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Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

businessinsider.com.au

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Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#301

Post by danuker »

rhizome wrote: post #156
paxys wrote: post #19

> Uber transfered its intellectual property through a $16 billion “loan” from one of its subsidiaries in Singapore that in turn owns one of Uber’s Dutch shell companies, a manuever that grants the company a $1 billion tax break every year for the next 20 years, the researchers found. Shit like this makes my head hurt and infuriates me at the same time.

I've taken to calling it anti-American (or anti-whatever country in which they're minimizing their taxes). How better to tell the world that you don't care about the societies that made your success possible than to refuse to help fund them?

Then again, what does the US government do with said revenue? Its citizens are certainly not helped when it comes to medical issues, for instance.

https://ourworldindata.org/grapher/life-expectancy-vs-health...

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#303

Post by crispyambulance »

Siira wrote: post #267
roenxi wrote: post #243

Earlier quoted context omitted.

That article is saying top 1% income in the US is numbers higher than $400k! The median was something like $50k or $80k last time I checked. Those aren't normal workers, those are exactly there sort of people who are seen as not contributing their fair share. They physically can't be working harder than a median worker but they're getting multiples of the salary. If someone is going to be supporting society, they are…

400K is not real rich territory. Wealth follows a power law.

If you look at the net worth of people who make ~400K/year in their jobs, it has a huge variation.

This is because some of them launched themselves into a high-earning job and others were born into significant generational wealth. Most people who are born into serious wealth aren't going to stay long (if ever at all) in a sub-100K salary grind regardless of talent and skills.

Incidentally, I happen to know that a good number of the people that get busted for insider trading are highly compensated finance folks that make ~400K. They see their peers with dynastic wealth and the accompanying toys, get envious, and try taking "short cuts".

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#304

Post by carlob »

throwaway2037 wrote: post #252
onlyrealcuzzo wrote: post #182

Earlier quoted context omitted.

99% of the top 1% are "normal workers" like me - engineers at Google - or my cousin - a radiologist - or one of my best friends - an investment banker - or lawyers, or owners of successful small businesses, etc... These "normal workers" pay a lot of that 40% of the tax bill. There aren't that many CEOs of Fortune 500 companies and board members, A+ list celebrities, and aristocrats. You're getting into the .01% - tha…

First, I assume when you write "normal workers" that you mean non-executives and non-passive income earners. (Executives can get a lot of equity or dividends that accrue taxes at lower rates; passive income earners use asset depreciation to lessen tax burden.) The top 1% in the US is ~400K USD. Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effec…

> Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effective and nominal tax rates!) In my view: "All in" should be about 50-55%. When I say "all in" I mean absolutely everything -- federal, state, local, national pension, national health (if applicable), yada yada yada. That would mean top 1% still have net income (after taxes) of more than 200K USD.

In my view one of the big problems is that capital gains are taxed less than income from working and they are a proportional tax. The result of that is that once you get to the 0.1 % taxation becomes regressive because a bigger chunk of your income comes from capital gains.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#305

Post by Mediterraneo10 »

slavik81 wrote: post #257
Mediterraneo10 wrote: post #46

Earlier quoted context omitted.

US citizens make something of a deal out of it, as you can see from expat forums every spring when tax-filing season comes. However, relatively few American citizens abroad choose to renounce their citizenship because they find it useful to retain it. The minimum income threshold to pay income taxes (otherwise you just file) is ~$100,000, so that generally means most middle-class people don’t have to pay. The real pa…

> However, relatively few American citizens abroad choose to renounce their citizenship because they find it useful to retain it. Also because the US government will not allow you to renounce your citizenship if you are doing so for tax reasons.

Not really. Most US expats who would want to renounce their citizenship, know to tell the consul at the renunciation appointment a vague "I have citizenship of country X now and I no longer identify with my American citizenship," and not, "I don’t want to file US taxes anymore."

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#306

Post by nichol4s »

staticautomatic wrote: post #14
jonas21 wrote: post #6

I don't fully understand the part about Dutch shell companies, but it seems perfectly believable that Uber would have $6B in revenue and still operate at a loss (and owe no income taxes). Isn't that the big criticism of Uber's business model -- that they can't turn a profit at rates people are willing to pay while also compensating drivers?

This begs the question of what purpose the shell companies serve.

My understanding is as follows: the Dutch shell company is a parent (holding) company which basically holds shares in a subsidiary. If the holding company owns more than 95% of the shares of its subsidiary it acts as a single fiscal unit, allowing it to be taxed as one. Now, if the parental company has multiple subsidiaries it enables the holding to settle costs of the one, with the profits of the other.

But, the main thing that the Dutch tax system enable, is that you can sell the shares of a subsidiary and hold the profits within the parental company (for the purpose of re-investing) without the need to pay taxes. This enables companies to quickly 'move' subsidiaries around the world without any tax consequences.

This opens up an enormous amount of opportunity for creative tax lawyers who thrive in this grey area. International tax rules are so complex and the stakes so high that in the end they can just negotiate an 'acceptable' tax rate on a government level. Where, in the end, if the government does not agree, they can just 'move' their business somewhere else.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#307

Post by fastaguy88 »

bartart wrote: post #117
seaourfreed wrote: post #93

Congress is corrupt (via lobbyists). Congress would make this illegal if congress men/women didn't sell out American Citizens. 88% of the cost of the US Fed gov is paid for by taxes by workers (income taxes). Less than 12% comes from all corp/business taxes combined with capital gains (taxing the rich 1%). Business shifting tax burden to workers is a massive scale problem. $3.5 Trillion = US Tax Revenues (2019) and 8…

It's also worth noting that the top 1% pay about 40% of all income taxes at the federal level, and they earn about 20% of annual income from all sources ( http://hdr.undp.org/en/indicators/186106 ). So classifying 88% of federal revenue as paid by regular workers might be a bit misleading

One must be careful about focusing on income taxes - they leave out about 1/3 of federal revenue paid by social security taxes, which are overwhelmingly paid by the bottom 99%. And focusing on federal taxes leaves out state and local taxes, which are also borne by the majority of the populace.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#308

Post by MrPowers »

> In 2019, Uber claimed $4.5 billion in global operating losses (excluding the US and China) for tax purposes – in reality, it brought in $5.8 billion in operating revenue

This sentence makes me feel like the article author does not understand the difference between profit and revenue. The wording makes it seem like there is something nefarious about being a loss making company.

Uber's global 2020 revenue was 11 billion, with a net income of -7 billion.

> a manuever that grants the company a $1 billion tax break every year for the next 20 years, the researchers found

I just have no idea how any researcher would be able to compute this. Corporate taxes are based on profits. In order to pay taxes, a corporation must actually make money. Did the researchers forecast a 20 year P&L and compute lost tax revenue based on their hypothetical financials?

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#309

Post by thrwhizzle »

Business and corporate taxes are an endless exercise in futility. We need to just completely get rid of them. Businesses and corporations will never pay, and there is no magical sequence of words to formulate a bulletproof tax scheme.

If we get rid of business and corporate taxes we can also get rid of special rates for capital gains, and treat all income the same.

Then if you really want to get crazy, get rid of all the deductions and credits. But you’ll have to fight off all the special interests on both sides of the aisle.

Re: Uber used 50 Dutch shell companies to dodge taxes on $6B in revenue

#310

Post by thrwhizzle »

throwaway2037 wrote: post #252
onlyrealcuzzo wrote: post #182

Earlier quoted context omitted.

99% of the top 1% are "normal workers" like me - engineers at Google - or my cousin - a radiologist - or one of my best friends - an investment banker - or lawyers, or owners of successful small businesses, etc... These "normal workers" pay a lot of that 40% of the tax bill. There aren't that many CEOs of Fortune 500 companies and board members, A+ list celebrities, and aristocrats. You're getting into the .01% - tha…

First, I assume when you write "normal workers" that you mean non-executives and non-passive income earners. (Executives can get a lot of equity or dividends that accrue taxes at lower rates; passive income earners use asset depreciation to lessen tax burden.) The top 1% in the US is ~400K USD. Real question for OP (and others): What do you think is a reasonable effective income tax rate? (Please do not confuse effec…

>What do you think is a reasonable effective income tax rate? (Please do not confuse effective and nominal tax rates!) In my view: "All in" should be about 50-55%. When I say "all in" I mean absolutely everything -- federal, state, local, national pension, national health (if applicable), yada yada yada.

Who is this for? The “rich” or for everyone else?

An effective rate of 50-55% is obscene. I would relocate for anything approaching 40%.

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