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Google Agrees To Pay 130M UK Pounds (~ $185M) In Back Taxes (telegraph.co.uk)
whoever57 writes: Google UK has come to an agreement with HMRC (Her Majesty's Revenue and Customs) under which it will recognize a larger share of its UK sales in the UK, instead of funnelling them through the Republic of Ireland. In addition, Google will pay 130M UK Pounds in back taxes representing tax on sales since 2005.
And obviously, Ireland will rebate on the taxes... since the income is being realized in the UK instead of Ireland, retroactively.
Right?
Right?
Google will pay 130M UK Pounds in back taxes representing tax on sales since 2005.
Isn't UK worried about bankrupting Google into going out of business?
The agreement, which comes after a six-year HMRC investigation
Is it at all possible that they spent more than 130M worth investigating this?
It's either £ or GBP, take your pick.
Well the phrasing "come to an agreement" says it all..
For any normal person you don't come to an agreement with the government, they state how much tax you owe and you have to pay it or you go to jail, there's no negotiation.
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This. It's quite clear that this is a gentleman's agreement and not based on any taxation laws otherwise the headline would be very very different.
Google has come to an agreement.
vs
Google has agreed to a settlement.
vs
Google has been found guilty and are forced...
What is the point of this? It seems very clear that this is some kind of feel good measure, a public gesture of good will. I wonder if this is part of reducing the heat on governments to close the taxation loopholes that allow this kind of activity to be legal in the first place.
>For any normal person you don't come to an agreement with the government, they state how much tax you owe and you have to pay it or you go to jail, there's no negotiation.
That's not actually true. The IRS will sometimes negotiate with you: https://www.irs.gov/Individual...
In the case of Google, the settlement amount is so small, I suspect the UK knew it would lose in court, since Google has been very clever with its tax strategies.
Other than Apple in one country all of these bastards are actually obeying the letter (but not the spirit) of the taxation laws.
If that were the actual spirit of the tax laws... the letter would be different.
Because the letter of the law is what it is, one has to expect that the letter is an accurate embodiment of the *actual* "spirit", as opposed to the "spirit" that everyone pays lip service to.
If this were not the case, the people making the laws would have to be pretty critically stupid.
And if that were the case... what does this say about the intelligence of the people who elected them? They don't even have the disadvantage of an electoral college causing a two party system as an emergent property to blame in the U.K., only the intelligence of the electorate.
Really? Won't Apple's tax bill in Ireland more than cover this when the EU get dos with them?
For any normal person, the tax law is incredibly simple. The larger you get, the more complicated the laws get.
If you are employed, you pay your taxes via the PAYE system, your employer handles all your tax issues at source.
If you have earnings from other sources, you fill out a 6 page form and send your outstanding tax to a HMRC bank account.
By the time you reach a few million in revenue a year, you need the additional issue of audited accounts. More paperwork, more issues.
Larger multinational companies have more chance that their operations fall under grey areas in tax law - a UK client is sold a product after entering their details on an enquiry form on a website hosted in the US, then being called back by an account handler in a UK office of an Irish subsidiary, pays into an Irish bank account, has his product delivered from a US data center, support handled by Indian call centers. Where should the tax be paid? Until the recent change in law, Google would only have had to pay VAT on that sale in the UK, as their corporation taxes would fall under a foreign nations revenue.
The same holds for a small trader in that respect - an Irish website sells something to a British buyer and makes a profit on that, but will only pay tax on those profits in Ireland.
Because the letter of the law is what it is, one has to expect that the letter is an accurate embodiment of the *actual* "spirit", as opposed to the "spirit" that everyone pays lip service to.
Splitting hairs. All laws are defined by what they are enforced to mean.
The "spirit" of the law, last I checked, is generally understood to be the intent of those who wrote/approved the law.
If that were the actual spirit of the tax laws... the letter would be different.
With GAAR in the UK that's no longer true.
God said, "div D = rho, div B = 0, curl E = -@B/@t, curl H = J + @D/@t," and there was light.
Because the letter of the law is what it is, one has to expect that the letter is an accurate embodiment of the *actual* "spirit", as opposed to the "spirit" that everyone pays lip service to.
No, it's pretty obvious that isn't the case. Most of these loopholes are clearly designed to take advantage of things that the people drafting the law didn't think of. They then become normalized and the people abusing them scream blue murder if anyone tries to fix the holes, claiming that it will destroy their apparently unprofitable and non-viable businesses.
It's obvious how we got to this situation. The tax system is extremely complex and has been added to and patch up endlessly over the years to deal with specific issues. It's tempting to think that we could just start from scratch and come up with something bulletproof, but politically it would be nearly impossible and would end up complex anyway as many of the finer points are tied in to other policies around corporate law, benefits and specific issues like encouraging/discouraging procreation.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
"Someone has to make the final decision."
And that "someone" in any civilized country is a justice court.
This highlights what a farce those defending long running tax evasion (yes evasion) schemes by large US companies is have been peddling. All along we've heard "But it's legal, they're doing nothing wrong!".
I've long been making the point that we don't know if it's legal or not, and that's never been fully established.
Between the amount of settlements now beginning to come through and the various investigations by European wide and European national institutions into tax deals it's beginning to become pretty clear that these companies have been breaking the law.
They wouldn't hand over large sums of money if they didn't have to. The facade of them "just doing what companies are supposed to do", or "not breaking the law", or "it's only avoidance, not evasion!" is finally beginning to fall.
The fact is, big tech is one of the most prevalent criminal sectors for tax evasion in the world, and it needs to stop if they want us to give the slightest shit about how offended they are by the government doing this, and the government doing that to them. You have no fucking right to say what you feel about the government doing something if you don't pay taxes owed because you're intentionally making sure you're not a proper part of the country you're complaining about by doing that.
Nice to see one of the biggest finally be forced to admit wrongdoing by having to hand over a large wad of cash - they got off lightly, but at least this is a clear admittance of guilt, else they'd never have done it if they were in the legal clear.
Now they all just need to follow suit, all need to apologise, and all need to pay back all the countries they owe. I wont hold my hopes up though, US big tech is big because it's built on this vast web of theft and competing on unfair grounds.
In 2013 Google paid about €28M (~$37M) in taxes in Ireland on their whole European operation (€17B), not just the UK - 0.16% of revenue. So I'm not sure how much of a rebate they might reasonably expect.
Because the letter of the law is what it is, one has to expect that the letter is an accurate embodiment of the *actual* "spirit", as opposed to the "spirit" that everyone pays lip service to.
Letters and spirit are in perfect harmony for a local company doing local business. They make sense on an island, they work well in isolation. The problem is that the letter of the law combined with the letters of laws of other nations become incompatible with the spirit.
See it doesn't matter if the entire world changes their laws to agree with the tax havens, or if the tax havens change their laws to agree with the rest of the world. Both are just fine except that the existence of different definitions of *where* profits should be taxed creates a loophole.
We're not talking about some dumb local law that can be fixed by a simple amendment. Fixing this problem will take treaties and international co-operation.
It's obvious how we got to this situation. The tax system is extremely complex and has been added to and patch up endlessly over the years to deal with specific issues.
Perhaps when the government wants to give money to a special interest, instead of changing the tax code from something simple to something extremely complex, they should leave the tax code simple, and make an explicit grant of funds.
So if you wanted to, say, encourage Twitter to locate its offices in San Francisco, instead of giving them a tax break in law, they'd have to pay exactly the same taxes as everyone else, and then there's have to be a separate "Thank yo for locating in San Francisco" grant to offset the taxes they are being charged for being in San Francisco.
Of course, that would clearly expose the nature of the relationship: "We recognize our taxes are too onerous to attract the kind of businesses which we want to attract, so we are willing to pay you off for a number of years to put up with it".
And we couldn't have that, right?
That's not how politics work. There are simply too many incentives towards complexity and obfuscation, fuzziness and discretion.
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That's not how politics work. There are simply too many incentives towards complexity and obfuscation, fuzziness and discretion.
They're not actually fooling anyone, you know.
Years ago, when I was opening a new office and picking the location, I actually had various municipalities approach me and offer me various subsidies, abatements for taxes that would be due, and things of that nature. My company was nowhere near the size of Google. At that time, I employed fewer than 150 people. So, I can only imagine what goes on behind closed doors. When we opened our third office, down in Georgia, I was getting calls from various folks as soon as they heard I was looking for large office rental space with a decent data connection. It's kind of crazy what they'll offer. One offer was something like discounted valuation rates and no property taxes for five years, shit like that happens. I'd like to have been a fly on the wall when this "agreement" was made.
"So long and thanks for all the fish."
Yeah some of this stuff isn't even based on agreements, it's based on the discrepancy between countries taxing where companies are based and countries taxing where companies are incorporated. The good old Double Irish loophole. Fortunately the loophole has been closed as of 2015. Unfortunately that's only for newcomers to the scheme, existing corporations are given grace until 2020, I'm sure that will be long enough for high paid lawyers to figure out the best place to move the company so the tax bill remains the same.
To negotiate with the IRS keep calling until you get a compatible agent. My business failed and left me with a $20,000 tax bill. Unable to pay that penalties and interest drove it to $50,000. I got a job and the IRS garnished any of my wages over $300 a week. That made providing for my wife and two children difficult. My wife called them to make other arrangements. Every one who had a particular accent told her pay up. After a while she got an agent who spoke with our accent. After a few questions she ask my wife what could we pay. I paid $200 a month for 10 years. The actual total owed actually went up a few hundred but I never missed a payment and by IRS rules any tax owed after making a good faith effort to repay is considered noncollectable after ten years and is no longer due.