3 ms·

There are clearly internal incentives to not pay taxes in local jurisdictions. Till there are penalties or clawbacks for employees or tax advisors this will go

There are clearly internal incentives to not pay taxes in local jurisdictions. Till there are penalties or clawbacks for employees or tax advisors this will go on all the time. Obviously small countries are routinely ignored and their only choice with tax evaders is to ban them outright.

goodpoint 4y ago
Large companies know getting banned is extremely unlikely and that most fines are going to be less than a slap on the wrist anyways.
yieldcrv 4y ago
I disagree because its deeper than that, there are also external incentives and they are the laws of the local jurisdiction. One thing that might not be obvious if you haven't employed CPA and lawyers and really read the supporting regulations for their decisions is that... the government doesn't know what your legal rationale is. Read that again, the government does not know your legal position, they don't know if they are more correct or you are more correct. When you have privileged communications and multiple business entities, the government doesn't even have a way to know. (If they were "parallel constructing" then the case would get dropped because they know what you did was legal.) All they know is that whatever you did wasn't common and that they didn't get paid. Your legal position can be very accurate. It can be a matter for the legislature to change it if they really don't like it. But that has nothing to do with you. And this isn't just fishing for loopholes. There are many outcomes where the government finds that velocity in the economy is more important than their own revenue collection. They wind up incentivizing certain kinds of transactions and heavily taxing the rest of the transactions. Governments worldwide do this. We'll see how it pans out for Facebook, but there is almost no world where I would immediately lean towards the prosecutor's opinion just because a mega corporation or billionaire is involved.

goodpoint 4y ago

Large companies know getting banned is extremely unlikely and that most fines are going to be less than a slap on the wrist anyways.

yieldcrv 4y ago

I disagree because its deeper than that, there are also external incentives and they are the laws of the local jurisdiction. One thing that might not be obvious if you haven't employed CPA and lawyers and really read the supporting regulations for their decisions is that... the government doesn't know what your legal rationale is. Read that again, the government does not know your legal position, they don't know if they are more correct or you are more correct. When you have privileged communications and multiple business entities, the government doesn't even have a way to know. (If they were "parallel constructing" then the case would get dropped because they know what you did was legal.) All they know is that whatever you did wasn't common and that they didn't get paid. Your legal position can be very accurate. It can be a matter for the legislature to change it if they really don't like it. But that has nothing to do with you. And this isn't just fishing for loopholes. There are many outcomes where the government finds that velocity in the economy is more important than their own revenue collection. They wind up incentivizing certain kinds of transactions and heavily taxing the rest of the transactions. Governments worldwide do this. We'll see how it pans out for Facebook, but there is almost no world where I would immediately lean towards the prosecutor's opinion just because a mega corporation or billionaire is involved.