
Google to end 'Double Irish, Dutch' tax scheme: filing - thefounder
https://www.reuters.com/article/us-google-taxes-netherlands/google-to-end-double-irish-dutch-tax-scheme-filing-idUSKBN1YZ10Z
======
crazygringo
> A Google spokesman on Tuesday confirmed it would scrap the licensing
> structure, saying this was in line with international rules and _followed
> changes to U.S. tax law in 2017_... The _tax strategy was legal_ and allowed
> Google to avoid triggering U.S. income taxes or European withholding taxes
> on the funds, which represent the bulk of its overseas profits... Under
> pressure from the European Union and the United States, _Ireland in 2014
> decided to phase out the arrangement, ending Google 's Irish tax advantages
> in 2020._

This is fantastic news because _laws were changed_ and that _worked_.

The criticism towards Google, Apple etc. for minimizing their tax burdens has
always been misplaced. Corporations are _supposed_ to maximize profits. And
governments are _supposed_ to collect taxes in effective ways.

It's always been a derelection of duty of _governments_ when these loopholes
exist in the first place. So it's great news that with enough publicity,
democratically elected lawmakers felt the pressure from voters to fix this.

In other words, _this is democracy working_ \-- which is always nice to see.

~~~
stefano
> The criticism towards Google, Apple etc. for minimizing their tax burdens
> has always been misplaced.

It's a valid criticism if you don't think that "Corporations are supposed to
maximize profits" should be true. When anything can be justified because it
maximizes profits it becomes very, very easy to be a technically law abiding
unethical company which is a net negative on society.

~~~
growse
> > The criticism towards Google, Apple etc. for minimizing their tax burdens
> has always been misplaced.

> It's a valid criticism if you don't think that "Corporations are supposed to
> maximize profits" should be true. When anything can be justified because it
> maximizes profits it becomes very, very easy to be a technically law abiding
> unethical company which is a net negative on society.

Isn't this why society comes together to form a government and pass laws to
prevent these sorts of behaviours?

Not every corporation will be looking to maximize profits, but they're
generally all looking to maximize _something_ typically at the expense of
something else. From a selfish perspective, externalising your costs is a good
thing.

~~~
chongli
Society is made up of human beings, most of whom are affected by emotions like
guilt and empathy. Society works best when we are able to assume good faith
from all participants. It breaks down when free riders (those unbound by
empathy or mores) reach some critical threshold and then everyone loses trust
in the system.

Have you ever been in a group of friends and played a board game where
everyone was playing casually to have a good time, except for _that one guy?_
MtG fans call this type of player Spike [1]. Other gaming circles refer to
these players as munchkins and they’ve been immortalized in the card game
Munchkin [2]. I think most people have played with someone like this before.
Their obsession with winning at all costs ruins the game for everyone else.

This is what big corporations are like! They put mom & pop out of business.
They drive down wages and destroy the environment. They play one government
against the other in order to minimize their taxes while maximizing their
subsidies. They are the Spikes of society. We try to fight them with
legislation but our laws are always one step behind.

If Google is making an announcement like this, you can be sure they’ve found
something else that works even better for them. You can’t expect them to give
anything away without a fight.

[1]
[https://mtg.gamepedia.com/Player_type#Spike](https://mtg.gamepedia.com/Player_type#Spike)

[2]
[https://en.wikipedia.org/wiki/Munchkin_(card_game)](https://en.wikipedia.org/wiki/Munchkin_\(card_game\))

~~~
growse
> Society is made up of human beings, most of whom are affected by emotions
> like guilt and empathy. Society works best when we are able to assume good
> faith from all participants. It breaks down when free riders (those unbound
> by empathy or mores) reach some critical threshold and then everyone loses
> trust in the system.

Human beings also self-organise and incorporate into groups, which may
individually have their own distinct aims. I'm not sure what guilt and empathy
have to do with organisations of people though.

"Good faith" is also pretty meaningless, as it doesn't really describe any
specific behaviour or motivation. What happens when two individuals (or
groups) come into conflict trying to optimise their own outcomes "in good
faith"?

> They play one government against the other in order to minimize their taxes
> while maximizing their subsidies. They are the Spikes of society. We try to
> fight them with legislation but our laws are always one step behind.

I, as an individual, choose to use a low tax savings scheme to minimize my tax
burden. I also make sure to claim every tax credit (or subsidy) that I'm
entitled to. Am I a 'spike' in society?

~~~
chongli
_I, as an individual, choose to use a low tax savings scheme to minimize my
tax burden. I also make sure to claim every tax credit (or subsidy) that I 'm
entitled to. Am I a 'spike' in society?_

Have you been using “Double Irish” accounting? Do you keep your money offshore
and lobby the government for favourable laws that let you repatriate the money
while avoiding billions in taxes?

No, probably not. You’re doing what normal people do as part of the game. You
probably don’t have your own accounting department with a payroll in the
millions whose entire mission is to scour the tax codes of every country in
the world, looking for loopholes like this.

A “Spike” is someone who will stop at nothing to win. They bring in the most
obscure rules and take maximum advantage of every possibility, convenience be
damned. You just sound like a sensible person who makes the best of the laws
as they were designed for people like you.

------
Gladdyu
Not Google being good - Irish law has been changed such that it's no longer
permitted.

"The legislation passed in Ireland in 2015 ends the use of the tax scheme for
new tax plans. However, companies with established structures can continue to
benefit from the old system until 2020."

[https://www.investopedia.com/terms/d/double-irish-with-a-
dut...](https://www.investopedia.com/terms/d/double-irish-with-a-dutch-
sandwich.asp)

~~~
bagacrap
If "being good" means intentionally paying more tax than legally obligated, I
don't think any corporation fits the bill.

~~~
domador
What if "being good" means "no legal arbitrage" and "no jurisdiction
shopping"? What if it means "not really, really going out of your way to find
ways to pay less tax, including by buying legislation"?

~~~
kmlx
what if it means no more taxes to corrupt governments?

------
Cactus2018
Pulitzer winning article explaining the “Double Irish With a Dutch Sandwich”

"How Apple Sidesteps Billions in Taxes" 'Funneling Earnings to Low-Tax
Regions' New York Times, April 29, 2012, Charles Duhigg and David Kocieniewski

[https://www.pulitzer.org/files/2013/explanatory-
reporting/04...](https://www.pulitzer.org/files/2013/explanatory-
reporting/04ieconomy4-29.pdf)

------
codesuela
The question is: what's the new scheme? It's not like these tech megacorps
will just start paying regular taxes

~~~
tchaffee
If they can't find a legal loophole, they will indeed just start paying
regular taxes. As many companies do around the world.

~~~
_the_inflator
> legal loophole

I side with you regarding tax debates for large companies. However what is a
"legal loophole"? There is no loophole. What Google did is not illegal.

~~~
moufestaphio
Of course what they did is legal.

A loophole is legal, that's the point. It's a way around the intent of the law
legally.

~~~
TomMarius
I am pretty sure the lawmakers intended it exactly as it was used. I'd give
them benefit of doubt if they closed the hole within a year after discovery,
but this is the most well known tax loophole of which even children know the
name, used for several decades.

------
Freestyler_3
Very nicely packaged to not sound to negative about google.

Google saying: we have done nothing illegal

Yeah, that's not the point. The point is that normal people can't afford to
dodge taxes like google (and others) so they are not happy about it.

~~~
hailhash
>>The point is that normal people can't afford to dodge taxes like google (and
others) so they are not happy about it.

If your assumption is all of 98,771 Google employees are dodging their income
taxes on the extra money Google "saves" from Double Irish Dutch Sandwich, you
could not be farther from the truth.

Someday the money "saved" from this "dirty evil" scheme has come-out in the
form of * Stock buy back * Dividend * Employee Salaries/Bonus * R&D Investment
* Merger and Acquisition * New Hires

All of the above are taxed anyway.

We are talking about extra "Corporate" tax whatever that means. Google "Milton
Friedman and Corporate Taxes" he has a much better explanation than me.

~~~
humanbeinc
I disagree. The surplus stays in the war chest (not last for times like these
when new tax evasion structures have to be set up and lobbied for). The taxes
lost on Googles EBIT in the EU per year equals to 2-3 Million working citizens
not paying a single Euro in income taxes.

~~~
hailhash
With all its great tax policies EU posted 1.8% GDP growth rate in 2018.

It's definitely working gangbusters, so lets double down on everything. There
is a lot of room below zero.

------
amelius
This scheme is hacking, except not with computers but with the financial
system.

~~~
m12k
If you define hacking broadly as 'repurposing a system in a way that is
significantly different from its originally intended use' then it certainly
covers it - and you sort of need to define it broadly to encompass both the
'hacker ethos' and 'blackhat' meanings in tech anyway.

~~~
artursapek
That's pretty much it. Snowden has a fun line in his new book about how he
"the first thing I ever hacked was bedtime".

------
thefounder
In 2017, Google’s Dutch filings showed that it had moved $23 billion through a
shell company to Bermuda, a strategy that allowed it to delay paying U.S.
taxes. In the 2018 filings seen by Reuters on Tuesday for both Ireland and the
Netherlands, the company said it would end the practice.

------
C14L
Did they find something "better"?

------
rolltiide
I wonder why?

Seems like the central EU government has grown stronger against the autonomy
of member states as they have been challenging Republic of Ireland's role in
this for some time? And/Or the US tax regime is favorable enough now? Which is
nice that you can wait it out. Easier to offset a 20% US corporate tax than a
35% one.

~~~
wolfi1
there is no "central government". Ireland was not so long ago a receiver of
large EU subsidies and at the same time permitted tax evasion. The EU
Commission now ruled that those tax evasion schemes are illegal subsidies to
the companies, if these ruling holds, is another matter.

~~~
rolltiide
> there is no "central government"

You're right, I meant The EU Commission flexing its autonomy over the member
states using its own courts, governing abilities, and physical location. If
only there was a word for that.

~~~
antientropic
The European Commission was created _by the member states_ to ensure that the
rules that they collectively agreed upon are enforced; it is not "flexing its
autonomy". Any member state that no longer wants this is free to invoke
Article 50 and leave the union.

~~~
rolltiide
The US Federal Government was formed by its member states too. Turns out it
got way richer and noticed that all commerce is interstate commerce over the
last century and uses that to flex its autonomy over all facets of life within
the states.

EU isn't acting that different, one ruling at a time.

------
hailhash
When was the last time a corporation went to local Starbucks to drink a cup of
coffee from all of the tax savings from the double Irish Dutch sandwich?

When you tax a corporation that gets passed on to its employees and its
customers, who already pay those taxes.

~~~
criddell
Google and other big tech companies that were doing this shady accounting
stuff are sitting on the money. If they had paid taxes on it, they would just
be sitting on less money and we would have a little bit more money for public
programs. Public programs that are run by people that stop at Starbucks some
mornings.

~~~
Gigablah
Or maybe you could siphon just a teeny little bit from your military-
industrial complex.

~~~
criddell
It isn't an either-or situation. Everybody should pay their taxes and we
(government) should spend the money carefully.

