Spanish authorities raid Google offices over tax • Hacker News Board

Re: Spanish authorities raid Google offices over tax

#251

Post by [deleted] » Thu, Jun 30, 2016, 6:13 PM UTC

AnthonyMouse wrote: post #128

uola wrote: post #73

Earlier quoted context omitted.

> (which would then allow the US rate to be lower for the same revenue) While I'm sure it can be minimized, the US doesn't have a particularly low corporate income tax rate. > And if they paid that tax in the US [...] how would that help Spain and France? Companies like Google not having to pay tax on revenues outside the US is essentially a government subsidy. One that creates a "slush fund" for US companies to acqu…

> Companies like Google not having to pay tax on revenues outside the US is essentially a government subsidy. One that creates a "slush fund" for US companies to acquire their European competition. We're essentially in a trade war, just that Europe hasn't realized it. Except that "US companies" incorporated in Ireland aren't US companies. Can't European companies also incorporate in Ireland?

[deleted]

Re: Spanish authorities raid Google offices over tax

#252

Post by ojosilva » Thu, Jun 30, 2016, 6:14 PM UTC

Actually, I find the bouncing around of fees and payments behind these internet companies very complex, and maybe even justified to some extent. The value-add that generates the taxable income is almost entirely elsewhere.

Let's say Google Spain got €100M in revenue and had €20M local expenses (mostly sales, local support and localization). Now, say they owe €30M to US HQ for the service, servers, R&D, IP, support, etc... among other expenses. (For simplicity, let's suppose everything is hosted and originates in California.)

That leaves Spain with €50M in profit, ready to be taxed by Spanish tax authorities. This sounds quite out of proportion. The great value-added is not in Spain, it's in the US.

Google HQ could easily establish Google Spain owes €80M in service costs, thus local profit is nil. To me that's fair: corporate has the right to charge whatever they see fit for their services and collect profits accordingly.

They way I see it, paying fees to the Bermudas is a US, not Spain, tax evasion problem.

Re: Spanish authorities raid Google offices over tax

#253

Post by jedmeyers » Thu, Jun 30, 2016, 6:15 PM UTC

bobwaycott wrote: post #229

mrschwabe wrote: post #218

Earlier quoted context omitted.

Why would profits be unethical?

Profits would be unethical if they were derived from unethical business practices. This isn't difficult to imagine.

Then taxes is not the way to remove those profits from the company.

Re: Spanish authorities raid Google offices over tax

#254

Post by linkregister » Thu, Jun 30, 2016, 6:15 PM UTC

tedmiston wrote: post #65

ForHackernews wrote: post #22

Earlier quoted context omitted.

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

Until they click "Sign out all other sessions" remotely. I'm not sure if opening a Google Doc from the local file system would work without a connection.

That would almost certainly condemn the local employees to face obstruction of justice charges, turning a minor "you have to relocate" issue into "you are imprisoned awaiting a criminal trial" one.

Re: Spanish authorities raid Google offices over tax

#255

Post by pfortuny » Thu, Jun 30, 2016, 6:15 PM UTC

euyyn wrote: post #233

pfortuny wrote: post #115

Earlier quoted context omitted.

You are right. However, as with everything, he (Montoro) does as he wishes: they started doing this just last year... the Law comes from 2003. Last year we started the cycle of these lists. Last year was... election year! Edit: last year, not two ago.

You're aware that Montoro hasn't been the only minister since 2003, right?

Absolutely!

Re: Spanish authorities raid Google offices over tax

#256

Post by bobwaycott » Thu, Jun 30, 2016, 6:17 PM UTC

jedmeyers wrote: post #253

bobwaycott wrote: post #229

Earlier quoted context omitted.

Profits would be unethical if they were derived from unethical business practices. This isn't difficult to imagine.

Then taxes is not the way to remove those profits from the company.

That wasn't the question I was answering.

Re: Spanish authorities raid Google offices over tax

#257

Post by dailo10 » Thu, Jun 30, 2016, 6:19 PM UTC

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…

There are multiple aspects at play here:

1. Fiduciary responsibility - Corporations have a financial objective to minimize their tax burden, in order to maximize shareholder value. Sure.

2. Legality. There are numerous loopholes that are technically legal. And it's remarkable how much gray area there is when it comes to tax law. This is why you have the big teams of lawyers to figure out how to best game the system and avoid taxation, while just barely staying on the legal side of the line.

3. Legal Consequences. And if they go to far and get caught breaking the law? No big deal. They can go to court and then settle. Sure, there will be a fine, but they knew that was a risk.

4. Jurisdictions and Multinationals. Countries can only make laws that take effect within their borders. But MNCs operate across multiple countries, and can effectively play jurisdictions off against one another.

5. Spirit of the Law. While lawyers may argue what they're doing is technically legal, it is certainly against the spirit of the law. The law did not intend for corporations to shift all the profits from where they are made to low tax haven jurisdictions.

Governments are trying to address these issues, as corporations will be doing their best to stay one step ahead of the law. This is why the OECD has started the BEPS movement to come up with a coordinated response. One of their initial goals is to create some transparency, so they can at least get some visibility into what's going on. That seems like a good first step.

Re: Spanish authorities raid Google offices over tax

#258

Post by bobwaycott » Thu, Jun 30, 2016, 6:19 PM UTC

hueving wrote: post #238

bobwaycott wrote: post #224

Earlier quoted context omitted.

That you cannot think of such an argument doesn't mean much. That such possible arguments wouldn't obtain "legitimacy" in your mind explains far more about your conception of the role of business in society. There are no optional taxes—any company that actively seeks ways to avoid taxes is not dealing justly or ethically with the society in which it exists. The same goes for citizens. A healthy and just society canno…

You are free to overpay on your taxes as well. I assume based on your reasoning that you give the government your entire income minus expenses. Governments have the ability to levy taxes. If they need money they should levy a tax. It's that simple. There is no 'right amount' that a company should be paying that is more than the law requires them to pay.

You appear to be responding to things I have not said. No suggestion at all of right amounts or paying more than the law requires.

Re: Spanish authorities raid Google offices over tax

#259

Post by linkregister » Thu, Jun 30, 2016, 6:21 PM UTC

drzaiusapelord wrote: post #98

>Not sure why you're being downvoted. HN is pretty intolerant of anything that isn't the far left, which is a bit ironic for what's supposed to be an entrepreneurial forum. This change seemed to happen a year or two ago. I suspect HN has been fully "redditized" now with college identity politics being the prominent narrative. The drive-by downvotes are just a symptom of that.

You think HN is dominated by the radical leftists, I see it being composed by a majority of anti-statist libertarians. But neither perspective is accurate.

I think reality is what dang touched upon yesterday: that on HN you can't avoid opinions that conflict with yours, and you assume that everyone is out to get you. But if you take a look even within this thread, you'll see plenty of opinions that match your own, and even exceed it. Hell, one person actually questioned the morality of taxation itself.

Re: Spanish authorities raid Google offices over tax

#260

Post by gshulegaard » Thu, Jun 30, 2016, 6:21 PM UTC

ojosilva wrote: post #252

Actually, I find the bouncing around of fees and payments behind these internet companies very complex, and maybe even justified to some extent. The value-add that generates the taxable income is almost entirely elsewhere. Let's say Google Spain got €100M in revenue and had €20M local expenses (mostly sales, local support and localization). Now, say they owe €30M to US HQ for the service, servers, R&D, IP, support, e…

Going to be honest, a little confused where the Bermudas or the US comes into this...

Apparently this is regarding Google reporting the bulk of their sales out of Ireland and therefore not paying taxes in Europe? This is based on maybe a loophole where Google makes sure to have Ireland staff conclude all sales contracts...