[governance] Re: Telecom TV on Google and Taxes
parminder
parminder at itforchange.net
Thu Dec 13 05:39:55 EST 2012
On Thursday 13 December 2012 03:37 PM, parminder wrote:
>
> On Thursday 13 December 2012 02:25 PM, Adam Peake wrote:
>> <snip>
>>
>>
>> Well not really as taxes are national.
>
> Even when the business activities are global? Not really, Adam.
I mean that while tax accrual is of course national, the issue of fair
accrual and distribution in case of global businesses, especially when
transacted in the global cyberspace, in indeed an international issue
and not just national...
> And since a developing country quote will perhaps hardly suffice, here
> is one from a EU document
>
> “E-commerce is, by its nature, a truly global process and no tax
> jurisdiction, acting in isolation, can resolve all the issues it
> raises. ... The successful administration and application of taxes
> will to a great extent depend on, inter alia, achieving an
> international consensus...”
>
>
> For corporate income taxes too, OECD has a model treaty, which most
> OECD countries follow.
>
> So, you see, we need to address an appropriate international level/
> forum for the google tax avoidance problem we are facing.
>
> It surprises me no end how when the issue is of interest to the most
> powerful countries and businesses, global controls and norms are
> sought - in trade, IP, and even free expression (fronting for free
> digital trade)...... and in the case of economic and social issues
> that concern the marginalised most, even when the obvious levers of
> doing anything are global, we are pushed to national jurisdictions ---
> mostly knowing well that in the globally networked world, national
> jurisdictions, especially of the developing countries, have little
> policy power left. This is unfair. This is what developing countries
> and those who purport to speak for the most marginalised must resist
> in these global spaces.
>
> parminder
>
>
>> 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
>>> <mailto:salanieta.tamanikaiwaimaro at gmail.com>> wrote:
>>>
>>>
>>>
>>> On Thu, Dec 13, 2012 at 5:33 PM, parminder
>>> <parminder at itforchange.net
>>> <mailto: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
>>>> <mailto: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 people rated this an average of 3/5] [0 people
>>>> rated this an average of 3/5] [0 people rated this
>>>> an average of 3/5] (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 <tel:%2B679%203544828>
>>>> Fiji Cell: +679 998 2851 <tel:%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 <tel:%2B679%203544828>
>>> Fiji Cell: +679 998 2851 <tel:%2B679%20998%202851>
>>>
>>>
>>>
>>>
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>>
>>
>
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