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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

#321

Post by linkregister »

disordinary wrote: post #316
linkregister wrote: post #295

Earlier quoted context omitted.

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?

Who cares about the taxes returning to the us? They're making money in foreign territories and should pay tax there. For instance here in nz Google reportedly only pays 200k in tax which is obviously outrageously low.

I think you didn't see the rest of the comment chain. The issue that we're discussing is the suggested U.S. government's involvement.

Re: Spanish authorities raid Google offices over tax

#322

Post by FollowSteph3 »

developer2 wrote: post #290
dailo10 wrote: post #257

Earlier quoted context omitted.

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 a…

1. This is why capitalism built on "everything to maximize revenue for shareholders" is broken. Maximize revenue by generating more revenue, not by evading - or avoiding - taxes. If your company cannot remain afloat without dodging taxes, your business is not viable and does not deserve to exist. 2. The fact that you can "game the system" and remain squarely in the "legal" column makes the system broken. 3. Consideri…

Although great in theory how do you collect the pay the taxes for revenues collected in every country? A big business like Google can handle this but a smaller business will be crushed by it. Imagine a 1-2 person. Imagine a 1-2 person business selling online. Are they capable of paying taxes in a hundred countries? That burden alone would crush them. Try managing the tax rules for 100 countries as a 1-2 person shop. Good luck.

Ignoring that who will enforce it? If say a Russian owes taxes to the US how will they get the payment if the person doesn't want to pay?

But even then why should the taxes go to that country? All the infrastructure to allow your business to operate in the first place is in your country. The roads to get your employees to work etc.

That being said if your going to open factories or offices in another country than I believe you should be required to have a corporation in that country and pay taxes in that country for the revenues those entities make. But even that is challenging. It's honestly a very hard issue to resolve...

Re: Spanish authorities raid Google offices over tax

#323

Post by tedmiston »

linkregister wrote: post #254
tedmiston wrote: post #65

Earlier quoted context omitted.

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.

I hope this was not mistaken as advice. My intent was merely a point in technical discussion.

Re: Spanish authorities raid Google offices over tax

#324

Post by disordinary »

linkregister wrote: post #321
disordinary wrote: post #316

Earlier quoted context omitted.

Who cares about the taxes returning to the us? They're making money in foreign territories and should pay tax there. For instance here in nz Google reportedly only pays 200k in tax which is obviously outrageously low.

I think you didn't see the rest of the comment chain. The issue that we're discussing is the suggested U.S. government's involvement.

Yes I read it, but its irrelevant.

Re: Spanish authorities raid Google offices over tax

#325

Post by FollowSteph3 »

FollowSteph3 wrote: post #322
developer2 wrote: post #290

Earlier quoted context omitted.

1. This is why capitalism built on "everything to maximize revenue for shareholders" is broken. Maximize revenue by generating more revenue, not by evading - or avoiding - taxes. If your company cannot remain afloat without dodging taxes, your business is not viable and does not deserve to exist. 2. The fact that you can "game the system" and remain squarely in the "legal" column makes the system broken. 3. Consideri…

Although great in theory how do you collect the pay the taxes for revenues collected in every country? A big business like Google can handle this but a smaller business will be crushed by it. Imagine a 1-2 person. Imagine a 1-2 person business selling online. Are they capable of paying taxes in a hundred countries? That burden alone would crush them. Try managing the tax rules for 100 countries as a 1-2 person shop.…

Also just to add to the complexity what happens for online websites. If you're from Australia and visit Google and the server is in the US and you click on an ad, the a houldnt the revenue, and hence taxes, be paid in the US because the server is located in the US. That's were the revenue was made. Assuming that's true then wherever you host the server is where you should be taxed. And in that case certain countries would be more beneficial to put your hosting servers in.

Basically all I'm saying is that it's not an easy problem and there are no easy and obvious answers :(

Re: Spanish authorities raid Google offices over tax

#326

Post by cortesoft »

dailo10 wrote: post #257
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 a…

Point #1 is silly.... Minimizing your tax burden does not always translate to maximizing shareholder value. Decision makers at corporations can (and should) take everything into account when deciding how to maximize shareholder value; the PR costs of evading taxes, the potential costs of settlements, etc.

I have never heard of a successful shareholder lawsuit over corporate leadership failing their fiduciary responsibility because they didn't find all the loopholes for limiting their tax liability.

Re: Spanish authorities raid Google offices over tax

#327

Post by Tiksi »

sbov wrote: post #270
hueving wrote: post #238

Earlier quoted context omitted.

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.

I would love to give all my income minus expenses. I could easily make it so I have zero after my expenses. But that's not how things work for individuals... and that's a large part of the difference.

http://www.fms.treas.gov/faq/moretopics_gifts.html

Now you can give all your income as you desire.

Re: Spanish authorities raid Google offices over tax

#328

Post by [deleted] »

varjag wrote: post #320
khedoros wrote: post #317

Earlier quoted context omitted.

> 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. Why would that be true? It would be inconsistent for them not to fight for their own self-interest. Also: Governments must be held to higher standards than corporations. I expect the Spanish government to act (nominally) in the best interests of its citizens. I expect Google to act in i…

Separation of morality and law is a recent trend. For most of human history, morality was the law. As such, it was a social contract born out of necessity and not some arbitrary installation. It's fine to take a modern, legalistic, maximize-shareholder-value-or-gtfo approach and eschew the ethics and spirit of law perspective altogether. However, generally it would be irrational for corporation to expect a favourable…

[deleted]

Re: Spanish authorities raid Google offices over tax

#329

Post by tim333 »

fizzbatter wrote: post #146
tim333 wrote: post #130

Earlier quoted context omitted.

Blaming is of limited use. What we need is a solution to make things better. Something like a global tax office to deal with global companies might do it.

Seems like a grand solution when we're failing even the lesser and more obvious solution: Don't allow them to ship earnings into havens. Saying we can tax them globally is like saying we can tax them domestically. We fail on the latter, so i can't imagine we'd succeed on the former. And while i do agree that blame alone is of little use, blame is often the precursor to action. You have to decide who is at fault and o…

The trouble with don't allow them to ship earnings to tax havens is saying what a tax haven is. There are plenty of regular countries with low taxes such as Ireland or tax breaks such as the UK for movies or the US for various things.

Re: Spanish authorities raid Google offices over tax

#330

Post by tim333 »

criley2 wrote: post #141
tim333 wrote: post #130

Earlier quoted context omitted.

Blaming is of limited use. What we need is a solution to make things better. Something like a global tax office to deal with global companies might do it.

"Global tax office" You would quite literally see revolt / insurrection in the western world, especially America and other former anglo colonies, at the idea of a One World Tax Authority, which would rightfully be seen as a part of one world government, the so-called New World Order that conservatives have maintain DEFCON1 fear of for decades. Even if it did exist, if if you had a global tax authority with the weight…

I see your objections. My idea is you could base it in the US possibly or have more than one and have them just work out the global earnings using GAAP and apportion it to the various countries by how much they sell there so you get a earnings figure for each country. The countries could then use that to come up with a tax demand at their chosen rate and the company could either pay up or face sanctions in that country. So it doesn't require anything like a world government, just some accounting and possibly trade agreements.
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