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Facebook tax court trial begins over Ireland offshore deal

reuters.com

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Re: Facebook tax court trial begins over Ireland offshore deal

#71

Post by tialaramex »

ThrowAway14592 wrote: post #2

Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.

Some countries have GAAR a General Anti-Avoidance Rule. Exactly how these rules work varies but e.g. the English law version uses a trick called the Double Reasonableness test. This says avoidance is legal IF a reasonable person (such as a juror) thinks that any reasonable person (here a different hypothetical person that the juror may well not agree with) might think that there was some other reason to do what was done besides to avoid tax.

For example, tax free savings accounts are often mentioned as "avoidance" in this context, to suggest that it's somehow nonsense to criminalise avoidance. But saving money is a reasonable thing lots of people might want to do anyway even if there was no tax advantage.

On the other hand, a scheme in which rich people pay somebody else to pointlessly buy and sell cars at a loss makes no sense - except that they then claimed a large tax discount as second hand car dealers...

One of the cleverest parts of the English scheme is that tax advisers, who sell such schemes to the rich for lots of money, are insulated from any penalty for doing so... As long as they tell the tax authorities how their scheme is supposed to work.

Re: Facebook tax court trial begins over Ireland offshore deal

#72

Post by raphaelj »

What would be the alternative to the current taxation scheme of digital goods?

Could we imagine the tax rate being weighted by the revenue made in a specific fiscal area? Lets say that if FB makes 40% of its revenue in the US where the corporate tax rate is 27%, the IRS could tax FB profits at a 11% rate (27% x 40%).

Re: Facebook tax court trial begins over Ireland offshore deal

#73

Post by AndrewDucker »

seibelj wrote: post #4

I truly wish that the corporate tax rate was 0. Not 25, not 15, but 0%. Then all of this ridiculous nonsense around crony capitalists lobbying for special tax breaks, “double Dutch Irish sandwiches”, and the insane discrepancies between big business and small business in regards to tax games would all go away. Just increase capital gains to match income tax and be done with all of this bullshit. Amazon pays an effect…

How do you then deal with "Business A pays no corporation tax in country X, moves the money back to country Y, where there are low capital gains taxes, and gives it to the shareholders there." - which means that country X gets no taxes at all, despite that being where the business happens.

Re: Facebook tax court trial begins over Ireland offshore deal

#74

Post by DyslexicAtheist »

ThrowAway14592 wrote: post #2

Is this actually illegal though? Or is it just clever exploitation of the rules? Tax avoidance is not the same as evasion.

tax avoidance is tax evasion for the rich. the only difference is barrier of entry which starts at around 1MM for avoidance (very low). if you're below that and still insist on playing this game, the tools at your disposal will almost always fall under evasion (and be considered a crime).

Re: Facebook tax court trial begins over Ireland offshore deal

#75

Post by toyg »

raphaelj wrote: post #72

What would be the alternative to the current taxation scheme of digital goods? Could we imagine the tax rate being weighted by the revenue made in a specific fiscal area? Lets say that if FB makes 40% of its revenue in the US where the corporate tax rate is 27%, the IRS could tax FB profits at a 11% rate (27% x 40%).

You still have the issue of who collects.

The UN or (better, maybe) WTO should broker an international framework for digital tax enforcement.

Re: Facebook tax court trial begins over Ireland offshore deal

#76

Post by mrep »

stkdump wrote: post #64
jdkee wrote: post #24

Earlier quoted context omitted.

Corporations have similar legal rights to corporeal persons. Freedom of speech, access to the legal system, etc. As a result of having similar rights, they should be taxed as corporeal persons. It is not rocket science to conclude that corporations in the U.S. should be taxed at the same effective tax rate as real persons.

Corporations just tax their profit. Persons have to tax all their income (with minimal exceptions). How is that fair?

For individual capital income, you are also only taxed on profit (although some presidential candidate are trying to change that with wealth taxes).

Re: Facebook tax court trial begins over Ireland offshore deal

#77

Post by big_chungus »

toyg wrote: post #75
raphaelj wrote: post #72

What would be the alternative to the current taxation scheme of digital goods? Could we imagine the tax rate being weighted by the revenue made in a specific fiscal area? Lets say that if FB makes 40% of its revenue in the US where the corporate tax rate is 27%, the IRS could tax FB profits at a 11% rate (27% x 40%).

You still have the issue of who collects. The UN or (better, maybe) WTO should broker an international framework for digital tax enforcement.

Okay, but if I'm producing widgets, every widget I produce is transported over roads and uses public resources. So you can make the argument that because each transaction uses those, a sales tax is justifiable. On the other hand, if I'm serving web pages, the marginal cost in public resources of each new page is zero. Is there any reason for taxing those other than "wanting a piece" of that?

Re: Facebook tax court trial begins over Ireland offshore deal

#78

Post by sorokod »

big_chungus wrote: post #77
toyg wrote: post #75

Earlier quoted context omitted.

You still have the issue of who collects. The UN or (better, maybe) WTO should broker an international framework for digital tax enforcement.

Okay, but if I'm producing widgets, every widget I produce is transported over roads and uses public resources. So you can make the argument that because each transaction uses those, a sales tax is justifiable. On the other hand, if I'm serving web pages, the marginal cost in public resources of each new page is zero. Is there any reason for taxing those other than "wanting a piece" of that?

Is serving pages what FB does?

Re: Facebook tax court trial begins over Ireland offshore deal

#79

Post by big_chungus »

sorokod wrote: post #78
big_chungus wrote: post #77

Earlier quoted context omitted.

Okay, but if I'm producing widgets, every widget I produce is transported over roads and uses public resources. So you can make the argument that because each transaction uses those, a sales tax is justifiable. On the other hand, if I'm serving web pages, the marginal cost in public resources of each new page is zero. Is there any reason for taxing those other than "wanting a piece" of that?

Is serving pages what FB does?

Basically, yeah. It's just a web app. Unless that was supposed to be taken as Socratic and you think it does something more?

Re: Facebook tax court trial begins over Ireland offshore deal

#80

Post by toyg »

big_chungus wrote: post #77
toyg wrote: post #75

Earlier quoted context omitted.

You still have the issue of who collects. The UN or (better, maybe) WTO should broker an international framework for digital tax enforcement.

Okay, but if I'm producing widgets, every widget I produce is transported over roads and uses public resources. So you can make the argument that because each transaction uses those, a sales tax is justifiable. On the other hand, if I'm serving web pages, the marginal cost in public resources of each new page is zero. Is there any reason for taxing those other than "wanting a piece" of that?

Taxation also pays for educating your workers, providing the electricity you need to run servers, the roads carrying your broadband infrastructure, or the salaries and general welfare of large numbers of your customers.

If you sell to / produce in a country, no matter how light your presence is, you still have a duty to pay something towards the general upkeep of such country.

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