[governance] Re: Telecom TV on Google and Taxes

michael gurstein gurstein at gmail.com
Thu Dec 13 08:27:33 EST 2012


Suresh,

Given the quite evident contempt that you feel for civil society and for those who are attempting to develop positions in the global public interest I`m wondering why you continue in this space except to function as a troll. http://en.wikipedia.org/wiki/Troll_%28Internet%29

M

-----Original Message-----
From: governance-request at lists.igcaucus.org [mailto:governance-request at lists.igcaucus.org] On Behalf Of Suresh Ramasubramanian
Sent: Thursday, December 13, 2012 1:00 PM
To: governance at lists.igcaucus.org; Carlos A. Afonso
Cc: governance at lists.igcaucus.org; parminder
Subject: Re: [governance] Re: Telecom TV on Google and Taxes

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-i
>>> n-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=e938181
>>> 7-0593-417a-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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