[governance] Re: Telecom TV on Google and Taxes

Fahd A. Batayneh fahd.batayneh at gmail.com
Thu Dec 13 00:44:55 EST 2012 

++1

Fahd

On Thu, Dec 13, 2012 at 6:40 AM, Salanieta T. Tamanikaiwaimaro <
salanieta.tamanikaiwaimaro at gmail.com> wrote:

>
>
> 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
>
>
>
>
>
> ____________________________________________________________
> You received this message as a subscriber on the list:
>      governance at lists.igcaucus.org
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> For all other list information and functions, see:
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