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Uber used 50 Dutch shell companies to dodge taxes

businessinsider.com

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Re: Uber used 50 Dutch shell companies to dodge taxes

#121

Post by dalbasal »

JI00912 wrote: post #120
dalbasal wrote: post #114

Uber might be very sophisticated in its tax avoidance, but it's probably not a good example for research... inasmuch as the research has a policy focus. Uber lose money. Corporate income tax is paid on profit. These article frustrate me: " 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. " Unless…

If Uber lost 4.5 billion, that also means they spent at least that much money. That's a lot of people who were able to sell good and services. That's actually a good thing. And while spending this money, Uber provided a useful service. Besides the journalist apparently not understanding how taxation works, the phrasing is used to make the situation sound nefarious without providing any evidence. 50 shell companies? O…

I don't think it's nefarious, more likely lazy. I suspect I spent more time reading it than the author did writing it.

Re: Uber used 50 Dutch shell companies to dodge taxes

#122

Post by emn13 »

beckman466 wrote: post #18
dstick wrote: post #4

I'm getting more and more frustrated by my own country's willingness to facilitate this. It just doesn't make any sense. From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". There's a growing resistance to the Netherlands as a "Doorsluisland", and our current administration's political turmoil will hopefully provide the momentum for actual change…

> There's a growing resistance to the Netherlands as a "Doorsluisland", and our current administration's political turmoil will hopefully provide the momentum for actual change - so hopefully things will change . I am really not holding my breath for this. I am glad to see the awareness of tax avoidance (through postbusfirmas, 'double Irish with a Dutch sandwich', etc.) growing, yet until we do something about the ro…

Because profits are easily gamed (e.g. via loans and IP licenses), the double Irish with a dutch sandwich depended not only on shifting profits (the dutch sandwich part) but also on a low-tax EU state (the double irish part, though that also involved bermuda iirc).

However, the loophole in Irish tax law was closed in 2015, and came fully into effect in 2020.

But the underlying problem still exists - after all, profit shifting isn't some tax loophole; it's an intrinsic possibility given IP law and intangible assets. I'm skeptical this is ever going to disappear - because how are you going to tell a legitimate low-margin firm that merely has high costs in the form of IP licenses and loan interest from a shell company that's engineered those costs to cancel out any income, such that all profit accrues to whoever holds that IP or granted the loan?

These tax avoidance techniques thus aren't really complex, and aren't trivial to solve - as long as you can shift profits into some jurisdiction with low or no taxes, but even more trivially simply by investing rather than making profits - resulting in lower-tax capital gains rather than income tax.

https://en.wikipedia.org/wiki/Dutch_Sandwich

https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey....

But even without outright tax havens like Jersey, profit shifting is a problem, because it encourages states to do a race to the bottom.

Personally, I think this game is lost; we should switch to taxing revenue and giving up on this profit-shifting whackamole; e.g. by much higher VATs instead.

Re: Uber used 50 Dutch shell companies to dodge taxes

#123

Post by cal5k »

dstick wrote: post #4

I'm getting more and more frustrated by my own country's willingness to facilitate this. It just doesn't make any sense. From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". There's a growing resistance to the Netherlands as a "Doorsluisland", and our current administration's political turmoil will hopefully provide the momentum for actual change…

> From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy".

As an aside, I find this (popular) sentiment quite amusing - what, exactly, is "trickle-down economics" and who can we credit for doing such an apparently thorough job of authoritatively debunking it?

Re: Uber used 50 Dutch shell companies to dodge taxes

#124

Post by benhurmarcel »

speleding wrote: post #96
dstick wrote: post #4

I'm getting more and more frustrated by my own country's willingness to facilitate this. It just doesn't make any sense. From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". There's a growing resistance to the Netherlands as a "Doorsluisland", and our current administration's political turmoil will hopefully provide the momentum for actual change…

I'm also Dutch, but I'm mainly frustrated that the press does a very poor job of explaining what is going on. Uber has its corporate head quarters for the EU in Amsterdam. For a company the size of Uber to have 50 different entities is not particularly special, you will find several other multinationals there with the same number. It makes sense to have one for each jurisdiction they operate in, for example. The term…

> 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.

"They don't come to the Netherlands because the tax rate is low, but because they can negotiate an extremely low tax rate just for themselves"

Re: Uber used 50 Dutch shell companies to dodge taxes

#125

Post by benwad »

cal5k wrote: post #123
dstick wrote: post #4

I'm getting more and more frustrated by my own country's willingness to facilitate this. It just doesn't make any sense. From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". There's a growing resistance to the Netherlands as a "Doorsluisland", and our current administration's political turmoil will hopefully provide the momentum for actual change…

> From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". As an aside, I find this (popular) sentiment quite amusing - what, exactly, is "trickle-down economics" and who can we credit for doing such an apparently thorough job of authoritatively debunking it?

I think "trickle-down economics" is usually a synonym for the Chicago School, promoted by Milton Friedman and exported (often forcefully) by the US government.

As for who's responsible for 'debunking' it, Thomas Piketty is the name I'd usually associate with popularising the skepticism towards the Chicago School.

Re: Uber used 50 Dutch shell companies to dodge taxes

#126

Post by vinay427 »

doikor wrote: post #81
bko wrote: post #58

Earlier quoted context omitted.

> its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar. Do you think tax compliance is higher in small local businesses than large mega corps? Based on my experience in the US, tax fraud is much easier and more common with small businesses. Think about how many small shops don't even have a proper point of sales system, encourage cash, and hire under the table. Stackbucks would not be able to…

American banking and tax system is archaic and really inefficient when compared to some places in Europe (especially the nordics). Here cash heavy businesses are rare and meaning the money is going through the banks. And as the money is moving through the banks it is pretty much impossible to have income that the local tax office would not see. And the banks are by law required to ask for proof of any irregular money…

> Here cash heavy businesses are rare

The divide here is certainly not between the US and much of Europe. If anything, the US is far closer to the Nordics than much of Europe based on the statistics I could find [1] and my own anecdotes from living in Western/Central Europe.

> For retail/coffee shops/any direct to consumer business you have to pay VAT and thus are required to always print a receipt to the customer.

For what it's worth, this is true in every European country and every part of the US and Canada I've been to. Virtually any store with a physical location will have some PoS system that manages this, and mobile businesses that provide services (such as the construction you mentioned) increasingly do so as well.

[1] https://www.statista.com/chart/19868/share-of-cash-payments-...

Re: Uber used 50 Dutch shell companies to dodge taxes

#127

Post by markvdb »

candiodari wrote: post #62
FriedrichN wrote: post #48

Earlier quoted context omitted.

> taking an X amount of jobs with them All three? These shell companies are often just a post address, sometimes an empty office with a plant (and someone to water the plant every week). The excuse is always that if we won't do it, someone else will and that we need international legislation. While that is true, someone needs to kick it off. And I don't want the crumbs, they can stick those crumbs where the sun don't…

Actually Ireland demands that some percentage of workforce plus some percentage of revenue is in Ireland. So no these are sometimes very large offices, and a bunch of actual business is also routed through these offices. Unless you mean in the Netherlands, yes, there you can have a post office/lawyer office, something along those lines.

Ireland at least until recently didn't even require Irish companies to be administered from Ireland. It was also super laissez-fair on arm's length principles for valuing services provided between connected entities.

[0] https://en.wikipedia.org/wiki/Double_Irish_arrangement#Conce...

Re: Uber used 50 Dutch shell companies to dodge taxes

#128

Post by jdasdf »

dstick wrote: post #4

I'm getting more and more frustrated by my own country's willingness to facilitate this. It just doesn't make any sense. From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". There's a growing resistance to the Netherlands as a "Doorsluisland", and our current administration's political turmoil will hopefully provide the momentum for actual change…

>From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy".

Eliminating corporate tax is a fairly mainstream idea in economics, that is hamstrung by politics.

Re: Uber used 50 Dutch shell companies to dodge taxes

#129

Post by martinald »

Marazan wrote: post #53
throwawayzRUU6f wrote: post #41

Earlier quoted context omitted.

Is the Netherlands in any way culpable in this - do they go the extra mile to help facilitate the evasion? My layman understanding of the tax evasion schemes is that there's nothing special about Ireland or the Netherlands. They're chosen due to other factors, like English proficiency, stable and well known legal framework - but the essence of the schemes could be done in nearly any western country.

No, there re absolutely special features of Netherlands and Ireland. Ireland specifically had a tax setup that allowed the creation of a "virtual" European Headquarters that was not in any tax jurisdiction that sales could be booked against.

Don't think that's accurate. All EU states allow a HQ like that.

What Ireland did differently was allow companies to offset huge amounts of tax with complex IP transfer agreements to offshore jurisdiacations (Bermuda primarily) - called the Double Irish.

And - more importantly - when this was "shut down" by the EU, there was another option called "Single Malt", which I believe is quasi shut down now or was meant to be in 2020. I'm not sure if there is a replacement but I imagine there is. You can read this all on the "Double Irish arrangement" on Wikipedia.

What Ireland has done differently is show multinational companies that even if the EU/whoever puts pressure on one scheme they will try and come up with another one. Personally, I think the tax loss is unjustifiable - I think Apple's EU corp tax rate was something like 0.002% or something. I don't have a problem with Ireland's aggressive 12.5% tax rate per se, but setting up schemes which deprives European states of corp tax revenue and charging far under It does seem that the US is finally fed up of this with the minimum corp tax proposals though.

Re: Uber used 50 Dutch shell companies to dodge taxes

#130

Post by js8 »

demadog wrote: post #113
kossTKR wrote: post #54

Earlier quoted context omitted.

The same thing is happening in _all_ countries. I'm from Scandinavia, and plenty of large US corporations pay zero taxes because of very complex arrangements. Regular people with smaller companies have to pay high taxes though. It's called soft imperialism. The US / Transnational empire forces all countries to "open their markets", either via direct war, og in allied states, via soft power. Then various firms like Mc…

Is there a good book that dives into this topic in more detail?

Not about taxes specifically, but about the problems of the free market policies: https://en.wikipedia.org/wiki/Bad_Samaritans:_The_Myth_of_Fr...
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