Slashdot Mirror
Australian Govt Pledges Action On Google Tax Evasion
daria42 writes "Looks like Google's habit of funneling billions of dollars in revenue through its Irish and Bermuda subsidiaries continues to attract unfavorable government attention globally. France has already announced plans to take on the search giant's tax evasion habits, and the Australian Government, to which Google paid just $74,000 in tax last year despite having Australian revenues close to $1 billion, has now confirmed plans to do the same."
have they actually been charged with tax evasion?
TFA doesn't mention evasion(not paying the tax you owe and illegal) and it's very different to avoidance which is just using legal means to pay as little tax as you legally can.
Don't Apple own all the patents on tax evasion techniques?
Actually, you are wrong. Companies freely admit that they sail as close to the legal wind as possible. Whether they are over the line or not depends on a case coming to court. Avoidance is merely evasion that has not yet been shown to be illegal.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
this is a fairly simple story of the risk of treating restrictions on freedom of speech as property. if you have to shift screws around the world to evade taxes it costs real money and the tax authorities can easily see if the value is wrong. When it comes to Google's trademark the value is whatever someone is willing to pay. Something that Google happily and legally adjusts to get the best tax benefit. They also don't need to do anything to make the sale to themselves.
Simply stop tax deductions for "intellectual property" whilst charging corporation tax in the place where the customer lives and this would go away.
Depends on one's definition of fair. If all multi-national companies in the UK paid the tax they are supposed to*, the UK deficit would vanish. That in turn means benefits for the poor wouldn't need to be cut, nor a squeeze on the health care system, education, investment in science wouldn't need to be reduced. Hey, and maybe everyone could pay fewer taxes if everyone paid what they ought to.
*: By this I mean the corporation tax based on their profit margin as reported to their investors and their regional sales.
"If anyone needs me, I'm in the angry dome."
Even if that tax is used to provide healthcare, schools, roads and benefits for those on low wages or unable to work? Or does that crazy idea make me a commie?
I want a list of atrocities done in your name - Recoil
If all multi-national companies in the UK paid the tax they are supposed to*...
What you mean by that is that they should not take the deductions that the UK government has written into its tax code. It seems perfectly fair to me for a company to take advantage of every tax deduction it is legally eligible for. Now whether or not those deductions should exist is another question entirely, but the people to hold responsible for that are the members of Parliament who voted for those deductions in the first place (or failed to vote to eliminate them).
The truth is that all men having power ought to be mistrusted. James Madison
I pay 40% tax plus National Insurance. I also used to work freelance and yes, deducted reasonable expenses. I did not claim for stuff that wasn't directly related to my work so no, not really a hypocrite. Being crazy, I tend to think of the wider picture, not just myself.
I want a list of atrocities done in your name - Recoil
"I also used to work freelance and yes, deducted reasonable expenses."
So you avoided taxes.
Yep, from 40% to about 35%. Not quite the same as reducing it to 0.0007% is it? it's the sheer scale that people object to. Is that so hard to understand?
I want a list of atrocities done in your name - Recoil
Commie? Can't say
At the very least I'd imagine it makes you a poor tax account though
Why would you expect a company to pay more than they have to when individuals do not?
Nice try. Google's employees pay tax on their salaries, not Google.
I want a list of atrocities done in your name - Recoil
Why would you expect a company to pay more than they have to when individuals do not?
Most individuals don't funnel their money through foreign tax shelters.
then change the law.
I'm 100% in favor of making such schemes harder.
what you don't seem to be paying attention to is that most of these are signed off on by the local countries tax authorities.
if one of your friends was a good accountant/lawyer who showed you how you could have cut your tax bill to, say 20% you wouldn't have done it?
it's as immoral as buying your grocery shopping for 1 cent when the supermarket offers to sell it to you for 1 cent and the owner of the supermarket has reviewed your shopping and agreed that he's ok with selling it to you for 1 cent.
him offering you an insanely good deal doens't make you an immoral person.
Has anyone here ever paid more taxes than they owe
Probably not. But while paying 75k out of a 1B revenue is probably/certainly legal... that shows there is a problem with nowadays local and international laws / rules. The problem is that most of our economy rules are based on a system designed long ago, from a time where a man in a company did matter.
Slashdot, fix the reply notifications... You won't get away with it...
Just to be clear it isn't only Google that's implicated in this, the summary is probably just a typical attempt at defaming just Google by the usual culprits (i.e. Microsoft shills). That's not to defend Google in this, there's no doubt they're in the wrong, but most well known US multi-nationals are guilty of the exact same thing - some even more so. In the UK the companies exposed for this have included Amazon, Apple, Starbucks, and many others.
They don't need to be in every country in the world. If their taxes go up, they can just as well decide to pack up and leave.
The only thing Hungarians need is to get their asses kicked for turning fascist. "Internet Money" is way down the to-do-list.
Even if that tax is used to provide healthcare, schools, roads and benefits for those on low wages or unable to work? Or does that crazy idea make me a commie?
Actually, it's everyone. Our corporate Tax rate is 12.5% for trading income and 25% for non-trading income. That benefits our companies too.
The point is whether Google issues invoices from the USA company or from the natcos. In the former case, it's OK they don't pay tax to other nations' governments. In the latter Google has been evading the tax.
Sent as ripples into the electromagnetic field. No single photon has been harmed in the process.
or that he's getting something else out of the deal.
perhaps it's stock he can't shift and would have to pay to dump.
perhaps you're a celebrity and he wants it to be seen that you shop there.
perhaps he's just incompetent.
and all 3 situations are common. they want the company in employing people more than they want a cut of their profits, they want some task done, they want prestige or the people writing the laws are just morons.
No, they funnel their money through domestic tax shelters.
Pretty much any 'fringe benefit' you get at work is not counted as gross income and thus not taxable from the employees perspective. At the same time the cost of these fringe benefits is tax deductible by the employer.
Drive a company car? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.
Use the companies daycare? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.
Does your company provide food and/or beverages? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.
Does your company have a fitness center, or contract out for preferred rates at the local gym? You are avoiding payroll taxes by accepting a portion of your income as reduced personal costs.
The fact is that individuals do not consider these benefits 'income' but they are, none-the-less, part of your compensation package and should be taxable under your fucked up sense of morality.
"His name was James Damore."
In the Uk we have Employers National Insurance. This tax is theoretically paid by companies (really by employees). It is almost impossible to avoid unless your employees are all one person companies themselves
There's a practical difference (at least that's how it's defined in Switzerland - which is one of the possible tax avoidance place, although far less attractive than the ones in the summary).
- One is *lying*, giving false information and not paying the taxes you're required by law to pay. You pretend you don't have money and try to hide it (in order not to pay taxes. But according to the law you should be paying taxes). This is illegal. A person or a company doing so should be persecuted.
- The other is just shifting money around. You're absolutely honest and give any needed information out. You simply move the money to another place, where the tax happen to be lower than the first place. Once there, you openly collaborate with the local tax institution, declare all the money you have and pay all the taxes you're required to pay. It just happens that said taxes are lower than in the country of origin. But nothing is hidden, all money is openly accounted for. No one pretends anything false. This *IS LEGAL*. A person or a company doing so is just cleverly playing the system. WHAT NEEDS TO BE DONE is collaborating with the local government so some tax money is funneled back to the original country.
Ireland, for example, has almost no taxes. There's nothing wrong in the law about storing your money there. There's nothing wrong about paying almost no taxes (as long as you declare everything and don't hide anything). If you're unhappy with this, you should bring to court the company putting their money there. you should instead write to your politician asking that the European Union finally comes up with a solution for EU-level taxes (so money is shared between Ireland and the other countries where the money was prior transfer but were the company isn't paying taxes).
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
So you paid as much as you had to and as few as you could.
That's the same those here are doing, too.
Your wrath should be directed at the politicians worldwide who take care of that Google's "as much as they had to" is so insanely low.
bickerdyke
So the long-terme solution would be a european law, asking ireland to reshare part of its income to other countries depending on how much money they store, so that healthcare, education, public transportation, etc. can be also produced there.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Most individuals can't funnel their money through foreign tax shelters.
There.. fixed that for you.
bickerdyke
At which point economy of scale becomes less of an issue and smaller competitors will see their chances improve.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
"Tax avoidance" doesn't appear to phase General Electric. They're definitely not an "internet company," have physical plants around the globe, and they pay a vanishingly small amount of corporate tax by using the same sort of schemes.
Imagine that....large corporations with armies of lawyers using lobbying to help them skirt tax payments to ultimately benefit their shareholders. And I guess it helps to have friends in high places. Guess who is Barack Obama's "jobs czar?" That's right, Jeff Immelt...CEO of GE. In 2010 GE made a global profit of US$14.2 billion. US$5.1 billion of that was attributable to operations in the US. How much did GE pay in taxes to the US government you ask? Well, zero. They actually had the balls to claim a tax benefit (billed against future earnings) of US$3.2 billion.
I'm all for companies being able to make a profit, but c'mon.
Actually, there's a very sensible approach to this, somewhat started in the UK already. We, as citizens, decide that we dislike this kind of behaviour and we boycott the worst 'offenders'. As an old-skool Brit, I'm a tea drinker anyway, there's nothing that I like in Starbucks and I dislike the appalling value for money too.
There's a genuine problem here in that a) it's their fiduciary duty of corporations to maximise profit at all costs, to hell with social infrastructure, the environment and other minor details so this is one of the results b) in the UK the so-called Tax Code runs to about 10K pages of useless complexity, so there's always a decent sized hole somewhere c) If the holes aren't closed everywhere, there'll usually be a new opportunity or place to do this, it's called fiscal dumping.
Finally some socially aware sharefolder activism would help, in some of these cases, but since shareholders are usually large investment funds and insurance companies, there's no pressure from there either. So consumer boycott and sustained negative commentary is a good start, then profits decrease and shareholders begin to wake up and take a mild interest.
On y va, qui mal y pense!
I also used to work freelance and yes, deducted reasonable expenses. I did not claim for stuff that wasn't directly related to my work so no, not really a hypocrite.
So, you did not claim things you could have gotten away with claiming, but which it was not technically legal for you to claim. However, you did claim everything it was legal for you to claim (that you were aware of), but you are complaining because Google did the same thing. That makes you a hypocrite.
The truth is that all men having power ought to be mistrusted. James Madison
That's not what he said at all ArgumentativeLesbian.
If you think someone isn't free to have a different definition of "freedom" you may be a tyrant.
Your sense of scale is somewhat out of whack if you are comparing tax deductions on child care (which allows people to work while providing jobs for child carers) to industrial tax evasion by some of the largest companies in the world.
If you think someone isn't free to have a different definition of "freedom" you may be a tyrant.
Fair point.
I want a list of atrocities done in your name - Recoil
What you mean by that is that they should not take the deductions that the UK government has written into its tax code. It seems perfectly fair to me for a company to take advantage of every tax deduction it is legally eligible for.
Oh Jeez, not this libertarian bleating again. In most case, these companies are intentionally exploiting loopholes in one or more countries' systems to minimise tax. It's disingenuous to imply that this was by design or the intention (as "eligible for" might suggest).
One might argue that their behaviour is still perfectly legal. However, what you said was that it was "fair", which isn't a legal term, and when they're clearly playing the system and paying minimal tax for the facilities they're using, we can quite reasonably say that it's "unfair".
Now whether or not those deductions should exist is another question entirely, but the people to hold responsible for that are the members of Parliament who voted for those deductions in the first place (or failed to vote to eliminate them).
As stated above, this is as much exploitation of loopholes than use of explicitly-designed "deductions", and while they may be legally entitled to take advantage of them, we're free to call them out on it and paint them in a bad light. If they don't like it or that affects their business, tough shit, they can go fuck themselves.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
Just like with other things, they use 'bad terms' to represent 'legal actions' to manipulate the public's opinion against the companies/people.
And since people in general are stupid, it tends to work every time.
---- Booth was a patriot ----
No. A lot comes out of consolidated revenue - which means government income from any tax or charge.
That's because very few individuals can take advantage of nearly as many loopholes written into the tax laws as big corporations can.
The truth is that all men having power ought to be mistrusted. James Madison
You can say that it "unfair". You can say anything you like, but that does not make it so. However, when a company is taking advantage of a perfectly legal tax minimization plan, it is not fair to blame the company. The people you should be blaming are the people who wrote the law that makes it legal and the people who have the power to change the law so that it is no longer legal. One thing to keep in mind is that these deductions may exist because they produce other benefits for the country that more than offset the "lost" revenue that comes from companies taking advantage of them (the word "lost" is in quotes because sometimes the only reason a company is doing business in a particular location is because of the tax deductions they receive for doing so).
The truth is that all men having power ought to be mistrusted. James Madison
But you're rather naive in thinking their is some easy black and white line between ok tac avoidance and wrong tax avoidance. If you had dropped your tax to 30% would that be ok? 25%, 20%, 15%, 10% and why would that be ok but 0.00001% lower would be henious behaviour.
We have tax laws and it is folly to try and replace laws with some fuzzy statement saying "You should pay the tax that we think it is appropriate you pay (decided at our discretion)" which is exactly what you do when you stop using the legality of tax payment as a baseline.
Simplify tax laws, remove loopholes etc by all means but until we do we can't really be shocked if this happens.
It's interesting how Apple is more profitable, but it seems that Google is the one getting the attention. Apple was highlighted by the NYT in April of 2012: http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?adxnnl=1&pagewanted=all&adxnnlx=1353677512-m5vLQkPH5461NGq9bcQvqw
You can't bend reality to meet your perceptions.
Yes, there are deductions I could have claimed on my last tax return that weren't worth chasing down the receipts for. So count me as one who has paid more than they have to. I could also have set up an offshore company to work through rather than becoming an ordinary income tax paying salaried worker. In fact, I may have also paid more than Google some years (maybe not with the current $AU exchange rate), and I certainly had nowhere near $1 billion in revenues.
The other is just shifting money around. (...) This *IS LEGAL*. A person or a company doing so is just cleverly playing the system.
Actually, this is only legal on paper. In practice, what's legal isn't so much about what the law says than it is about how a court sides on a case.
If you're convinced otherwise, I suggest that you put your money where your mouth lies. Specifically, create a company in a tax haven, and a subsidiary thereof in the country you live in. (If you're an employee, tell your employer that, in order to optimize your respective tax bills, you'd like to work as a consultant.) Pay yourself a reasonable salary through the local subsidiary, and then funnel the remaining profits back to yourself as dividends through the tax haven company. This is all legal on paper as long as you dutifully declare everything properly.
Tax authorities, as you might expect, see things in a very different light. When individuals and small businesses do this, they get slammed in court. Larger corporations, by contrast, get away with it in the name of keeping jobs around or of keeping financial markets alive. Or rather, did until now.
I think these tax evasion cheerleaders are the kind of people who would see no problem with using glitches to gain an advantage in a videogame. After all it's no different from being able to aim really good or use good strategy, right?
"When information is power, privacy is freedom" - Jah-Wren Ryel
You're going to be the next one to crumple your little plane against a government building I bet.
"When information is power, privacy is freedom" - Jah-Wren Ryel
In this case I don't think the submitter is a shill, he (or she) has submitted only Australia-related stories, including some are negative towards MS.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Ultimately every dollar someone avoids paying to the federal or state governments is an extra dollar someone else has to pay. Technologically we're almost to the point where we could actually tax every single transaction that occurs with the currency, and I'd actually rather have that than the jumbled mess we currently have. Of course, the way things work, we'd probably end up having that AND the jumbled mess we currently have.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Your sense of scale is somewhat out of whack if you are comparing tax deductions on child care (which allows people to work while providing jobs for child carers) to industrial tax evasion by some of the largest companies in the world (which allows tens of thousands of people to work and provides jobs for many dozens of specialties.)
Fixed that vitriol for you.
In the United States, 35 million families (I looked it up) each getting $5000 per year in nontaxable daycare compensation (95% of employers offer it), which would have been at the individuals highest marginal rate (its off the top, after all), well thats a lot of fucking missing tax revenue, and just one kind of domestic tax shelter that individuals exploit.
I think your sense of scale is whats in doubt, or that you really don't understand why tax policies are what they are, including the taxes on corporations. Taxes are used to reward and punish the behaviors of both individuals and corporations. This is most often implemented as a high base rate (punishment by default) with deductions (reward if the behavior qualifies.) Businesses are ALLOWED to do what they do, just like individuals are ALLOWED to do what you do, AS A REWARD.
"His name was James Damore."
You can say that it "unfair". You can say anything you like, but that does not make it so. However, when a company is taking advantage of a perfectly legal tax minimization plan, it is not fair to blame the company.
*You* can say that it's "not fair to blame the company", but that doesn't make it so either. (See, that's an obvious and easy argument that cuts both ways).
While I'm not accusing you of actually saying that "fair" and "legal" are technically synonymous, I think I'm right in saying that your underlying moral assumption is that anything within the *letter* of the law is inherently fair because it was set up by an elected government.
Disregarding the fact that the law is not perfect, and that the most egregious examples of tax avoidance are clearly seeking holes in a system that isn't- and can't ever be- a perfect implementation of what it was intended to do. This, of course, assumes that the law was written in good faith anyway. In practice, the same big business interests that stand to benefit from tax avoidance are also in a position to exert undue influence and pressure on those elected representatives directly or indirectly responsible for creating those laws.
The people you should be blaming are the people who wrote the law that makes it legal and the people who have the power to change the law so that it is no longer legal.
Aside from the fact that this is just a restatement of what you said in the first place, this isn't the case. It's impossible to create a tax regime that's entirely watertight from from *legal* abuse and loopholes without being unworkable. That is, from actions clearly not in the spirit of what was intended, but still within the legal wording. Of course, past experience can be used to spot obvious flaws, but no-one- and I mean *no-one* is going to be able to create something immune from hordes of highly-paid lawyers working for the vested interests of corporations working out how to exploit the system.
One can revise or improve the legislation- and failure to address loopholes being obviously exploited once they become obvious *is* a valid point of blame- but no system will ever perfect unless it's so tied down that businesses find it unworkable.
The "irony".... sorry, I meant "hypocrisy", is that the additional administration, red tape, restriction and general complexity required to address these loopholes being exploited will be complained about by the same corporate interests doing the exploiting.
At any rate, what you said is an attempt to absolve corporations and business of responsibility by shifting an unreasonable level of expectation onto the shoulders of the populace and their elected representatives, and I'm not buying it.
One thing to keep in mind is that these deductions may exist because they produce other benefits for the country that more than offset the "lost" revenue that comes from companies taking advantage of them (the word "lost" is in quotes because sometimes the only reason a company is doing business in a particular location is because of the tax deductions they receive for doing so).
In some circumstances, yes, this may be a fair use of a low tax regime.
On the other hand, if you (or anyone else) is trying to tell me that (e.g.) Starbucks arranging their UK operation such that the profits are effectively taxed elsewhere- as was in the news here recently- is "beneficial", or indeed anything short of exploiting loopholes in the system that benefits no-one but their shareholders, then you're full of it.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
That's true, like how rocket-jumping started. I was thinking more along the lines of wallhacks which are pretty unsporting.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Getting China to stop manipulating their currency is the first step to putting the world economy right.
The peg is allowing the USA to run deficits that would have wrecked the dollar otherwise.
The basic problem is the people who run China own factories. They set their exchange rate to target a 100% industrial utilization. Who cares what that does to the rest of China or their trading partners.
This kind of simple minded economic metric will bite the world in the ass. What's the point of stalling the first worlds middle class and building a middle class in India and China, if it's all going to fall over. The sooner the currency floats the smaller the shock will be.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Cash is great for avoiding taxes.
Can you guess what tax rate I paid on the medicine I grow in my backyard?
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
On our tax forms, there's a line that reports how much in taxable benefits I've received from my employer... and I am required to pay taxes on that amount.
Is it 30% of a hemp sandle?
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
I'm aware it's most if not all corporations but there is only one with a motto that strongly implies they should take the moral high road.
I think there's a loose patch on your tinfoil hat.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
Bullshit. The tax law allows for genuine business expenses to be deduced.
Google and others are creating shell companies that charge licence/service/hardware costs to each other that are not genuine, realistic or competitive. They are gaming the system and laughing all the way to the bank (in another country).
If those deductions were worth billions of dollars to you; do you believe that you would have the same attitude?
I believe most individuals wouldn't pay any tax at all if there were no punitive response from the government for not doing so
One might argue that their behaviour is still perfectly legal. However, what you said was that it was "fair", which isn't a legal term, and when they're clearly playing the system and paying minimal tax for the facilities they're using, we can quite reasonably say that it's "unfair".
Is it fair when you shop around and go to a store that isn't in your neighborhood to buy something? The closer store you didn't go to opened specifically because you (and others like you) live in the area, and you're depriving them of your business.
Google shops around and finds the best deal on incorporation & monetary services that various countries & jurisdictions provide. If they actually do things illegally, then yeah throw the book at them. You could also argue that countries should remove certain legal allowances and deductions. But Google and other companies again are literally just shopping around to find the best deals on the products and services they need and using them.
Dude. Tax breaks are there to encourage businesses to start. They kind of give people jobs, which is also sort of important. Just saying.
One thing I know, and that is that I am ignorant...
Microsoft does it too. Recently in my country someone pointed out that while goverment pays huge sums for software to Microsoft, most of this money doesn't get even taxed.
For US corporations profit is only sane thing for them. Being good and responsible corporative subject of the country - naaah.
user@ubuntubox:~$ stfu This server is going down for shutdown NOW!
While some people treat the alternative minimum tax (AMT) as if it's evil incarnate, the only reason it exists is that EVERYBODY knows greed compels people to avoid paying taxes. A corporate version of the AMT would mean Apple, Google, Microsoft, et al could do a double Irish with a Bermuda twist as much as they want but they would STILL pay (say some lowball number 10-15%) on profits earned in a given country. And that would be IRS calculated profit! Now the only way it would work is if there were strong disincentives to current practices. The US House is too dysfunctional to revise the tax code in an intelligent manner. So one option would be if the President reallocated some resources (say FBI/CIA) working to create the IRS equivalent of a major crimes division. Not only could they track the profits but even better they could bring criminal charges against lawyers, accountants, bankers, CEO/CFO, corporate boards that get even close to breaking the law. Waterboard a few Kellogg or Wharton boys and I bet patriotic taxpaying will rise dramatically. Now to entice the raving loons about tax increases, you allow corporations to CHOOSE between the current system (35% + automatic audits yearly) or the new AMT. Choosing the AMT would be a de facto reduction in the corporate tax rate which would benefit EVERY company. In particular, it would be a boon for the hundreds of thousands of small businesses (that don't have an army of lawyers/accountants) that have dutifully paid the corporate rate. A few of the worst corporate citizens might even take the opportunity to repatriate the trillion or so in profits they've parked overseas.
Is it fair when you shop around and go to a store that isn't in your neighborhood to buy something? The closer store you didn't go to opened specifically because you (and others like you) live in the area, and you're depriving them of your business.
Nope; that's a very flawed analogy.
There's no obligation upon me to support that particular business (unless I made some sort of promise to in advance). Granted, if they stop trading and I lose a convenient store near me, I probably don't have any moral right to whine about it. But that's beside the point- as I said, it's not a good analogy.
Google are the business, not the consumer.
Google are carrying out *their* business in one country, but exploiting loopholes in the system to pay virtually no business rates in that country. It's like your shop wanted to open a store in one area, but pay business rates in another totally different area- well, actually, a totally different country.
You could also argue that countries should remove certain legal allowances and deductions.
Indeed, I would.
But Google and other companies again are literally just shopping around to find the best deals on the products and services they need and using them.
As I said, your "shopping around" analogy above was poor. They're intentionally exploiting loopholes in the system.
If Google want to be taxed in the Republic of Ireland or any other country, I'm fine with that. Provided they only want to carry out business in that country. Others will take their place to fulfil the needs of UK businesses seeking to advertise.
If Starbucks want to pay the Netherlands' lower business rates instead of the UK, no problem. Let them close all their UK outlets and open them in the Netherlands instead. I'd require a subatomic-scale violin to express how "sad" I'd feel at this "loss" of an overpriced corporate chain whose position could easily be taken by another.
You see, this isn't about job-creating industry that we should be grateful to have in the country. This is about businesses that want to make money by trading with us, but aren't willing to pay their share.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
Some of you raise voices that tax evasion is evil, unfair or whatsoever. But it is merely playing the rules, only better than an average-man. In my consideration the term "tax evasion" is only a negatively biased way of calling tax minimization - what is what any sane person does. You shouldn't blame companies for using loopholes in the tax system - if anything you should learn from them. Yes - probably most of the loopholes were created due to some unfair lobbying, but why would you blame Google for loopholes created by some mischievous Australian companies and rouge Australian politicians? And did you ever considered the fairness of different forms of taxation and its effects on economy? Did you take time to think which form of taxation does the least damage? Income tax and value added tax for instance highly demote being productive and make the exchange of services less profitable for individuals (companies aren't affected by this due to being able to deduce their expenses from being taxed). Probably the least unfair and destructive (which means it is still evil but the least evil option) is the property tax (i.e. land tax or ad valorem tax) as it doesn't hinder productivity and it reflects what government really is - in this case a tenant to all the companies and people living on the territory of the country it governs. People tend to fear this tax, because it frightens them to pay tax just for having something (land, real estate, money) but they forget that in reality in most regimes they are only granted this possessions by the government, and it always has the power to take those possessions away, so they don't really own them. They also forget (or don't know) how much do they pay in taxes which is in reality between 40% and 90% of income in most countries (taking in consideration all of paid taxes - income tax, value added tax, inflation, ...). They also forget that this tax target mostly those who poses the most wealth - the rich, not the poor (which is exactly opposite to the other taxes).
To sum up - don't blame the player - blame the game. ;)
These tax avoidance schemes play a significant role in the current global financial crisis, and the debt problems of countries like the US. It also represents an highly unfair competitive advantage for large multinationals in competition with smaller national-scaled companies.
But, it *still* *completely* *LEGAL*. Unfair, unethical, but legal.
If you have a problem with that, don't sue them.
If you have a problem with companies gaming the system in order to take advantage of it, don't try to hit them (other will take turns and you're in for a huge whack-a-mole game). Try to change the system itself. Try to bring new laws, try to create new international tax scheme.
(And try to find a way to do it without alienating said company and having them run away from you).
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
...yup but sadly 2 decades after Maastritch, there still isn't a common EU taxation law.
So currently, corporation get to game the system all they want - thanks to the increased mobility offered by the european union.
But there's no way for the state to get money to finance eduction, health, and so on. Because of lack of a European-level tax.
(more likely instead of an actual tax - i.e.: an extra tax to be paid by individuals and corporations - it would be better as flux of money between states. If all corporation run away to ireland, it would be fair for ireland to pay to the EU a share of the increased income coming from the companies moving in).
Curriously: although it's not even actual part of the EU but just having bilateral convention with it, and although its considered as a tax haeven, Switzerland DOES give money to the EU currently.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
You can say that it "unfair". You can say anything you like, but that does not make it so. However, when a company is taking advantage of a perfectly legal tax minimization plan, it is not fair to blame the company.
You are right, one shouldn't _blame_ the company. On the other hand, we _should_ grab them by the balls, squeeze hard, and extract any money we can.
Right, and when they are out of money, move on to the next guy (of course, sooner or later, you will be the "next guy").
The truth is that all men having power ought to be mistrusted. James Madison