[governance] Re: Telecom TV on Google and Taxes

Wed Dec 12 23:40:22 EST 2012

On Thu, Dec 13, 2012 at 5:33 PM, parminder <parminder at itforchange.net>wrote:

>
> Rather shameful that google paid 3 percent tax on its overseas profit!! It
> surely leaves it with a lot of money to spend in lobbying and advocacy
> efforts to keep global markets free for its unlettered operations... Like
> organising campaigns against ITU, German legislature, and so on.
>
> Would IGC write an open letter to Google that its tax evasion policy is
> anti people, and it should pays its taxes where it makes its profit. (Or is
> it that the IG civil society does not go into such re-distributional
> questions )   It is not rhetorical but a real question to the list, and its
> coordinator.
>

What does the list think?
+1 if you think the IGC should write a letter to Google
-1 if the IGC should not write a letter to Google

As always the IGC decides

>
>  parminder
>
>
>  On Wednesday 12 December 2012 09:37 PM, Salanieta T. Tamanikaiwaimaro
> wrote:
>
> More on Bloomberg:
> http://www.bloomberg.com/news/2012-12-10/google-revenues-sheltered-in-no-tax-bermuda-soar-to-10-billion.html
>
> On Thu, Dec 13, 2012 at 4:48 AM, Salanieta T. Tamanikaiwaimaro <
> salanieta.tamanikaiwaimaro at gmail.com> wrote:
>
>>
>>  Somehow it feels that there is a targeted media campaign out against
>> the likes of Google and other mncs - the timing of the release is almost
>> impeccable with the WCIT.
>>
>>  Source:
>> http://www.telecomtv.com/comspace_newsDetail.aspx?n=49763&id=e9381817-0593-417a-8639-c4c53e2a2a10
>>
>>  Google “can make money without doing evil” (as it evades $2bn in taxes)
>> Posted By TelecomTV One<http://www.telecomtv.com/go/?ct=9&id=e9381817-0593-417a-8639-c4c53e2a2a10>
>>  , 12 December 2012 | 1 Comments<http://www.telecomtv.com/comspace_newsDetail.aspx?n=49763&id=e9381817-0593-417a-8639-c4c53e2a2a10#comments>
>>  |    (0)
>> Tags: *Google<http://www.telecomtv.com/results.aspx?tag=122&tagname=Google>
>> * *corporate<http://www.telecomtv.com/results.aspx?tag=6972&tagname=corporate>
>> * *tax <http://www.telecomtv.com/results.aspx?tag=434&tagname=tax>* *
>> Finance <http://www.telecomtv.com/results.aspx?tag=365&tagname=Finance>*
>>
>> As the net closes around the multinationals that avoid paying corporation
>> taxes, Google is accused of saving $2bn by routing income through a “Double
>> Irish Dutch Sandwich”, paying tax of just 3.2 per cent on its overseas
>> profits. Guy Daniels reports.
>>
>>  Three questions. One; where do you stand on the subject of tax
>> avoidance? We at TelecomTV believe that individuals and corporations have a
>> duty to pay their fair share of tax. By fair, we mean whatever respective
>> governments rule to be the legal requirement (after all, in most countries,
>> we voted the politicians in to office). By all means try and mitigate the
>> amount of tax you have to pay, using whatever accepted mechanisms are
>> available. But avoidance? That just means somebody else (with far less
>> access to expensive and clever advisors) has to contribute to your share as
>> well.
>>
>>
>>
>> Second question: how do you define evil? The Oxford English Dictionary
>> defines evil as “profoundly immoral and wicked” or “something which is
>> harmful or undesirable”. In my book, that means tax avoidance is evil,
>> simple as that.
>>
>>
>>
>> Third and final question: Is Google evil? If you believe that avoiding
>> tax is wrong (especially through aggressive and mind-boggling complicated
>> avoidance schemes) and if you believe that depriving society of tax
>> revenues is wrong (and so reducing the level of available State support for
>> the most needy) and could be described as an evil act, then surely you must
>> conclude that Google is acting in an evil manner.
>>
>>
>>
>> An investigative report by Bloomberg<http://www.bloomberg.com/news/2012-12-10/google-revenues-sheltered-in-no-tax-bermuda-soar-to-10-billion.html> has
>> discovered that Google avoided about $2 billion in worldwide income taxes
>> in 2011 by shifting $9.8 billion in revenues into a Bermuda shell company –
>> almost double its total from three years ago. The information was disclosed
>> in a November filing by a Google subsidiary in the Netherlands, which was
>> discovered by reporters from Bloomberg.
>>
>>
>>
>> It appears that Google legally routed profits from overseas subsidiaries
>> into Bermuda, which doesn’t have a corporate income tax, thereby enabling
>> it to cut its overall tax rate almost in half. Bloomberg says the amount
>> moved to Bermuda is equivalent to about 80 per cent of Google’s total
>> pretax profit in 2011.
>>
>>
>>
>> Tax evasion and avoidance costs the European Union a staggering €1
>> trillion a year. That’s worth dwelling on for a moment longer…. €1
>> trillion. No wonder politicians are now acting to try and prevent this
>> financial loss and branding such acts as scandalous and immoral.
>>
>>
>>
>> Bloomberg has a good quote from a UK-based tax accountant, which pretty
>> much sums up the feeling in Europe at the moment. According to Richard
>> Murphy of Tax Research:
>>
>>
>>
>> “The tax strategy of Google and other multinationals is a deep
>> embarrassment to governments around Europe. The political awareness now
>> being created in the UK, and to a lesser degree elsewhere in Europe, is:
>> It’s us or them. People understand that if Google doesn’t pay, somebody
>> else has to pay or services get cut.”
>>
>>
>>
>> Just look what happened to Starbucks. When the public discovered the US
>> coffee giant paid zero taxes in the UK (yes, absolutely nothing at all), it
>> started to boycott the chain.
>>  Advertisement
>>  As a result, Starbucks was forced to “volunteer” to pay taxes…
>>
>>
>>
>> The UK is Google’s second-biggest market, responsible for about 11 per
>> cent of its sales. Of the $4 billion it turned over last year, it paid UK
>> corporation tax of less than $10 million. Bloomberg says Google avoids tax
>> by using an Irish subsidiary to collects revenues from ads sold in the UK,
>> which then pays royalties to another Irish subsidiary whose legal residence
>> is in Bermuda. Payments are then sent to yet another subsidiary in the
>> Netherlands (with no employees, note) before finally reaching the tax haven
>> of Bermuda.
>>
>>
>>
>> Sounds pretty ‘evil’ to me. And if so, then that’s against the internet
>> company’s guiding principles. Stated clearly on the “Ten Things We Know to
>> be True” page on Google <http://www.google.com/about/company/philosophy/>’s
>> website is the following:
>>
>>
>>
>> “You can make money without doing evil.”
>>
>>
>>
>> I’m sorry, Google, but I don’t see how avoiding tax is anything but evil.
>> Of course you – and all companies – have a duty to shareholders to maximise
>> profits. But there are rules. Some of these are merely ethical, whilst some
>> are legal. There is no indication or suggestion that Google has acted
>> illegally, but there is every suggestion that it has acted unethically.
>>
>>
>>
>> And who said you can’t have ‘ethical companies’? Of course you can. I
>> don’t buy the ‘extreme capitalist’ viewpoint that corporations will only
>> act in self-interest and never “do the right thing” or pay their fair
>> share. If their customers start to boycott their services, then they’ll
>> change. It happened with the sudden emergence of all the so-called
>> ‘corporate responsibility’ positions that all featured heavily in annual
>> reports. I don’t see why it can’t happen with fair tax positions.
>>
>>
>>
>> Other ICT companies reported in the media to be using this complicated
>> tax evasion (sorry lawyers, of course I mean ‘mitigation’…) structure
>> include Apple, Facebook, Microsoft and Oracle. Unfortunately, Google – and
>> all the others, who no doubt will soon be named and shamed – will continue
>> their sharp practices until they are forced to make a change. If
>> governments can’t do that through the legal process, then it’s up to
>> customers to vote with their feet and walk away from Google services. As
>> Richard Murphy said, consumers are beginning to get the message that it’s
>> “us or them”, and we’re already being squeezed by the many austerity
>> measures that are in effect to drag us out of recession.
>>
>>
>>
>> Come on Google, time to step up to the plate and show some leadership.
>> Pay your fair share. And then the rest of the ICT industry can do likewise.
>> Or else remove that fatuous and out-dated “don’t do evil” slogan from your
>> website once and for all.
>>
>>
>>
>> *Further reading: *The Pearse Trust<http://www.pearse-trust.ie/blog/bid/86105/US-Companies-Their-Use-Of-The-Double-Irish-Dutch-Sandwich> blog
>> has a detailed explanation of the so-called “Double Irish Dutch Sandwich”
>> tax scheme. Please don’t try and implement it.
>>
>>
>>
>
>
>
>  --
> Salanieta Tamanikaiwaimaro aka Sala
> P.O. Box 17862
> Suva
> Fiji
>
>  Twitter: @SalanietaT
> Skype:Salanieta.Tamanikaiwaimaro
> Tel: +679 3544828
> Fiji Cell: +679 998 2851
>
>
>
>
>
>
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-- 
Salanieta Tamanikaiwaimaro aka Sala
P.O. Box 17862
Suva
Fiji

Twitter: @SalanietaT
Skype:Salanieta.Tamanikaiwaimaro
Tel: +679 3544828
Fiji Cell: +679 998 2851
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