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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

#131

Post by nicoburns »

busymom0 wrote: post #90
bryanrasmussen wrote: post #80

Earlier quoted context omitted.

right if you're a small company and you pay 0% tax you're probably getting shut down and owner is having some legal problems when they investigate you, if you're big enough you might get a small fine or maybe just have investigation dropped.

Not really. The main problem is that if you are small, you most likely don’t have expensive accountants who will find every possible way to find legal loop holes to reduce our tax burden plus you don’t have the political connections to lobbying for certain exclusions or deals by the politicians. This is why small businesses are the ones which get hurt the most by things like raising taxes, minimum wage etc. There’s a…

The main problem is that there are such legal loopholes.

Re: Uber used 50 Dutch shell companies to dodge taxes

#132

Post by emn13 »

bko wrote: post #58
technicolorwhat wrote: post #26

Earlier quoted context omitted.

Im dutch too and im super frustrated about this. I don't care about paying taxes (I've done so for the last 20+ years) even if they go as high as 52%. But it really irritates me that: - other companies with this tax deals pay almost nothing - its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar.

> 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…

Focusing on tax compliance is misleading; because tax avoidance is legal. The point is that BEPS techniques allow businesses to have lower than average tax burdens - the fact that they can do it without fraud makes it worse not better, because there is less disincentive.

Then there's the fact that large corporations intrinsically damage the marketplace by making it less fluid.

Unfortunately, I can't find any clear stats on what % of GDP is due to large corporations and set that next to their contribution via taxes. I suspect larger corporations pay relatively less taxes than smaller ones, but I don't know how to test that hypothesis - any ideas?

E.g. https://fivethirtyeight.com/features/big-business-is-getting... notes that the fortune 500 revenue rose gradually to reach around 75% of GDP in 2013, but obviously sum total national revenue is much higher than GDP, so that doesn't really say much...

Re: Uber used 50 Dutch shell companies to dodge taxes

#133

Post by beckman466 »

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?

Zak Cope's 'The Wealth of (Some) Nations': https://www.goodreads.com/book/show/43015121-the-wealth-of-s...

Re: Uber used 50 Dutch shell companies to dodge taxes

#134

Post by cal5k »

benwad wrote: post #125
cal5k wrote: post #123

Earlier quoted context omitted.

> 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.

No Friedman acolyte that I'm aware of would actually endorse wealth transfers to the rich in the hopes that it would "trickle down" to everyone else. It's a simplistic caricature of a broad system of thinking that seeks to maximize individual economic freedom and broadly minimize taxation and unnecessary regulation.

Re: Uber used 50 Dutch shell companies to dodge taxes

#135

Post by vladvasiliu »

kossTKR wrote: post #54
technicolorwhat wrote: post #26

Earlier quoted context omitted.

Im dutch too and im super frustrated about this. I don't care about paying taxes (I've done so for the last 20+ years) even if they go as high as 52%. But it really irritates me that: - other companies with this tax deals pay almost nothing - its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar.

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…

While I don't think you're wrong, to me, the issue is that those schemes they implement are legal.

Yes, they ago against the "spirit of the law", but that's pretty much it.

What frustrates me is this feeling I have that tax laws being Byzantine is actually a "feature", not a bug. As in the tax laws were designed this way. Maybe via "soft power" applied on the politicians by "moneyed interests", I don't know.

But clearly, there seems to be much too little action done to put a stop to this given how much noise politicians make about how Google et al. should pay more taxes.

They just come up with absurd schemes which of course won't be implemented, or again, will be but with loopholes such that Mom & Pop's store will have to pay a lot but BigCorp's army of lawyers will be able to dance around them.

Re: Uber used 50 Dutch shell companies to dodge taxes

#136

Post by emn13 »

elmo2you wrote: post #92
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.

There are certainly special features that make the Netherlands attractive for foreign multinationals. The Dutch government has, for a long time, actively presented itself (euphemistically) as a great place for foreign business. They of course would not openly advertise that as a tax avoidance opportunity, but you do the match. While I'm not sure if this still happens today, the Dutch IRS used to have "special arrange…

I think framing matters a lot here. I'm sure the dutch were particularly pragmatic in this regard, but fundamentally, the EU/US corporate tax system is based on profits, unlike for individuals, where it's based on revenue (aka income). And unfortunately, profits are largely a bookkeeping exercise - intrinsically so, not just due to tax loopholes. After all, who is to say which part of a multinational "created" the value? Between legal entities profit shifting via IP licenses or loans is indistinguishable from... actual IP license costs or loans.

As long as there are tax differences between jurisdictions and means to shift profits (but e.g. within the EU those are a given as part of the single market), this problem isn't going away.

I think the problem is in the whole concept of taxing profit, rather than revenue.

Re: Uber used 50 Dutch shell companies to dodge taxes

#137

Post by etripe »

dtech wrote: post #61
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.

What you're saying is not entirely false, but it is naive at best. Ireland, the Netherlands & co are fully aware of these tax loopholes, even if we give them the benefit of the doubt that they were not originally intentional. They like the arrangement because it gives them a tiny - compared tot he dodged taxes - tax benefit for basically free.

> it gives them a tiny - compared tot he dodged taxes - tax benefit for basically free.

Well, if I remember correctly, the Dutch government enabled avoiding something to the tune of 30-40 billion euros last year. The benefits for the Dutch treasury were something like 24 million. Yes, you read that right - even though I probably got the exact numbers wrong, this is the order of magnitude we're talking about.

Re: Uber used 50 Dutch shell companies to dodge taxes

#138

Post by krageon »

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…

> It just doesn't make any sense

The Netherlands' primary business model is facilitating tax evasion (and thereby stimulating an influx of shell corporations here that pay a nominal amount of money for a "tax deal"). I'm genuinely confused why you think it doesn't make sense in this specific case (or in general?).

Re: Uber used 50 Dutch shell companies to dodge taxes

#139

Post by jorvi »

krageon wrote: post #138
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…

> It just doesn't make any sense The Netherlands' primary business model is facilitating tax evasion (and thereby stimulating an influx of shell corporations here that pay a nominal amount of money for a "tax deal"). I'm genuinely confused why you think it doesn't make sense in this specific case (or in general?).

The Netherlands' primary business model is having a high value service economy. The tax thing only amounts to a few percent points of the entire GDP.

That doesn't make the tax trickery less of an issue, but do not make it out as if that's our raison d'être.

Re: Uber used 50 Dutch shell companies to dodge taxes

#140

Post by emn13 »

JI00912 wrote: post #112
emn13 wrote: post #110

Earlier quoted context omitted.

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…

If you make 100$ and spend 150$, you have revenue of 100$, no profit and a debt of 50$. So you'd have to pay taxes on the 100$ from your -50$.

Assuming you (or the corporation) have no money - yes. That's exactly how it works for individuals, and how it should work for corporations too; they would need to take a loan (or dip into capital) to cover the 50$ loss, and would then similarly need to cover whatever tax was on revenue. Obviously taxes on revenue would not need to be as high as on profit to generate the same tax income, so for most businesses this is fine - but low margin businesses would need to raise prices slightly. On the other hand, if large corporations actually payed their share, income taxes would likely be lower, and it would be easier for smaller competitors to compete with larger corporations that can afford to profit-shift.

It would also be hell of a lot simpler, because all those crazy shell company incentives go away, and it's also much clearer what's deductible (not a whole lot).

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