[governance] Re: Telecom TV on Google and Taxes
Suresh Ramasubramanian
suresh at hserus.net
Thu Dec 13 07:00:05 EST 2012
When and where they do cross a line, there are tax authorities eager to sue to collect penalty, and there are courts to pronounce on the matter. Entirely without benefit of CS making pious statements.
--srs (iPad)
On 13-Dec-2012, at 17:24, "Carlos A. Afonso" <ca at cafonso.ca> wrote:
> Dear Parm, unfortunately (again) I am unable to follow up closely on the thread. But one point intrigues me: taxes are determined by governments within their geopolitical boundaries. Why don't governments charge appropriate taxes (if any) on services such as Google's?
>
> The point is: I do not think a corporation of that size just evades taxes and keeps an eye for what may happen. The certainly know about tax legislation in the countries they have operations.
>
> What is the proper way to define a policy on this for us?
>
> frt rgds
>
> --c.a.
>
> On 12/13/2012 02:33 AM, parminder 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.
>>
>> 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
>>> Fiji Cell: +679 998 2851
>
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