Ecuador Tax Agency Closes Microsoft Branch Offices

An anonymous reader writes "The Ecuador Tax Agency (SRI) has closed Microsoft branch offices for seven days. 'We have twice requested balances, payment reports and complete tax information, but the company hasn't given it to us, so in accordance with our laws we have proceeded with the closure,' the SRI official in charge of the proceeding said. Microsoft said it was a human mistake."

Comments

OUTRAGE

[Anonymous Coward]

Ecuador holds dominion over the Galapagos Islands. Who made the Galapagos famous? That's right, Darwin... Which happens to be the name of Apple's OS Kernel. COINCIDENCE?

Ha!

[milo_a_wagner]

All your branches are belong to us!

First Time

[Anonymous Coward]

The first time it may have been a "human" mistake. Second time, I do not think so.

I wonder if this is related to paying for votes on the ISO committee?

Re:First Time

[Farmer Tim]

The first time it may have been a "human" mistake. Second time, I do not think so.

Maybe the first person who made the mistake was fired, and the replacement also happened to make the same mistake.

That's not giving Microsoft the benefit of doubt, I'm thinking of how many times they make the same mistakes over and over, almost like it's company policy.

Excel

[MK_CSGuy]

Cue in the Excel jokes just about... now!

Human error

[wjcofkc]

It can only be attributable to human error. This sort of thing has cropped up before, and it has always been attributable to human error

"closing" a business in an online world

[G4from128k]

I doubt this will have the impact that it would if Microsoft were a traditional bricks-and-mortar company. Does this closure prevent Ecuadorians from activating copies of Windows, or downloading updates, or buying additional Microsoft licenses online?

At what point in time will tax authorities seek the right to seize a company's domain name and DNS entries to truly seize a business for back taxes.

Re:"closing" a business in an online world

[mysticgoat]

This means that for at least seven days, any Ecuadoran corporation that needs Microsoft support is SOL [Sh*t Outta Luck]. That might cause some ripples in the mining industry, for instance.

I don't see how this benefits the worldwide adoption of Vista or Office 2007. This is an entirely new avenue by which a corporate user of Microsoft products might find their operations temporarily "locally orphaned"— that is, without any local vendor support. I'm pretty sure that this event has not been received favorably in Redmond. I'm thinking that it is the kind of event that throws a chair when it bubbles up to the top.

Who would have guessed that when doing comparative risk assessments of OSs and office suites, one of the factors that now needs to be considered is whether the software vendor will comply with local laws?

A human mistake

[NJVil]

"Microsoft said it was a human mistake."

Well, it's highly unlikely they'd admit it was a technology mistake. So, a head will roll, a chair will be thrown, and full faith in Microsoft technology will return to normal in Ecuador.

tax evasion

[ClippySay]

/ You look like you're trying to evade \
\ taxes. May I help you?               /
     \
      \
       \     ____
        \   / __ \
         \  O|  |O|
            ||  | |
            ||  | |
            ||    |
             |___/

Celebrity Section for Slashdot?

[Nymz]

This story feels alot like "Is Britney Spears fit?" or "has Linsey Lohan left rehab too soon?" Do we really need 24/7 coverage of every detail of Microsoft? Hmm, what do you think of these stories:

• Steve Jobs drops his iPhone again - video link
• Linus Torvald buys a mac - is this the end of the world?
• Bill Gates gets a fashion makeover - image slideshow

Re:Celebrity Section for Slashdot?

[tomhudson]

> "Bill Gates gets a fashion makeover - image slideshow"

They already tried that in the '80s. Didn't work then ... won't work now.

He was posing for a cover shot for newsweek. He held up something, and you could see the hole in his sweaters' armpit. So they had him take off the sweater. Then you got to see the pit stains on his shirt. They had to literally take the shirt off another Microsoft employee's back to get a "clean shot."

"Stinkin' nerdz!"

Re:Celebrity Section for Slashdot?

[garett_spencley]

Your post has just 'caused me to make a revelation about myself that is most disturbing.

Celebrity gossup / papparazzi is one of my biggest pet-peeves. It drives me INSANE when people care about Paris Hilton being in jail or Britney shaving her head or whatever. The fact that I even know those events occurred makes me want to kill myself. I mean, really WHO THE HELL CARES AND WHY ?!?! Are people's own lives so bloody shallow that they need to constantly invade the privacy of other people that they do not even know just to see something more interesting ? Why is that considered to be more interesting anyway ? Leave the celebrities the fuck alone, they're just people. They are no more interesting or important or "special" than you. Aside from the media that they have a small part in producing they have absolutely no "real" effect your lives what-so-ever. The fact that anyone cares about their private lives is the most absolutely ridiculous aspect of human / pop culture and it depresses me.

Yet, thanks to your post I have realized that I am also guilty of this. Only not with pop-culture. I am interest in things like what Linus is currently working on, the direction that Jobs is taking his business, whether Steve Ballmer will be finally taken to an asylum to get the anger management that he needs. I know more names of "popular" geeks and business people than I do of actors or musicians etc.

I need some Prozak now :(

Oh and expect a call from my lawyer ...

Re:Celebrity Section for Slashdot?

[TheRaven64]

Linus Torvald buys a mac - is this the end of the world? Actually, he didn't. Apple gave him one, to improve PowerPC support under Linux. In hindsight, possibly not a particularly good investment.

Re:Celebrity Section for Slashdot?

[Artraze]

> Only not with pop-culture. I am interest in things like what Linus is currently
> working on, the direction that Jobs is taking his business, whether Steve Ballmer
> will be finally taken to an asylum to get the anger management that he needs.

With the exception of the Ballmer comment, there's nothing wrong with being interested in those things.

Think of it this way, is it wrong to listen to what Bush says? Or your representative? Of course not, because the decisions these people make affect your life. Being concerned with "the direction that _Bush_ is taking this _country_" is important.

Now certainly Apple isn't as important as the country. However, if you run an apple, the decisions Jobs makes will matter to you. Even more so with Linus and Linux. And with Microsoft's strangle hold on businesses across the world, the "war on Microsoft" is actually in some ways more important than the "war on Terror".

Re:Public Prophet and Private Profit

[Anonymous Coward]

Sorry but the law is the law. MS forgot to send some papers and the rules had been applied on that case. Many other ecuadorian companies were also closed for seven days, MS was the only multinational branch closed.

MSFT PROXY VOTE IS NOW

[JackMeyhoff]

Time to vote Steve Balmer and Bill Gates OFF the Board of Directors again. One day we will get lucky, MSFT will rise at LEAST 10..15% if they left. They don't contribute anything anyway.

Umm, yeah Ecuador is high on the list...

[LynnwoodRooster]

of "we have a branch there?" offices. Considering Microsoft's revenues are about 1.8 times higher than the entire GDP of Ecuador, it probably doesn't rank really high on the list of priorities, all in all...

Re:Umm, yeah Ecuador is high on the list...

[janrinok]

I think your post was intended to be funny - but it should be high on the list of any company operating in any country in the world to ensure that they comply with the local laws. Making a profit higher than a nation's GDP does not absolve any company from full legal compliance. If they don't like it, they can close their offices down and stay back home, but they do not have a right to go elsewhere and behave as if the law does not apply to them. It does, and they are wrong.

No special treatment.

[arthurpaliden]

What this story really shows is that this little country treats all its businesses the same. No one gets special treatment just because they are a huge US based multi-national.

Ecuador moving to free software

[H4x0r Jim Duggan]

Don't know if it's related, but maybe Ecuador isn't too afraid of MS nowadays since they're moving to free software:

http://rudd-o.com/archives/2006/12/13/%C2%A1success-for-free-software-in-latin-america/

Re:In Soviet Russia...

[tomhudson]

As opposed to Soviet Korporate Amerika, where Microsoft taxes YOU!

In such a context,

1. couldn't running linux be considered somewhat equivalent to the Boston Tea Party? Or would that be running a pirated copy of Windows?

2. could running a pirated copy of Windows, in the current "Corporatist" environment, be considered a political statement, and as such, be "protected speech", same as flag burning?

Also

[jeffasselin]

in completely unrelated news, Microsoft announced that every copy of Windows trying to validate with WGA from Ecuador was found to be non-genuine. The affected systems have started zeroing the data on their hard drives.

Not really-- this is significant

[einhverfr]

Basically, the argument is that Microsoft didn't cooperate with an audit, so the government doesn't know if they paid taxes or not.

This is a very interesting though as it relates to regional politics. Rafael Correa won his election partly on the promise to clean up corruption in foreign corporate entities (in particular tax evasion and the like). It also has other ramifications for open source, business, economics, etc. in Ecuador. I will be watching this closely.

Actually this is very significant

[einhverfr]

Many Latin American countries have been struggling with corruption for a long time, Ecuador included. Ecuador in particular has been severely destabilized by such corruption (8 presidents in 10 years-- everything from coups to phony impeachments). Correa vowed to change that, and he has been doing a great job of it so far.

If Microsoft is not cooperating with tax audits, this could be due to an issue of management in their branch officies, but it could also be due to a human error. What is significant is that this happened at all. 10 years ago, it would have been unthinkable even if they weren't paying taxes at all. 20 years ago, it would have been avoided for fear of covert retribution from the US (as we saw in Guatamala, and arguably Ecuador as well).

This is significant because it means that Correa is serious about his willingness to stand up to powerful foreign corporations. Its significance is not limited to Microsoft-- this is more significant as to how it affects things like oil exports, foreign-owned banana plantations, and the like.

The rule of law is being asserted strongly in Ecuador which is a good thing.

Matrix

[weirdcrashingnoises]

MS Agent: Only human.
Ecuador: Dodge this.

Human mistake?

[fishbowl]

*ALL* mistakes are "human mistakes."

Correa is no Chavez

[einhverfr]

Despite the rhetoric which the media seems to get almost completely wrong, I don't think that Rafael Correa is anything like Hugo Chavez. Correa is a rule-of-law capitalist who wants to see Ecuador develop along the lines of the United States. Of course this means that corporations must be forced to obey the laws evenly, which he has pledged to do. He has also pledged to get the Constitution rewritten to help reduce the level of corruption (restricting who can run on the basis that you must live in the district you want to represent), and a few other structural changes which are not aimed at disolving checks and balances but actually adding them. Independence from US interests and policy is a key element to his approach so he wants to close the USAF base in Manta, and has entered into an alliance of convenience with Chavez.

My own feeling is that Correa has acted responsibly regarding the attempts to rewrite the Constitution by tackling it immediately so that the question of term limits is less likely to be addressed as a way of keeping him in power.

CUrrently everything Correa has accomplished has been through sheer power of personality. He has been able to get previously opposing parties to back him and has, time and time again, routed opposition by building political alliances which would have seemed impossible before.

Correa, unlike Chavez is not a part of a massive political party. In fact, he doesn't have anyone from his party in Congress. Correa wants Ecuador, not Venezuela or Brazil, to be the new center of South America. Appearances aside, I think he is actually Chavez's worst enemy.

Correa earned his Masters in Economics in Belguim, and his PHD at the University of Illinois. He is a former university professor at USFQ (Universidad de San Francisco de Quito). He is hardly Anti-American. though he does dispise the Bush Administration (but so do I....). He is, however, unlikely to be a puppet to any other government.