[governance] Re: Telecom TV on Google and Taxes

Adam Peake ajp at glocom.ac.jp
Thu Dec 13 03:55:44 EST 2012 

On Thu, Dec 13, 2012 at 5:49 PM, parminder <parminder at itforchange.net>wrote:

>
> On Thursday 13 December 2012 02:05 PM, Adam Peake wrote:
>
> -1
>
>  write to politicians.
>
>
> You mean we should write to governments? Good idea. Which venue you think
> is best to address in this regard? Remember, there is a strong, perhaps,
> central, element of inter-country issues here.
>
>

Well not really as taxes are national.  So I would recommend we draft a
letter and send to respective ICT ministries, treasury and appropriate MPs
(or equivalent.)  And to the countries such as Ireland, Luxembourg, etc
favored by companies like Google, Amazon eyc.



>   to google would be just posturing.
>
>
> You means that they would not pay heed to civil society's voice/ statement
> on this, and not bother to respond? If nothing else, that will be
> interesting to note, given the numerous close compacts with civil society
> that google has worked up in these last few months on many global IG issues.
>
>
No.

(disclosure, GLOCOM hosts a Google Policy Fellow)

Adam





> parminder
>
>
>  Adam
>
>
>
> On Thu, Dec 13, 2012 at 1:40 PM, 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 <%2B679%203544828>
>>> Fiji Cell: +679 998 2851 <%2B679%20998%202851>
>>>
>>>
>>>
>>>
>>>
>>>
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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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