Activision Blizzard has moved billions of dollars of profit into tax havens • Hacker News Board

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#121

Post by anm89 » Sun, Aug 04, 2019, 9:42 PM UTC

Retric wrote: post #112

lukevdp wrote: post #108

Earlier quoted context omitted.

Politicians don’t have to listen to lobbyists. The blame lies with politicians.

Everyone talking to a politician about an issue is a lobbyist, that’s what lobbing means. It’s easy to think only those people you disagree with are lobbyists, but even just sending a letter to your congressional representative is lobbying. And there are paid lobbyists on both sides of almost every issue.

This is at best half true. There are professional lobbying organizations that have vastly more resources and know how than individuals. And when people complain about lobbyists everyone knows that a this is what is being referenced.

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#122

Post by ArnoVW » Sun, Aug 04, 2019, 9:44 PM UTC

ryanlol wrote: post #103

DanBC wrote: post #22

Earlier quoted context omitted.

Often with complex tax schemes we don't know if they're legal or not because they haven't been tested in courts. Some governments focus on low-hanging fruit or on flagrant tax evasion. They don't want a long running court case costing millions with an uncertain outcome. So we never get to find out whether this scheme is legal avoidance or illegal evasion. But, even if it's legal avoidance: I pay my tax. Why shouldn't…

So, what exactly stops the politicians from writing simple and clear tax laws? It wouldn’t be hard for the lawmakers to eliminate this uncertainty, they just want to remain competitive.

Don't know the particular tax law in question, but perhaps it would help you if you thought you of lawmaking as making software (in fact in French the word for law is 'code')

Everything you code has to be coherent, requirements change, and when they do it is hard to get everyone to agree on the details. You have 200 years of legacy code, have to be compatible with other states and countries, have to support all possible edge cases, and your code is interpreted not by a computer but by a human.

Are there broken laws? Sure. Is it easy to make good ones? Not so sure.

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#123

Post by Fnoord » Sun, Aug 04, 2019, 9:47 PM UTC

blub wrote: post #81

FDSGSG wrote: post #69

Earlier quoted context omitted.

I operate a small business with 3 employees, I'm certainly incentivised to fend for us. jnwatson worded my actual arguments better than I would.

You're not fending for a small business with 3 employees, which anyway, let's be serious can't afford any fancy tax shenanigans, you're fending for a big business with several thousand employees. This company had a record revenue year and yet they decided to cut 800 jobs.

Wasn't there a complete town in UK who went to offshore all of their assets? A quick search delivered me this source [1].

[1] https://www.independent.co.uk/news/uk/crickhowell-welsh-town...

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#124

Post by Fnoord » Sun, Aug 04, 2019, 9:58 PM UTC

FDSGSG wrote: post #6

It's downright ridiculous to complain about companies taking perfectly legal steps to reduce their tax burden. As the oft-quoted US judge Learned Hand said: > Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is…

> It's downright ridiculous to complain about companies taking perfectly legal steps to reduce their tax burden.

How ironic that you had to post (as of now) 24 times in this very thread defending this condescending viewpoint. You're not at all addressing what the article mentions.

I'll address what the article mentions. The article (quite clearly, in bold) mentions, at the top:

> The company is currently under investigation by tax authorities in the UK, Sweden and France over alleged transfer pricing irregularities and is is facing a potential bill of over $1.1bn in back taxes and penalties.

> In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m

It appears these steps may very well be not legal.

If you deal with your tax in countries such as:

> The multinational company has a complex structure with subsidiaries in a number of tax havens including Malta, the Netherlands, Barbados and Bermuda.

(Yes, I'm including my own country here.)

Then you're appearing to do something shady with regards to tax. You can expect something shady in return. And of course, since they're also using Delaware, it could very well be that they do pay fair (or "fair") tax over their US part. If so, would you argue Americans have no say in this, given that they're not losing out on tax from Activision-Blizzard?

There appears to be a lack of political willpower here in The Netherlands to combat this issue. No surprise, given how far right the current leading party (VVD) is. As a result, The Netherlands wins a little bit, but the EU as a whole loses out. Its stupid egoism like this which makes the EU lose on an international scale, akin to Germany allowing the NSA to tap data as long as it wasn't about Germans.

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#125

Post by charlesdm » Sun, Aug 04, 2019, 9:59 PM UTC

ravitation wrote: post #94

FDSGSG wrote: post #72

Earlier quoted context omitted.

Not really, it's simply indicative of a disagreement. wrong tends to suggest tax fraud.

I think you're being a little consciously naive. Choosing not to prosecute (especially because prosecuting tax fraud requires proof of willfulness) and simply collecting a tax deficit is pretty common, especially in cases of corporate tax evasion. The disagreement in this case is called a tax deficit, and is what I meant by wrong. It's also the first necessary part of tax fraud. EDIT: Also, if you read about the sour…

It all depends on the amounts being moved. Transfer pricing is complex because what is market rate in situation A is not market rate in situation B. $345 million could be a minor difference of a few percentage points on tens of billions in revenue.

Just like FDSGSG wrote above, I went through a sizeable tax dispute (for an individual, outside of the US) and won. I have a good understanding of tax law yet it was nothing more than a bullshit money grab. No merit, nothing. More along the line; that's a very nice outcome for you but we don't really like it -- so pay up regardless. Like trying to shake a tree.

In this case, I can imagine for Activision (as a publicly traded company) it is better to settle a case for an OK amount than take it to court and run through the process. You have to make a risk reward analysis of whether it's worth spending time and resources on.

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#126

Post by Fnoord » Sun, Aug 04, 2019, 10:03 PM UTC

Scoundreller wrote: post #66

pdpi wrote: post #38

Earlier quoted context omitted.

Lucas Pope has made very successful games out of being a passport control officer and an insurance agent, so I'm sure he can manage a tax optimisation game too.

I could see it now. Starbucks develops a "new brew". They fly the best coffee connoisseurs to a Liberian-flagged, Korean-built ship sailing from Saipan to Nauru, and develop a new formula there with equal parts Arabic beans and Robusta beans. They sell this new product worldwide, with marketing from a PR team domiciled in Malta, but operating in the Netherlands. Where was the value created?

They're not operating in The Netherlands. They're "operating" in The Netherlands. The "operating" refers to having a PO box. That's all they need to have a physical presence here.

See RamBam episodes (in Dutch, but contain some English too):

> S04E11 Nederland Belastingparadijs broadcasted 29 Apr 2015

> S05E05 Russische bedrijven in Nederland broadcasted 17 Feb 2016

[1] https://nl.wikipedia.org/wiki/Rambam_(televisieprogramma)

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#127

Post by slaymaker1907 » Sun, Aug 04, 2019, 10:05 PM UTC

FDSGSG wrote: post #6

It's downright ridiculous to complain about companies taking perfectly legal steps to reduce their tax burden. As the oft-quoted US judge Learned Hand said: > Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is…

I think this kind of reasoning needs to be questioned since the mechanisms available to large corporations and the wealthy completely outclass those available to less wealthy citizens and small business.

Additionally, despite the delusion that some companies and individuals may have, they damn well do have similar and perhaps greater obligation to work towards the betterment of society. For some reason, we seem to think that a group of people somehow have less ethical obligations than individuals.

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#128

Post by chronic84920 » Sun, Aug 04, 2019, 10:08 PM UTC

slaymaker1907 wrote: post #127

FDSGSG wrote: post #6

It's downright ridiculous to complain about companies taking perfectly legal steps to reduce their tax burden. As the oft-quoted US judge Learned Hand said: > Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is…

I think this kind of reasoning needs to be questioned since the mechanisms available to large corporations and the wealthy completely outclass those available to less wealthy citizens and small business. Additionally, despite the delusion that some companies and individuals may have, they damn well do have similar and perhaps greater obligation to work towards the betterment of society. For some reason, we seem to th…

> they damn well do have similar and perhaps greater obligation to work towards the betterment of society.

Says who?

I don't hold the elevator door if I see someone behind me. I don't tip. I don't recycle. I don't donate blood. I don't vote. I give preferential job treatment to my friends.

Is it illegal to be an asshole?

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#129

Post by thefounder » Sun, Aug 04, 2019, 10:10 PM UTC

FDSGSG wrote: post #6

It's downright ridiculous to complain about companies taking perfectly legal steps to reduce their tax burden. As the oft-quoted US judge Learned Hand said: > Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is…

Yeah, I think people should complain about the lawmakers not the companies. Maybe that way we will see some changes but I doubt given the current administration stance on the subject(i.e Digital Tax)

Re: Activision Blizzard has moved billions of dollars of profit into tax havens

#130

Post by jjoonathan » Sun, Aug 04, 2019, 10:14 PM UTC

oconnor663 wrote: post #106

mattmanser wrote: post #10

Earlier quoted context omitted.

No it's not. That's how change happens. It's still perfectly legal to destroy the environment in many ways, it doesn't mean we can't complain about it. If we don't talk about it, nothing happens.

No one designed the environment to be destroyed. But tax laws are often designed precisely to incentivize people to behave in a certain way. If we raise taxes on cigarettes, and then people smoke less, and tax revenue goes down, does anyone complain? Of course not; that's why we raised taxes on cigarettes. Now sometimes you have tax laws that are poorly designed, where we don't like what happens when people follow th…

If you find a legal loophole that lets you steal cars and subsequently take advantage of it to steal cars then you are still a car thief, still a bad person, and the theft is still newsworthy. The fact that your were "merely following incentives" does not make it right and does not make it uninteresting. Quite the opposite.

You're even more culpable if it is later discovered that you lobbied for the loophole.

Society's reaction should be to disseminate the surprising story and use it to drum up support to fix the law. At that point, the only reason to not pursue the matter further is to serve the higher principle of avoiding ex post facto legislation. It's an important principle, so we allow the crime to go unpunished, but the morality of the situation is still that the theft was wrong.