4 ms·

too bad Google quickly offshores all profits and pays zero taxes

adventured 9y ago
Google commonly pays around 15% to 17% for its overall corporate income tax rate. By comparison, the statutory rate for Norway is 23%, Sweden is 22%, Denmark is 22%, Portugal is 21%, Slovakia is 21%, Finland is 20%, Estonia is 20%, Iceland is 20%, Russia is 20%, Czech is 19%, the UK is 19%, Poland is 19%, Switzerland is 18%, Ukraine is 18%, Romania is 16%, Serbia is 15%, Lithuania is 15%, Ireland is 12.5%, Moldova is 12%, Macedonia is 10%, Hungary is 9%. I'll emphasize again, those are just the statutory rates. Google is obviously aggressive in their tax avoidance, however they're not in fact paying low rates compared to what can be managed in more than a dozen European nations.
- cyphar 9y ago
  But who do they pay those taxes to? From the perspective of an Australian (for instance), Google pays 0% Australian tax (even though they profit from my country) because they have sufficiently clever accountants. It is less important to me that they pay 15% globally (though that is still a ridiculously small number -- most people have to pay at least 30% tax in Australia) than it is that they pay 0% tax to many countries they do business in. I still have to pay GST when I pay for Google's services -- why do I have to pay my Australian taxes when I transact with them but they don't have to pay their Australian taxes for that transaction? > however they're not in fact paying low rates compared to what can be managed in more than a dozen European nations. But they run businesses in significantly more countries outside of the ones you've listed. The fact that you could only find a handful of countries (several of which have very questionable governments) where 15% tax for a multi-billion dollar company sounds normal is pretty telling.
  - wyager 9y ago
    > Google pays 0% Australian tax (even though they profit from my country) They don’t “profit from your country” - they have users who live in your country. Maybe it makes sense for those users to pay up to the government, but it’s crazy to say that you should have to pay taxes to a foreign government just because someone under that government uses your website. In the long run, if this rhetoric you’re advocating is successful (that if you touch anything somehow related to a government over the internet then you owe them a cut and have to follow their local rules), you can say goodbye to the open, global internet. Companies will IP-restrict (or if that doesn’t convince the lawyers, government ID restrict) every single website.
    - cyphar 9y ago
      > They don’t “profit from your country” - they have users who live in your country. Which they make money from -- in fact quite a few companies make more money from a given Australian than other markets[1] meaning that they are profiting more off Australians (even for online services -- like Adobe that charged AU$1400 more for their software in Australia). If a company wishes to sell books in Australia, they have to pay Australian taxes. But if you sell online services, all of a sudden everyone starts talking about the destruction of a free and open internet. If a company selling a service is willing and has the ability to "destroy the free and open internet" through IP blocks if they are asked to pay taxes for the money they make off foreign markets, then ask yourself -- how free is the internet in the first place if that is all it takes to destroy it? You don't pay taxes if you don't make money. I don't understand what you're trying to argue against here. > but it’s crazy to say that you should have to pay taxes to a foreign government just because someone under that government uses your website. It's not about usage, it's about profit. If you're making a profit by providing services to people in a foreign market, you have now made money in a way where society requires that you pay taxes on your profit. Most countries have bilateral tax agreements to avoid double taxation, so if a company pays tax in $countryA they only have to pay the excess in $countryB. Those agreements exist explicitly to facilitate the ability to do business overseas. Not to mention that many of these companies are incorporated in foreign countries as well, which means that they aren't even foreign entities at that point. They're just ordinary Australian companies that don't pay tax. > In the long run, if this rhetoric you’re advocating is successful (that if you touch anything somehow related to a government over the internet then you owe them a cut and have to follow their local rules), you can say goodbye to the open, global internet. I hate to break it to you, but you already have to follow the law of countries that you do business with. If you host certain kinds of hate speech, you are not permitted to provide access to said hate speech in Germany (even if legal in your country). If you host certain kinds of pornography, you are not permitted to provide access to said pornography in other countries (even if legal in your country). And so on. Will you be extradited for breaking those laws? Maybe not, but that doesn't make it any less illegal. I understand the whole "anti-regulation" view that some US folks have (and I agree that many laws regarding the internet are very troubling), but pretending as though companies should be allowed to make money in a foreign market without paying tax just because their company happens to involve the internet is pretty odd to me. [1]: https://en.wikipedia.org/wiki/Australia_Tax https://en.wikipedia.org/wiki/Australia_Tax

Google commonly pays around 15% to 17% for its overall corporate income tax rate. By comparison, the statutory rate for Norway is 23%, Sweden is 22%, Denmark is 22%, Portugal is 21%, Slovakia is 21%, Finland is 20%, Estonia is 20%, Iceland is 20%, Russia is 20%, Czech is 19%, the UK is 19%, Poland is 19%, Switzerland is 18%, Ukraine is 18%, Romania is 16%, Serbia is 15%, Lithuania is 15%, Ireland is 12.5%, Moldova is 12%, Macedonia is 10%, Hungary is 9%. I'll emphasize again, those are just the statutory rates. Google is obviously aggressive in their tax avoidance, however they're not in fact paying low rates compared to what can be managed in more than a dozen European nations.

cyphar 9y ago
But who do they pay those taxes to? From the perspective of an Australian (for instance), Google pays 0% Australian tax (even though they profit from my country) because they have sufficiently clever accountants. It is less important to me that they pay 15% globally (though that is still a ridiculously small number -- most people have to pay at least 30% tax in Australia) than it is that they pay 0% tax to many countries they do business in. I still have to pay GST when I pay for Google's services -- why do I have to pay my Australian taxes when I transact with them but they don't have to pay their Australian taxes for that transaction? > however they're not in fact paying low rates compared to what can be managed in more than a dozen European nations. But they run businesses in significantly more countries outside of the ones you've listed. The fact that you could only find a handful of countries (several of which have very questionable governments) where 15% tax for a multi-billion dollar company sounds normal is pretty telling.
- wyager 9y ago
  > Google pays 0% Australian tax (even though they profit from my country) They don’t “profit from your country” - they have users who live in your country. Maybe it makes sense for those users to pay up to the government, but it’s crazy to say that you should have to pay taxes to a foreign government just because someone under that government uses your website. In the long run, if this rhetoric you’re advocating is successful (that if you touch anything somehow related to a government over the internet then you owe them a cut and have to follow their local rules), you can say goodbye to the open, global internet. Companies will IP-restrict (or if that doesn’t convince the lawyers, government ID restrict) every single website.
  - cyphar 9y ago
    > They don’t “profit from your country” - they have users who live in your country. Which they make money from -- in fact quite a few companies make more money from a given Australian than other markets[1] meaning that they are profiting more off Australians (even for online services -- like Adobe that charged AU$1400 more for their software in Australia). If a company wishes to sell books in Australia, they have to pay Australian taxes. But if you sell online services, all of a sudden everyone starts talking about the destruction of a free and open internet. If a company selling a service is willing and has the ability to "destroy the free and open internet" through IP blocks if they are asked to pay taxes for the money they make off foreign markets, then ask yourself -- how free is the internet in the first place if that is all it takes to destroy it? You don't pay taxes if you don't make money. I don't understand what you're trying to argue against here. > but it’s crazy to say that you should have to pay taxes to a foreign government just because someone under that government uses your website. It's not about usage, it's about profit. If you're making a profit by providing services to people in a foreign market, you have now made money in a way where society requires that you pay taxes on your profit. Most countries have bilateral tax agreements to avoid double taxation, so if a company pays tax in $countryA they only have to pay the excess in $countryB. Those agreements exist explicitly to facilitate the ability to do business overseas. Not to mention that many of these companies are incorporated in foreign countries as well, which means that they aren't even foreign entities at that point. They're just ordinary Australian companies that don't pay tax. > In the long run, if this rhetoric you’re advocating is successful (that if you touch anything somehow related to a government over the internet then you owe them a cut and have to follow their local rules), you can say goodbye to the open, global internet. I hate to break it to you, but you already have to follow the law of countries that you do business with. If you host certain kinds of hate speech, you are not permitted to provide access to said hate speech in Germany (even if legal in your country). If you host certain kinds of pornography, you are not permitted to provide access to said pornography in other countries (even if legal in your country). And so on. Will you be extradited for breaking those laws? Maybe not, but that doesn't make it any less illegal. I understand the whole "anti-regulation" view that some US folks have (and I agree that many laws regarding the internet are very troubling), but pretending as though companies should be allowed to make money in a foreign market without paying tax just because their company happens to involve the internet is pretty odd to me. [1]: https://en.wikipedia.org/wiki/Australia_Tax https://en.wikipedia.org/wiki/Australia_Tax