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US blocks crackdown on tax avoidance by net firms like Google and Amazon

guardian.co.uk

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Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#41

Post by Nursie »

patrickaljord wrote: post #37
phpnode wrote: post #31

Earlier quoted context omitted.

As a French citizen, do you think it's fair that you get taxed at a high rate whilst some huge, billion dollar business pays significantly less in terms of percentage? Whether the French tax rate is too high or not is not relevant. The question is, should a foreign company be given an unfair advantage compared to a local company? I would hope your answer is 'no'.

Google and Amazon already pay plenty enough taxes here, they employ thousands of people and pay millions in salary tax. They contribute to improving people's life thanks to their great products unlike the State that only creates more debt. But to answer your question, I think that as a French citizen I pay too much tax and I'm glad Google and Amazon are able to get away with it. I applaud anyone who manages to not fe…

>> I think that as a French citizen I pay too much tax and I'm glad Google and Amazon are able to get away with it.

Even though their activities directly increase your own tax bill. You have an odd way of thinking.

>> taxing Google and Amazon more wouldn't change anything for local companies.

Of course it would, their tax avoidance games mean nobody else can compete.

You can argue that lower tax for everyone is a good thing, but I really don't see how you can argue for the perpetuation of special exemptions for those that can afford it.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#42

Post by priteau »

simonh wrote: post #32
cmdkeen wrote: post #17

Earlier quoted context omitted.

You're missing a step though - which is that these corporations do everything possible to avoid paying the due tax on those foreign profits. I'm all in favour of getting to repatriate profits then - but taking the profits through a tax haven needs to be stopped first. Take Google in the UK for instance. They don't "sell" anything in the UK according to their tax returns, so claim every deal is actually finalised thro…

It's not as simple as that. Suppose I run a company based in France employing 100 people and selling goods by mail order. All my operations are in France, so clearly I should pay my taxes in France. The only economic activity that occurs when I sell to someone in the UK is the postage delivery at the UK end. Your proposition is that I should pay UK taxes, but clearly I should definitely pay French taxes. So which do…

It's definitively not as simple as your example. Both Amazon and Google have staff and infrastructure in UK and other European countries. Yet they channel all their profit to lower tax countries (Luxembourg for Amazon and Ireland for Google).

In the case of Amazon, when some sales staff is in the UK (evidence coming from whistleblowers, for instance http://www.guardian.co.uk/technology/2013/may/16/amazon-whis...), when warehouses are in the UK, and Luxembourg seems to be used only for signing the official contract, how is that not tax avoidance?

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#43

Post by danmaz74 »

patrickaljord wrote: post #33
danmaz74 wrote: post #26

Earlier quoted context omitted.

The thing here is not about "more taxes" or "less taxes". It is about WHO pays the taxes, however high or low they are. Giving a big competitive advantage to these (mostly US) corporations isn't going to lower your taxes in France; on the contrary, you don't just have to pay more taxes (or create more debt).

Any observers here for the last 60 years have noticed that the more tax revenues we get, the more ambitious we get with out spending and the more debt we create. The day France gets no or too little tax revenue and very bad rating is the day it'll be forced to cut spending. Until then, time has proven that it will never seriously cut spending.

Correlation is definitely not causation...

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#44

Post by danmaz74 »

patrickaljord wrote: post #38
weavejester wrote: post #30

Earlier quoted context omitted.

The idea that private industry is always more efficient than the public sector is, at best, an over simplification. One need look no further than healthcare to find an example where the public sector is vastly more efficient than a market of competing, private sector companies. The state also spends money on things that would not be funded any other way. Pure-scientific research, such as CERN. Policing for people too…

Public health-care is a complete failure here in France. We actually pay more than Switzerland where it's privatize and the French assurance maladie is going completely bankrupt while being forced on us. Many pure scientific research have been done by private entities, I don't see why only public programs could do any pure scientific research. Plus, if the people were given their money back , maybe they could use it…

In the face of ideology there is little to discuss...

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#45

Post by Silhouette »

simonh wrote: post #32
cmdkeen wrote: post #17

Earlier quoted context omitted.

You're missing a step though - which is that these corporations do everything possible to avoid paying the due tax on those foreign profits. I'm all in favour of getting to repatriate profits then - but taking the profits through a tax haven needs to be stopped first. Take Google in the UK for instance. They don't "sell" anything in the UK according to their tax returns, so claim every deal is actually finalised thro…

It's not as simple as that. Suppose I run a company based in France employing 100 people and selling goods by mail order. All my operations are in France, so clearly I should pay my taxes in France. The only economic activity that occurs when I sell to someone in the UK is the postage delivery at the UK end. Your proposition is that I should pay UK taxes, but clearly I should definitely pay French taxes. So which do…

Suppose I run a company based in France employing 100 people and selling goods by mail order. All my operations are in France, so clearly I should pay my taxes in France.

I don't think anyone would have a problem with that. The problem is running your operations in France, supplying to customers in the UK, but declaring all of your profits in The Democratic People's Republic of South West Nowhere (corporation tax rate: 0.075%) where your corporate headquarters (head count: 1 lawyer (PT), 1 accountant, 3 board members who also sit on the board of 97 other businesses run by that lawyer and that accountant) is based.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#46

Post by Silhouette »

ezequiel-garzon wrote: post #7
dantheman wrote: post #4

Earlier quoted context omitted.

Well I agree with you that the foreign earnings things completely crazy. Using one bad policy to argue against a good one is just as bad. This is a good move on the part of the US, what we also need is the ability to move corporate profit from foreign subsidiaries back into the US without facing tax.

The moment you're trading in another country you must honor their laws and taxes. If the costs become too high and the margins too low you can always leave, or skip said country in the first place.

The moment you're trading in another country

The difficulty is in defining what "trading in another country" actually means.

If you sell a physical product, there are some unambiguous facts that can be considered: where was the product made, where did its components come from, where was it delivered, that kind of thing.

If you're selling information, say an e-book or an MP3 download, things are slightly more ambiguous.

If you're providing services of some kind, things get much more complicated, as anyone who has to deal with VAT in Europe can testify. There is a concept of the "place of supply", and trying to come up with a standard way of determining that place of supply that is both practical and reasonably fair to all concerned is still a work in progress.

And that is just for sales taxes/VAT, where the parties involved tend to be obvious (someone paid money, and someone received it). With multinational business structures, where you might have revenues and expenses in many jurisdictions and somehow you have to decide how to balance everything up and declare profits, there's an entire extra layer of ambiguity to contend with.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#48

Post by justincormack »

edoloughlin wrote: post #27
nawitus wrote: post #19

Earlier quoted context omitted.

The problem with preventing the use of 'tax havens' is that there's no non-arbitrary way to decide if a company is truly using another country as a tax haven, or that they are actually using developers from another country. In the Google example, Google UK is clearly benefiting from the developers that work outside UK, therefore they should be able to pay 'brand fees' or whatnot to the 'main Google'. Of course in thi…

Of course in this case most of the development is not happening in Ireland I'd say that very little (probably zero) development is done in Ireland, but I get the impression you think that development is the taxable activity (I don't know if it is or not). However, there are 1,700 people doing something in Ireland (from http://www.idaireland.com/google/index.xml , 1/2 way down): A site reliability/engineering team sup…

Google does not pay tax in Ireland either, even at low Irish rates. So while it is great that it employs people there and it might anyway, Ireland is integral to its tax evasion strategy, as is the Netherlands.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#49

Post by weavejester »

patrickaljord wrote: post #38
weavejester wrote: post #30

Earlier quoted context omitted.

The idea that private industry is always more efficient than the public sector is, at best, an over simplification. One need look no further than healthcare to find an example where the public sector is vastly more efficient than a market of competing, private sector companies. The state also spends money on things that would not be funded any other way. Pure-scientific research, such as CERN. Policing for people too…

Public health-care is a complete failure here in France. We actually pay more than Switzerland where it's privatize and the French assurance maladie is going completely bankrupt while being forced on us. Many pure scientific research have been done by private entities, I don't see why only public programs could do any pure scientific research. Plus, if the people were given their money back , maybe they could use it…

WHO ranks the French health care system as the best in the world, and the expenditure per capita is less than Switzerland (at least in 2007), so I'm not sure where you're getting your numbers from.

I also suspect you'd have a hard time finding private companies willing to spend $9 billion on a particle accelerator with no foreseeable profits.

I'm generally against subsidising any industry, but letting Google and Amazon get away with dodging tax is effectively the same thing as a subsidy. Speaking as someone who owns a small company, I'd rather the playing field be level.

Re: US blocks crackdown on tax avoidance by net firms like Google and Amazon

#50

Post by adventured »

flexie wrote: post #13

The US IT sector is heavily subsidized. Giving Apple, Google, Facebook etc. billion dollar subsidies at home would spur trade wars. So instead the US uses its never failing ability to play European countries against eachother and its influence over smaller jurisdictions like Ireland, Netherlands, Switzerland, Guernsey, Jersey, Bahamas, Isle of Man, British Virgin Islands etc to make sure that large US corporations' f…

Other countries and foreign companies can't and don't take advantage of legal global tax dodging jurisdictions and schemes?

I wasn't aware it was exclusive to the US. I also wasn't aware German / French / British etc. IT firms don't dodge global taxes at every opportunity.

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