Google May Be $1 Billion Behind In Tax Payments To France 199
An anonymous reader writes "Ars Technica reports, 'Technology giant Google has been delinquent on its tax payments in France for the past few years, to the tune of more than $1 billion in missed payments, and it now may be hit with a sizable tax penalty by the French government.' Google asserts that it has operated within the law in France, but the French government has reason to believe that in order to avoid French taxes, Google has been passing off some of its business contracts as Irish rather than French."
Re:So few (Score:5, Insightful)
Google, Amazon, Apple escaping taxes and it starts to add up to real money.
Re:Same as UK (Score:2, Insightful)
Nope. No one goes to jail when the pile of money on the table is this large.
You have to be pretty small-time to get prison unless you've stolen from our real rulers, i.e. Bernie Madoff's mistake.
Re:Same as UK (Score:2, Insightful)
Re:So few (Score:5, Insightful)
If they don't like the laws the company is free to not operate in the country. If they choose to operate there they must follow the law. I have no sympathy for them, they knew what the deal was when they stablished there.
Re:So few (Score:5, Insightful)
The problem is that they are following the laws in these countries. The governments have the legislative powers and have created tax systems that don't work under these conditions, but instead of fixing the problem, it's politically better PR to just blame the big organisations for having decent accountants.
In cases where that creates a hostile public feeling toward a company, that can be a surprisingly effective strategy -- certain businesses that operate in the UK have recently changed their accounting practices so they declare more taxable income in the UK -- but usually the amounts involved are relatively small, just enough to counter the bad press with a good soundbite about how many million they paid in tax last year -- and it doesn't really work on businesses that utterly dominate their industries and/or don't deal much with the average guy in the street anyway.
Sooner or later, these governments are going to have to get their act together and fix the broken system properly, but I suspect a lot of them are hoping the next election will come and go first so either they have some breathing room or it's someone else's problem.
Re:So few (Score:5, Insightful)
Dear leader? The French president is more like Ronald Reagan than Dear leader lately.
The 75% for income above one million euros (after deductions), was a symbolic measure as it concerns very few people and is still not applied. Just stuff waived around to get elected. Same president had pleaded to renogotiate the treaty on European Stability Mechanism, but didn't. Not a single point or comma was changed. Now this government will get us in the Great Transatlantic Market, or whatever it's called in which US corporations will dictate their laws to the countries and European Union, putting an end to national democracy.
Dear leader my ass! We're trapped, with a presidency and governnement that have "socialist" in name but are right-leaning collaborationists, more in the way of Tony Blair and Gehrard Schroeder.
Re:Same tricks played in UK (Score:5, Insightful)
The problem with sales tax (VAT) is that it taxes the poor more than the rich because the poor tend to spend a greater proportion of their income. It is also quite a burden to administer for companies and government. It is also an inefficient tax for states with welfare - government gives you money and then you give a large portion of it back again.
I don't have a solution though, even though it is something I think about often. But it seems to me that what we really need is for some way to experiment with widely different tax regimes. But what country is going to be willing to suffer negative consequences of doing so?
Re:Same tricks played in UK (Score:2, Insightful)
In cases like this, I wonder about just moving to a VAT entirely and dispensing with income taxes.
In a perfect world where companies paid what they earned, an income tax would be better in theory, as consumption taxes tend to slow down purchasing and movement of money.
However, in the real world, we read all the time about the stashing of income. A VAT is better because it is a lot harder to get around (as of now... I'm sure there might be loopholes.)
tl;dr... Income can be hidden. Hiding that factory, Lear Jet, or Maybach, not so much.
VAT, or sales taxes don't work on a level playing field. If you make a low wage the vast majority of your money is spent on housing, then on the repeat purchasesables. Food, household items like garbage bags, dishsoap, clothes, and possibly fuel.
Most of your spending is taxed, a decently high rate. When you make 10-15k a year 15 precent or so sales tax hurts. A lot.
On the other hand, if you make 10 or 20 times that much you don't spend 10 or 20 times as much on the same things. You'd spend a little more. Higher quality goods do cost more, but unless you are doing hilarious things with your wealth like buying solid gold Lambo's chances are you aren't spending anything close to a similar ratio. Even a good house (mansions are a whole nother thing) doesn't cost that much more than renting an apartment.
The richer you are the less a sales tax hurts, when that's the opposite of the way you want to distribute a tax burden.
The examples of factories, lear jets, that kind of thing. Rich people don't own their own toy's if they are smart. That Lear Jet? Its a Company Jet, which means it'd actually a tax deduction as a business expense. That's right the private jet let him pay less, not more taxes.
If we're going to get really sneaky, we can double down on Company's. Lets incorporate a Transportation Company that exists solely to own this Lear Jet, its only income is renting the Jet to our theoretical rich man. To offset this income it has the operating costs of the jet, gas, maintenance, fuel, the pilots salary and a lawayer/accountant to run the whole mess.
Except this Company doesn't own the jet either. Much like a bank loans you money so you can buy a house, a third company exists solely to loan the money to the second company to buy a jet with. And since we control both companies, we'll make some silly terms, like a 100 year repayment plan, with interest payments tailored to the setup so that the Transportation company will stay in the tax bracket we desire. In fact, lets make sure the Transportation company slowly loses money over time, so they qualify for all those tax incentives the government sets up to help small businesses, and since the transportation company doesn't own anything, if there is ever an accident or something there are no assets to sue for. All it owns is a big fat debt on the Jet which Company number three can repossess if necessary.
Now we put each of these companies in whatever country has the most favorable laws for each circumstance.
This is the problem with tax laws. Not that Google (or any, hell, lets be honest, EVERY, multi-national corporation) owes money, its that the tax laws are so messed up that the above scenario is possible, legal, and if I had to guess, probably simplistic.
I love beating on mega-corps as much as anybody, but I'd put money that Google has been following the letter of the law in France. They have teams of very highly paid lawyers to make sure of it after all. France is just pissed somebody figured out how to game their system.
Re:So few (Score:5, Insightful)
"The government redrafted a proposed bill to levy a temporary 75% tax on earnings over 1 million Euros."
-- on earnings over 1 million Euros --
Personally I don't see the problem to contribute more to society if you earn that much money.
Re:So few (Score:5, Insightful)
The US had a top marginal tax of 90% during it richest times of the last century. Why does it bother you so?
Re:So few (Score:4, Insightful)
the wealthiest has resulted in a lot of them just flat out leaving that country.
Which is why tax laws need a lot more international corporations.
Right now, the rich and the mega-corporations are turning countries into enemies that fight each other over "competitive" tax rates, when they should be allies fighting the tax evaders with criminal prosecutions.
It's just another trick to make you and me pay indirect subsidies to the rich. Even if you're anti-government, you can't deny a simple truth: Every $ that some rich dude or corporations evades in tax payment has to be paid by the rest of us instead.
75% tax on rich does not exist (Score:5, Insightful)
Re:75% tax on rich does not exist (Score:5, Insightful)
"France is famous for its generous social benefits, somewhat relaxed work ethic"
That relaxed work ethic that gives France one of the highest GDP/hour worked in the world.