Wage theft is a bigger problem than tax avoidance.
Uber used 50 Dutch shell companies to dodge taxes
141–150 of 163 posts
Re: Uber used 50 Dutch shell companies to dodge taxes
#142Earlier 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…
> This means you have to input the sales into the register and now it is in the books and thus really hard to not end up paying all the taxes.
These are typically cash heavy businesses ( as long as it is allowed ) and keeping revenue out of the books is as old as the Romans.
> Also companies get a part of the VAT back so they really really want to register the sale into their system or they are out of that (VAT is 24% for most stuff at the moment here in Finland)
Companies generally deduct all of the VAT on their expenses and it is not a fraction of the revenue. If the sum is negative, our IRS pays up.
Furthermore, in NL coffee is in the low bracket of VAT ( used to be 6%, is now 9% )
> Basically the only business where just plain not reporting taxes is still happens sometimes is small scale construction
I think you are pretty naive here.
Re: Uber used 50 Dutch shell companies to dodge taxes
#143Earlier quoted context omitted.
Starbucks doesn't need to resort to fraud to effectively pay 0% tax.
it's not fraud as in "tax evasion" it's 100% legal albeit morally bankrupt "tax avoidance". the problem is that if you grow a company to a certain size the only way to compete is to be part of this rigged system. not a single fortune-500 company that is in the top 500 because they don't use thick layers of shell companies. the strategy is always to squeeze the supply end and the demand end while scooping the profits…
I do have to ask...why is it morally bankrupt?
Do you go out of your way to pay more tax than is legally required? If not, are you morally bankrupt? Of course not.
Tax laws are the rules of the game. If you don't like the rules, change them (democracy and all) and enjoy the positive and negative consequences as they unfold.
Re: Uber used 50 Dutch shell companies to dodge taxes
#144Earlier quoted context omitted.
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…
As a French entrepreneur, I was advised several times to move my HQ to the Netherlands because of the extremely low taxes on intellectual property. The HQ can invoice european subsidies/entities for the usage of the brand as well as the IP of internal software or patents. You calibrate this so that European subsidies makes little to no profit, so you don’t pay any local tax. Then, what amounts essentially to the prof…
There is indeed only a 5% tax on gains that can directly be attributed to innovation, which is probably what you are referring to. It's intended to give innovative companies a leg up against ones that don't innovate, and aimed to support start-ups.
This is a good idea in itself, but, of course, it's quite tricky to establish what part of profit is really owing to innovation, and several tax lawyers have found ways to abuse the scheme. By now that loophole has been mostly closed, but there will always be new ideas by politicians that will subsequently be abused, it's not really because they wanted to become a tax haven.
Re: Uber used 50 Dutch shell companies to dodge taxes
#145Earlier 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.
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.
Culpable?
No.
Its not well known, but large multinationals actually get ("opinions", "guidance", etc.) from their tax authorities ahead of the implementation of a tax scheme.
The polemic in the press is that the tax authorities 'uncovered' a scheme. This is more-often not the case.
Re: Uber used 50 Dutch shell companies to dodge taxes
#146Earlier quoted context omitted.
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 i…
> Obviously taxes on revenue would not need to be as high as on profit to generate the same tax income
No income has been generated by a business running at a loss. You had a number of things. Now you have less. Nothing was generated. You can distribute all you want, but you have less all of the time.
> It would also be hell of a lot simpler, because all those crazy shell company incentives go away
There's nothing wrong with shell companies. If you want to do anything, you have to register a business. It's just lazy journalism.
Re: Uber used 50 Dutch shell companies to dodge taxes
#147Earlier quoted context omitted.
> Well considering they are usually used by corporations/capitalist firms to avoid all kinds of responsibilities to society, I seriously question your lack of critique here. No they're usually used by basically all companies that aren't tiny. > institutional terrorism that is going on on a daily basis Ummm... > They are gaslit with propaganda Eh take a hard look in the mirror. The marxist hate machine has never helpe…
> No they're usually used by basically all companies that aren't tiny. This argument is just “everyone does it.” The 50 companies likely has little to do with taxes; let’s say it is for liability. Is that a good thing? The profits move out of a company, leaving nothing for when others are seeking damages. Is that a positive?
> This argument is just “everyone does it.”
No it isn't. That's not the argument at all. You're just projecting whatever you want to say on what you're reading.
Re: Uber used 50 Dutch shell companies to dodge taxes
#148Earlier quoted context omitted.
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.
Transferring publicly-owned assets to privately-owned companies is exactly what Friedman proposed to the various South American dictators he advised.
Re: Uber used 50 Dutch shell companies to dodge taxes
#149Earlier quoted context omitted.
> Well considering they are usually used by corporations/capitalist firms to avoid all kinds of responsibilities to society, I seriously question your lack of critique here. No they're usually used by basically all companies that aren't tiny. > institutional terrorism that is going on on a daily basis Ummm... > They are gaslit with propaganda Eh take a hard look in the mirror. The marxist hate machine has never helpe…
> No they're usually used by basically all companies that aren't tiny. Ummm... that's what I said. That's my point. It's become normalized for corporations to not take responsibility. The working class always ends up paying the price here. Collectively we in the working class now expect corporations to treat us badly and that we have to accept this abusive behavior. In the context of more and more of the working clas…
Partitioning your company into legal entities is like creating folders on your hard drive. Yes, shielding one entity from liabilities in another can be one reason to make a partition, but I really don't think that's the main driver here. It just helps your administration to group stuff logically.
For a company the size of Uber it would become a mess if they had one entity that worked in dozens of countries. Are you suggesting they should do that?
Re: Uber used 50 Dutch shell companies to dodge taxes
#150Earlier quoted context omitted.
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 va…
The problem with taxing revenue instead of profit is that it allegedly would stifle reinvestment. Whether that's actually true or just convenient storytelling (like e.g. with trickle down and patents) is a whole different story.
What you described certainly plays a role too. But it is not what I was pointing at.
What I wrote is no doubt speculative and only meant as contextual background. Still, here we have a country that literally wrote the book on capitalism. Which "just so happens" to be a popular tax haven for big multinational corporations. When in addition to that, the country's IRS has (or at least used to have) a "discretionary authority" to make secret arrangements, I sincerely wonder how much faith it takes to hold on to the idea that their role as a tax haven is just an inherent consequence of how profit tax works (or how companies can be creative with their bookkeeping).
The Dutch generally have a good reputation, but a lot of that might have more to do with their wealth (for those who own it, because over 1/3 of the country's population actually balances around the poverty line), clever PR and keeping the doors to their kitchen firmly shut. Strictly in accordance with their laws, of course.