Australian Govt Pledges Action On Google Tax Evasion

← Back to Stories (view on slashdot.org)

Australian Govt Pledges Action On Google Tax Evasion

Posted by samzenpus on Thursday November 22, 2012 @10:12PM from the pay-up dept.

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."

20 of 331 comments (clear)

Min score:

Reason:

Sort:

Avoidance vs Evasion by HungryHobo · 2012-11-22 22:19 · Score: 4, Insightful

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.
1. Re:Avoidance vs Evasion by ccguy · 2012-11-22 22:41 · Score: 4, Interesting
  
  No they haven't been charged with tax evasion. However, as the Australian Taxation Office has seen claims of AU$1b in payments including GST to Google through the quarterly business activity statements that every registered business has to make, there is a very large discrepancy in how much Google are paying taxwise and how much they are earning in Australia.
  Well, the thing is - you can easily put your earnings in any country you want. For example, here's what Apple does for Spain: Apple Ireland sells (all) devices to Apple Spain (however its legal form is) pretty much at the same price the devices are sold to consumers. Therefore Apple Spain makes no profit - in fact it can easily be at a loss they since have to pay to employees, leases and so on. All the profit is legally produced in Ireland where the taxes are a lot lower.
  Problem here is that the European Union doesn't really want to fix it. If they wanted to, the problem would be solved rather quickly.
  Ireland (and a few others) are just parasite states - their tax system is based on 'let's have foreign companies here by lowering their taxes a lot' even if they just means they're fucking the European partners which whom they share a market and a lot of other things. The day there's an unified tax law over Europe these problems will cease to exist.
2. Re:Avoidance vs Evasion by ccguy · 2012-11-22 23:15 · Score: 4, Insightful
  
  The day there's an unified tax law over Europe some non-European company will step up to replace Ireland.
  That's fine. But there will be import taxes and duties, same as with anything that comes from say, China.
  
  The problem here is that Ireland is distorting tax income in other European Union countries and these countries can't do anything about it.
  
  Say you pay now a 30% income tax. I -legally- offer you to pay just 10% over here (but you still live wherever you are, and use the infrastructures and services over there). Do you take the offer or not? If you do, then you pay 1/3 of the taxes you should pay, you still get all the benefits (at someone else's expense), and I get 1/3 of your taxes for nothing.
  
  That's what Ireland is doing.
It isn't very different by Kupfernigk · 2012-11-22 22:24 · Score: 3, Insightful

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."
1. Re:It isn't very different by HungryHobo · 2012-11-22 22:52 · Score: 4, Insightful
  
  lots of forms of tax avoidance have gone to court and been declared perfectly legal. so no, it's not a matter of "Yet"
  If you do your own taxes then whenever you do anything legal to keep your tax bill down then you're avoiding taxes.
  Ever put your money into a government saving scheme to which DIRT isn't applied? tax avoidance.
  and sometimes the lawyers are wrong, they've missed a comma in the law or the judge decides that some interpretation of the law isn't correct.
2. Re:It isn't very different by Anonymous Coward · 2012-11-22 23:33 · Score: 3, Insightful
  
  Understand that "tax avoidance" is merely a loaded term targeted at uneducated public for "tax compliance". Google in this instance is being used as a scapegoat for it's "tax compliance" in order to deflect anger about unneccessary and inefficient "stimulus" schemes that have left the country in fiscal deficit.
3. Re:It isn't very different by Xest · 2012-11-22 23:42 · Score: 3, Insightful
  
  It doesn't matter either way. Here in the UK for example the government has a corporate tax rate of something like 21%, yet Amazon paid no corporation tax on Â£7bn worth of sales.
  It doesn't matter how they managed to do it, the point is the intention is clearly that they pay 21% of that in tax so the government has every right to collect that from them retroactively even if it means they technically did nothing wrong at the time.
  As Ian Hislop put it on have I got news for you a few weeks ago he was spot on, stating something along the lines of:
  "Okay yes, very funny, you're very clever, you found a loophole, now just pay us what you owe" ...and that's the attitude governments are now taking over this, quite rightly too. Nice to see Australia following France's lead, hopefully the UK and others will also join in now where this has come to light. You can't justify a situation where small businesses and most citizens pay the taxes it's intended that they pay and larger companies and individuals with more money don't because they have enough money to pay people to find loopholes.
  People and companies can disagree with taxes and that's fine, but if you think they're extortionate then get them changed through political means, don't evade them and leave everyone else to foot the bill and subsidise your existence because you're too selfish to contribute your fair share to society.
  Yes, yes, I know these tax dodger companies claim they still produce tax in other ways, like VAT paid, employees taxes and so forth, but they're still subsidised. The amount they pay isn't enough to cover healthcare to keep their workers healthy enough to work, the education system the rest of us paid for to give them an educated workforce to even make money in the first place, the highways they use to transport their products, the police, military, and fire brigade to protect their premises and so forth. That's why corporation tax is there in the first place - to help pay for this sort of thing. If they don't pay it perhaps the alternative is to remove services like police protection from them or something and let people steal from them at will making it a fair playing field.
4. Re:It isn't very different by HungryHobo · 2012-11-23 00:04 · Score: 4, Insightful
  
  You still don't seem to understand the difference between "evade" and "avoid"
  so, the government starts a saving scheme to encourage people to save.
  they offer to not charge you tax on the interest on money you save. the rate is a little worse than other saving accounts but you go with that one since without the tax you make a little more interest.
  then a few years later some self righteous clown comes along and says to you "very funny, you're very clever, you found a loophole, now just pay us what you owe" and gives you a bill for 5 years back taxes on the account along with interest and penalties as if they'd never offered the origional deal.
  is that remotely fair?
  or the government wants to encourage the building of low income housing. so they offer to only charge a lower rate of tax or no tax. you invest your money into building low income houses.
  then a few years later some self righteous clown comes along and says to you "very funny, you're very clever, you found a loophole, now just pay us what you owe" and gives you a bill for 5 years back taxes on the account along with interest and penalties as if they'd never offered the origional deal.
  is that remotely fair?
  You're morally obliged to pay every penny of tax you owe but not a penny more.
  you don't want rule of law, you want an autocracy where even if you follow the law to the letter someone can swoop in and punish you or declare that you owe them money.
5. Re:It isn't very different by Custard+Horse · 2012-11-23 00:20 · Score: 5, Interesting
  
  Quite right.
  Where there is an flaw in tax law, it will eventually be written out and that loophole closed. Google has avoided tax thus far but now is the time to pay up and for that to occur the law needs to be changed.
  Of course, Google isn't the only entity using such tactics - it is the extent of the avoidance that is causing uproar. Every multinational company will have similar tax plans in place (or their accountants atrn't doing their jobs properly) and they will all be concerned about any tax developments.
  Remember, it's not a Google Tax people want, it is a prevention of tax avoidance which might affect the decision of of large companies to move into or out of the countries where they have a physical presence. Catastrophic financial consequences may well occur.
  Revision of tax law is not the work of a moment...
6. Re:It isn't very different by Anonymous Coward · 2012-11-23 00:28 · Score: 4, Informative
  
  Avoidance is merely evasion that has not yet been shown to be illegal.
  Is English your native language?
  What's your point? Regardless of whether the words "evasion" and "avoidance" are synonymous or similar in general usage, the distinction between "tax evasion" and "tax avoidance" as referring to illegal and legal activities respectively is widely accepted and standard terminology.
  If you don't know this, perhaps it says more about *your* ignorance of the language.
7. Re:It isn't very different by drinkypoo · 2012-11-23 00:57 · Score: 5, Insightful
  
  Where there is an flaw in tax law, it will eventually be written out and that loophole closed
  I can't speak for Australia, but here in the USA, corporate interests bought those laws, and therefore the features that permit them to dodge taxes are not flaws, they are the system working as designed. Therefore, they will not "eventually" be written out in order to close the loopholes, because the people writing the laws are keeping them open. Even if you should close a loophole, not only will another be opened, but the same one will be reopened later.
  
  Every multinational company will have similar tax plans in place (or their accountants atrn't doing their jobs properly) and they will all be concerned about any tax developments.
  I'm sure their lawyers are rubbing their "hands" (or pedipalps or whatever you call lawyers' forelimbs, I haven't kept up with analzoology) together with glee even as we type.
  
  Revision of tax law is not the work of a moment...
  No, it takes decades to really and truly corrupt a body of law.
  I really don't know what things are like in Australia but since they learned most of what they know from the same teacher we did, only earlier, I imagine that law is pretty well and rightly fucked there as well.
  
  --
  "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
8. Re:It isn't very different by drinkypoo · 2012-11-23 01:17 · Score: 3, Interesting
  
  So, I take it you are in favor of the Flat Tax?
  No, because I am in favor of a fair tax. And that is a simple progressive tax only assessed to people making more than enough to survive upon. A flat tax is a regressive tax because the poor spend more of their income on taxes on necessities, and necessities ought not to be taxed. Any government which cannot provide more than the minimum to its citizenry deserves to fail and get out of the way of one which can. The road to fair taxation involves simplification, but not writing it in crayon.
  
  --
  "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
9. Re:It isn't very different by Attila+Dimedici · 2012-11-23 01:38 · Score: 4, Insightful
  
  You are apparently unaware that most versions of the Flat Tax propose that there be a single deduction for each taxpayer that would be set at some level based on the Poverty Line. So, one could calculate how much it costs to provide the "necessities" and set the deductions some amount above that, thus making it so that people do not pay taxes on necessities. This would be a fair tax and would in all probability result in the wealthy paying more than they do now, since there would be no additional deductions for them to use to reduce their taxable income so that they do not actually owe that high marginal tax rate that everyone is so anxious to see passed.
  
  --
  The truth is that all men having power ought to be mistrusted. James Madison
10. Re:It isn't very different by Xest · 2012-11-23 04:04 · Score: 3, Informative
  
  If you can stop with the tears and name calling for just a moment, you'll find plenty here:
  http://en.wikipedia.org/wiki/Ex_post_facto_law#United_States
Re:How are they legally allowed to do this? by WindBourne · 2012-11-22 22:33 · Score: 4, Informative

If so, then loads of prior art. MS, IBM, GE, etc come quickly to mind.

--
I prefer the "u" in honour as it seems to be missing these days.
Re:Avoidance != Evasion by clickclickdrone · 2012-11-22 22:50 · Score: 4, Insightful

Good on any company for minimizing their tax liability.
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
Re:Avoidance != Evasion by clickclickdrone · 2012-11-22 23:09 · Score: 3, Insightful

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
Re:Tax incidence by clickclickdrone · 2012-11-22 23:23 · Score: 3, Insightful

Google will have paid plenty of tax on its employees salaries,
Nice try. Google's employees pay tax on their salaries, not Google.

--
I want a list of atrocities done in your name - Recoil
Re:Do no evil, my ass by Xest · 2012-11-22 23:45 · Score: 3, Informative

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.
Google is using the General Electric model by Ritz_Just_Ritz · 2012-11-23 00:13 · Score: 3, Interesting

"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.