Uber used 50 Dutch shell companies to dodge taxes

They had their fun back in the day when they smuggled opium into China.

> The term "shell companies" seems to imply something nefarious

Well considering they are mostly used by big corporations/capitalist firms to avoid all kinds of responsibilities to society, I seriously question your lack of critique here.

Maybe the way to frame this is that tax avoidance (or in corporate speak: 'tax planning') has become horribly normalized by the media.

I think most of the working class have no idea of the institutional terrorism that is going on on a daily basis, against their own interests. They are gaslit with propaganda day in day out (I'm looking at you Murdoch, yet also liberal news gives terrible systemic critiques - so you could argue that's actually worse since they claim to be a fair and objective news source).

Your arguments speak much too kindly about these firms (and the bourgeois government institutions that supposedly 'democratically' govern them), who are oh so happy to create as many 'externalities' as possible.

> It's also important to point out that they do not choose The Netherlands for low corporate tax rates, they are not the lowest in the EU by far, but because of "tax rulings". Those are agreements they can make with the tax authorities that ascertain them how much tax they will pay this year as long as revenue, costs, etc, stay within a certain bandwidth.

The way you're framing it, it sounds like you think this makes it fairer? The problem remains: multinational capitalist firms/corporations are leeches on the working class and are not adequately contributing back to society.

>Well considering they are usually used by corporations/capitalist firms to avoid all kinds of responsibilities to society, I question your lack of critique here.

Regardless of what the effective tax rate paid is having a corporate entity per country you operate in greatly simplifies the regulatory compliance situation for taxes, labor laws and any specific laws that cover whatever your business is.

It's convenient to think this is some simple tax loophole that needs closing, but that's unlikely. Those 50 legal entities likely have no profit (on paper) due to fairly arbitrary pricing of intellectual property and the loans. It'd be interesting to see where the profit ends up disappearing into - if anywhere at all, because Uber isn't profitable IIRC, and it's profits that are taxed in major jurisdictions (IIRC, IANAL, I bet there are thousands of exceptions).

The real problem here isn't the dutch sandwich, it's the very notion of taxing profits. We should not tax profits nor capital gains; we should tax revenue and ownership - those are much harder to game. After all, that's what we do with individuals too.

Such taxes are, in principle, not new: VAT is such tax. When implemented properly, those taxes have the additional benefit that they encourage participation - after all, you get to deduct VAT already payed on your inputs when paying VAT on your outputs.

This is a much more resilient model, and thus a better basis for for corporate taxation; and it's open to tweaks (e.g. discouraging hyper-complex legal structures by allowing less than 100% deduction for input VAT); it's potentially regressive, but if you acknowledge that, you can attempt to compensate for that by altering (or even dramatically reducing) income tax, and considering measures such as universal basic income, and choosing to have lower tax on human consumables (food) than on e.g. services (vacations or medical care).

Fundamentally though, the real problem here is that profit is a mirage; it's much too easily distorted, especially with flexibly interpreted valuations of ever more intangible goods we have today. Transactions however, are at least a little harder to fake, so those should be where taxation takes place if possible.

Another advantage of VAT is that it can be levied by a consuming country; the US could simply impose this, and mostly ignore whatever shenanigans in corporations try to pull in foreign jurisdictions.

Which isn't to say VAT doesn't have it's issues (e.g. https://en.wikipedia.org/wiki/Missing_trader_fraud ) - but by and large those are much more easily dealt with, and easier to clearly label as fraud, not merely clever and antisocial but legal tax avoidance. And perhaps somebody can come up with something even better than VAT; but regardless - I'm pretty sure playing whack-a-mole with profit-shifting tax avoidance isn't going to lead anywhere very quickly.

The real fix is taxing revenue, not profit. The 50 shell companies here are surely useful to Uber, but the core problem here is that Uber is at least on paper non profitable, and therefore doesn't owe taxes. The fact that it plays some kind of shell game is likely due to the fact that the concept of profit depends on how the boundaries are drawn, and it wants to ensure that it controls those boundaries, such that no part pays any taxes.

Overall however, in the current system used pretty much worldwide (I believe?) it's reasonable for a loss-making company like Uber to not pay any taxes. The problem is in the approach, not really in the ridiculous shell companies.