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back to article Tech firms face massive tax bill if Dutch vote to end loopholes

US corporations including Dell, Yahoo!, and Google could be facing an extra $90bn in taxes if the Dutch government presses ahead with plans to stop the country being used as a conduit for companies looking to avoid paying local revenue officials. "We should not be a tax haven," said Ed Groot, a parliament member from the Labour …

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You have to admire the cheek

I always thought that the drawback of these schemes for US companies was the requirement (at some stage) to repatriate funds to the home country - after all for the unsophisticated of us, the ability to spend where we live is kind of the point? But this tax holiday - golly, golly, golly. Hope Obama says Nyet.

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Re: You have to admire the cheek

They lend it back to the home country, at usurious rates of interest, which means they get to spend the money, and reduce their US tax bill.

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Devil

Re: You have to admire the cheek

I think that if the holiday is structured right, it could be great. For example, the money repatriated might be required to be invested over the next several years (i.e. not all at once) in new tech startups in the US, or in US venture funds. This could result in a burst of new technology reminiscent of the 1980s that came out of the R&D tax credit - a substantial part of the companies that grew out of the Internet (before the dotcoms), such as Sun, Oracle, and many others were in large part funded by investors taking advantage of that tax credit.

This time around the investments might be directed by the holiday rules into biotech, accessible computing, space development and maybe advanced transportation - maglev rail maybe?

This would require the politicians to actually use some sense in building such a tax holiday scheme, which is admittedly a low probability scenario.

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Joke

Re: You have to admire the cheek

But even then the profits need to be landed and taxed eventually? This was its all free. I suppose the question is whether Obama et al hang out for a long (possibly very long when you see how much profit companies like Apple have stashed abroad) term, or whether he takes the breadcrumbs now and hopes they might reinvest in the US?

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same shit different day

If and when, the Dutch change the law, Starbucks et. al. will just restructure their affairs and use some other jurisdiction. There are a lot of very smart tax lawyers out there eager to sell their services to multinationals in the game of international taxation.

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Devil

Re: same shit different day

@Shagbag "There are a lot of very rich tax lawyers out there"

Fixed it for you...

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Re: You have to admire the cheek

The money is there purely to avoid it being taxed at the proper rate. There was a "one-off" holiday in 2004, which meant billions flowed back without proper tax being paid on it.

Now they want another "one-off" holiday. And if they get it, I'm sure in five years time they will be asking for another "one-off".

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Re: You have to admire the cheek

This 'tax-amnesty repatriation' is bollocks. It is ALWAYS presented as a one-off measure that will allow tax fiddlers (or outright cheats) to repatriate their funds with immediate benefits to teh country, combined with future astronomically high penalties for anyone caught with undeclared foreign assets at a later stage.

Funnily enough the tax-amnesty repatriation always crops up from time to time so there is only a carrot and never a stick. Also, the companies make a big spiel abot how it will help teh economy at large, but it won't. Big compaies are right now sitting, Smaug-like, on huge piles of cash which they refuse to spend on infrastructure investment, hiring / training workers or even paying some back to shareholders. If the get their mega-cash loads repatriated, who'se to say they won't just sit on it as well?

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Re: You have to admire the cheek

upvote for the reference to Smaug capitalism

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WTF?

Re: But this tax holiday - golly, golly, golly. Hope Obama says Nyet.

I seriously doubt that will happen!

The last time this subject came up. all kinds of promises were made, and never kept; so I have absolutely no reason to expect differently.

Big Biz will say whatever the pols want, and dangle all kinds of campaign cash in return for a "tax holiday" and promises of jobs and investments, etc, all of which will amount to just the same bullshit Big Biz has been spouting for the past 4 decades.

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Joke

Alternate headline

Dutch thinks to much money comes into their country. Looks to get companies to move their PO Boxes.

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> "It's called capitalism. We are proudly capitalistic. I'm not confused about this," Schmidt said.

Thank f*ck for a breath of fresh honesty among the usual bull sh*t piped out by the other coporate drones.

> cash-strapped EU

WTF? I think this is a typo. The EU is a tax magnet. I know the UK puts enough wonga into it.

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Anonymous Coward

Re: If I ever meet that Dell f*cker

when a Dutchman says he's not doing anything immoral, he's probably raping children in his basement.

I would narrow it down to Dutch tax consultants. The rest are shlobs just like you and me, like in any other country.

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Re: If I ever meet that Dell f*cker

I am dutch, and you are welcome to come and checkout my basement. If you confused the Netherlands with Belgium, where a sick fellow called Dutroux did some terrible things to little children, locked up in his basement, you should go and visit an geography teacher.

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Anonymous Coward

The UK negotiated a discount when their economy was in shambles. Now that the EU helped them to recover, they're unwilling to give a fair share and menace to leave.

http://ec.europa.eu/budget/figures/2011/2011_en.cfm

Whatever "wonga" they put into it - the EU also has put a lot of "wonga" in the UK when they were begging for it, and is still giving them a lot.

It is sad that that those who were in need lose that memory and are not ready to show the same generosity they themselves were shown.

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The UK negotiated a discount when their economy was in shambles. Now that the EU helped them to recover, they're unwilling to give a fair share and menace to leave.

What a load of old bollocks. Unless you mean something different - which you'd need to explain better than that link to general spending.

Britain has always been a net contributor to the EU/EC/EEC. Even back in the 1970s when people laughed at us, and called us 'the sick man of Europe'. That's back in the days when Britain was one of the poorest members (partly because the EEC was smaller, with richer countries in). The rebate was agreed with Thatcher after a lot of years of negotiation because British net EC contributions were about to go above West Germany's even though Germany was massively richer than Britain, and France were still a net recipient of EC spending. France were of course, also richer than us... The shock to the system for the poor French is that they're now the 3rd biggest net contributor, when they've been taking money out of the EU (even as one of it's richest members) up until the last decade. Aw poor Fwance...

Also, rather than the EU helping Britain, we actually agreed to reduce the rebate as otherwise, due to the odd way it's calculated, Poland would have ended up a net contributor to the EU budget, rather than receiving from it. This was done because it was fair, and also with the promise of unspecified reform of CAP in future. Of course that promise was broken by France and Germany. There are reasons that British voters and politicians are suspicious of dealing with the EU...

While we're not perfect, and we've never managed to quite 'fit in' due to having a weird political system, we've always paid our way and pulled our weight. Even if we've complained about it...

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Happy

Re: If I ever meet that Dell f*cker

@Johan,

But before you plan the trip to @uncle's basement, make sure you ask your tax advisor to make sure this trip is tax-deductible.

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Jail the bastards next time they get off a plane anywhere in the world. If they want to be in the cloud let the fuckers live there.

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WTF?

We are not doing anything illegal or immoral

Yeah, right! Illegal, maybe not - the politicos aren't clever at writing legislation, and tax accountants are very good at working loopholes. But immoral? Certainly!

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Anonymous Coward

Re: We are not doing anything illegal or immoral

Looks like tax accountants read The Reg too and you are right. It may not be illegal but it certainly is immoral.

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politicos aren't clever at writing legislation

You think the loopholes are just bad law writing?

I'm sure a lot of thought went into making sure they only work for the big corps that paid for them. Can't have any normal people using a loophole!

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Stop

Re: We are not doing anything illegal or immoral

> ...but it certainly is immoral.

Where does it say in the bible/quo'ran etc that paying taxes is a moral duty?

I don't remember that at school.

Perhaps you went to a school in cloud cuckoo land or something...

There is no moral obligation to pay tax, any tax.

There is a legal duty because the law says so and that's it.

We theoretically pay tax because it contributes to the common good.

In practice, the vast majority of that money is frittered away on wastage, pointless beaurocracy wars in places we have no business being in and the EU (more pointless beaurocracy of course).

The government long ago lost any moral highground from which to preach to anyone aiming to reduce their tax bill as low as possible. In fact, I would suggest to you that it is our duty to cut the tax take to the bone in order to force the government to cut their spending as much as possible.

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Re: politicos aren't clever at writing legislation

> You think the loopholes are just bad law writing?

Ahem: http://www.thedailymash.co.uk/news/business/tax-negotiable-2012120351605

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Anonymous Coward

Re: We are not doing anything illegal or immoral

You lost me with equating the bible (any "holy" book) with morally, but got me back with, "We theoretically pay tax because it contributes to the common good." and you're right about governments having long ago lost, or never had, any moral high ground.

We can't change the behaviour of government without trying and we certainly all know that we need to try.

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Devil

Re: We are not doing anything illegal or immoral

"Give to caesar what is caesar's"? Or did you skip that part when thumbing through your bible.

Your children go to a state funded school. You drive your car over a road that's build by state funds. Your house is kept safe by state funded police and fire brigades.

But you're right, in your case that just wastage and pointless. What do you see in the mirror when you brush your teeth in the morning? A non-tax paying rat!

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Re: We are not doing anything illegal or immoral

"Give to caesar what is caesar's"

Commonly misunderstood. The pharisees' question was designed to elicit a response that was either seditious or look bad to the jewish nationalist audience. The reply would be understood by the audience - Caesar should be given what is rightfully his - i.e. nothing, without actually saying anything that would land Jesus in hot water with the Roman authorities.

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Re: We are not doing anything illegal or immoral

I don't know about the koran, but the bible says it here:

http://www.biblegateway.com/passage/?search=Matthew%2022&version=KJV Matthew 22:21

17 Tell us therefore, What thinkest thou? Is it lawful to give tribute unto Caesar, or not?

18 But Jesus perceived their wickedness, and said, Why tempt ye me, ye hypocrites?

19 Shew me the tribute money. And they brought unto him a penny.

20 And he saith unto them, Whose is this image and superscription?

21 They say unto him, Caesar's. Then saith he unto them, Render therefore unto Caesar the things which are Caesar's; and unto God the things that are God's.

22 When they had heard these words, they marvelled, and left him, and went their way.

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Re: politicos aren't clever at writing legislation

And here's the tax guide they use:

http://www.nicecupofteaandasitdown.com/book/

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ideology

skelband, paying the zakāt tax is one of the Five Pillars of Islam, a moral duty for any observant Muslim who can afford to pay it. (It is primarily for the benefit of the poor, so it is sometimes translated into English as “alms”.)

If it be the duty of people to “cut the tax take to the bone”, the result of a population taking that duty seriously would be not that their government would be forced to cut its spending (unless their nation no longer retained monetary sovereignty), but that that same government would increase its borrowing to pay the bills — and be assured that the local financial sector would be grateful for further opportunities to service the country.

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Re: We are not doing anything illegal or immoral

@skelband: and where it's it written that the bible/ Koran are the only sources of moral authority? Why even bring them into it? I'm not religious, so does that mean I have no morals? As far as I'm concerned, a thing can be safely considered to be "morally wrong" if a majority of society believes it so. Certainly I'd use that measure long before I resorted to a fairy tale.

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Re: We are not doing anything illegal or immoral

Actually, being rich by itself is immoral, and the Gospels are clear on that:

Matthew 19:24: "Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

Mark 10:25: "It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

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Anonymous Coward

Re: We are not doing anything illegal or immoral

Your children go to a state funded school. You drive your car over a road that's build by state funds. Your house is kept safe by state funded police and fire brigades.

What is is alluding to in a convoluted way is that in some nations the tax pressure on your average salary is somewhere between 40% to 60% and nothing works, whereas in other nations the overall burden is somewhere around 25%..30% and all works fine. This is the debate that repeatedly flares up between Germany and Switzerland, for instance.

I have seen what governments do with your tax, which is why I never ever want to deal with anyone in New Labour other than when percussive attitude correction becomes legal.

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Angel

Re: We are not doing anything illegal or immoral

> Actually, being rich by itself is immoral, and the Gospels are clear on that:

No, its a warning about the tendency of those with money to trust in their wealth rather than God.

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Anonymous Coward

Re: We are not doing anything illegal or immoral

This whole Jesus/religious story you are preaching is fiction! Let’s stick to the facts and not waffle on about wastage or how tax is spent in ways you do not approve of.

Schmit and his kind need to be brought back to earth, because they are definitely not living on this planet.

Avoiding tax is no different than stealing from you. Tax pays for our public services. No tax, no public services.

I was raised believing that we must pay our own way. There is NO ONE out there with responsibility for your care. You work, you pay your tax, and you consume public services. Schmitz et all need to rethink their position and pay their fair share.

Morality isn't dictated by the bible (what a farfetched piece of literature that is), it is dictated to us by what we feel is right or wrong. No one would say that rape was a moral act. Tax avoidance is just as immoral. The majority of sane people believe that.

Trying to avoid your burden doesn't make you clever; it makes you anti-social and a SPONGE, a drain on society. These actions make you lower than a snakes cock.

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Anonymous Coward

Re: We are not doing anything illegal or immoral

> where it's it written that the bible/ Koran are the only sources of moral authority?

Materialist/humanist ideology suggests that evolution favours species (though a single datapoint is a dubious basis) with morality in their DNA (a totally unproven idea) because it helps preserve the species. However, it offers no good reason for a given individual to obey the rules other than the risk of being caught and punished.

From a humanist view, morality is genetically programmed irrationality. If morality is determined by the majority view, there is nothing intrinsically wrong, which is pretty much the opposite of the definition of morality. If there is no morality, you can't really be moral, unless you think by following the majority, you are being "moral".

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Re: We are not doing anything illegal or immoral

skelband:

Mark 12:17 And Jesus answering said unto them, Render to Caesar the things that are Caesar's, and to God the things that are God's. And they marvelled at him.

"And they marvelled at him" I guess accountancy has not changed much in the last 2000 years

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@Obviously!

"This whole Jesus/religious story you are preaching is fiction! Let’s stick to the facts and not waffle on about wastage or how tax is spent in ways you do not approve of."

Go on then, prove it! The "render unto Caesar" stuff and the "turn the other cheek/go the extra mile" stuff are very likely the teachings of a genuine radical in Judea during the Roman occupation. It's all about passive resistance.

Now imagine two thousand years from now, the dominant religion is Gandhiism, which worships Mahatma, the son of Brahma, born of a virgin in India. Three world leaders came to pay tribute after his birth was foretold on Twitter, and they went to Queen Victoria to ask where the new King of the Indians was, which led her to massacre all the children in Amritsar.

Would that change the fact that the teachings of Mohandas K Gandhi were and are teachings of peace, of love, and of general moral good?

So why do you dismiss the good teachings of religion along with their bad parts? Throwing the bathwater out with the baby Jesus, so to speak....

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Tax rate in Germany vs. Switzerland

"What is is alluding to in a convoluted way is that in some nations the tax pressure on your average salary is somewhere between 40% to 60% and nothing works, whereas in other nations the overall burden is somewhere around 25%..30% and all works fine. This is the debate that repeatedly flares up between Germany and Switzerland, for instance."

Of course the Swiss collect some 25% of Quellensteuer ('source tax' on income from invested capital) from all that foreign money sitting in their bank accounts. If you are a small country and generously administer lots of foreign money (Switzerland, Luxemburg, Bahamas, ...) this is an attractive option. If you actually have a real economy to worry about, then this trick is harder to pull off. It's only a free lunch if you took it from someone elses pocket.

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Facepalm

Re: We are not doing anything illegal or immoral

@skelband "Where does it say in the bible/quo'ran etc that paying taxes is a moral duty?"

It might shock you to know that the Bible / Quran / other holy texts are not authorities on the subject of morals.

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Re: We are not doing anything illegal or immoral

Exactly, It is our "moral" duty to pay as little tax as possible because government (UK) is highly proficient at wasting the money collected.

There is only one thing you can rely on the (UK) government to do and that is piss tax payers money against the wall -and feel good about it while they're at it. A little less money available on the country's debit card might force them to re-evaluate their priorities and start spend our money more wisely -If that ever happened though, I think I would probably be constantly expecting to wake up in the shower at any moment ;-)

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Coat

Re: We are not doing anything illegal or immoral

>Where does it say in the bible/quo'ran etc that paying taxes is a moral duty?

"Render unto Ceaser that which is Ceaser's"

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Re: Where does it say in the bible

I believe the relevant quote would be when Jesus was asked what is effectively the same question:

"Render unto Caesar the things which are Caesar's, and unto God the things that are God's" (Ἀπόδοτε οὖν τὰ Καίσαρος Καίσαρι καὶ τὰ τοῦ Θεοῦ τῷ Θεῷ Matthew 22:21).

The problem of course is that Ceasar is nothing more than a thug posing as a moral man while usurping that which is God's.

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Re: Tax pays for our public services.

The problem is that thugs like you have perverted the meaning of public services to the point that taxing is now stealing from working people. If taxes are truly allocated to public services instead of Marxist redistribution schemes, then yes we owe taxes. But the duty of charity is a personal one not a public one, and cannot be conducted by governments which are at best inherently amoral, and all too frequently provably immoral.

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@AC 24-Jan 10:29 Re: We are not doing anything illegal or immoral

Oh great, just what we need, a semantic discussion about morality. You're being the slow-witted grandparent who, when faced with a flippant/sarcastic remark, takes it straight and proceeds to explain in excruciating detail why the remark was factually incorrect. Don't be that person.

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Re: We are not doing anything illegal or immoral

What does religion have to do with morality?

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Re: Where does it say in the bible

Paul's letter to the Romans (Romans 13) and Jeremiah's letter to the Jewish exiles in Babylon (Jeremiah 29) are both relevant.

Paul knew very well how thuggish the authorities could be (as detailed in Luke's account of the Acts of the Apostles), but he still recognised the need for a civil society to have well-paid administrators.

Anyway, back to today. 1) the EU tax laws are meant to be so that one country can't tax companies punitively, just for being located in another EU jurisdiction. 2) I'm actually glad to see a Labour politician acting on principle, accepting a little less tax money for the perceived greater good of governments elsewhere, though of course the economy of the Netherlands is big enough (unlike Ireland's) to not be too disadvantaged by having a little less money due to accounting tricks.

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Anonymous Coward

an easy fix to this situation

The easy fix to that is to have taxes paid on the earning of all money earned by every company in the place that money was earned. Any company not wanting to pay said tax will have it's assets in that country seized and not be allowed to do business in that country.

I don't think it would take too many asset seizures to bring the business community around.

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Re: an easy fix to this situation

The problem is that that is like the drugs legislation they use in the Netherlands; it only works if everyone does the same. You can see that now: companies simply shop for the most beneficial jurisdiction and don't have a problem with moving if changing conditions make moving cheaper than the tax difference..

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Stop

Re: an easy fix to this situation

Which is exactly what happens at present.

Profits are taxed, however if the business in a country doesn't make any profits then it won't pay any tax. Costs of sales is the problem. For example, Dell may sell a laptop in the UK for £400, but it might need to buy the laptop from Ireland for £399.99 (a grossly inflated price, but that's what it charges internally), so in the UK it only makes 1p profit.

So really there is no easy fix - multinationals will always need to sell things internally and there is nothing anyone can do to change that. (not saying its fair, just pointing out the facts)

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