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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

#271

Post by monadic2 »

LegitShady wrote: post #246
monadic2 wrote: post #237

Earlier quoted context omitted.

Bud we entered a post fact world, especially when it comes to politics, decades ago.

This is not true and just more political talking points. You're contributing to the problem you describe.

Oh what “fact-based” source do you get news from and how do they verify the “fact”? Do they use floating signifiers like “democracy”, “freedom”, “liberal”, “middle class”, “big government”? Do they have opinion columns and private ownership? It is impossible to act as if you’re both fact based and as if you’re serving your readership at the same time—the very act of choosing which stories to cover is deeply political itself, and that’s before you hit framing, what parts of the story you choose to emphasize, the goddamn headline (often written by a different person).

The National Review for instance is excellent at fact-checking, but I would not call the NR a factual paper or a paper of record.

There are no rocks on which to build these days (probably ever), just a series of private rides you can choose to be taken on.

Re: Facebook tax court trial begins over Ireland offshore deal

#272

Post by munificent »

AnthonyMouse wrote: post #194
jjoonathan wrote: post #162

Earlier quoted context omitted.

If a professional accountant told my buddy to do one weird trick to completely eliminate the lion's share of his tax liability, and he did it, and then the IRS went after him, I'd feel entirely comfortable judging both my buddy and his accountant, even if I didn't know the precise details.

Then you'd be judging a lot of people wrongly, because that sort of thing happens all the time for entirely legitimate reasons. For example, at various points there have been federal tax credits for installing solar panels on your house or buying certain types of green cars. For a lot of people the credit would exceed their federal tax liability for the year. You're prepared to send them all to jail for that without…

Those are not "weird tricks". Those are tax incentives whose intent is obvious (make the environment better) and where your friend's using the tax incentive directly aligns with why that tax rule is there. Your friend and the tax law are clearly doing what they are clearly designed to do, which benefits not just him but us all.

However, if your friend's "weird trick" is something like a double Irish [1], then it's not at all clear that the applicable tax laws are intended to be used that way or that your friend's choice to use that loophole is good for anyone but your friend.

[1]: https://en.wikipedia.org/wiki/Double_Irish_arrangement

Re: Facebook tax court trial begins over Ireland offshore deal

#273

Post by linuxftw »

AaronFriel wrote: post #183
hugh4life wrote: post #179

Earlier quoted context omitted.

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

Some were, and based on the timeline provided by the District Court it was clear that it would be nearly impossible for the matter to be resolved expediently. i.e.: before the next election, which the President was alleged to have abused his power to interfere in. It would rely on Congress trusting that the Supreme Court would deviate extraordinarily from its normal process and decide a matter in a very short time. A…

I guess if Congress isn't happy with the outcome, they can just impeach the president... Woops!

Sucks when the other party uses the rules against you.

If you believe you're being attacked by politically motivated partisans, it's your duty to obstruct them by whatever lawful or procedural means available.

It's all just a dog and pony show anyway. The news just want to drum up advertising because they're a dying media. The best way they have found to do that is click-bait political fighting.

Re: Facebook tax court trial begins over Ireland offshore deal

#274

Post by SilasX »

AnthonyMouse wrote: post #222
gamblor956 wrote: post #83

Earlier quoted context omitted.

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.

What measure? It's two different transactions that occur under different terms at different times. Suppose some code is written by an independent contractor instead of your employees. The contractor is in San Francisco. The San Francisco office pays the contractor, then does nothing more than immediately sell the rights to the code to the Ireland office for approximately the same amount. You just demonstrated that th…

"Sell" is a four-letter word. Was that an actual market transaction where the seller got the highest price they could, and said price was evaluated by the buyer against alternatives? No, of course not. It was a dictated sale, precisely to present a fiction to the tax authorities.

You can only use a sale price to justify a valuation when it's under those circumstances, or a good-faith approximation of such circumstances.

In normal circumstances t would make no sense for FB to take on the risk of hiring a contractor and justify the RoR to shareholders knowing they could only immediately sell for exactly what they paid. That's not how sane businesses operate.

Re: Facebook tax court trial begins over Ireland offshore deal

#275

Post by jjoonathan »

JoshTriplett wrote: post #236
three_seagrass wrote: post #219

Earlier quoted context omitted.

I think by implying that the IRS went after them, the "weird trick" was not as legal as previously anticipated, despite being guidance from a professional. Appealing to popularity wouldn't make it anymore legal than appealing to professionalism.

> I think by implying that the IRS went after them, the "weird trick" was not as legal as previously anticipated, despite being guidance from a professional. That's about as legitimate as "the police investigated them, so they must have done something wrong". That kind of argument has huge problems.

Sure, but it wasn't that kind of argument. It's not about trusting the police/IRS, it's about distrusting loopholes.

I'm about as sympathetic to Facebook here as I am to the people who claim that under the maritime act of 1776 their car is a ship and therefore the police can't arrest them for speeding.

Re: Facebook tax court trial begins over Ireland offshore deal

#276

Post by 101404 »

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…

> The lawsuit was originally filed in 2016 and widely discussed at that time.

What was the "coercion" in 2016 about? Tin foil hats?

Re: Facebook tax court trial begins over Ireland offshore deal

#277

Post by jellicle »

ceejayoz wrote: post #250
nradov wrote: post #225

Earlier quoted context omitted.

The Supreme Court will deviate extraordinarily from its normal process and decide a matter in a very short time when national politics are at stake. For example see Bush v. Gore, 531 U.S. 98 (2000). The whole case took only a few weeks, and the court delivered its decision just one day after oral arguments.

"We don't know who's about to be President in a month" is a fairly uniquely urgent scenario that doesn't apply here, though.

Dahlia Lithwick described how the courts are intentionally making the political choice to slow-walk various Trump matters in order to enable his behavior:

https://slate.com/news-and-politics/2020/01/courts-slow-trum...

Re: Facebook tax court trial begins over Ireland offshore deal

#278

Post by danenania »

iguy wrote: post #259
danenania wrote: post #229

Earlier quoted context omitted.

Could the US simply impose a tax on all corporate profits, including international profits, for any company with any sort of nexus or business activity in the US? US citizens are basically already treated this way as individuals. I imagine it would allow the rate to be drastically lower since the tax base would be so much larger. And while megacorps would obviously grumble, it would still be a profitable decision to…

If I understand right, US citizens only owe income tax if what they already paid is less than the US rate. (Edit: "IRS Form 1116. If your income was taxed by a foreign country, you can subtract that tax from your US tax") If something similar were applied to the tax on corporate profits, then it would not change much, as the US rate (21% I think) is pretty low by world standards. But there are exceptions, like Irelan…

"If I understand right, US citizens only owe income tax if what they already paid is less than the US rate."

I'm not an expert, but my understanding is that unless there's a tax treaty specifying otherwise (which we do have with many countries), all personal income over the "foreign earned income exclusion" (roughly 100k) is subject to income tax just like US-derived income would be. (Edit: just saw your edit about Form 1116... thanks, I didn't know about this. But I guess my point still applies in that, tax credit aside, you are still considered to be under the authority of the IRS even if your life and all your income are elsewhere.)

"If something similar were applied to the tax on corporate profits, then it would not change much, as the US rate (21% I think) is pretty low by world standards. But there are exceptions, like Ireland (6-12%, IIRC)."

Right, but if we taxed all international profits, it could probably be very low (maybe "But isn't the Irish company a different entity anyway? How far down the chain of ownership / authorized-importer-relationship would such a rule go?"

My thinking is that perhaps we should end this silly game of international subsidiaries being treated like separate entities for tax purposes and just tax the aggregated profits of the parent entity, regardless of where in the world or under what subsidiary they are realized.

Re: Facebook tax court trial begins over Ireland offshore deal

#279

Post by throwawayhhakdl »

Stranger43 wrote: post #174

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 d…

if Ireland isn’t taxing the revenues, then it’s not a break of the treaty for the us to tax them. No?

Re: Facebook tax court trial begins over Ireland offshore deal

#280

Post by samatman »

tyfon wrote: post #99
lm28469 wrote: post #95

Earlier quoted context omitted.

9B out of 70B revenues is a pretty big deal imho, what about profits ?

Net income for 2019 was ~18 milliards (or billions for you Americans) so it's half of that!

All English-speaking countries have adopted the short scale.

Since we're not using French, it's 18 billion.

Or you could follow SI recommendations and say 18G$. Pretty sure this crowd would know what you mean.

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