[governance] Re: Telecom TV on Google and Taxes
Suresh Ramasubramanian
suresh at hserus.net
Thu Dec 13 08:39:06 EST 2012
I have done my fair share of activism elsewhere (mostly on antispam laws and best practices) since at least the mid 1990s - I acknowledge that's comparatively recent, compared to several other people in this space.
I still do call a spade a spade. And a trial by kangaroo court a trial by kangaroo court.
So - again, what is google doing different compared to, say, any large manufacturing corporation or any other corporation with a presence spread across several countries?
And what locus standi does any sort of igov based civil society have in these issues?
--srs (iPad)
On 13-Dec-2012, at 18:57, "michael gurstein" <gurstein at gmail.com> wrote:
> 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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