[governance] Re: Telecom TV on Google and Taxes
Carlos A. Afonso
ca at cafonso.ca
Thu Dec 13 09:24:44 EST 2012
Yet another demo of mutual biting in defense or against a corporate
entity which does not need our help at all :)
--c.a.
On 12/13/2012 11:39 AM, Suresh Ramasubramanian wrote:
> 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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>>
>
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