back to article French gov 'plans to hand Google €1bn tax bill' - report

The French tax office will be handing Google a €1bn tax bill to make up for revenues from France routed through Google Ireland, claims French weekly Le Canard Enchaîné*. An inquiry into Google's Transfer Pricing - how profits and revenues are moved across borders by the corporation - has just finished and according to Le …

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  1. LarsG
    Meh

    Of course they will pay it!

    1. Anonymous Coward
      Anonymous Coward

      Perfectly legitimate but I suppose Napoleon, I mean Holland must find a way to pay for the public service spending he refuses to cut. 75% tax anyone?

    2. Anonymous Coward
      Anonymous Coward

      Knowing what a childish bunch of morons Google are they will probably pay France €999,999,999.99.

  2. The Axe

    Profit != Turnover

    "Google France paid only €5m in corporation tax to the French government in 2011 on a turnover of approx €1.4bn."

    Corporation tax is paid on profit. Turnover is NOT profit. Repeat turnover is not profit. Profit is what a company has left over after it's paid off everything else, including fees to parent companies, employees salaries and taxes, etc.

    1. localzuk

      Re: Profit != Turnover

      Which is why they pay so little tax - they do clever accounting tricks like licensing branding etc... and claim they made 4p profit on that €1.4bn.

      Corporation tax should be paid, at a lower rate, on turnover, instead of profit. That way, all those ridiculous accounting techniques disappear.

      1. Kevin Johnston

        Re: Profit != Turnover

        NO....just NO

        OK, so you have some companies using LEGAL loopholes to redirect income to minimise taxation (this is a duty of limited companies by the way)

        Under your scheme, EVERY company would see their tax bill rise, possibly wiping out their thin margin, for the sake of hitting companies who have lots of money.

        You want to stop it happening then close the loopholes, just don't be surprised when the big boys move 99% of their current operation offshore leaving one Office manager to schmooze the politicians into adding more loopholes.

        1. Danny 14 Silver badge

          Re: Profit != Turnover

          "Corporation tax should be paid, at a lower rate, on turnover, instead of profit"

          What? So my company (which sells aeroplanes) has a turnover of 100Bn however, making aeroplanes is expensive so it costs me 99.5Bn to make them along with all my wages, etc. Profit is rather healthy at 500m though.

          so you are saying I pay say 1% of 100Bn rather than 20% of 500m? Sure that will work, ive just gone into the red by a tune of 500m using your figures.

          1. vic 4

            Re: Profit != Turnover

            A business with a 0.5% profit margin is not going to stay in business very long.

          2. Richard Taylor 2 Silver badge
            Thumb Down

            Re: Profit != Turnover

            Actually if the numbers are right, your return on investment is abysmal. Do you have real investors?

        2. Anonymous Coward
          Anonymous Coward

          Re: Profit != Turnover

          Google? Thin Margin? Oh come on.

          1. Anonymous Coward
            Anonymous Coward

            Re: Profit != Turnover

            "Google? Thin Margin? Oh come on."

            You really haven't grasped the incredibly simple "You can't introduce a tax law that only applies to Google" concept, have you?

            1. Anonymous Coward
              Anonymous Coward

              Re: Profit != Turnover

              Err, is France introducing a new law?

              As I read the article, the French govt. is merely talking about sending Google a bill on all the money they are smuggling out via Ireland and Bermuda.

              That sounds pretty much like an existing law being enforced.

              Or haven't you grasped the incredibly simple concept of making tax dodgers pay their due?

              1. Anonymous Coward
                Anonymous Coward

                Re: Profit != Turnover

                Bloody criminal minds seem to be out in force today promoting the theft of other's money probably because they can't make an honest living themselves.

                Google's setup is legal, note that the French are not able to attack the structure, instead France is (as is their modus operandi) trying to thieve more money because they think they can. Governments simply want to tax this money because of their insatiable demands for vote buying splurges; and Google won't end up paying, their customers (i.e. you) will.

                1. Bob. Hitchen
                  Thumb Down

                  Re: Profit != Turnover

                  International companies on tax fiddles should be taxed on profits no matter which country they declare them in. Plan B is to bar their web sites, products and services making it impossible to trade in the UK.

      2. Sean O'Connor 1
        FAIL

        Re: Profit != Turnover

        > Corporation tax should be paid, at a lower rate, on turnover, instead of profit.

        errr.. that's called VAT. It's 20% if you hadn't noticed.

      3. Anonymous Coward
        Anonymous Coward

        Re: Profit != Turnover

        "Corporation tax should be paid, at a lower rate, on turnover, instead of profit"

        Hang on, is this really such a bad idea?

        The idea of a "Corporation Tax" is surely meant to be a tax on corporations and reflect the fact that they are part of a civilised society and should contribute proportionately to that society, same as any individual. Surely turnover generated in any given country is as good a measure of this proportion as anything. Why punish profit?

        Imagine if personal Income Tax was based on what you have left over at the end of the month (after mortgage/car payments, bills, holidays etc) rather than what you get in the bank at the start? While we'd all love this, it would be crazy to implement. The law treats corporations as individuals in other regards, so why should this be any different?

        As for the companies that spend 900m to generate a turnover of 905m, really what is the point of doing this? Just give up. Don’t give me the jobs argument. Business is about making as much money as you can within the law, not charity or public service - profit is the sole raison d'être of any corporation. So a tax on turnover rather than a tax on profit would discourage ineffective and inefficient businesses and encourage/reward profit making by not penalising it.

        Accountants would hate it of course. It would kill off a great swathe of their revenue generating practices and but how much better for everyone else without these fiddling systems and complexities. Why, even normal people might be able to understand what was going on.

        Regarding the VAT comment, VAT is paid by the consumers of goods and services (which can include a corporation of course) so this is not the same thing as a Corporation Tax. Individuals pay Income Tax and VAT too.

        So, imagine the rate is 5%, how would this affect your business?

        1. Badvok
          Mushroom

          Re: Profit != Turnover

          @AC 14:16 "As for the companies that spend 900m to generate a turnover of 905m, really what is the point of doing this? Just give up."

          I'd happily run a business that worked like that, about 100m of that 900m could simply be my pay packet.

        2. Anonymous Coward
          Anonymous Coward

          Re: Profit != Turnover

          Better idea, don't tax companies at all, just tax people. After all, companies get almost no benefits from taxation so why should they pay ? They get no welfare, no health, , no education. Their owners get that, but not the company. The only rationale is the same one, it's easy money from a source that doesn't vote. Immorality defined.

      4. Anonymous Coward
        Anonymous Coward

        Re: Profit != Turnover

        So when a company is losing money and trying to get a foothold in a market, they should still be forced to pay tax !!?? What possible moral or ethical grounds for demanding such money with menaces exists, except the old ones, "because we have the power and the monopoly on violence to do so".

      5. cs94njw
        FAIL

        Re: Profit != Turnover

        How are you going to pay the tax bill on the turnover, if you only have the profit left over?

    2. (AMPC) Anonymous and mostly paranoid coward
      Terminator

      Re: Profit != Turnover

      Yes,

      But these are MPs, and they sometimes struggle with real-life accounting principles, unlike the businesses that help pay for their nice offices. chaffeurs and stately homes.

    3. Anonymous Coward
      Anonymous Coward

      Re: Profit != Turnover

      Since Google seems to be so tragically unprofitable in the United Kingdom and France, perhaps we should do the kindest thing for them and nationalise their European divisions, fire all the executives (if they're unable to turn a profit on 1.4 billion turnover they're obviously incompetent) and run it as a public company until it can return to profitability. At which point, if Google asks nicely, we'll sell it back to them. How about it, Google?

    4. Yet Another Anonymous coward Silver badge

      Re: Profit != Turnover

      Since just about every company in the world is in bermuda, they hide $100Bn of 'costs' their, Bermuda has no armed forces - I think i can see a way of paying for those new aircraft carriers

  3. nsld
    Mushroom

    oh dear

    It looks like the Irish Double and Dutch sandwich just turned into the Parisian Steamer.

  4. Richard Jukes

    "Corporation tax should be paid, at a lower rate, on turnover, instead of profit. That way, all those ridiculous accounting techniques disappear."

    And what rate of tax do you think is fair? 5%? 10%?

    My profit margin on nigh on 1m turnover is around 8%. Yes, thats right - every million I turn over I 'earn' £80k.

    Taxing turnover is not progressive and will ruin the economy.

    I am however in favour or rounding up all accountants and doing a 'Clarkson' - even the good ones deserve it...

    1. Jon Press

      Ahem...

      If you're employing anyone you're already paying a 12% tax on your labour cost (including yourself, unless you're doing a Google and taking most of your drawings as dividend). That's regardless of whether you make a profit or not. If you occupy any premises, you're paying business rates which are likely to be roughly similar to the rent you're paying. That's also regardless of whether you make a profit or not.

      There are a lot of large and very profitable companies that are paying very little in the way of corporation tax at all. If a turnover tax were introduced it would reduce the amount of tax you're already paying, not increase it, because it would cover a much wider tax base.

      Would you really prefer your fixed overheads to rise continually in order to permit large multinational corporations to opt out of the tax system?

    2. lightknight

      Lol

      It's about the bigger picture -> France, despite its troubles, is not a nation of idiots. They are well aware that the financial maelstrom affecting the rest of Europe could quickly change course. As such, they are marshalling their defences ahead of time, to prepare for the worst.

      According to their government's current structure, that defence means acquiring a lot of money. Services, which their people depend upon, can be rather expensive; someone must pay for these outstanding accounts, and like any nation, they would prefer it not to be them.

  5. Anonymous Coward
    Anonymous Coward

    If Google complies

    Apple, Samsung, Hyundai and a thousand others will be given bills as well.

    Governments are short of funds and will do what is needed to fill the coffers. The US government already taxes foreign non-resident citizens.

    This will only get worse.

    1. Anonymous Coward
      Anonymous Coward

      Re: If Google complies

      Sigh. If you're going to try this kind of FUD, please be less obvious than conflating Apple, one of the world's richest corporations, with a foreign non-resident citizen.

  6. Anonymous Coward
    Anonymous Coward

    The French can't generate the tax themselves so the next best thing is to try and fleece any successful business they can. Maybe they should come up with something themselves LeGoogle perhaps. Napoleon went out to take over Europe and it looks like Holland wants to take on the world.

    Something about small dogs bark the loudest....

    1. Anonymous Coward
      Anonymous Coward

      Err...

      It's hardly fleecing Google to ask them to pay fair corporation tax and not engage in technically legal but actually immoral tax avoidance.

      It's not like Google are using business equivalents of schemes such as ISAs to avoid paying tax, schemes setup and run by government and encouraged for use. They're spending millions of pounds at top accountancy firms to find technical legal loopholes to allow them to avoid paying vast amounts of money to the host countries who they are happy to make money from the population of.

      1. Anonymous Coward
        Anonymous Coward

        Re: Err...

        Well said.

      2. Anonymous Coward
        Anonymous Coward

        Re: Err...

        I like it. There are too many tax loopholes for corporations to slip through without paying their share. Every country should doing the same thing to every corporation.

      3. Vic

        Re: Err...

        > to find technical legal loopholes

        This is the point: the loopholes are *legal*.

        If the pols really want to do something, they need to close the loopholes. But then that would harm the various organisations in which they themselves have interests...

        Vic.

        1. Anonymous Coward
          Anonymous Coward

          Re: Err...

          I posted the comment you responded just above and I couldn't agree with you more. Pols and self-interest always go ahead of what would be best for the people/country.

        2. Anonymous Coward
          Anonymous Coward

          Re: Err...

          @Vic - They are loopholes, rather than intended methods for avoidance of tax (Tax free savings, rebates on certain business practices etc). No-one is saying it's illegal, many are saying it's immoral.

          I'm quite happy to criticise people or companies for behaving in a legal, yet immoral manner.

          1. Anonymous Coward
            Anonymous Coward

            Re: Err...

            Who are all the asshats down voting immoral corporate behaviour? Perhaps the Tea-Party has members that like The Reg? No, can't be that. The Reg aint 'mercan.

            1. Anonymous Coward
              Anonymous Coward

              Re: Err...

              @AC: Which set of morals are you using to judge immoral corporate behaviour? Is it economics? Not if you support taxing the turnover of a company. Is it the moral stick of the working man? If so is it the morals when you had easy money from misbehaving banking and gov interference or the morals now that all bankers are somehow demonised?

              Your moral compass is worthless in the world. So while you might think your clever talking about tea parties being immoral, you might want to figure out what your morality is, where it comes from and how stupid you must be thinking its more moral than someone elses morals. Its the same dumb argument that leads to religious disagreements, or do you think your morals come from a higher power lol

      4. Anonymous Coward
        Anonymous Coward

        Re: Err...

        Another bullshit thief wanting a "fair corporate tax". More money to extort outside the law.

  7. Robert E A Harvey

    Bloody good show

    The french are pretty good at looking after No. 1

    I hope Cameron/Osbourne are taking notes.

    1. Jediben
      Devil

      Re: Bloody good show

      I'm sure they will cope; they seem to put looking after number 1 ahead of looking after number 10 at least.

  8. Anonymous Coward
    Anonymous Coward

    Lead the way then...

    A question to all those harping on about how Google/Starbucks/FB/etc *should* pay more tax then they legally have too...

    How about you lead the way and personally pay more tax then *you* legally have too?

    Oh, it's all gone a bit quiet now...

    1. Anonymous Coward
      Anonymous Coward

      Re: Lead the way then...

      I thought the point here is that their business practices are not exactly legal.

      1. Anonymous Coward
        Anonymous Coward

        Re: Lead the way then...

        That's right google trolls, go ahead and downvote me.

      2. Vic

        Re: Lead the way then...

        > I thought the point here is that their business practices are not exactly legal.

        No. These practices *are* exactly legal.

        They just shouldn't be, that's all.

        Vic.

    2. Anonymous Coward
      Anonymous Coward

      Re: Lead the way then...

      There is a difference between paying tax you should and engaging in activities - such as the old run your own company and pay yourself minimum wage scam - which while legal are obviously tax avoidance and immoral.

      I live in my society, I am proud to be able to fund it a bit more than most. I may have an ISA, but the government encourage me to do so. I don't have a personal tax accountant who dreams up ways for me to contribute sod all to the society in which I live, while profiting from those who pay their due.

      I will not be quiet about this.

      1. Shonko Kid
        Mushroom

        Re: Lead the way then...

        "such as the old run your own company and pay yourself minimum wage scam"

        That's not a scam, it's just the most meaningful way for certain self-employed people to pay taxes - why should I pay government for the privelege of employing myself? For such people income is largely uncertain, and PAYE doesn't accomodate week-week changes in circumstances. For those that do have that certainty, they usually fall under the watchful eye of IR35.

        So don't drag freelancers and PSVs into this, it's a whole different thing - it's not like I've set up a company in The Caimans that owns the Trademark 'Shonko Kid' and they charge me millions per year in licensing. Though now I think of it...

        For sure, I'm dead against obvious scams, such as the recent Jimmy Carr revelation, and the Starbuck's one was particularly inventive, but you have to remember one thing. For a publicly traded company, the first priority is maximising shareholder value. That's the Law. And that means employing armies of accounts to minimise tax bills. Which as an added bonus means those guys aren't roaming the streets!

        And if you don't like your own tax arrangements, then you know what to do don't you.

        I live in my society, and I fund it too. I even employ the services of a local accountants. Frankly I find the comparision between freelancers trying to eke out a living and the tax avoiding shenanigans of MegaCorp insulting. And you even hide behind the Fawkes mask.

        I'm also suprised you've been upvoted so many times on this, Have all the IT contractors left the building?

        Flame on.

      2. Anonymous Coward
        Anonymous Coward

        Re: Lead the way then...

        Ah, so it's YOUR morals that count, and only laws that favour YOU are "moral". Gutter politics.

        You might not be quiet, but you're not making moral sense.

    3. Hnk0

      Re: Lead the way then...

      The question is not whether they should pay more tax than they legally have to, but whether their tax evasion schemes should be allowed to remain legal. As most of us are on PAYE/not rich enough, we do not have the opportunity to reduce our tax burden by registering in Luxembourg (amazed they and Malta are in the EU). It is about time our governement clamped down on tax evasion and tax havens. Here is a short list we could start with:

      Channel Islands

      Isle of Man

      Gibraltar

      And for the French government:

      Andorra

      Monaco

      Personally I like to hear of who is using these schemes and then I do my best not to do business with them, as is my right. For example I buy my coffee at Costa, not Starbucks (although I admit the fact that their "coffee" is brown piss helps my resolve).

      1. SkippyBing Silver badge

        @Hnk0

        Their tax evasion schemes are illegal, their tax avoidance ones aren't. You should probably learn the difference before you spout off much more.

        1. Hnk0

          Re: @Hnk0

          I meant tax avoidance, as you rightly pointed out. Thanks for the correction, no thanks for the "spouting", I ain't no teapot.

          Rest of my post stands.

      2. David Neil

        Re: Lead the way then...

        Aren't Andorra and Monaco independent states?

      3. Lars Silver badge
        Flame

        Re: Lead the way then...

        Tax havens are a cancer around the globe. All governments have declared they do not like them, but in and behind governments are those who profit from them. Individual governments are simply to week (or too involved) to do anything about it, but talk. Thus we need "powers" like the EU (and the USA) to do it for them. It is high time.Sound companies will survive anyway and those who will not will not should go anyway.

        There is nothing wrong it a company uses all "legal" means to add to the bottom line, the problem is just that there are too many just and just "legal" ways to do it.

    4. Anonymous Coward
      Anonymous Coward

      Re: Lead the way then...

      err how about donations to charity, a private pension or private health care?

      You know those additional "private taxes" where you pay extra, for the basics which you've already paid taxes for and therefore should be provided by the state.

      Maybe Google/Starbucks etc should pay a "private tax" as well

    5. NumptyScrub

      Re: Lead the way then...

      quote: "A question to all those harping on about how Google/Starbucks/FB/etc *should* pay more tax then they legally have too...

      How about you lead the way and personally pay more tax then *you* legally have too?"

      When my government tax me personally on profit, instead of turnover, I will be happy to oblige. I am however currently legally obliged to pay tax on turnover. At more than 20%.

      So please, feel free to compare my tax situation with that of Google :)

      1. Anonymous Coward
        Anonymous Coward

        Re: Lead the way then...

        Sure will, you receive probably(by the sound of your posts) a lot more from the government than you put in, no wonder you're keen on getting more taxes. And you receive a lot of services, health and welfare for a start, that Google itself as a "person" does not receive. So you get a lot of benefit from the tax, or so you think, Google, not so much...

  9. Destroy All Monsters Silver badge
    FAIL

    Overregulated and south-european, moi?

    Seriously, why would Google want to hand the french government anything? So they can blow it on make-work schemes? Sod that.

    Really, french politicians are on an all-out trip to destroy that country. Regulatory uncertainty, powerful unions, the minister who promises to "take on" the rare successful investor and insults towards the management boards of the automotive industry. Additionally, promises to "collect" 30 billion in taxes (could be that money won't be, like, invested anywhere but misspent, maybe ... MAYBE?)

    Do we have 3x10⁶ people unemployed? Yep, good job.

    1. Anonymous Coward
      Anonymous Coward

      Re: Overregulated and south-european, moi?

      If Google didn't want to pay the French tax, they can easily do that by not doing business in France. But it appers that they want to do business in France, so should pay their tax there.

    2. Anonymous Coward
      Anonymous Coward

      Re: Overregulated and south-european, moi?

      I think the French have it more right than most countries. God forbid (I'm an atheist but do find this term useful) that us workin' folk should get ahead a little and enjoy our lives without having to worry about working 50 or 70 hours a week and then hope the boss won't think we're lazy when we ask for a week off. Strong unions have an important place in society to balance the power of the cheap, slave driver boss that still really exists in every country in the world.

  10. Anonymous Coward
    Anonymous Coward

    The infinite circle

    The government wants more money, so they up taxes, or create new ones

    In doing so they create ways to avoid these taxes

    Companies go "what? A 0.5% increase? That's an extra 10 million they want, bugger that" and pay to shuffle the accounts.

    The government doesn't get the extra money they wanted, so they increase taxes

    continue circle.

    Overall the large companies and rich individuals can afford to pay tens of thousands to get an accountant to shuffle their funds and avoid 90% of the tax they SHOULD be paying. While the little guy (me and you) have to keep paying the ever increasing taxes because well... We can't afford no to (literally)

    At the same time, the government can't drastically lower the tax rate to draw companies back to keeping their books accurate, because the public would have a hissy fit "Why cut their tax? They earn billions!" and there's no garuntee it'd make them keep more money here anyway.

    At the same time, the tax laws are such a jumble it's become nigh on impossible to close up one loophole without either opening several others, or blocking off designed functionality which wasn't a loophole.

    Really it's down to a case of, we have laws dating back to the 19th century, and although they started out simple they've been added to, edited, added to again, archived as a new document is penned to extend the original. What they need to do is stop amending the laws, and start re-writing them.

    By and large, it would cost the government a fair sum to get all the lawyers etc around and to adjsut the system while the new laws (laws 2.0) are written up. But long term we'd probably be able to consolidate a few thousand different legal documents into a few hundered which go into further depth, apply to modern era problems rather than based on dated information and ideals. Furthermore because of the added simplicity to all these documents, they would (in theory) make it easier to enforce the law, monitor breakage of the law and just make things easier. Of course it'd probably take a decade or so of mess and faffing about to get these new laws in place, and then another decade or so for the country to adjust. But by the end of it all we'd probably be in a far far far better situation than we are in now.

    But of course it'll never happen.

    1. Anonymous Coward
      Anonymous Coward

      Re: The infinite circle

      Software example of what I'm getting at with the whole "rewrite the laws thing"

      You have a piece of software you build for company X. Over the years company X adds new functionality, fixes defects, changes coding standards, direction of the software, maybe even primary programming language. So after a few years you have a piece of legacy software with layers and layer on top of it.

      On the front it all works. But in the background to make it work there are twice as many resources being used to do so, and it takes many more times the effort to find and fix a problem without breaking it further.

      So you rewrite the software. You take down all the functionality, refactor, adjust how different functions are split up perhaps follow a design pattern through the entire software, maybe use OO or MVC principles. It takes you a long time, but eventually you have a new piece of software coded from the ground up which is effectively a mirror of the original software. But looking through the code it's now far easier to understand. And the amount of resources used to keep the software running on a machine has dropped considerably.

      Sure during the first few months of launch there might be teething problems. A few functions that weren't coded correctly perhaps. But thanks to how tidy the new code is, it's easy to find and fix.

      You go from having spaghetti code with 500,000 lines which needs 1gb of memory and a quad core CPU to run. To having well written code with only 100,000 lines which needs 256mb of memory and a dual core CPU to run. And any errors in the process will be fixed far quicker than with the legacy setup.

      That's basically the theory I was trying to apply to the legacy laws from 1900s etc.

    2. Colin Millar
      Pint

      Beer tax

      " large companies and rich individuals can afford to pay tens of thousands to get an accountant to shuffle their funds "

      Then the answer is obvious - make accounting illegal!!

      But seriously folks - the current complete mess that is the tax code in most countries comes straight out of the back-scratching, nodding and winking political game that has always been played between govt and corps. It is corrupt because it was designed to be corrupt and there is no political will to change that. certainly not from a couple of old etonians and their pet lackey in the UK and certainly not from a French "socialist" dilettante who thinks that increasing tax on beer is the way to squeeze the rich.

    3. Rampant Spaniel

      Re: The infinite circle

      Politicians need money to get elected, money buys advertising they need to lie their little heads off. Companies make significant donations to politicians. Completely coincidentally laws are passed \ ammended by these politicians in such a manner that allows companies to profit, be it via tax breaks \ loopholes etc. Of course knowing where the funding from your reelection campaign is coming from in no way influences the manner in which they discharge their duties.

      Yes we would be unwise to tax companies based on their turnover although it does make some sense. Some businesses, especially those that resell others services, would take a big hit and the length of a supply chain would affect taxation heavily. Rather than each company paying tax based on its profit, they would all be paying on turnover which would increase the cost of the goods significantly unless the rate was very very low and even then it would penalise longer chains.

      Rewriting the tax laws would be a very good start. Imprisoning accountants and lawyers wouldn't hurt either. What these companies are doing isn't illegal, it's just wrong. Do business here, pay tax here. As I find out about companies pulling this stunt I stop doing business with them.

  11. jubtastic1
    Mushroom

    Fuck them all

    Anyone can build a business that's only profitable when they pay less than a percent in tax, fuck, my family would be well set in a nice house if we didn't have to pay tax, but someone has to pay for the roads, police, fire service, hospitals, schools, sanitation, etc etc. It's fucked up that the biggest corporations in the world are passing on their share of the costs to the public.

    First against the wall etc

    1. Anonymous Coward
      Anonymous Coward

      Re: Fuck them all

      You seem to have made a mistake. You said "It's fucked up that the biggest corporations in the world are passing on their share of the costs to the public" but the services you mention are services for YOU not a business. The roads and sanitation make sense for the business but the rest is for you. So is it not fucked up that you want them to pay for your services because you wont pay for them, and I expect you to say you cant afford to. So you pass the expense of your 'necessities' to others with money.

      So in that case your happy to pay the cost of the riots as people took what they wanted and expect others to pick up the tab?

      Many have said turnover!=profit and no kidding. So this is not a demand for money earned (profit) its on the necessary running cost as well. If you were taxed more than you earn would you not think that was fucked up? Or does it give you a warm feeling that your robbed blind but paying for other peoples services?

      1. Jediben
        WTF?

        Re: Fuck them all

        <Meanwhile, in AC's twisted little world>

        *RING RING*

        "Allo, Une Une Deux, vhat iz your emergency monsieur?"

        "Hi buddy, this is Chuck E Cheeze, head of Legal at Monstro Corporation in the US OF A. One of our depots in Je Ne Sais Q'oui-ville has been burgled by a load of your fellow garlic munchers and Uncle Sam insists you get off your little Frog behind and investigate ."

        "Votre taxe ne paie pas pour les services de police, investgate vous-même! Bonne journée! "

        <click>

      2. kyza

        Re: Fuck them all

        'but the services you mention are services for YOU not a business. The roads and sanitation make sense for the business but the rest is for you. '

        Not true. Companies benefit directly from countries that have skilled workers because of free universal education systems. They benefit from decent public healthcare provision because they either don't have to directly pay medical insurance premiums (as in the US) and when someone is ill they can generally get fixed quickly.

        Companies exist as part of society, and benefit from the services the state provides. That some make use of tax avoidance schemes isn't moral, but it's a direct result of both legislative failure, and the amoral nature of profit before anything else.

        Easy way of sorting this out - stop all this nonsense about being able to register companies overseas. If you want to trade in Britain a company should have to have a UK base, not be able to set up an HQ in Dublin and move it's revenues around to end up in Bermuda.

        1. Vic

          Re: Fuck them all

          > If you want to trade in Britain a company should have to have a UK base

          But that is trivially worked around.

          UK base must buy the services it resells. It buys them from a company in Bermuda, for little less than it sells them for. And the Bermudan company has a strangely-similar name...

          The trouble with trying to solve a complex problem with simplistic "solutions" is that you usually end up worse off than when you started.

          Vic.

          1. kyza

            Re: Fuck them all

            Thanks for the reply.

            How would you fix it, since it's always good when someone who says 'That won't work' has an idea of what would.

            1. Rampant Spaniel

              Re: Fuck them all

              A solution, elect me supreme ruler with cartle blanche. Several firing squads later company execs will be less hasty to optimise their tax bills.

              I totally understand your sentiment, however I don't think there is any easy answer. It's not like we can really tax the imported services, EU free trade etc. Taxing on turnover is worse than loosing the tax. Rewriting the tax code entirely is an option although this is limited by obligations to conform to EU rules on levels of tax.

          2. DavCrav Silver badge

            Re: Fuck them all

            "> If you want to trade in Britain a company should have to have a UK base

            But that is trivially worked around.

            UK base must buy the services it resells. It buys them from a company in Bermuda, for little less than it sells them for. And the Bermudan company has a strangely-similar name..."

            Hence the suggestion of taxing based on turnover... If a company makes so little money that they cannot have a 2% turnover tax (if we assume 10% profit then that translates into 20% tax, about what corporation tax is) then they will go out of business anyway.

      3. toadwarrior

        Re: Fuck them all

        You're a penis. Corporations use more than the roads and sanitation. They too get the benefits of the police and the fire department and in real countries (the ones that provide healthcare) they do benefit from having a healthier workforce.

        Corporations are also the ones who put the most stain on services too. Your average person doesn't drive a loaded lorry around as their family vehicle nor do their homes have a hundreds of people concentrated into one area shitting and using the water.

        1. Anonymous Coward
          Anonymous Coward

          @toadwarrior

          When did a business walk into a hospital last? The police may visit the premises after a crime I suppose but they were pretty pointless during the riots or concerning most of their legal issues.

          The various people who work there get services and the business contributes, that is not the debate. The challenge in this article is that the turnover (not profit!!!) should be taxed because the people dont want to pay more for their services.

          And so nobody wants to pay more than they have to. The argument comes back around and laughs at "your a penis". The argument you dont like them paying less because you must pay more applies to both sides. But its you who wants the service.

          1. Rampant Spaniel

            Re: @toadwarrior

            They may not use hospitals, but hospitals (in theory at least) are paid for by NI which technically is not a tax (although taking a mandatory percentage of your wage for a service provided by the government is about as close to the definition of tax as it gets).

            People pay tax, in return they in theory get services. Businesses pay tax, in return they get services. The exact division of who pays how much rarely relates to how much is used. I pay a fecking shedload of tax (mostly because I don't **** with my taxes unlike some), I do get some stuff in return but not all that much, but someone else might pay no tax and get the same amount. Is that fair? In some ways no and in some yes. I am taxed at a rate I can afford, at least thats the theory. I wouldn't want to pay less tax if the trade off is someone with bugger all money not having enough to eat. So yes companies use services and pay taxes but perhaps not in the same ratio as citizens, but hopefully based on what they can afford. In reality they weasel out of as much as they can which I do object to. They benefit from security from our armed forces and police. They benefit from the fire service. They benefit from our infrastructure to move their products around. It is not a one sided deal where poor helpless little corporations are taken advantage of. A country needs money to run, most of us have to pay some, companies included.

  12. wowfood

    Tax Rates

    The one thing I've never liked about taxes. There's too many, and they all vary.

    We're taxed when we get paid, when we pay for something, when we save, when we don't, when we go to the doctors. And they all vary.

    I'd much rather see them go. "Alright y'know what. We're getting rid of VAT, and we're getting rid of these other taxes. There's now a single flat rate on your paychecks, but we've upped minimum wage"

    Effectively we get taxed more on our paychecks, but it's from a single location. Suddenly everything is 20% cheaper though, so that doesn't matter as much.

    And the reason I say a flat rate and not a climbing rate is simply because the climbing rate has far too large a jumps.

    Lets face it. And I'm using random numbers here because I don't know what rate it is your tax increases.

    You pay tax bracket A on up to £30,000 You currently get paid £29,500.

    You get a payrise, you're now on £30,000 hooray. But now you're in tax bracket B, so you're actually earning £1000 less, boo.

    I admit though, a flat tax rate would hit the poor far worse than the rich. But that's also why I brought up increasing minimum wage, to counter balance this.

    1. Hnk0

      Re: Tax Rates

      Income tax doesn't work like that (in the UK anyway).

      To take your eaxmple, what you earn up to £30,000 would be taxed at rate A, and anything you earn above £30k would be taxed at rate B, so you always get more net pay when your salary increases. Note that when you take into account benefits (for total income) this might not be true anymore.

    2. Anonymous Coward
      Anonymous Coward

      Re: Tax Rates

      There is another little spoken of issue with taxes, in that governments think they can spend your money more efficiently than you.

      If they didnt take so much tax, there would be more money in the economy, you would have more money in your pocket and you would be able to buy that new car, house, windows and therefore company X makes more profit, employees more staff etc....

      To increase taxes to then re-spend it to stimulate the economy is just plain stupid

      1. Lars Silver badge
        Pint

        Re: Tax Rates

        So you would take care of the infrastructure the army and the police, hospitals and so forth. Feel stupid, friend.

        1. Daniel Johnson

          Re: Tax Rates

          None of the tax you pay is spent on infrastructure or "services".

          All income tax in the UK is paid back out in welfare benefits - i.e. the UK gov. spends more on welfare than it takes in income tax.

          Therefore, all the other taxes (mostly paid by business) pay for all the infrastructure and "services".

          Basically, everyone who works pays all their taxes to support those who don't.

          And the "evil" 1% pay 25% of all income tax, while the top 10% pay half of all income tax.

      2. kyza

        Re: Tax Rates

        'company X makes more profit, employees more staff etc....

        Should read:

        'company x makes more profit which it gives to it's shareholders, meanwhile keeping a firm grip on employee compensation & ensuring minimum staffing levels to further increase it's profit margins.'

        Your argument is fallacious - it's basically a variant on the trickle down theory that says as the rich get richer, the poor get richer too because of some magical cake crumb effect from the rich spending more on services. A quick look at the two countries that have practised this approach most closely - UK & US - and their Gini coefficients over that period reveals the theory to be a crock of shit.

        1. Daniel Johnson

          Re: Tax Rates

          "A quick look at the two countries that have practised this approach most closely - UK & US - and their Gini coefficients over that period reveals the theory to be a crock of shit."

          Under Reagan the US had massive job growth. Now, the labour participation rate under Obama hasn't been lower since the last year of Jimmy Carter.

          Obama recently redefined full time employment, lowering the required hours to just 30 a week. He's moved unprecedented numbers of people out of the labour pool.

  13. Anonymous Coward
    Anonymous Coward

    UK-Ireland-Holland-Bermuda

    THIS is how to do it, lads, all ye self-employed UK plebs! - Follow Google, the leaders in innovation: provide services in the UK, sent revenue to Ireland, declare your tax there, route it to Holland, and transfer to Bermuda, where you are officially located.

    (actually this bit gets confusing, i.e. what gets routed where, presumably tax obligations half the way, and tax-free revenue, all the way round?

    p.s. don't forget to then transfer it back to your bank account in another warm-climate, tax-friendly country.

    ...

    no can do! But... why?! Why can't I be like Google and be praised by our Glorious Leader and, instead, have to pay ALL my tax here, OR ELSE, and this "else" is no mean else, mind you!

    And I can't even f... go past those armoured gates in London, to see Mr Cameron, to ask him those questions :(

    1. Mike VandeVelde
      Unhappy

      Re: UK-Ireland-Holland-Bermuda

      That's what "free trade" is all about, ain't it great?!

      Because if a corporation doesn't like the local tax rate / regulations, they can just pack up and leave and set up shop in another country, you know the globalized free market. Just like if I'm a farmer in Mexico and I don't like the local wages, I can just pack up and leave and move to a country where the wages are better... right? Oh. Only the money flows freely, if the people flowed freely and wages equalized in a gloabl free market that would make obscene profits harder to come by and we just can't have that now can we.

      Also nice how if a corporation is doing business, or even just planning on doing business, and a government changes or implements a regulation that might have an effect on future income, well with all these free trade deals it's getting more and more common that the corporation can sue the government to make up for the lost profits, because obviously if they planned on making that much money then that's guaranteed to be what would have happened if that pesky public health department / whatever hadn't got their fingers in and made the work less "efficient". Just like if government introduces a new user pay fee for service, or makes me go out and get a helmet to ride my bicycle or get a hands free device to drive with my cell phone, well that gives me a good legal case to recover my lost income.... right? Oh. I see, totally different, right.

      Tariffs are protectionist and protectionism is baaaad mkay. Yay free trade! So now if I order something online from out of country, when it gets here there won't be any surprise tax / duty / brokerage fees to pay extra? Oh.

      Corporations are persons. No they're not they're overlords with way more rights than the pathetic useless human parasites who should be thankful to have a chance to suckle at corporate tits.

    2. Yet Another Anonymous coward Silver badge

      Re: UK-Ireland-Holland-Bermuda

      You can, just become self-employed, register your company in the channel islands/bermuda/etc get your current boss to pay that company rather than you.

      This used to be very popular because you paid yourself in dividends which are/were taxed at 10% and no NI. But the government caught onto this and decided you are no longer self-employed and you get to pay both employer and employee NI.

      The Jimmy Carr method is never to pay yourself at all - just have your offshore company lend you money every month which one day you might have to pay back - so no tax. This is what rock bands used to do in the 70s with supertax.

  14. Anonymous Coward
    Anonymous Coward

    this could be a controlled leak

    just to put a little pressure on Google: you pay our (limping, robbed, iefficient) media for linking to their sites, and we forget about the tax issue.

    1. Colin Millar
      Big Brother

      Re: this could be a controlled leak

      If the French Gov wanted to control a leak they wouldn't go anywhere near Le Canard with it - they'd get piss all down their leg.

      Grand Frere is too busy preening himself in the mirror to be watching the plebs.

  15. Tim Worstal

    No chance

    France has absolutely no chance with this. None whatsoever.

    Corporation tax within the EU is deliberately and specifically designed to produce this sort of result.

  16. Anonymous Coward
    Anonymous Coward

    They should close them in Britain

    and back date it 10 years. Like they are doing to the little guy right now. Imagine the money they could make in one clap if they back dated the ruling 10 years?

  17. Anonymous Coward
    Anonymous Coward

    A couple of points:

    1. Google is not breaking any French tax laws

    2. Any failure on the part of the French to collect taxes from Google reflects an inability on their part to draft effective legislation

    It would appear that the correct solution would be to draft appropriate legislation. Not start demanding money that is not owed.

    1. Horned-Devil

      Re: A couple of points:

      Actually it may well be - transfer pricing isn't just a made up number (weil not quite) - technically it has to have some basis behind the calculations and justifications for the charges. The money gets routed back to Bermuda because (I'm guessing), Google Bermuda owns a significant portion of the IP and charges France for it. Similarly, management and probably the bulk of the servers are not located in France and so Google France gets charged for those. What the French Gov is probably doing is challenging the 'value' of these charges - certainly for the more intangible side of things around marketing and IP and therefore reducing the costs/increasing the profit and therefore the tax.

      The problem here is that some of these will be judgmental and will need the French to be able to disprove Google's allocations - which will be subject, no doubt, to court ruling in both France and ultimately the EU. As this will hit the EU a 'victory' for France will be a 'loss' for Ireland/Netherlands in this example and so will be driven more by politics than the realities of the case. I predict a lot of posturing from both sides followed by some under the table settlement that both parties can claim means they 'win'

  18. Stratman

    One way to stop it...

    ...would be to declare licencing fees paid to parent companies non tax deductible.

  19. toadwarrior
    Thumb Up

    Good move by the french. More companies need to do this and nail the tax dodger's balls to the wall.

  20. Anonymous Coward
    Anonymous Coward

    A Govt can do what it likes with tax, such as a tax on money moved by a corp to Bermuda. They then apply that to Google. If Google France goes bust because they "don't make a profit" via ruses such as license fees for branding or Google logo paper coffee cups, then the French Govt can make their carriers announce 74.125.0.0/16, 173.194.0.0/16, 209.85.128.0/17 & 72.14.192.0/18 . That should get their attention.

  21. mark l 2 Silver badge

    Its all well and good to say that starbucks, Google etc should pay more tax here but where as this will increase the tax revenue the government gets it will result in those companies increasing prices to their customers to make up for the loss in revenue. So ultimately your next cup of coffee or a shiny nexus 7 will be more expensive and then everyone will be complaining that prices are too high.

  22. David 45

    How, when, where?

    If what they've done is perfectly legal, how can they be stung for what sounds like a punishment tax? Surely it's up to governments to close loopholes and then use due process through the courts to prosecute alleged offenders.

  23. arrbee
    Coat

    In the UK the Inland Revenue now has powers to declare an existing tax avoidance scheme "ineffective", upon which those using said scheme must cough up all the unpaid tax - not that the IR would ever do this where a large corporate was involved.

  24. Anonymous Coward
    Anonymous Coward

    WTF, is this a Communist Party gathering?

    They don't pay their fair share, what they do is legal but immoral, nationalize them ... WTF?

    Sure, chase Google out, chase all of them rich bastards out, after all, they got rich by stealing from you the plebs, right? Right? How dare Google point the public to a web page published by a French entity (publish ... public, see what I did there?), they need to pay for that privilege, right? Oh, shit, I'm posting this from across the pond, is there a tax associated with that? Sure there must be a nice EU office somewhere set up for this eventuality? What do I owe for this privilege?

    While we're at ranting, screw free trade, who needs that anyway! All your profits (or make that all your revenue) are belong to us, we're the government and we know better what's good for you, can't you see how hard we work for you for only about 65-ish % of everything that you earn? Crap, if Google took their service, renamed it to fromage.fr and gave it to the French government, they would still be called criminals and asked to pay to keep it running.

    I'm afraid there's no hope for you blokes, keep at it, workers of the world!

    1. Daniel Johnson

      Re: WTF, is this a Communist Party gathering?

      People have been brainwashed into thinking government knows best and does best, and that the failing schools and dirty hospitals are all due to too little money, and if only the rich paid their fair share everything would be okay.

      Labour doubled the NHS budget with little noticeable result (except GP pay packets got thicker and their hours got smaller).

      http://www.youtube.com/watch?v=661pi6K-8WQ

    2. John Brown (no body) Silver badge
      FAIL

      Re: WTF, is this a Communist Party gathering?

      "I'm posting this from across the pond"

      You do know that Google are screwing the US IRS in exactly the same way, don't you?

      See this article

      "Sources said it was "bringing more than typical scrutiny" to techniques known as the "Double Irish" and "Dutch Sandwich", which move revenues through units in Ireland, the Netherlands, and Bermuda.

      The complex revenue shuffle is legal and is used by countless US multi-nationals. However, the tactic cost the US treasury an estimated $90bn in tax revenues in 2008, according to Kimberly Clausing, an economics professor at Reed College.

      Over three years Google is estimated to have saved $3.1bn in tax revenues using a subsidiary located in Bermuda where the corporate tax rate is zero."

  25. Anonymous Coward
    Anonymous Coward

    Legal vs Moral

    Tax payment is not a moral obligation. It is a legal one.

    Google fulfills any real or imagined moral obligation by providing jobs for their french staff, each of whom will pay an income tax. Google probably also pays directly for any other benefit they get from France, so why on top of all that, do people have the cheek to suggest that they should have a moral obligation to pay Corporation Tax there?

    I don't see tax as a moral obliation. I see it as a form of state-sponsored extortion. Fair enough there are various state services that have to be paid for, but I for one would be much better off if I paid for each of those services myself as and when I needed them, as opposed to having 35%-50% my pay packet stolen by the government every month. As a citizen of a free country, I should be afforded the choice to opt out of the tax system ( and by extension all of its supposed benefits )..

    As for people "less fortunate" ( aka lazy bastards ), why should they be supported free of charge? I strongly suspect that a lot of these "less fortunate" would suddenly become "more fortunate" if they weren't being propped up by the tax payer.

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