4 ms·

Tech companies don't show profits as long as there's place for development. They're still paying tax on everything else, including renting offices, paying salar

Tech companies don't show profits as long as there's place for development. They're still paying tax on everything else, including renting offices, paying salaries and bonuses etc.

DanBC 11y ago
> paying salaries Isn't that a tax paid by the employee, not employer? Starbucks tried to say that they paid a lot in VAT, but that's a tax paid by the customer not the business.
- Feoj 11y ago
  In the UK employers have to pay a "National Insurance" Contribution on top of the employee's contribution. https://en.wikipedia.org/wiki/National_Insurance https://en.wikipedia.org/wiki/National_Insurance
- IanCal 11y ago
  Well, I don't think there's a huge difference, the money is taken before people ever see it although some people will claim a bit back. However, there is also employers NI which is definitely paid by the employer, at 13.8% over a low threshold.
- garblegarble 11y ago
  >> paying salaries >Isn't that a tax paid by the employee, not employer? It's technically both - there's an element of National Insurance tax paid by the employer and an element payed by the employee (then the employee pays income tax on the remainder). The core of your point is correct, though, the bulk of the tax paid as a result of salaries is taken from the employee
- radu_floricica 11y ago
  > Isn't that a tax paid by the employee, not employer I don't know why people still fall for this. The government may say whatever it wants, but the value of the paycheck is market determined which means taxes are taken from both sides. Unequally, of course, depending on how (in)elastic work supply and demand are.
  - spacecowboy_lon 11y ago
    But of course Starbucks claims VAT back so the net VAT paid to the UK government is not the same as the gross
exDM69 11y ago
> They're still paying tax on everything else, including renting offices, paying salaries So is every other company operating in Europe, and they have to pay their corporate taxes. But the multinational corporations evade their corporate taxes and get an unfair competitive advantage. A practical example: a hamburger and fries from a local franchise costs 2 eur (about 20%) more than one from McDonalds, because the latter doesn't pay their taxes to this country, using the same "license fee" trick as Facebook, channeling all of their profits through Netherlands, Luxembourg and/or Ireland. These tricks are known with names such as "double Irish with a Dutch sandwich".
- radu_floricica 11y ago
  That's a different case. I was simply saying _tech_ corporations often operate at a loss for a very long time. I'm reasonably sure Amazon didn't make a profit for decades, assuming it does now. This is not paperwork hand-waving, they're actually reinvesting all income, plus as much extra they can raise.
  - exDM69 11y ago
    > I was simply saying _tech_ corporations often operate at a loss for a very long time. Facebook is not operating at a loss in the UK or elsewhere. That's just their creative accounting after diverting funds offshore to tax havens in the form of royalties. The exact same scheme is employed by the aforementioned hamburger franchises.

Tech companies don't show profits as long as there's place for development. They're still paying tax on everything else, including renting offices, paying salaries and bonuses etc.

DanBC 11y ago

> paying salaries Isn't that a tax paid by the employee, not employer? Starbucks tried to say that they paid a lot in VAT, but that's a tax paid by the customer not the business.

Feoj 11y ago
In the UK employers have to pay a "National Insurance" Contribution on top of the employee's contribution. https://en.wikipedia.org/wiki/National_Insurance https://en.wikipedia.org/wiki/National_Insurance
IanCal 11y ago
Well, I don't think there's a huge difference, the money is taken before people ever see it although some people will claim a bit back. However, there is also employers NI which is definitely paid by the employer, at 13.8% over a low threshold.
garblegarble 11y ago
>> paying salaries >Isn't that a tax paid by the employee, not employer? It's technically both - there's an element of National Insurance tax paid by the employer and an element payed by the employee (then the employee pays income tax on the remainder). The core of your point is correct, though, the bulk of the tax paid as a result of salaries is taken from the employee
radu_floricica 11y ago
> Isn't that a tax paid by the employee, not employer I don't know why people still fall for this. The government may say whatever it wants, but the value of the paycheck is market determined which means taxes are taken from both sides. Unequally, of course, depending on how (in)elastic work supply and demand are.
- spacecowboy_lon 11y ago
  But of course Starbucks claims VAT back so the net VAT paid to the UK government is not the same as the gross

exDM69 11y ago

> They're still paying tax on everything else, including renting offices, paying salaries So is every other company operating in Europe, and they have to pay their corporate taxes. But the multinational corporations evade their corporate taxes and get an unfair competitive advantage. A practical example: a hamburger and fries from a local franchise costs 2 eur (about 20%) more than one from McDonalds, because the latter doesn't pay their taxes to this country, using the same "license fee" trick as Facebook, channeling all of their profits through Netherlands, Luxembourg and/or Ireland. These tricks are known with names such as "double Irish with a Dutch sandwich".

radu_floricica 11y ago
That's a different case. I was simply saying _tech_ corporations often operate at a loss for a very long time. I'm reasonably sure Amazon didn't make a profit for decades, assuming it does now. This is not paperwork hand-waving, they're actually reinvesting all income, plus as much extra they can raise.
- exDM69 11y ago
  > I was simply saying _tech_ corporations often operate at a loss for a very long time. Facebook is not operating at a loss in the UK or elsewhere. That's just their creative accounting after diverting funds offshore to tax havens in the form of royalties. The exact same scheme is employed by the aforementioned hamburger franchises.