Spanish authorities raid Google offices over tax • Hacker News Board

Re: Spanish authorities raid Google offices over tax

#291

Post by ransom1538 » Thu, Jun 30, 2016, 8:05 PM UTC

ori_b wrote: post #288

ransom1538 wrote: post #280

Earlier quoted context omitted.

"The profits are not earned by U.S. Corporations; they're earned by alien corporations." These alien corporations are then owned by proxy by US corporations, THUS a violation of 26 U.S. Code § 7201. It isn't a "it feels bad" thing, this is just a felony.

The argument that these large corporation's lawyers are putting forward is that the taxes aren't imposed on them by the tax code because the US government only taxes money when it is brought in to the US, and therefore, they aren't evading taxes. Whether that's true or not is a task for the courts to decide, but considering that there is a long history of the US government not taxing overseas profit until it comes to…

Courts? Why? There is a simple fix:

Since these are felony allegations (criminal not civil) IRS investigators should sit a few of these CFOs down in a cement room and ask: "Does any of this money come back to the US?"

Then the CFO has a few options: 1) lie to a federal agent (not a good plan) 2) plead the 5th (not a good plan) 3) state to a federal officer that none of the money is used, transferred, or used to pay employees of said corporation by proxy.

I would assume these wouldn't go well at all.

Re: Spanish authorities raid Google offices over tax

#292

Post by kafkaesq » Thu, Jun 30, 2016, 8:06 PM UTC

pipio21 wrote: post #287

kafkaesq wrote: post #156

Earlier quoted context omitted.

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 recen…

I believe you miss the small detail that "El Pais" and other Spanish newspapers and media are technically bankrupt because of Google. Google and Facebook grew their profits by advertisements, traditional media (that did not innovate anything) lost all this revenue. So they(traditional media) are terribly biassed against Google and make everything they can to harm the company. They destroyed Google News for example.

If you don't like what the newspapers are saying -- or are suspecting them of severely distorting and/or outright fabricating the reasons behind the raid conducted earlier today -- I'm sure the Hacienda will be putting out their own press releases soon, if they haven't already.

Re: Spanish authorities raid Google offices over tax

#293

Post by gozur88 » Thu, Jun 30, 2016, 8:09 PM UTC

simonh wrote: post #227

antr wrote: post #168

Earlier quoted context omitted.

I'm an energy investor and get to work with tax advisors and lawyers very often in order to maximise tax structures and cash repatriation. Everything we do is approved by tax authorities and positively seen by our shareholders. I agree to a certain extent with you that companies are acting rationally. I can assure you it's my responsibility to make the best use of these tools. However, the direct and indirect pressur…

Ok, but that's not tax avoidance because the companies are absolutely following government rules. Given the choice of having billions of dollars of investment in their country and thousands of jobs but no corporate tax; or no investment and no jobs and no tax, those governments are making a rational choice. The real problem comes when these deals disadvantage local businesses competing with the big foreign conglomera…

>Ok, but that's not tax avoidance because the companies are absolutely following government rules.

You're mixing up terms here. Tax avoidance is minimizing your tax bill within the law. Tax evasion is what you do when you pay less tax than your legal obligation.

Re: Spanish authorities raid Google offices over tax

#294

Post by Pyxl101 » Thu, Jun 30, 2016, 8:09 PM UTC

bobwaycott wrote: post #275

hueving wrote: post #264

Earlier quoted context omitted.

No, your comment quite clearly implies that the corporations should not utilize the tax laws to pay the minimum required amount of taxes. You use words like 'avoid' to imply that it's evasion, but it's 'avoiding' in the same way as someone who 'avoids' taxes by taking a deduction for a dependent.

No, you've misread and inserted your own ideas as what I meant. The comment I replied to used 'avoid' in describing 'optional taxes'. I reused the word in disagreeing with the notion there are optional taxes, particularly as these allegedly optional taxes were suggested as taxes a corporation took action specifically to avoid. [Edit]: Moreover, you still fail to address how I've suggested any notion of right amounts…

> The effort a corporation expends to avoid taxes, such as those under scrutiny in the matter at hand, are not at all homologous to electing to take a dependent exemption for an individual citizen. Reducing one's tax bill via deductions and elected credits is not the same as going to great lengths to create special structures that enable a corporation to avoid tax bills altogether.

You've said it's not the same. How is it different? Both ways of reducing tax burden are things that the laws permit, and that have been established as lawful from much precedent.

Re: Spanish authorities raid Google offices over tax

#295

Post by linkregister » Thu, Jun 30, 2016, 8:11 PM UTC

ransom1538 wrote: post #291

ori_b wrote: post #288

Earlier quoted context omitted.

The argument that these large corporation's lawyers are putting forward is that the taxes aren't imposed on them by the tax code because the US government only taxes money when it is brought in to the US, and therefore, they aren't evading taxes. Whether that's true or not is a task for the courts to decide, but considering that there is a long history of the US government not taxing overseas profit until it comes to…

Courts? Why? There is a simple fix: Since these are felony allegations (criminal not civil) IRS investigators should sit a few of these CFOs down in a cement room and ask: "Does any of this money come back to the US?" Then the CFO has a few options: 1) lie to a federal agent (not a good plan) 2) plead the 5th (not a good plan) 3) state to a federal officer that none of the money is used, transferred, or used to pay e…

When the funds come back to the U.S., Google is taxed on them. But they haven't returned yet. Have you missed all the news stories talking about how many of these companies keep the funds outside the U.S. for this purpose?

Re: Spanish authorities raid Google offices over tax

#296

Post by pipio21 » Thu, Jun 30, 2016, 8:13 PM UTC

krmmalik wrote: post #174

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.

I have to agree with Wyager here. Governments create incredibly challenging tax rules and environments. Those rules are hard to understand and they cripple the growing businesses. The small business just can't compete with the big player in managing their tax affairs. This hurts even more when you know that after all the hard work that you do, your tax money isnt even being spent in the right places. After the UK dec…

I travel the world a lot and wars are the ugliest thing that could happen to a country.

I lived for 6 months in Damascus. It was an incredible city with lots of History. It breaks your heart to remember people younger than you that you know are dead now. The country is devastated and everything stops working.

You go to Servia, normal people could barely survive, long after the war. A few guys made themselves rich at the expense of normal people.

You go to Congo(old Zaire) and experience so much pain over the war there.

In Congo it is about Cobalt and coltan, diamonds, gold. In Syria it is about strategic position, natural gas. In Libia it is about energy resources.

A couple of powerful countries decide to plunder weak countries and war is the way they do it. If their leaders are not ok about plundering their own country you just give millions(or billions) of dollars in weapons to the opposition.

Once a war is started, it is like a drug, both sides needs weapons just for survival and they will do anything for getting them, basically selling their country for almost nothing.

A huge business at the expense of entire families dying and loosing everything they have, women being raped and the state collapsing, infrastructures destroyed.

Re: Spanish authorities raid Google offices over tax

#297

Post by kafkaesq » Thu, Jun 30, 2016, 8:14 PM UTC

mrschwabe wrote: post #202

andrewprock wrote: post #196

Earlier quoted context omitted.

Yet, they also have an ethical responsibility to the society in which they operate. Being legal and ethical are two different things.

What if the taxes are unethical?

What if the taxes are unethical?

Doesn't matter -- when the principals signed documents agreeing to incorporate, they simultaneously agreed to abide by the what the law says in regard to paying taxes due as the law requires. If they thought these laws were "unethical"... well, that was their chance to make a principled stand against them.

Re: Spanish authorities raid Google offices over tax

#298

Post by gozur88 » Thu, Jun 30, 2016, 8:16 PM UTC

nickik wrote: post #247

antr wrote: post #168

Earlier quoted context omitted.

I'm an energy investor and get to work with tax advisors and lawyers very often in order to maximise tax structures and cash repatriation. Everything we do is approved by tax authorities and positively seen by our shareholders. I agree to a certain extent with you that companies are acting rationally. I can assure you it's my responsibility to make the best use of these tools. However, the direct and indirect pressur…

That is why many people have often called for tax simplification. The Flat Tax proposal (and for you progressives, yes we can make it progressive but that not the point) is designed to be as simple as possible and to provide few loopholes. This is not the end all solution but it at least makes everything far, far simpler.

Flat taxes address the wrong problem. It's easy enough for individuals and corporations to look up their tax in a table once gross income (or profit) is determined. The complication is determining what counts as income, and flat tax schemes don't do anything to address that complication, particularly for corporations.

Most corporate tax avoidance strategies take advantage of laws intended to prevent different countries from taxing the same dollar of profit, and those rules will still exist in any reasonable tax structure.

Re: Spanish authorities raid Google offices over tax

#299

Post by bduerst » Thu, Jun 30, 2016, 8:20 PM UTC

ransom1538 wrote: post #280

linkregister wrote: post #271

Earlier quoted context omitted.

I think the taxes Google, Apple, et. al. are avoiding aren't imposed by that U.S. Code. The profits are not earned by U.S. Corporations; they're earned by alien corporations. In order for this regulation to cover these alien corporations, large parts of precedent, legislation, and regulation would have to be repealed/rewritten. Intuitively, it feels bad. But until the profits actually come back to the U.S., the USG d…

"The profits are not earned by U.S. Corporations; they're earned by alien corporations." These alien corporations are then owned by proxy by US corporations, THUS a violation of 26 U.S. Code § 7201. It isn't a "it feels bad" thing, this is just a felony.

The revenues are being earned from foreign citizens in foreign countries using foreign infrastructure.

Why should that tax revenue instead go to a different country that didn't contribute to it?

Re: Spanish authorities raid Google offices over tax

#300

Post by yongjik » Thu, Jun 30, 2016, 8:22 PM UTC

oldmanjay wrote: post #216

spdy wrote: post #209

Earlier quoted context omitted.

How can a tax be in this category?

There are many ways a tax can be unethical. It may finance torture, invasion, and fomenting coups in undeveloped nations that lead to widespread suffering. For example.

You can't willingly start a business in a country that finances torture and invasion, make yourself money, and then turn around and say you won't pay tax because the country is unethical. That will be hypocrisy of highest magnitude.