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Netflix Europe offices raided in tax fraud probe

bbc.co.uk

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Re: Netflix Europe offices raided in tax fraud probe

#31

Post by s_dev »

seanhunter wrote: post #29
diggan wrote: post #4

The meat: > Last year, French media outlet La Lettre reported that until 2021, Netflix in France minimised its tax payments by declaring its turnover generated in France to the Netherlands. > investigators are trying to determine whether Netflix continued to attempt to minimise its profits after 2021. Wasn't Uber or some other US company found doing something similar? First they were found to be in violation of some…

Yeah there's the so called "Dutch Sandwich"[1] which is a well-known tax "planning" methodology that corporates use with the so called "Double Irish" being another one. There's also a slightly less-well known one involving Mauritius and India. They're all ways of moving profits between companies in order to exploit tax treaties that countries put in place. In the case of the Dutch sandwich I think the Netherlands has…

Your information is outdated -- Double Irish is no longer applicable according to your own source since 2010.

Re: Netflix Europe offices raided in tax fraud probe

#32

Post by s_dev »

dylan604 wrote: post #27
s_dev wrote: post #14

Earlier quoted context omitted.

I'd imagine you'd get done for not being tax compliant. At least in Ireland you have to able to show all tax accounting for the last four years on request by Revenue. If you can't produce this and all the files 'have gone missing' or 'we can't find the cloud keys' I'd would expect to be fined out of existence and ordered to cease trading immediately. So that would be worse that getting dragged through the courts whil…

I'd expect it to something along the lines of "sorry Mario, but the princess is in a different castle" bit of shell game. "no no mister Revenue man, we have that information you want, but it's in a different office".

There is only so much you can play whack a mole -- virtually nobody 'cheats' the taxman. There are plenty of legal loopholes etc. if you are smart enough to use them.

If you aren't -- you'll find the enforcement end of the tax authorities in ANY country are pretty efficient. Even in third world countries where many services are falling down the tax authorities will be a well oiled machine as the stability of the entire country rests on the government even corrupt ones to collect taxes.

Re: Netflix Europe offices raided in tax fraud probe

#33

Post by beeboobaa3 »

s_dev wrote: post #14
seiferteric wrote: post #5

I wonder how these "office raids" would work for remote first companies that don't have much of an office presence and with little or no physical documents and everything being stored in the cloud somewhere.

I'd imagine you'd get done for not being tax compliant. At least in Ireland you have to able to show all tax accounting for the last four years on request by Revenue. If you can't produce this and all the files 'have gone missing' or 'we can't find the cloud keys' I'd would expect to be fined out of existence and ordered to cease trading immediately. So that would be worse that getting dragged through the courts whil…

sure but politely demanding some documents is not the same as raiding an office

Re: Netflix Europe offices raided in tax fraud probe

#34

Post by avianlyric »

dylan604 wrote: post #27
s_dev wrote: post #14

Earlier quoted context omitted.

I'd imagine you'd get done for not being tax compliant. At least in Ireland you have to able to show all tax accounting for the last four years on request by Revenue. If you can't produce this and all the files 'have gone missing' or 'we can't find the cloud keys' I'd would expect to be fined out of existence and ordered to cease trading immediately. So that would be worse that getting dragged through the courts whil…

I'd expect it to something along the lines of "sorry Mario, but the princess is in a different castle" bit of shell game. "no no mister Revenue man, we have that information you want, but it's in a different office".

This is why companies are required to have registered addresses. As far as the law is considered, that address is where all your records can be accessed, and requested from.

If the state turns up at that address, and you tell them they’re at the wrong address, then the directors start becoming liable for fraudulent behaviour.

Re: Netflix Europe offices raided in tax fraud probe

#35

Post by isodev »

seiferteric wrote: post #5

I wonder how these "office raids" would work for remote first companies that don't have much of an office presence and with little or no physical documents and everything being stored in the cloud somewhere.

It depends on the type of business. In the EU, VAT registered companies are usually mandated to have a physical location and local representative within the country of operation. So you can be remote all you want, as long as your company and fiscal representative can be reached at a physical location.

Re: Netflix Europe offices raided in tax fraud probe

#36

Post by sokoloff »

yunohn wrote: post #17
diggan wrote: post #13

Earlier quoted context omitted.

> Literally every single company that can afford to setup these tax transfer schemes, are actively evading taxes. Yeah, but I think that's different than what happened in this case with Netflix. Declaring earnings from one country in another country is not just "tax optimizations" but straight up illegal. It's not using/abusing legal loopholes like most larger companies do, but going against the law.

Honestly, I’m not sure. I find the premise of such tax laws to be illogical at a basic level. There are apparently always multiple ways to create legal loopholes. If we consider the Irish sandwich mechanism that was recently “stopped”, somehow that hasn’t materially affected any of the innumerable companies that were using it. As we saw in the Apple vs EU case, most practices might’ve never been actually legal either…

I'm sorry for my immoral behavior of generally holding investments for more than a year, contributing to my 401(k) and HSA accounts, buying an EV, and installing energy efficiency upgrades in my house, all of which are driven by tax optimization (at least in part).

Re: Netflix Europe offices raided in tax fraud probe

#37

Post by yunohn »

s_dev wrote: post #31
seanhunter wrote: post #29

Earlier quoted context omitted.

Yeah there's the so called "Dutch Sandwich"[1] which is a well-known tax "planning" methodology that corporates use with the so called "Double Irish" being another one. There's also a slightly less-well known one involving Mauritius and India. They're all ways of moving profits between companies in order to exploit tax treaties that countries put in place. In the case of the Dutch sandwich I think the Netherlands has…

Your information is outdated -- Double Irish is no longer applicable according to your own source since 2010.

No, it’s much more complicated than that. If you scroll a bit further:

> After pressure from the EU,[22] the Double Irish BEPS tool was closed to new users in 2015,[citation needed] however, new Irish BEPS tools were created to replace it:[23][24]

Not only do the original evaders get to continue doing it, they’ve also found new loopholes already.

Re: Netflix Europe offices raided in tax fraud probe

#38

Post by tiahura »

seanhunter wrote: post #29
diggan wrote: post #4

The meat: > Last year, French media outlet La Lettre reported that until 2021, Netflix in France minimised its tax payments by declaring its turnover generated in France to the Netherlands. > investigators are trying to determine whether Netflix continued to attempt to minimise its profits after 2021. Wasn't Uber or some other US company found doing something similar? First they were found to be in violation of some…

Yeah there's the so called "Dutch Sandwich"[1] which is a well-known tax "planning" methodology that corporates use with the so called "Double Irish" being another one. There's also a slightly less-well known one involving Mauritius and India. They're all ways of moving profits between companies in order to exploit tax treaties that countries put in place. In the case of the Dutch sandwich I think the Netherlands has…

What’s the rationale for double taxing corporate profits vs other types?

Re: Netflix Europe offices raided in tax fraud probe

#39

Post by DanielHB »

marcinzm wrote: post #18
diggan wrote: post #4

The meat: > Last year, French media outlet La Lettre reported that until 2021, Netflix in France minimised its tax payments by declaring its turnover generated in France to the Netherlands. > investigators are trying to determine whether Netflix continued to attempt to minimise its profits after 2021. Wasn't Uber or some other US company found doing something similar? First they were found to be in violation of some…

Given Wirecard I wouldn’t assume the EU equally prosecutes or tracks crimes for EU and non-EU companies.

They obviously target the companies the highest revenues. Also you would be suprised. For example Klarna, a Swedish company, is often in trouble with the Swedish tax authorities.

A few years ago they had to pay huge amounts of money to the Swedish government because of some tax-dodging loophole was deemed illegal by court-order. So Klarna went into a desperate attempt to last-minute cut costs to not tank the stock value due to much lower expected returns that quarter.

It was kinda funny because the employees of Klarna are unionized they couldn't just fire anyone on short notice like that, but they did let go pretty much all consultants in one swoop. If this was the US the CEO would have just fired a bunch of people because the CFO f-ed up. For a few months there was a major glut of former-Klarna consultants around in Stockholm, two of them ended up at my company at the time.

I couldn't find details about this tax dodging online (it was around 5 years ago), but here is another article about Klarna being in trouble over GDPR violations:

https://www.reuters.com/technology/swedens-klarna-fined-7330...

Re: Netflix Europe offices raided in tax fraud probe

#40

Post by scotty79 »

diggan wrote: post #4

The meat: > Last year, French media outlet La Lettre reported that until 2021, Netflix in France minimised its tax payments by declaring its turnover generated in France to the Netherlands. > investigators are trying to determine whether Netflix continued to attempt to minimise its profits after 2021. Wasn't Uber or some other US company found doing something similar? First they were found to be in violation of some…

That's rich coming from French. Long time ago France Telecom bought Polish top phone network. Immediately rebranded it to Orange (despite the fact that the company had one of the strongest brands on market where it operated).

Unsurprisingly the licensing fees for using Orange brand that the Polish company had to pay to France Telecom amounted to large percentage of taxable profits that the Polish company had. Overt theft from Polish company and Polish taxpayers.

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