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I think it's the general sentiment that companies avoid things like paying taxes by skirting around the rules through means available to them due to their wealt

I think it's the general sentiment that companies avoid things like paying taxes by skirting around the rules through means available to them due to their wealth and status. While a smaller company isn't going to have the resources at their disposal to gain such advantages. I guess it's similar to how it people feel like celebrities and executives can always avoid going to jail for things that a regular person would almost definitely end up in jail for. Or more succinctly, laws aren't perfect and corporations abuse those imperfections.

icebraining 13y ago
I agree it's the sentiment, but I'm not sure how many of those means are only available due to wealth, and how many could be used by many small companies if they knew about them. It's not like creating a company in a tax haven is particularly hard or expensive.
- DanBC 13y ago
  Some of the schemes are pretty complicated. Routing the goods and money and paperwork needs to be done carefully to ensure you're still legal. Hiring KPMG, Deloitte, Earnst & Young, or PWC isn't cheap. And we have a really weird system here. These big four firms sent some of their accountants to help the government create tax laws. They then exploited the loopholes in the tax laws they had created. (http://www.guardian.co.uk/business/2013/apr/26/accountancy-firms-knowledge-treasury-avoid-tax http://www.guardian.co.uk/business/2013/apr/26/accountancy-f...) EDIT: Here's some discussion of the PAC report that's more balanced: (http://www.ion.icaew.com/TaxFaculty/26745 http://www.ion.icaew.com/TaxFaculty/26745)
  - hkmurakami 13y ago
    And we have a really weird system here. These big four firms sent some of their accountants to help the government create tax laws. They then exploited the loopholes in the tax laws they had created. Said "weird" system actually aligns with their incentives perfectly. Create a system of laws that can be exploited, but only through the advisory services of accounting professionals like themselves. Complexity creates exploitation opportunities, which results in more monetary rewards for themselves.
    - untog 13y ago
      Create a system of laws that can be exploited, but only through the advisory services of accounting professionals like themselves. Right, but the weird part is that the government is complicit in this. They have no such incentives.
- pfortuny 13y ago
  Well, it is hard for department stores to claim they do not sell goods where their cashiers are, despite their address being perhaps in a tax haven. However, Amazon have this unfair advantage as well as google. IIRC. Or for small service companies to claim they do not do 'sales' in a country when their business is done there. It is not just a business address.
- klaruz 13y ago
  It's not knowing about them, it's being able to defend them. A gray area loophole is much safer to exploit if you have a large legal team to back up your interpretation.
- davorak 13y ago
  Are the rules really that static that once you know the trick it will last for years if not decades? Or do you have to pay a staff yearly to keep up with the small changes to stay a little ahead of the tax law to make sure you have all the `i`s doted and all the `t`'s crossed less pay overwhelming fines?
- brown9-2 13y ago
  As a point of reference, GE employs about 1000 people in it's tax department (http://www.propublica.org/article/5-ways-ge-plays-the-tax-game http://www.propublica.org/article/5-ways-ge-plays-the-tax-ga...), although to be fair, according to other reports the returns they file are about 57,000 pages in length.
talmand 13y ago
Sure, but by all means the people who write the tax code are more than welcome to close such loopholes, or even better, stop making them. It's incredibly stupid to complain about a company legally reducing (saying they are avoiding is unfair since that implies illegal actions) their tax liability when you are the one of those responsible for making it possible.
- Nursie 13y ago
  I would say naive, rather than incredibly stupid. One might expect companies that pride themselves on ethics and corporate citizenship to go along with the spirit of the law rather than the letter. But I agree it's the government's responsibility to fix this. --edit-- Two more things. Firstly avoiding does not really imply illegal. Evasion tends to be the illegal one. Secondly, where google are concerned, there does seem to be some doubt over which country various sales activities could actually be said to have happened in, so there may be grounds for an investigation and they may be found to have been in contravention of the law.
  - talmand 13y ago
    Avoidance and evasion are much the same thing. If one implies negativity in this matter then so does the other. Reduction versus evasion is better to me. If Google broke the law, then sure, punish them for it. At that point one can say they evaded paying their "fair share" of taxes and did not act in good faith.
    - Nursie 13y ago
      Both can imply negativity while only one is illegal.
      - talmand 13y ago
        That's just the accepted legal term. By definition they both can be the same thing. When the law was written they could have just as easily as gone with tax avoidance as tax evasion. But in the context of the discussion, avoiding taxes is being used in a negative way by implying that the companies are not paying taxes that they should be paying by whatever criteria society dreams up, such as "fair share". I simply object to this characterization since these companies are following the law until a tax court says otherwise.

icebraining 13y ago

I agree it's the sentiment, but I'm not sure how many of those means are only available due to wealth, and how many could be used by many small companies if they knew about them. It's not like creating a company in a tax haven is particularly hard or expensive.

DanBC 13y ago
Some of the schemes are pretty complicated. Routing the goods and money and paperwork needs to be done carefully to ensure you're still legal. Hiring KPMG, Deloitte, Earnst & Young, or PWC isn't cheap. And we have a really weird system here. These big four firms sent some of their accountants to help the government create tax laws. They then exploited the loopholes in the tax laws they had created. (http://www.guardian.co.uk/business/2013/apr/26/accountancy-firms-knowledge-treasury-avoid-tax http://www.guardian.co.uk/business/2013/apr/26/accountancy-f...) EDIT: Here's some discussion of the PAC report that's more balanced: (http://www.ion.icaew.com/TaxFaculty/26745 http://www.ion.icaew.com/TaxFaculty/26745)
- hkmurakami 13y ago
  And we have a really weird system here. These big four firms sent some of their accountants to help the government create tax laws. They then exploited the loopholes in the tax laws they had created. Said "weird" system actually aligns with their incentives perfectly. Create a system of laws that can be exploited, but only through the advisory services of accounting professionals like themselves. Complexity creates exploitation opportunities, which results in more monetary rewards for themselves.
  - untog 13y ago
    Create a system of laws that can be exploited, but only through the advisory services of accounting professionals like themselves. Right, but the weird part is that the government is complicit in this. They have no such incentives.
pfortuny 13y ago
Well, it is hard for department stores to claim they do not sell goods where their cashiers are, despite their address being perhaps in a tax haven. However, Amazon have this unfair advantage as well as google. IIRC. Or for small service companies to claim they do not do 'sales' in a country when their business is done there. It is not just a business address.
klaruz 13y ago
It's not knowing about them, it's being able to defend them. A gray area loophole is much safer to exploit if you have a large legal team to back up your interpretation.
davorak 13y ago
Are the rules really that static that once you know the trick it will last for years if not decades? Or do you have to pay a staff yearly to keep up with the small changes to stay a little ahead of the tax law to make sure you have all the `i`s doted and all the `t`'s crossed less pay overwhelming fines?
brown9-2 13y ago
As a point of reference, GE employs about 1000 people in it's tax department (http://www.propublica.org/article/5-ways-ge-plays-the-tax-game http://www.propublica.org/article/5-ways-ge-plays-the-tax-ga...), although to be fair, according to other reports the returns they file are about 57,000 pages in length.

talmand 13y ago

Sure, but by all means the people who write the tax code are more than welcome to close such loopholes, or even better, stop making them. It's incredibly stupid to complain about a company legally reducing (saying they are avoiding is unfair since that implies illegal actions) their tax liability when you are the one of those responsible for making it possible.

Nursie 13y ago
I would say naive, rather than incredibly stupid. One might expect companies that pride themselves on ethics and corporate citizenship to go along with the spirit of the law rather than the letter. But I agree it's the government's responsibility to fix this. --edit-- Two more things. Firstly avoiding does not really imply illegal. Evasion tends to be the illegal one. Secondly, where google are concerned, there does seem to be some doubt over which country various sales activities could actually be said to have happened in, so there may be grounds for an investigation and they may be found to have been in contravention of the law.
- talmand 13y ago
  Avoidance and evasion are much the same thing. If one implies negativity in this matter then so does the other. Reduction versus evasion is better to me. If Google broke the law, then sure, punish them for it. At that point one can say they evaded paying their "fair share" of taxes and did not act in good faith.
  - Nursie 13y ago
    Both can imply negativity while only one is illegal.
    - talmand 13y ago
      That's just the accepted legal term. By definition they both can be the same thing. When the law was written they could have just as easily as gone with tax avoidance as tax evasion. But in the context of the discussion, avoiding taxes is being used in a negative way by implying that the companies are not paying taxes that they should be paying by whatever criteria society dreams up, such as "fair share". I simply object to this characterization since these companies are following the law until a tax court says otherwise.