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Google Boss: We Follow The Law On Tax

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Re: Google Boss: We Follow The Law On Tax

#41

Post by rayiner »

ars wrote: post #35
rayiner wrote: post #28

I see a lot of talk about "tax loopholes" but not any specifics about exactly what those loopholes are. It's easy to blame the law (a process which is mostly just a self-reinforcing talking point), but has it occurred to anyone that maybe neither the law nor Google are "crooked?" You can take the most straightforward law and it still won't withstand a company putting all their IP in a tax haven and then attributing m…

> I see a lot of talk about "tax loopholes" but not any specifics about exactly what those loopholes are. See here: https://en.wikipedia.org/wiki/Double_Irish_arrangement The "cheating" accusation comes because you have to be very large to be able to make use of this. If everyone could use this tax arrangement people wouldn't complain. (Well, they would complain that it exists, but not that people use it.)

The double Irish arrangement isn't a loophole, or if it is its a loophole that's the fault of the Irish by not taking account of US transfer pricing rules. The basic problem is that transfer payments within multinational corporations makes it hard to account for income, and rules to attempt to achieve that accounting are easily undermined by tax haven jurisdictions.

Re: Google Boss: We Follow The Law On Tax

#42

Post by skore »

AnthonyMouse wrote: post #38
skore wrote: post #20

Earlier quoted context omitted.

Now now, be fair. There IS a difference between "paying only the taxes that I am required to pay" and setting up a Double Irish with a Dutch Sandwich. One is investing resources to minimize failure ("I want to make sure we don't pay more than we need to pay"), which I completely agree with - if your accountant fails to do that, it's not a good accountant. But the other is a proactive investment of even more money to…

I'm not sure what line you're attempting to draw. An accountant's job isn't just to make sure you file the right paperwork, it's to identify courses of action that could have a significant effect on the bottom line. You seem to be suggesting that a business would be doing something unreasonable by moving any of its operations into a jurisdiction with lower taxes, since that would be making an investment in order to p…

> You seem to be suggesting that a business would be doing something unreasonable by moving any of its operations into a jurisdiction with lower taxes [...]

Moving to or setting up a subsidiary in a different jurisdiction: Completely fine.

Doing the same thing for the sole purpose of avoiding taxes: Not fine.

I really don't get what's so hard to understand about that. How many employees do Google or Apple have in Ireland, the Cayman Islands or the Netherlands? And how many in the US? Quite simple, I think.

Re: Google Boss: We Follow The Law On Tax

#43

Post by ams6110 »

svenkatesh wrote: post #16
pvnick wrote: post #14

Earlier quoted context omitted.

Seriously, what's up with politicians recently, both in Europe and here in the States, hammering at successful companies for trying to minimize their tax liability? I specifically avoided saying "leftist" politicians because even the right is guilty (I'm looking particularly at that sniveling fool John McCain). Expect the law to change, creating an even more complicated tax structure and destroying even more economic…

I agree with you about simplifying the tax code, but do not agree about reducing the tax-liability. Since these corporations benefit from society just like private individuals do, they should contribute to society (in the form of taxes) in kind.

Corporations are organizations of private individuals (either employees or shareholders), all of whom already pay taxes.

Re: Google Boss: We Follow The Law On Tax

#44

Post by gamblor956 »

rayiner wrote: post #41
ars wrote: post #35

Earlier quoted context omitted.

> I see a lot of talk about "tax loopholes" but not any specifics about exactly what those loopholes are. See here: https://en.wikipedia.org/wiki/Double_Irish_arrangement The "cheating" accusation comes because you have to be very large to be able to make use of this. If everyone could use this tax arrangement people wouldn't complain. (Well, they would complain that it exists, but not that people use it.)

The double Irish arrangement isn't a loophole, or if it is its a loophole that's the fault of the Irish by not taking account of US transfer pricing rules. The basic problem is that transfer payments within multinational corporations makes it hard to account for income, and rules to attempt to achieve that accounting are easily undermined by tax haven jurisdictions.

The double-Irish is definitely a loophole. The basic premise of the loophole is that Irish-incorporated companies don't owe Irish income taxes on their business activities if they are not managed in Ireland.

This is a relatively recent change to the Irish tax code (based on the pace of tax law development)--and was introduced only after the development of transfer pricing rules (assignment of income to/between subsidiaries of multinational companies). In other words--the loophole was deliberately designed to get around U.S. and European transfer pricing rules and make Ireland "competitive" for multinational corporations.

Re: Google Boss: We Follow The Law On Tax

#45

Post by markvdb »

rayiner wrote: post #28

I see a lot of talk about "tax loopholes" but not any specifics about exactly what those loopholes are. It's easy to blame the law (a process which is mostly just a self-reinforcing talking point), but has it occurred to anyone that maybe neither the law nor Google are "crooked?" You can take the most straightforward law and it still won't withstand a company putting all their IP in a tax haven and then attributing m…

How can a Bermuda google subsidiary be the owner of the intellectual rights? Where do these funds come from?

I guess the biggest loophole, even more than the double Irish, is non-existing or very lenient transfer pricing rules...

Re: Google Boss: We Follow The Law On Tax

#46

Post by figbucket »

dpatru wrote: post #26
svenkatesh wrote: post #16

Earlier quoted context omitted.

I agree with you about simplifying the tax code, but do not agree about reducing the tax-liability. Since these corporations benefit from society just like private individuals do, they should contribute to society (in the form of taxes) in kind.

Government is a parasite on society. Corporations and other private enterprises are what create good societies through mutually advantageous exchanges. In contrast, governments extract wealth by force or the printing of money (fraud) and use it to pay for things that no private person or corporation would pay for (war, prisons, bureaucracy, fat pensions, welfare for people who could work but don't want to, etc.)

nonsense. Consider for a second all of the technology that corporations use in their products that were originally funded by government research projects like the internet(arpanet), world wide web (And others).

If government didn't have the scale to take on such projects a lot of these corporations wouldn't exist and a lack of research like those often government funded would just reinforce the status quo.

Re: Google Boss: We Follow The Law On Tax

#47

Post by AnthonyMouse »

skore wrote: post #42
AnthonyMouse wrote: post #38

Earlier quoted context omitted.

I'm not sure what line you're attempting to draw. An accountant's job isn't just to make sure you file the right paperwork, it's to identify courses of action that could have a significant effect on the bottom line. You seem to be suggesting that a business would be doing something unreasonable by moving any of its operations into a jurisdiction with lower taxes, since that would be making an investment in order to p…

> You seem to be suggesting that a business would be doing something unreasonable by moving any of its operations into a jurisdiction with lower taxes [...] Moving to or setting up a subsidiary in a different jurisdiction: Completely fine. Doing the same thing for the sole purpose of avoiding taxes: Not fine. I really don't get what's so hard to understand about that. How many employees do Google or Apple have in Ire…

>Moving to or setting up a subsidiary in a different jurisdiction: Completely fine.

>Doing the same thing for the sole purpose of avoiding taxes: Not fine.

And how exactly do you propose to distinguish the two?

"Number of employees" is a completely worthless metric. Apple (and/or Foxconn) employs many times more employees in China than in the U.S., does that mean they should be reporting most of their profits in China?

Re: Google Boss: We Follow The Law On Tax

#48

Post by DanBC »

rayiner wrote: post #28

I see a lot of talk about "tax loopholes" but not any specifics about exactly what those loopholes are. It's easy to blame the law (a process which is mostly just a self-reinforcing talking point), but has it occurred to anyone that maybe neither the law nor Google are "crooked?" You can take the most straightforward law and it still won't withstand a company putting all their IP in a tax haven and then attributing m…

> So why should the mere existence of servers in the U.K. entitle the country to tax some substantial amount of Google's income?

This is wrong.

UK customers buy ads to be shown in the UK to UK viewers, from UK staff at Google's UK offices. They pay in UK pound sterling, from UK bank accounts. So far everything is in the UK. It is only at the very end of the process that someone in Google's Ireland office pushes a button to close the sale, thus taking the sale out of the UK (and our tax system) and into Ireland and their tax system.

This is a transparent dodge to avoid paying tax. It might be legal, but it's sleazy.

> but not any specifics about exactly what those loopholes are.

You don't know what you're talking about, which is fine, but why go to all that effort to create scenarios that aren't happening rather than just asking what is happening?

Re: Google Boss: We Follow The Law On Tax

#49

Post by rayiner »

DanBC wrote: post #48
rayiner wrote: post #28

I see a lot of talk about "tax loopholes" but not any specifics about exactly what those loopholes are. It's easy to blame the law (a process which is mostly just a self-reinforcing talking point), but has it occurred to anyone that maybe neither the law nor Google are "crooked?" You can take the most straightforward law and it still won't withstand a company putting all their IP in a tax haven and then attributing m…

> So why should the mere existence of servers in the U.K. entitle the country to tax some substantial amount of Google's income? This is wrong. UK customers buy ads to be shown in the UK to UK viewers, from UK staff at Google's UK offices. They pay in UK pound sterling, from UK bank accounts. So far everything is in the UK. It is only at the very end of the process that someone in Google's Ireland office pushes a but…

> K customers buy ads to be shown in the UK to UK viewers, from UK staff at Google's UK offices. They pay in UK pound sterling, from UK bank accounts. So far everything is in the UK. It is only at the very end of the process that someone in Google's Ireland office pushes a button to close the sale, thus taking the sale out of the UK (and our tax system) and into Ireland and their tax system.

Except, arguably, the most important thing: the search algorithm and database that brings those UK customers to view those ads in the first place.

In any case, my point isn't that what Google is doing is the right answer. My point is that its quite debatable even from our armchairs how much tax revenue the UK is entitled to from Google's activities in the country. Google is just taking advantage of that complexity.

Re: Google Boss: We Follow The Law On Tax

#50

Post by skore »

AnthonyMouse wrote: post #47
skore wrote: post #42

Earlier quoted context omitted.

> You seem to be suggesting that a business would be doing something unreasonable by moving any of its operations into a jurisdiction with lower taxes [...] Moving to or setting up a subsidiary in a different jurisdiction: Completely fine. Doing the same thing for the sole purpose of avoiding taxes: Not fine. I really don't get what's so hard to understand about that. How many employees do Google or Apple have in Ire…

>Moving to or setting up a subsidiary in a different jurisdiction: Completely fine. >Doing the same thing for the sole purpose of avoiding taxes: Not fine. And how exactly do you propose to distinguish the two? "Number of employees" is a completely worthless metric. Apple (and/or Foxconn) employs many times more employees in China than in the U.S., does that mean they should be reporting most of their profits in Chin…

I'm pretty sure that Foxconn and Apple are separate corporations, so I have no idea what you're getting at.

Apple has 73k employees, 50k of which are in the US. Pretty sure most of them have benefited from US society (education, roads, police stations etc.) or benefit from it now that they have moved to the US.

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