[governance] Re: Telecom TV on Google and Taxes
Carlos A. Afonso
ca at cafonso.ca
Thu Dec 13 06:56:00 EST 2012
Sala, this is not as simple as it seems. We need to go deeper on the
implications of this, as I just posted.
--c.a.
On 12/13/2012 02:40 AM, Salanieta T. Tamanikaiwaimaro 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
> Fiji Cell: +679 998 2851
>
>
>
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