Google Spared $1.3 Billion Tax Bill With Victory In French Court (bloomberg.com) 56
New submitter Zorro shares a report from Bloomberg: Google won its fight against a 1.12 billion-euro ($1.3 billion) French tax bill after a court rejected claims the search-engine giant abused loopholes to avoid paying its fair share. Google didn't illegally dodge French taxes by routing sales in the country out of Ireland, the Paris administrative court decided Wednesday. Judges ruled that Google's European headquarters in Ireland can't be taxed as if it also has a permanent base in France, as requested by the nation's administration. "Google Ireland isn't taxable in France over the period 2005-2010," the court said in a statement. Google said in a statement: "The French Administrative Court of Paris has confirmed Google abides by French tax law and international standards. We remain committed to France and the growth of its digital economy."
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Some places, but not all places. It depends on the local laws. And that's really the point isn't it? Rule of law. Not "this is how it should work ideally". But "this is how the law, as written and applied, works".
I agree multi-nationals shouldn't have loopholes like the Dutch Sandwich. I also agree that since they are legal, the companies are doing nothing wrong.
Fix the laws.
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some places, get this, make you pay a percentage based on the time you spent there. Interesting, as it's almost as if companies could do the same based on how much revenue they made in said country.
There's all sort of schemes that companies use to get around this, including the corporate creation of subsidiaries designed to incur only losses, and thus show a perpetual loss on their balance sheets. The profits are funneled to sister subsidiaries through the use of clever legal arrangements that often rely upon classifying one type of financial transaction (e.g. a sale) as instead a different type of financial transaction (e.g. loan with amortized commission.)
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Said scheme is usually countered by the local IRS by stating that "companies of type X make profit percentage y% normally, so we will levy taxes as if you do that too, since you are obviously operating more than x months now, and not bankrupt". There's also a law over here that basically says that any construct of companies used solely to evade taxes can be declared null and void for the purpose of assessing taxes. I worked for a multinational once and the tax authorities just used both rules. Tax authoriti
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Re:Tax Equivs (Score:4, Interesting)
To me it's a matter of stability. This system is stable, so whatever. Yes, they abuse the loopholes; and it doesn't matter. We can design new tax strategies that don't address this behavior without opening up new loopholes, so our economic data about what's out there to tax is safe.
There's some logistics we can look at about this, too. They don't form a coherent argument; they're just worth a thought.
When we buy things from a seller in China, we don't tax that seller on profits. We might issue a tariff, but that's generally a bad idea; instead, we just tax the profits of the business selling the good domestically. That gets the good to the consumer at the lowest price.
Likewise, the business doing the selling has employees locally. It pays some of its revenue to those employees, who are taxable, and who spend money into the local economy. We also tax it on any of its profits.
If the business abroad takes a huge profit margin, it starts charging more than domestic manufacture. In such a case, trade makes no sense: we can make it cheaper ourselves, and so do so.
So what's with these tech businesses?
A tech business will supply a good or service to a country. In essence, it's selling to the country, but not necessarily in the country. Where the business is selling from is ... well, it's not clear. It's pretty much arbitrary.
A business like Google might or might not have a presence in a country, such as France. That is to say: Google might or might not have employees in France. If it has employees in France, then it's doing productive work in France; that productive work is part of France's GDP, because it's producing a product in France. Those employees's labor represents the actual production, although the business profits represent the expenditure for that productive output: the total contribution to GDP should be the entire revenue stream created by that particular productive unit.
Even that's fuzzy: Google in France is using Google in the U.S.. Face it: local Apple, local Google, local Microsoft, all are leveraging the products of business efforts of other parts of the business in other parts of the world. No, we can't accurately model this; we can, of course, say that an empty office in Ireland receiving all the taxable income is not providing productive output.
You also have secondary effects of presence. Google, Apple, or Microsoft might have a data center, an office building, something. If Google is hosting Google's French services in France, then Google is paying money to a French data center buying French power, French internet, and French office space. That's even more of the revenue stream of Google France going to France. If Google France's servers are colocated in Ireland and not France, well... that chunk of Google's revenue stream represents the GDP of Ireland; taxing it in France is a nifty legal trick, and dishonest.
So it's somewhat of a complex issue. It's also one that doesn't much matter, usually; and when it does, it's often a matter of perspective. Apple, for example, chews through $234Bn of revenue, keeps $53Bn of profits; Apple gets that revenue from sales all over the world of devices manufactured in China and services (iTunes) provided from wherever they locate their servers. Apple draws $2Bn of global revenue to Cupertino, paying the workers there, who spend into the local economy of Cupertino and the surrounding municipalities. Apple expends billions of dollars into the United States economy for products and services supplying its business activities.
That $53Bn seems like a lot to dodge if you're only diffusing $100Bn into the U.S. economy.
It is.
Apple's effective tax rate is 25.8% (the statutory rate is 35%). They paid $15.8 billion in U.S. taxes, after all the dodging they did.
On $53Bn, Apple would owe $18.55Bn. (Irrelevant factoid: under the Universal Social Security I designed, the the
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whatsa cock egg? is that sumpthin the gays use?
I made a passing comment a while back about having an egg-shaped kidney stone in 1995. The 14-year-old wankers have been screaming cock eggs ever since.
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sounds painful btw
It was more scary than painful since I watched it pass through. I've been told this is exactly how a baby is delivered by a woman.
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A woman doesn't give birth through her urethra, you ignorant fat fuck.
The experience is similar, dumbass.
Did you fail special sex ed in special ed school?
I've never attended sex ed. I knew they taught it wrong. I came from a farming family, so I know how barn animals have sex.
It doesn't matter because you've never seen a female urethra and you haven't seen a vagina outside of porn.
I played doctor when I was in the sixth grade.
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YIKES!
That's what she said. ;)
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Who are you talking about? A blind date? I am confused...
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I've been told this is exactly how a baby is delivered by a woman.
These people were laughing at you when telling you that. Kidney stones and babies don't come out by the same hole.
Female Reproductive Organ Anatomy:
http://emedicine.medscape.com/... [medscape.com]
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Creimer's dad taught him that babies are born from a woman's anus because that's how creimer's mother had him.
My parents never talked to me about sex. I learned it all from "The Joy of Sex" [amzn.to] that I read at the library.
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Our parents should hang out together. My parents put a copy of "The Stork Didn't Bring You" in my library... It's a book from the 1940s, probably loaned to them from a priest down the street.
https://archive.org/stream/sto... [archive.org]
The E-not-so-U (Score:2)
Judges ruled that Google's European headquarters in Ireland can't be taxed as if it also has a permanent base in France, as requested by the nation's administration.
Why should any company doing business in the EU have to have multiple permanent base, unless the company itself thinks it's to their advantage? If the company actually wants it, that's one thing - but why does the French administration "request" that Google keep a base in France when they already have one in another EU member state?
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I think you read the brackets in the wrong place, but I don't see why it's unreasonable for a country to require a registered address etc for any company doing regular[1] business there.
[1] a bit more than selling a few knitted toilet roll covers to someone on the other side of the world via eBay.
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The EU aspect is what makes that unnecessary for businesses. A single presence gives you access to the whole market.
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Who cares about, bases or camps or what ever they can come up with. All taxes should be paid at the point of revenue. They create the conditions that promote that revenue, hence the taxes should be paid there. All claims of cost at foreign locations should be substantiated and only, non-profit cost should be deducted, all remote profit, claimed as costs should be ignored and tax should be paid locally on those shifted profits. Where offshore costs can be effectively established, than those cost should be ig
At least the French Legal System seems Fair (Score:3)
Court of first instance (Score:2)
Pretend to do no evil (Score:3, Insightful)
Curious Kid: What does that mean?
Google: We believe in social justice, taking care of the poor, equality, stuff like that?
Curious Kid: So, this means that you are very diverse, have about 50% girls, and pay all your taxes to fund all the social programs that you advocate for?
Google: Not in the slightest
Curious Kid: Oh, I get it, progressive means the life you think others should have, but not yourself.
Google: Pretty much
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Curious Kid: So, this means that you ... pay all your taxes to fund all the social programs that you advocate for?
First, no court has yet found that they do not pay all of "their" taxes—they pay what is legally required, just like everyone else. Second, if Google actually wants to take care of the poor it would be more effective to just support the appropriate programs directly, and not outsource that responsibility to the government. Taxes are not primarily a way to help the poor; they are a way to (inefficiently) force others to contribute to social programs and subsidies you approve of against their will. Only
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Since google actively advocates for social programs, the second part of your argument does not hold either. Google seems to think that this is a good way to help people. Therein lies the problem. On one hand they are asking for more money to be spent by the governm
I wish I could book all my earnings (Score:2)
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Loopholes are a problem in the LAW (Score:1)
Is everything illegal by default?
I pronounce government largesse illegal!