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Thread: Firms Play "Double Dutch" to Skip on Tax

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    Firms Play "Double Dutch" to Skip on Tax

    Big firms play 'Double Dutch' to skip on tax | thetelegraph.com.au

    MULTINATIONAL corporations including Google, Facebook, Apple and eBay are likely to have short-changed Australians by more than $1 billion in lost tax revenue thanks to an arrangement dubbed by Treasury as "the Double-Dutch Irish Sandwich".
    Apropos the whole theme of how taxpayers act when taxes are increased, witness this scheme used by Google, Facebook and others to avoid corporate taxes.

    It seems that when one pays for advertising on Google, for example, one buys it from an Irish subsidiary of the company which pays a 12.5% corporate income tax then transfers the money to a Dutch subsidiary. Being within the EU this transfer is tax free. The Dutch subsidiary then pays a tax deductible royalty to a Bermuda subsidiary.

    This has predictably set politicians in France, Australia, etc. to huffing and puffing about these multinationals not pulling their weight with regard to their own national need for tax revenue. But what the companies are doing is perfectly legal, and the politicians are hamstrung by international trade treaties when it comes to slapping taxes on international financial transactions at their end.

    Or, as they no doubt say at Google, three cheers for globalization!

    "The urge to save humanity is almost always a false front for the urge to rule." --HL Mencken

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    Re: Firms Play "Double Dutch" to Skip on Tax

    As you say..."...what the companies are doing is perfectly legal...".

    Change the law...write new treaties...if you don't like what they are doing. Pissing and moaning accomplishes nothing.

    But be careful how you go about your changes. You just might get something worse.
    TANSTAAFL

    “An armed society is a polite society.”
    ― Robert A. Heinlein, Beyond This Horizon

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Quote Originally Posted by LowDown View Post
    Big firms play 'Double Dutch' to skip on tax | thetelegraph.com.au



    Apropos the whole theme of how taxpayers act when taxes are increased, witness this scheme used by Google, Facebook and others to avoid corporate taxes.

    It seems that when one pays for advertising on Google, for example, one buys it from an Irish subsidiary of the company which pays a 12.5% corporate income tax then transfers the money to a Dutch subsidiary. Being within the EU this transfer is tax free. The Dutch subsidiary then pays a tax deductible royalty to a Bermuda subsidiary.

    This has predictably set politicians in France, Australia, etc. to huffing and puffing about these multinationals not pulling their weight with regard to their own national need for tax revenue. But what the companies are doing is perfectly legal, and the politicians are hamstrung by international trade treaties when it comes to slapping taxes on international financial transactions at their end.

    Or, as they no doubt say at Google, three cheers for globalization!
    I've always pondered why others believe they're entitled to something they didn't earn themselves.

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Is there no corporate tax in Bermuda?

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Quote Originally Posted by Mr.Nick View Post
    I've always pondered why others believe they're entitled to something they didn't earn themselves.
    Like roads, internet infrastructure, an electrical grid, police and fire protection...

    Oh wait. You weren't talking about Google's entitlements, were you?
    He touched her over her bra and underpants, she says, and guided her hand to touch him over his underwear
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    We’ll say what? Something like “nothing happened” ... Yeah, we might say something like that.

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Quote Originally Posted by Deuce View Post
    Like roads, internet infrastructure, an electrical grid, police and fire protection...

    Oh wait. You weren't talking about Google's entitlements, were you?
    I'm sorry... I didn't realize Google got all of those and you didn't?

    They are recieving the same services you are yet their workers pay way more in taxes. Maybe its you who isn't carrying his weight?

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Quote Originally Posted by Deuce View Post
    Like roads, internet infrastructure, an electrical grid, police and fire protection...

    Oh wait. You weren't talking about Google's entitlements, were you?
    You mean like local taxes?

    Yeah, don't confuse communal and federal taxes..

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Quote Originally Posted by LowDown View Post
    Big firms play 'Double Dutch' to skip on tax | thetelegraph.com.au



    Apropos the whole theme of how taxpayers act when taxes are increased, witness this scheme used by Google, Facebook and others to avoid corporate taxes.

    It seems that when one pays for advertising on Google, for example, one buys it from an Irish subsidiary of the company which pays a 12.5% corporate income tax then transfers the money to a Dutch subsidiary. Being within the EU this transfer is tax free. The Dutch subsidiary then pays a tax deductible royalty to a Bermuda subsidiary.

    This has predictably set politicians in France, Australia, etc. to huffing and puffing about these multinationals not pulling their weight with regard to their own national need for tax revenue. But what the companies are doing is perfectly legal, and the politicians are hamstrung by international trade treaties when it comes to slapping taxes on international financial transactions at their end.

    Or, as they no doubt say at Google, three cheers for globalization!
    Was Apple that invented the scheme back in the 1990s basically and are the one of the biggest in avoiding taxes (and are rarely mentioned... funny eh). That is why the multinational companies pay no where near the official corporate tax rate...

    And even companies in the US are doing it.. they have almost all their sales in the US, but because they are officially registered in some Caribbean island and the "sales" are counteracted by goodwill costs or administrative costs so the end result is that the US government gets no tax income.. or even worse.. pays the company for losses... while the small Caribbean island gets a few bucks in taxes.... brilliant eh?
    PeteEU

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Quote Originally Posted by spanky View Post
    Is there no corporate tax in Bermuda?
    No there isn't. I guess the people who have to comply with laws are smarter than the folks who write laws.

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    Re: Firms Play "Double Dutch" to Skip on Tax

    Quote Originally Posted by Deuce View Post
    Like roads, internet infrastructure, an electrical grid, police and fire protection...

    Oh wait. You weren't talking about Google's entitlements, were you?
    No one is saying that Google is breaking the law. They are paying all the taxes the law requires.

    I'm sure they pay a ton in road taxes what with all those Google camera cars buzzing all over creation.

    The tree of liberty might need to be watered with the blood of patriots from time to time, but the thirst of politicians for the blood of taxpayers is constant and never ending. No one should ever be criticized for taking steps to stifle that thirst. Paraphrasing Judge Learned Hand, everyone is entitled to arrange his affairs so as to minimize his taxes and should come under no censure for doing so.

    I'd like to see them try to put a tariff on those monies. There's nothing like a good trade war to exemplify stupid governance.

    "The urge to save humanity is almost always a false front for the urge to rule." --HL Mencken

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