Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Facebook tax court trial begins over Ireland offshore deal

reuters.com

Post reply on HN
Print view View original

81–90 of 333 posts

Re: Facebook tax court trial begins over Ireland offshore deal

#81

Post by BurningFrog »

dodobirdlord wrote: post #57
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 are just bundles of stuff that people own. They have legal personhood as a convenient legal fiction because it would be obnoxious if all of the owners had to get together to sign things, and they have rights because people don't lose any of their individual rights just because they happened to form a corporation together. But at the end of the day, bundles of stuff. Economists seem to be broadly in agree…

Yeah, this "corporate personhood" issue is so dumb.

All it is is that the legal system decided it would make sense to apply the same laws in some areas to both companies and humans, rather than design completely separate frameworks for each case.

In HN terms: This is code reuse/refactoring.

Re: Facebook tax court trial begins over Ireland offshore deal

#82

Post by sorokod »

big_chungus wrote: post #79
sorokod wrote: post #78

Earlier quoted context omitted.

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?

I guess it was somewhat socratic. Monetary value is being extracted from UK users. Presumably that value would have not existed without physical,legal, political etc. infrastructure maintained by the state.

Re: Facebook tax court trial begins over Ireland offshore deal

#83

Post by gamblor956 »

AnthonyMouse wrote: post #51
SilasX wrote: post #43

Earlier quoted context omitted.

Part of the problem is, it’s not a legit, best price, arm’s-length, market price. Facebook:Ireland is just a sock puppet for Facebook:USA, and the latter has no intention of selling it to a true outsider. OTOH, if FB:USA sold the rights to FB:I for $1, knowing it would pay billions to license those rights the next year, I don’t get how that can be a proper valuation, even without a clear price discovery mechanism.

The real issue is that "market price" legitimately has an amount of slop in it that can eat the company's entire profit. Suppose it costs $50M in salaries to create intellectual property which is then licensed to customers for $500M. Which one is the "market price"? It was sold for both prices, once by the employees to the company and then by the company to the customers. But the difference is a factor of ten. More t…

That is not how IP valuation works. The internal cost is not the measure; the potential or actually sales/licensing value of the IP is the measure.

Re: Facebook tax court trial begins over Ireland offshore deal

#84

Post by gimmeThaBeet »

james1071 wrote: post #70
gimmeThaBeet wrote: post #55

Earlier quoted context omitted.

IANAL, Retroactively going after the valuation of assets based on success years on is awkward at the least, and dangerous at the worst. FB is right, they were still pretty unproven in 2010. It took nearly 1.5 years after their IPO before they convinced people they could make money. I agree, it seems like they would be looking for evidence of undervaluing. But like, let's say you are discount potential cash flows. I d…

You don't need to be a lawyer to understand what this is all about and it certainly isn't hindsight, as you have suggested. The reason why the IRS are challenging FB is that Apple's Irish tax arrangements became public and were very embarrassing to the US authorities, which were revealed not to be applying US law. Now, to the matter of hindsight. The essential point is that the transactions have to be a sham to work.…

>There is precisely no point in selling IP from a US subsidiary to one in Ireland at a fair price. That would just trigger an immediate taxable event in the US for no benefit whatsoever.

Apparently there is if you want to book your international operations in Ireland without the IRS dragging you to court saying you lowballed them a decade ago.

Facebook had a funding round in mid 2009, and mid 2010. The 2009 valuation was $9.8B, and $13.8B in 2010. And this case is solely about their ex-US operations, which they're saying basically didn't exist at the time.

I mean it's like if you join a startup, how much are your equity options worth? Does the IRS go back and say your options were worth way more because it turns out you were working at the next Netflix or something?

Re: Facebook tax court trial begins over Ireland offshore deal

#85

Post by andrepd »

seibelj wrote: post #11
andrepd wrote: post #10

Earlier quoted context omitted.

What about closing the loopholes? They're known for decades, why not stamp down, with teeth, on this sort of thing?

There will always be loopholes. Any corporate tax rate above 0% will have carve outs for any number of industries that are favored for any number of reasons. If it was 0, huge swaths of busy-work jobs in law and tax industries would go away. They provide no value to society.

But in a capitalist system, that which could be good is a problem. Now you have swathes of people who become unemployed. You now probably have to support them with welfare (and without corporate tax revenue to boot :)).

Re: Facebook tax court trial begins over Ireland offshore deal

#87

Post by bilekas »

The number is big, but simular to when they faced the 5Bn file for antiprivacy in SF also, it's not that big of a deal for Facebook.

In 2019, Facebook's revenue amounted to 70.7 billion US dollars, up from 55.8 billion U.S. dollars in the previous fiscal year.

Thats revenue.

https://www.macrotrends.net/stocks/charts/FB/facebook/revenu...

Re: Facebook tax court trial begins over Ireland offshore deal

#88

Post by skrowl »

Facebook made $70B in 2019. This fine amounts to about 7 weeks of their time.

During the time it takes for the trial / etc, they'll make enough money to pay the full fine.

That's just revenue, obviously they'll have other expenses... but still, this isn't as large of a hit to them as $9B sounds.

Re: Facebook tax court trial begins over Ireland offshore deal

#89

Post by bilekas »

rdlecler1 wrote: post #86

These tax dodges are corporate shenanigans, and to me it’s no different than tax evasion.

But if you as a citizen owe 1000USD, you'll be pursued more.

Its completely messed up, but that's the current rules of the system. Without going into politics, they play by the stretched rules.

Re: Facebook tax court trial begins over Ireland offshore deal

#90

Post by the_watcher »

Is there a reason why Mike Schroepfer is being called to testify? Boz makes sense given that he ran ads for years, Naomi Gleit and Javier Olivan led parts of the growth team for years, but Schroepfer is the CTO. Not entirely sure why he'd be called while Sheryl Sandberg isn't (or any number of people who actually worked directly on revenue)?
Post reply on HN