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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

#201

Post by markus_zhang »

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…

Guys, everything at that level, regardless of reasons, are political...it has nothing to do with right and wrong, just interests. Of course it has to be packaged with good reasons otherwise people won't buy it, but again very often they don't bother to give good reasons and push through anyway.

That said, I do believe that tackling offshore revenue is a good move.

Re: Facebook tax court trial begins over Ireland offshore deal

#202

Post by the_watcher »

jlmorton wrote: post #94
the_watcher wrote: post #90

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)?

Probably because the tax avoidance scheme involves shifting intellectual property and technology to overseas subsidiaries and then charging the parent company a large royalty. Schroepfer would be asked to testify about the actual source and work product that led to the intellectual property transferred to the Irish subsidiary.

Got it, that makes sense. Thanks.

Re: Facebook tax court trial begins over Ireland offshore deal

#203

Post by wpietri »

throwaway55554 wrote: post #126
m0zg wrote: post #118

Zuck is being brought to heel before the election.

Really now? Social media played a large part in the election of the current regime, so why would they go after FB?

I suspect this particular action is the IRS actually doing its job for once, although I'm more suspicious of the recent DoJ and FTC moves to look more intensely at tech companies.

But the reason to go after FB now would be to keep them in line. Facebook, which has an effective monopoly, understands the number one threat to their income and wealth is regulation. That's why they've just started telling people how they should be regulated. Doing things that are menacing but not immediately consequential is a great way for authoritarians to tilt things in their favor.

Re: Facebook tax court trial begins over Ireland offshore deal

#204

Post by dboreham »

m0zg wrote: post #134
throwaway55554 wrote: post #126

Earlier quoted context omitted.

Really now? Social media played a large part in the election of the current regime, so why would they go after FB?

Why do you think it's the "current regime" that's going after FB? Before Barr, the "current regime" couldn't even launch investigations into fake "dossiers" and things of that nature, and this stuff with FB started back in 2016. Could be the deep state. Could, in fact, be both, competing with each other. Not being able to control public opinion is a pretty terrible thing for all of them. In the good old days you coul…

Typo: fake "investigations" into dossiers.

Re: Facebook tax court trial begins over Ireland offshore deal

#205

Post by danenania »

rtkwe wrote: post #139
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…

I think there's room to argue that intentionally shipping all your IP to a lower tax country then charging the main company (that developed that IP in the first place) high fees to use that IP as a way to shift profits from higher tax areas to lower tax areas could constitute fraud. Either they sold/transferred the IP for way to little or they're charging themselves way too much because it's advantageous for taxes.

Is there any good reason to treat subsidiaries as separate from the main entity for tax purposes? All these "subsidiary X licenses from subsidiary Y" schemes seem basically fraudulent in terms of common sense--none of it generates any real profits or losses for the parent company.

Re: Facebook tax court trial begins over Ireland offshore deal

#206

Post by vertig0h »

MrStonedOne wrote: post #176
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…

>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.

These things you're mentioning are minor issues which have been blown out of proper proportion and context by a hostile media spoon-feeding political propaganda to a willing segment of the public.

That said, none of the things you mentioned are related to investigating tax evasion.

"Oh, you sneezed on Sally when you were in first grade without apologizing? You must be guilty of armed robbery."

Re: Facebook tax court trial begins over Ireland offshore deal

#207

Post by pbalau »

Mirioron wrote: post #163
rtkwe wrote: post #139

Earlier quoted context omitted.

I think there's room to argue that intentionally shipping all your IP to a lower tax country then charging the main company (that developed that IP in the first place) high fees to use that IP as a way to shift profits from higher tax areas to lower tax areas could constitute fraud. Either they sold/transferred the IP for way to little or they're charging themselves way too much because it's advantageous for taxes.

Here's the million/billion/trillion dollar question: how much is a brand worth? Clearly it is worth something. Facebook can do the most inane thing, but if they put their brand on it then it will have some value. To me this is the flaw in corporate taxation. I don't think you can ever work around this as long as you allow free trade. It just makes sense to tax them in other ways instead and perhaps simply get rid of…

> how much is a brand worth? Clearly it is worth something. Facebook can do the most inane thing, but if they put their brand on it then it will have some value.

Then, Toyota should only pay taxes in Japan? Or Volkswagen?

Re: Facebook tax court trial begins over Ireland offshore deal

#208

Post by CodeSheikh »

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…

I hate to say this but a lot of unfounded speculation in your comment as well.

"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."

Can you back this up with some factual information? Would love to know more about other companies. Thanks.

Re: Facebook tax court trial begins over Ireland offshore deal

#209

Post by saalweachter »

ksec wrote: post #178
saalweachter wrote: post #136

Earlier quoted context omitted.

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 p…

It's also legal to claim your home office as a business expense, but most accountants will tell you to be really certain you don't use your home office for non-business use, because of the copious precedent for people getting in trouble when it turns out that their home office was really more of a guest bedroom / sometimes home office / sometimes gaming den.

Fill in a suitable analogy with "selling IP to a shell company for a song".

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