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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

#171

Post by cheez »

amylene wrote: post #148
cheez wrote: post #115

Earlier quoted context omitted.

My experience with tax collectors is that they pursue those owing between 10K-500K intensely. Once it gets into 7-8 figures, you can VERY easily pay proportionately less than the poor suckers caught in the 10-500K net.

Just curious, how have you come by this experience? Does the irs release full audit rates?

Been in both situations and did a lot of research on what was possible negotiating. There is public information out there which they try to suppress (imagine if the public knew that the guy who owed 10 mill, got away paying 5 mill after years of not paying anything even after the IRS marked them).

Re: Facebook tax court trial begins over Ireland offshore deal

#172

Post by freddref »

Large corps can afford to figure out ways around the tax law internationally, while countries take a long time to legislate internationally.

Easier for states to retaliate by suing, or otherwise fining, like google in the EU https://www.wired.com/story/eu-hits-google-third-billion-dol...

potentially cheaper than paying taxes?

Re: Facebook tax court trial begins over Ireland offshore deal

#173

Post by Mirioron »

jlmorton wrote: post #100
pbiggar wrote: post #93

> "Facebook Ireland and Facebook’s other foreign affiliates - not Facebook US - led the high-risk, and ultimately successful, international effort to sell Facebook ads,” the company said in a pre-trial memorandum. This is hilarious! Does anyone really believe the pretense that these are multiple different companies?

The US should have a tariff on intellectual property royalty payments from wholly-owned foreign subsidiaries of American companies.

This seems like it could actually work. If you made this tariff equal to the corporate tax rate then won't you generate the same amount of taxes?

Re: Facebook tax court trial begins over Ireland offshore deal

#174

Post by Stranger43 »

I am willing to bet Facebook did not pay Irish taxes on US income, but failed to pay US tax on non-us income, which is a different thing, as the US have signed treaties with the EU preventing them from taxing revenues that an company have already paid taxes on in Europe, so the IRS suing Facebook from headquartering in Ireland would be an severe treaty violation and is likely not what is happening in the real world despite it being an obvious angle for fox to try and push to their audience.

The problem with Facebook/Google taxation(the EU is even less happy about it) is that is that by moving the money through Ireland(who dont tax corporate transaction, only Irish revenue) the profits end up in limbo somewhere in the Atlantic where nobody gets to claim taxes on them.

It is essentially the reverse of what the EU is suing apple over as apple insists that their profits is taxable in the US despite not paying tax on their IP related profits in California.

Re: Facebook tax court trial begins over Ireland offshore deal

#175

Post by thfuran »

speleding wrote: post #168
raiyu wrote: post #158

Earlier quoted context omitted.

Except Facebook makes most of its money from US users not from international users. Also hard to argue that their campus that houses the majority of their employees in the US isn’t the one generating the IP.

> Except Facebook makes most of its money from US users not from international users. Source? 96.75% of the world population is outside the US, of Facebook users it will be a smaller percentage, but it seems highly unlikely that most of the revenue will come from such a narrow base.

Does China use facebook? Don't they have their own thing?

Re: Facebook tax court trial begins over Ireland offshore deal

#176

Post by MrStonedOne »

complianceowl wrote: post #157
riazrizvi wrote: post #119

Surely this is more about political coercion than tax? Amongst all US companies that offshore profits, including the likes of Halliburton, Facebook has been singled out because the US administration wants the company to do it's bidding regarding policy and algorithms for political advertising? Especially considering all the other political reprisals and pardons that are in the news, following the impeachment acquitta…

A lot of unfounded speculation in your comment. It seems more politically-motivated than rooted in facts. Secondly, have you done your research? Surely Facebook is not the only company being targeted by the government right now. I can assure you that, surely there are more. Thirdly, as much as I might dislike an administration, I won't take the giant, speculative leap as to assume that I know exactly what they're thi…

>unfounded speculation

It's not unfounded in the days of pardons to political donors, political donations to jury members, and firing of whistleblowers and witnesses.

You are allowed to assume bad faith when the entity has time and time again showed bad faith. This is suppose to be one of the detriments to acting in bad faith time and time again.

Re: Facebook tax court trial begins over Ireland offshore deal

#177

Post by harryh »

raiyu wrote: post #158
speleding wrote: post #155

Earlier quoted context omitted.

> Facebook is clearly a US company. Founded and HQ'd in the US, so they should be paying US taxes. If most of the advertisers are outside the US, most of the users are outside the US, and most of the servers are outside the US, I think you will agree that it's not reasonable to say ALL of the profit should be taxed in the US. Which part of the profit should go where is an endless debate among pundits, politicians and…

Except Facebook makes most of its money from US users not from international users. Also hard to argue that their campus that houses the majority of their employees in the US isn’t the one generating the IP.

Those things are true, but not really the point.

1) The entire issue here is about international revenue not US revenue.

2) Your second point is true but this IP was then sold to a subsidiary. The dispute is about the price paid in this sale, not about the origin of the IP.

Re: Facebook tax court trial begins over Ireland offshore deal

#178

Post by ksec »

saalweachter wrote: post #136
mech1234 wrote: post #128

Earlier quoted context omitted.

I doubt facebook committed a crime here. The right way to address tax avoidance is to change the law, not to punish companies that comply with the law through arbitrary levels of complexity. Even if everyone in the room is aware that facebook is practicing avoidance, avoidance is still legal and categorically different than evasion. Now- The right way to figure out whether this was a crime seems to be by examining th…

Legal precedent is a portion of the law. You -- or in this case, Facebook -- has one interpretation of what is legal, the enforcement agency has another. The court decides and everyone goes forward from there. You and I can have opinion on whether these various international schemes are legal ways to avoid taxes, but ultimately the law going forward will be the precedent set by this case, and its appeals.

There is nothing in the case suggest the international schemes are illegal. Even the IRS is not trying to push for that.

"The IRS argues that Facebook understated the value of the intellectual property it sold to an Irish subsidiary in 2010 while building out global operations"

That is what IRS is trying to sue, on the ground that Facebook Ireland is now collecting substantially large revenue compare to what it was priced.

To me, trying to compare 2010 Facebook patents cost on revenue generated in 2020 is simply absurd. Patents are per user an per revenue based. Facebook 2020 is way bigger than Facebook 2010.

Re: Facebook tax court trial begins over Ireland offshore deal

#179

Post by hugh4life »

davidw wrote: post #170
complianceowl wrote: post #157

Earlier quoted context omitted.

A lot of unfounded speculation in your comment. It seems more politically-motivated than rooted in facts. Secondly, have you done your research? Surely Facebook is not the only company being targeted by the government right now. I can assure you that, surely there are more. Thirdly, as much as I might dislike an administration, I won't take the giant, speculative leap as to assume that I know exactly what they're thi…

Good comment, and good way of looking at things. However, currently it's not possible to obtain a lot of facts about the inner workings of this administration, since it is effectively above the law in terms of things like subpoenas.

The subpoenas you're talking about were purposely not taken to court.

Re: Facebook tax court trial begins over Ireland offshore deal

#180

Post by caconym_ »

Mirioron wrote: post #165
caconym_ wrote: post #145

Earlier quoted context omitted.

Regardless of any particular politics, they seem like a politically expedient target. Everybody hates them (while using their products, which is funny), and they aren't a big government contractor.

On the other hand, if this is done for political purposes with demands, then Facebook's problem will go away when they capitulate. That will mean that they can continue doing what they were doing. If they're actually guilty then they should be punished.

Indeed. I think politicians understand better than anybody that optics now are a better expedient than results later.

And, to get explicitly political for a second, you don't have to look any further than the events of the last few days to see how little interest this administration has in the rule of law.

Disclaimer: I have no idea why this particular thing is happening, what the motives behind it are, etc. Everything above this paragraph in this comment is meant in the general sense. This IRS action seems to fit a pattern, that's all.

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