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".
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.
Like roads, internet infrastructure, an electrical grid, police and fire protection...
Oh wait. You weren't talking about Google's entitlements, were you?
Like roads, internet infrastructure, an electrical grid, police and fire protection...
Oh wait. You weren't talking about Google's entitlements, were you?
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!
Is there no corporate tax in Bermuda?
Like roads, internet infrastructure, an electrical grid, police and fire protection...
Oh wait. You weren't talking about Google's entitlements, were you?
Nope, and no income tax either!Is there no corporate tax in Bermuda?
Like roads, internet infrastructure, an electrical grid, police and fire protection...
Oh wait. You weren't talking about Google's entitlements, were you?
Nope, and no income tax either!
Are you saying you pay more taxes than Google?
How does Google get the money from Bermuda to the US to pay employees and expenses?
Precisely why the US needs to lower its tax laws and rates so that the little guys can compete with the big guys who have clever accountants. And maybe the big guys might stick around and pay us instead of them.It dont.
Google has say 1 billion in sales in the US. It then pays its wages from those sales and it makes say a profit of 100 million as an example. Now because Google is registered in Bermuda, then the US based company has to pay "administrative costs" or "franchise" costs to the parent company... which is of course about 100 million dollars. That way the move the profit gotten in the US overseas to be taxed there and it is fully legal pretty much everywhere and all international companies do it if they can. Some dont do it for political reasons, some only take a certain portion out of the country for political reasons and so on.
Now the point is, if the company is big enough then they can do this.. even though they might not have any overseas sales at all.. but those that cant do it, are of course the small local companies who have to pay the full tax burden, where as their direct competitors who are international.. get a way with next to nothing.
Precisely why the US needs to lower its tax laws and rates so that the little guys can compete with the big guys who have clever accountants. And maybe the big guys might stick around and pay us instead of them.
It dont.
Google has say 1 billion in sales in the US. It then pays its wages from those sales and it makes say a profit of 100 million as an example. Now because Google is registered in Bermuda, then the US based company has to pay "administrative costs" or "franchise" costs to the parent company... which is of course about 100 million dollars. That way the move the profit gotten in the US overseas to be taxed there and it is fully legal pretty much everywhere and all international companies do it if they can. Some dont do it for political reasons, some only take a certain portion out of the country for political reasons and so on.
Now the point is, if the company is big enough then they can do this.. even though they might not have any overseas sales at all.. but those that cant do it, are of course the small local companies who have to pay the full tax burden, where as their direct competitors who are international.. get a way with next to nothing.
But in the US it doesn't matter where the company is registered, if they derive income from inside the US it has to be declared as income on their US Corp tax return.
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?
I didn't realize I said anything of the sort. (because I didn't and you know it)
They are (legally) dodging taxes in those countries, while benefiting from said infrastructure in those countries.
Does a corporation not benefit from these things? Should it not pay taxes to support these things?
That comes down then to a matter of opinion. How much money that the government takes in actually goes to "infrastructure"? We spend more money on wars, subsidies, and other BS than 100 Googles could ever pay. I'm willing to bet the 10% or however much tax they actually pay would buy quite a bit of infrastructure if that's what it went to.
Corporate welfare is a huge problem around the world. CATO estimated that the US spends 100 billion a year on it.. and that is a conservative think tank that has a history of underestimating things big time (if not out right lying). They for one dont include tax loopholes in the number.. so the actual number could easily be double that.
Yep, so you can see why I'm not exactly supportive of taking more from some corporations to give to others.
But in the US it doesn't matter where the company is registered, if they derive income from inside the US it has to be declared as income on their US Corp tax return.
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