Google slips $3.1bn through 'Double Irish' tax loophole Google has saved $3.1bn in taxes since 2007 by shuttling its foreign profits through Ireland and the Netherlands, then on to a haven in Bermuda, according to the company's regulatory filings. As reported by Bloomberg Businessweek, Google uses techniques known as "Double Irish" and "Dutch Sandwich" to lower its foreign tax rate …
What would the country do with the money? If the result of minimising taxes paid is that various countries have less money available for, say, invading other countries, or getting their police/army/paramilitaries to shoot civilians for the heinous crime of Loitering Whilst Black/Muslim/Irish, or subsiding institutionally-corrupt countries such as Greece, then it's all good. The corporation can then put that money into things that actually *do* benefit society.
Pirates bcos they know what to do with taxmen.
...is that they are the ones that profit from a complex tax system with lots of tax breaks and tax credits because they can hire the best lawyers / accountants and have the resources to set up foreign subsidiaries etc... AND at the same time they publicly complain about high taxes.
The result is that the beatnik / hippie / socialist / union / communist types continue to favour keeping the current tax system, while increasing rates for top earners and adding breaks / rebates for poor folks. In reality the way to make rich people and big corporations to pay their fair share is to have a flat tax rate with NO breaks / rebates.
But this model is the one which the socialists will never accept... and also one which any politician will also never accept because it will put a million tax buereaucrats out of work AND cut off their corporate funding, all in one go.
Everyone gets 10,000 per year to keep them off the breadline. Everyone pays tax at, say, 30p on every single pound they earn beyond that. Tax departments streamlined by 90%, benefits departments reduced to dealing with a tiny minority of cases such as severe disability. No poverty trap because every hour you work makes you richer. If only ...
I don't agree with the view that "beatnik / hippie / socialist / union / communist types continue to favour keeping the current tax system", and that says a lot about your intolerant attitude towards anyone who doesn't "celebrate capitalism". The only thing that "socialists" favour is that people who earn less should pay much less tax, not that there are lots of different ways to "claim back" stuff: most people in the groups you mention don't have the time or inclination to spend hours poring over all the tax regulations looking for deduction opportunities.
In fact, a lot of the deductions are about placating people who don't feel that they should be paying tax on stuff because they're special in some way, resulting in attitudes like "I drive my car to work, so I don't see why I can't have the car, the petrol, the tyres, the servicing, the parking charge, the fluffy dice, my new garage door, the new Top Gear DVD, all deducted as 'work expenses'." It's precisely this kind of 1980s-style "go getter" bullshit that the tax system rewards while it swallows up resources trying to support and occasionally police it.
And the claim that the rich inadvertently benefit from such supposedly "socialist" complexity. Were you born yesterday?
"The result is that the beatnik / hippie / socialist / union / communist types continue to favour keeping the current tax system"
There aren’t many beatniks in my local branch but I'll ask around the party at the National Conference in November.
Socialists / Communists don’t want to keep the current tax system , we want to replace private ownership with total public ownership .If you would actually like to learn about socialist economics I could recommend many books , none by FA Hayek.
Lets not even argue about flat tax, go have a look at some countries that have such a thing.
for example Ukraine - where, in 2003, 4.9 percent of the Ukrainian population live under 2 US dollar a day and over 19% were below the poverty line.
(public)Companies owe their shareholders profits ,they will accumulate these by cutting wages ,dodging tax or whatever legal means they can employ .
Unfortunately I happen to live in a <strike>banana</strike> potato republic where our government is happy to garnish a small percentage of tax off large foreign corporations and risk long term economic instability rather than create employment directly, or failing that , incentivise companies to come here with a college educated populace and potentially guarantee lasting employment
Incidentally Ireland doesn’t have "a million tax bureaucrats", we have , proportionately a small civil service compared to the rest of the EU.
Apologies , I'm extremely off topic
Because ultimately the Governments get money both ways. A reduced amount from the large Corporation itself; but LOTS from the taxes deducted from the many local employees employed by the corporations. If these avoidance loopholes are closed, the corporations will move away from the UK and Government then realises that it is getting exactly 100% of sweet f*** all and higher unemployment figures to boot.
I was sat here wondering how the UK will cope with the devastating cuts and loss of jobs. I then see this post and it really is sickening. Governments across the globe are struggling and yet these corporations use loopholes to stick two fingers up to all the rest of us.
If I was the President or Prime Minister and I saw hundreds of Millions in tax being evaded I'd first start blocking these loopholes and then shame them on every TV channel...
"Google and [another company name] and [another company name] tax avoidance could have built and staffed a thousand new hospitals, could have given our troops the equipment they desperately need, could have created thousands of new jobs, could have built homes for the homeless, could have repaired hundreds of schools across the country. Instead troops needlessly die, the sick get sicker and we have to cut services, increases taxes and make the rest of the country suffer harder because those who should be paying the most taxes sneak out of their moral obligations by using loopholes they know were never intended to there in the first place."
Shame on you Google and shame on the Governments for letting this happen in the first place.
Just because a loophole exists doesn't mean it is morally right or justifiable; especially when you yearly profits are already so obscene!
One day the legislators will realise that a book three inches thick, with twenty thousand tax rules is also a book three inches thick with twenty thousand tax loopholes*
Do away with all tax exemptions and allowances, and watch your personal tax rate rate drop towards the floor.
*Maybe they do realise it, but their law and accounting companies do very nicely out of the current mess, thank you very much.
You mean like where they claimed that LotR made a loss so they didn't need to pay Peter Jackson?
Or how they sold the DVD rights to Spiderman to their own company for $1 and paid Stan Lee a percentage of $1.
Or my favorite, where they didn't pay the author of Forest Gump, because it made a loss, then went back to him to write the sequel. He refused saying he couldn't let them waste any more money.
The Bloomberg article says that "Google now has a stock market value of $194.2 billion", and that "if the company paid taxes at the 35 percent rate on all its earnings, its share price might be reduced by about $100" (from a current price of $607.98. )
How much Capital Gains tax has the US government collected from the trade in shares of Google stock in the last few years, and how much less would they have made if the stock price was lower, because Google paid more corporate taxes?
(I have no idea, and I'm not particularly comfortable with the notion that the tax on profits made from speculating on share prices is less than the tax on earnings from actually doing productive work, but it's an aspect of the system that shouldn't be ignored).
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Sad fact of U.S. corporate law: Publicly- held corporations are required *by law* to return the highest possible return to their stockholders. If by some whack miracle $some_company actually wants to do the right thing (e.g., keep jobs in the U.S. at real wages, procure only recycled or cleanly produced goods, or whatever), it would risk stockholders' crabbing about "that costs too much, we're losing dividends, send the jobs to China". It's possible that the corporation might get some slack if it has a mission statement declaring its intent to do the right thing and investors be aware, but I don't know for sure.
As was stated before, if our gubmint (and by this I mean the Congresscritters who slop with gusto at the trough of corporate campaign contributions) did not like the current system, changes would be made.
that the politician who ignores said loopholes gets generous donations from those benefiting from the loophole, whereas the "honest" politician doesn't.
And how many television adds/mailout campaigns/newspaper adverts does "honesty" buy you?
I don't know about you guys n girls, but where I come from a politician without cash to spend doesn't get (re)elected.
As Leonard Cohen sang, "the poor stay poor and the rich get rich".
UK citizens could decide how much if any tax that they paid.
Hopefully, this Avoidsnce scheme with eventually be closed, I pay no UK VAT on my Google adword bills.
Along with things like "Container Accounting" these loopholes are not ethical.
What we really need is some form of "Golden Rule" where by if the inherent substance of these transactions is to avoid tax, then it is evasion, and the legal wording is subserviant to this "Golden Rule."
The average "man on the street" has no idea what goes on, as for the Schemes used by some footballers, they're just as bad.
Spoken as a past tax accountant.
Another trick is for a mother company to bill a subsidiary for services supplied so the subsidiary never makes a taxable profit. Unfortunately, for these financial rip artists, governments are catching on and gaining more taxes in the process.
The US Congress is bought off by Wall Street and companies so this will not change for a long time.
It's really the mildest evil I can think of. Anyone in their right mind would do whatever they could to minimise their losses to 'the man'
Google are known for their engineering successes, so it shouldn't be a surprise that they have built a highly efficient large scale scheme for processing their income. And, if the governments ever figure out exactly how to thwart this, the scheme will probably be replaced by something even more bizarre and inexplicable.
"And, if the governments ever figure out exactly how to thwart this, the scheme will probably be replaced by something even more bizarre and inexplicable."
I'm sure there are a bunch of government people who are quite happy about this. Where, after all, does the money for the kickbacks come from? Sadly, these people then go on to lobby for corporations at every level - local, national, European Commission - saying that some paid-for legislation must be passed because it stimulates the economy, creates jobs, "fosters innovation", and all the other bullshit that just funnels cash to a bunch of very rich people while the politicians pretend that they're visionaries and their offshore accounts get topped up.
Not evil, my bottom!
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