[governance] FW: [Dewayne-Net] Facebook paid £2.9m tax on £840m profits

[michael gurstein]

Hi Michael,

No question that you are correct but a few things need to be added to the
mix I think...
1. globalization including in the transfer and sale of immaterial (virtual
or virtualized) goods and services is becoming transformative both in volume
and in substance as a result of  the Internet... National administrative and
political regimes (including in taxation) are struggling to keep up and in
many cases appear to be falling behind--hence the current complaints from
largely OECD countries concerning the tax related behaviours of companies
like Google and Facebook. 

2. a further effect of the Internet is to render national boundaries much
much more porous/fluid/transparent/immaterial than previously. While some
corporations (and individuals) are massively able to capitalize on this;
these appear to be restricted to only a very few countries who in turn
appear to be sufficiently well positioned and resourced to profit while
others lack sufficient resources to intervene or even have oversight over
these processes let alone ensure significant local benefits. This suggests
the need for some sort of global oversight mechanism since no single
national regime is able to effectively respond in these areas.

3. the issue under discussion here is less whether past behaviours were
legal or not (leaving aside the ethics of not paying ones' "fair share") but
whether certain actions/interventions are either deliberately or by
happenstance directed towards a "political" intervention so as to preclude
the type of globalized "Hands On" actions that might be warranted given the
changing legal, taxation and other circumstances that the Internet is
precipitating.

4. Internet enabled globalized and digitized communications; commerce;
production, management and distribution all indicate the need for an equally
globalized set of institutions and actions in support of a globalized public
interest including in the area of taxation but more broadly concerning the
distribution of the benefits (and costs) of these processes.

Mike, Vancouver

-----Original Message-----
From: governance-request at lists.igcaucus.org
[mailto:governance-request at lists.igcaucus.org] On Behalf Of Michael
Leibrandt
Sent: Thursday, December 27, 2012 4:37 AM
To: governance at lists.igcaucus.org; Roland Perry
Subject: Re: [governance] FW: [Dewayne-Net] Facebook paid £2.9m tax on £840m
profits

Well, having started as a tax lawyer some decades ago, I remember pretty
well the discussions we already had at that time for example in the
respectice OECD working groups. But it needs to be said that we are looking
at tax avoidance, not tax fraud. And all those preferential rules and
regulations have been introduced by democratic governments after listening
to the national stakeholders, so we can't blame the companies for making use
of it. Without the political will to make individual countries more
attractive for international business by offering tax incentives, schemes
like the well-known "Double Irish in a Dutch Sandwhich" wouldn't be
possible. By the way, this is not only about big companies - next time you
by music from U2 or the Stones you should be aware they are doing exactly
the same...

Michael, Berlin

----- Original Message -----
From: "Roland Perry" <roland at internetpolicyagency.com>
To: <governance at lists.igcaucus.org>
Sent: Thursday, December 27, 2012 12:16 AM
Subject: Re: [governance] FW: [Dewayne-Net] Facebook paid £2.9m tax on £840m
profits


> In message <00a001cde14d$204533f0$60cf9bd0$@gmail.com>, at 12:36:02 on 
> Sun, 23 Dec 2012, michael gurstein <gurstein at gmail.com> writes
>
>>A Facebook spokeswoman said: "Facebook complies with all relevant 
>>corporate regulations including those related to filing company 
>>reports and taxation."
>
> It's taken a long time for legal tax avoidance schemes to become a 
> political hot potato [several other companies have done it in plain 
> sight for a generation]. But the genie is out of the bottle now.
>
> (Apologies for the profuse metaphors).
>
>>The company added that it chose to base its international headquarters 
>>in Ireland as it was the "best location to hire staff with the right 
>>skills to run a multilingual hi-tech operation serving the whole of 
>>Europe".
>
> Which is true. Many well-known technology companies have based 
> themselves in Ireland and tapped the same talent (much of it 
> immigrant, not that it's a bad thing). Dell, Intel, Apple etc.
> --
> Roland Perry
>
>


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