactly written with strongly-typed languages or run against integration tests before being passed. Laws are often vague and difficult to precisely interpret, and they usually have unintended consequences. This is true regardless of the complexity of the situation to which the law is applied.

Add to this words attributed to Napoleon Bonaparte: "A Constitution should be short and obscure."

Tax raids are often a symptom of such legislative tradition where laws are written so as to allow authorities to apply loopholes to get their way (as opposed to loopholes for citizens or companies). In my country (Finland) there are practically none, and the tax collection procedure is very effective. This amount of control comes at a price, of course; regulation is predictable but there's a lot of it (and recently the development has been towards more and more rapid and unpredictable changes, often somewhat to do with how to apply EU regulations).

Re: Spanish authorities raid Google offices over tax

#156

Post by kafkaesq » Thu, Jun 30, 2016, 4:11 PM UTC

wyager wrote: post #114

melenaboija wrote: post #111

I don't think there is a justification for big corporations to do what they do and they have to be pursued. I've been working for a bank in a tax haven in Europe and I've seen that financial engineering powerful people use has been a known and accepted tool for the governments for a while, and now that Europe is living a financial crisis governments start asking. These companies play in an absolutely different league…

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.

I can't fault anyone for trying to legally minimize their tax burden.

I think what you're missing is the fact that the Tax Office is pursuing Google for an apparently grounded belief that they were, in fact, acting illegally. (That is, making false representations as to the true functional roles of its local subsidiaries, so as to make its locally-generated revenue appear much smaller than it actually is, per a recent El País article).

Not simply for being "clever" and minimizing their tax burden within established guidelines.

Re: Spanish authorities raid Google offices over tax

#157

Post by kafkaesq » Thu, Jun 30, 2016, 4:12 PM UTC

threatofrain wrote: post #132

Gargoyle wrote: post #124

Earlier quoted context omitted.

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?

No -- we do, unfortunately. And we don't have to put up with it, if we don't want to.

Re: Spanish authorities raid Google offices over tax

#158

Post by fizzbatter » Thu, Jun 30, 2016, 4:12 PM UTC

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.

I agree with your sentiment, but ultimately Governments are the ones allowing and enabling it.

If legal, corporations are just doing what is allowed. I hate them for it, but ultimately, i hate that it is allowed. If the law was put into place via illegal bribing/etc, then yes, both parties are to blame. But if it's all above board, then it's entirely on the Government imo.

Take America for example. Lobbying is an utterly disgusting practice in my eyes, yet i can't blame the groups doing the lobbying. I would too if i had the resources. I blame the government for enabling lobbying, and not shutting it down as it stands now.

Corporations have invaded Government, but ultimately the Government is what needs to be fixed to not allow corporations to get away with this.

edit: And of course, you could just continue with the blame train, saying people are to blame, etcetc. I'd agree with you there too. We all need to do something, to fix this damn Government(s).

Re: Spanish authorities raid Google offices over tax

#159

Post by SixSigma » Thu, Jun 30, 2016, 4:14 PM UTC

moron4hire wrote: post #47

AnthonyMouse wrote: post #33

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 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.

Except that's what happens now. Uber UK pays Uber Luxembourg $1b to use the Uber brand. Lux pay 1% tax, shift it to Uber Bermuda who then hoarde it & wait for us tax amnesty

I'm making this example up but it's the general process of Transfer Pricing. Tax authorities now make you justify the prices which is why Google negotiated a settlement with UK Chancellor George Osborne, his superbowl seats and job for his son were just coincidences.

Re: Spanish authorities raid Google offices over tax

#160

Post by aianus » Thu, Jun 30, 2016, 4:14 PM UTC

spriggan3 wrote: post #24

zo1 wrote: post #13

Earlier quoted context omitted.

" Are countries, simply put, afraid to put an end to tax schemes like this, because it would just mean that Ikea or Google would pack up and leave? " In an "odd" application of market-competition, that is precisely what happened. Countries where Google generally did business wanted to tax Google at some X. Then along came Ireland, or Google found Ireland, and saw that they could do some legal paperwork and pay Irelan…

> The point I'm making is that Google did pack up and leave No they did not. There is a Google Spain and a Google France. They can't escape the Spanish law or the french law if they have an office in these countries, no matter where Google trully is incorporated, and there is an obvious reason why they have officies in these countries. So what Google Spain and Google France do is that they pay huge fees to Google Ire…

Google Search and Adwords are not developed in Spain or France. In effect these subsidiaries are just local distributors for a US product.

If Apple sells an iPhone (developed in the US and built in China) to retailers in Paris, should they have to pay French income tax on the entire profit of the phone? Of course not, that's ridiculous, even if the retailer is an Apple subsidiary.