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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

#301

Post by ori_b »

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…

Or point to the accounts that live outside of the USA, and say that the money is kept outside of the USA to legally avoid taxes.

Re: Spanish authorities raid Google offices over tax

#302

Post by ransom1538 »

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…

linkregister

Yes I am well versed in the new stories. The entire point is to move funds out of the country and avoid taxes. They aren't investing in Spain's tech future. They will use this money (stolen from the US people) illegally to: produce products overseas by proxy, perform HR functions by proxy, marketing by proxy, etc. All these products/services are then sold under the company and for more US profit.

Re: Spanish authorities raid Google offices over tax

#303

Post by ptaipale »

HappyDreamer wrote: post #274
munificent wrote: post #215

Earlier quoted context omitted.

How does that thinking apply when you consider that companies actively lobby and work to affect the laws? Are you arguing that companies have a responsibility to change laws to maximize their profits? If a company could get a law passed that let them, say, remove all environmental restrictions, are you arguing that they should do that? Do their fiduciary responsibilities trump their social ones?

A super interesting question. If a company attempts to abolish environmental restrictions, in order to, say, get to sell food with carcinogenic substances, and in that way make more money — then one viewpoint can be, that the company attempts to make money by killing people. I.e. attempted murder. Therefore the executives and people at the company, responsible for lobbying / bribing politicians, in order to remove al…

Everything is carcinogenic, or poisonous - it's always only a matter of dose. Defining lobbying as murder in such a broad category as this is silly.

Re: Spanish authorities raid Google offices over tax

#304

Post by ptaipale »

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…

Tax avoidance is by definition absolutely following government rules.

Re: Spanish authorities raid Google offices over tax

#305

Post by linkregister »

spangry wrote: post #236
charlesdm wrote: post #41

Earlier quoted context omitted.

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?

You've actually hit on the basic 'integrity rule' for these kinds of arrangements (at least in Australia): foreign related entities must charge on-shore related entities using 'arms-length' pricing (the 'transfer pricing' rule). Same goes for the interest rates on loans made by foreign related entities, because the interest is deductible against gross profits (the 'thin capitalisation' rule). I've simplified somewhat…

Please post some analysis on the main thread; there is a lot of confusion regarding IP licensing and tax avoidance. It would be good to have an expert opinion promoted to the top comment.

Re: Spanish authorities raid Google offices over tax

#306

Post by bobwaycott »

Pyxl101 wrote: post #294
bobwaycott wrote: post #275

Earlier quoted context omitted.

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…

What is lawful != what is ethical. Most of my comments in this thread and on this subject engage the ethical responsibilities of citizens and corporations to their societies, and their parts in the establishment and perpetuation of just and healthy societies.

Beyond that, there is quite an orders of magnitude difference between electing to take an individual deduction as a citizen and establishing complicated structural entities specifically to avoid or reduce taxes by increasing the complexity of determining tax obligation. If you do not see these things are different, I doubt I could convince you otherwise.

Re: Spanish authorities raid Google offices over tax

#307

Post by linkregister »

ransom1538 wrote: post #302
ransom1538 wrote: post #291

Earlier quoted context omitted.

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…

linkregister Yes I am well versed in the new stories. The entire point is to move funds out of the country and avoid taxes. They aren't investing in Spain's tech future. They will use this money (stolen from the US people) illegally to: produce products overseas by proxy, perform HR functions by proxy, marketing by proxy, etc. All these products/services are then sold under the company and for more US profit.

I agree that Spain, EU Parliament, and the European Council should enact meaningful legislation and trade agreements to mitigate this tax loophole.

The crux of my argument is that you won't find a U.S. felony here, no matter how bad you want it.

Re: Spanish authorities raid Google offices over tax

#308

Post by ransom1538 »

bduerst wrote: post #299
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 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?

No, those shell offices were paid for by stolen american tax money, ran by foreign citizens controlled by proxy, using infrastructure controlled by proxy, producing things for the original company. "Why should that tax revenue instead go to a different country that didn't contribute to it?" Because it is a felony.

Re: Spanish authorities raid Google offices over tax

#309

Post by bduerst »

ransom1538 wrote: post #308
bduerst wrote: post #299

Earlier quoted context omitted.

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?

No, those shell offices were paid for by stolen american tax money, ran by foreign citizens controlled by proxy, using infrastructure controlled by proxy, producing things for the original company. "Why should that tax revenue instead go to a different country that didn't contribute to it?" Because it is a felony.

The cash used to "build" the offices was already taxed as net income. And what if it's a lease? Fixed cost investments happen all the time.

The employees in the offices are citizens of that country or immigrants approved by the local government of that country. If they are U.S. citizens then they typically pay income tax to the U.S. (depending on the reciprocity).

The infrastructure (roads, water, energy, police & fire protection, healthcare, etc.) being used by those offices and employees were paid for by that country.

Also the citizens in that country are the ones paying for a product or service - so again, why should a different company reap the tax revenue?

Re: Spanish authorities raid Google offices over tax

#310

Post by varjag »

khedoros wrote: post #272
varjag wrote: post #214

Earlier quoted context omitted.

Google infamously has an ethical clause in their mission statement, so we expect them to make a moral choice. Or is it a trick question?

> so we expect them to make a moral choice. We do? Why? Because, by one interpretation, they pay lip service to it by saying "Don't be evil"/"Do the right thing"? I take those as marketing (both to the public and to their employees). Even if we take their mottos as honest statements of intent, how do you know that their definitions of "evil" and "right" match yours? Or that their definitions won't shift to fit the si…

I don't care. They pretend to play morality games, they get held to a certain standard by public, that's just how it works.

If they are amoral entity, I'm sure they won't care for Spanish government doing unethical but not illegal things to them as well.

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