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."

Comments

Avoidance vs Evasion

[HungryHobo]

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.

Re:Avoidance vs Evasion

[ccguy]

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.

Re:Avoidance vs Evasion

[ccguy]

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.

Re:How are they legally allowed to do this?

[WindBourne]

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

Re:Avoidance != Evasion

[clickclickdrone]

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?

Re:It isn't very different

[HungryHobo]

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.

Re:It isn't very different

[HungryHobo]

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.

Re:It isn't very different

[Custard Horse]

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...

Re:It isn't very different

[Anonymous Coward]

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.

Re:It isn't very different

[drinkypoo]

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.

Re:It isn't very different

[Attila Dimedici]

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.