
Google shifted $23B to tax haven Bermuda in 2017 - spking
https://www.reuters.com/article/us-google-taxes-netherlands/google-shifted-23-billion-to-tax-haven-bermuda-in-2017-filing-idUSKCN1OX1G9
======
manigandham
This is legal. Any issues should be taken up with the political and tax system
that allows it.

If you blame the company for doing this then I expect that you also make 0
deductions on your personal taxes and pay as much as possible.

~~~
sremani
You cannot replace ethical with legal. We all understand its legal. But to
post on a forum criticizing this is not a permissible action?, but some how
supposed to bring the political class to change things...

~~~
cascom
Cheating on your spouse is not ethical but it is legal, would you argue for it
to become illegal?

My point is that it is not a given that ethically dubious actions should be
illegal. Furthermore, what is ethically wrong to some may not be so for
others.

~~~
DannyBee
I agree with what you are trying to say, but i must point out: this example
may not prove what you think

"Cheating on your spouse is not ethical but it is legal, would you argue for
it to become illegal?"

It was and is in fact illegal for many years precisely because people found it
not ethical enough. In english common law, it was even a felony. It is
changing (and has changed in a lot of states) precisely because people are
more okay with it than they were.

In practice, the legality of things is generally decided by the societal
consensus around "ethical dubiousness".

~~~
hermitdev
In some jurisdictions in the US, I think it is still illegal to cheat on your
spouse, or to knowingly have relations with a person that is married. I think
it's a civil penalty, usually not criminal. e.g. The cheated-on spouse would
have to file a lawsuit. I don't have anything concrete to cite, just vague
memories of a few news articles in the past decade.

~~~
DannyBee
(I'm a lawyer licensed in 3 states, previously 4 :P)

It is definitely illegal in various jurisdictions, and even criminal in many.
It's also generally viewed to be no longer federally constitutional since the
late 60's due to various supreme court decisions. As a result, most states
have struck the laws down over time or repealed them (wikipedia has a map
somewhere of this), so you generally only see it as a plea bargaining anymore.
IE people will plead to adultery instead of a greater crime.

(Yes, it's as weird as it sounds)

------
chuckgreenman
> The tax strategy, known as the “Double Irish, Dutch Sandwich”, is legal

Hey, at least it's got a fun name. I can't imagine anyone is too surprised by
this. Personally I'm happy to pay my tax burden. I grew up in America, went to
public schools and benefited from public services.

Corporate tax evasion like this seems like fixation on a local maxima. There's
no way to account for the return on your mandatory tax investment, but their
is a return and it's important for everyone.

~~~
fixermark
Keep in mind that the "evasion" in question is the US government trying to
grab taxes on money paid to a company by foreign nationals in a foreign
market.

It's unclear why that money would be owed to the US ethically. These companies
are, ostensibly, already paying their fare share in payroll taxes, real estate
taxes, sales taxes, commercial use taxes, etc.

~~~
tossaccount123
>It's unclear why that money would be owed to the US ethically

The company is headquartered there, the IP was developed there, the founders
were educated there, the core technology that made their company possible was
funded by US tax payers, the safe environment that makes business possible is
secured by police and military funded by US tax payers, etc

~~~
fixermark
These are all true things, and this is why the company pays all its domestic
taxes.

When the company then goes on to do business in another country as well, where
another nation is providing security, safety, infrastructure, perhaps a public
education system that creates a workforce the company wants to invest in...
How much does the company owe its home country?

If you graduated university, how much do you owe your alma mater in annual
donations beyond what you paid for the diploma program? ;)

------
solarkraft
I would expect the HN crowd especially to see the economy as a technical
system.

A fluid pipe line, perhaps. There are no ethics. Expect companies to do
everything there allowed to. Disallow things you don't want them to do.

It's this easy.

~~~
simplify
This is called the Freidman Doctrine [1], and didn't exist until 1970. Before
this stupid idea got popular, companies _were_ actually concerned with how
their actions impacted society. They weren't the souless profit-seeking
machines you see today.

[1]
[https://en.wikipedia.org/wiki/Friedman_doctrine](https://en.wikipedia.org/wiki/Friedman_doctrine)

~~~
refurb
Really? Seems like the past is ripe with abuses by corporations - pollution,
child labor, tax avoidance.

I think you need to take your rose colored glasses off.

~~~
tivert
> Really? Seems like the past is ripe with abuses by corporations - pollution,
> child labor, tax avoidance.

And before the Friedman Doctrine, they could be more easily condemned for
their lack of social responsibility without the constant refrains that the
only duty a corporation is to make money for its shareholders.

------
m_b
What a surprise. But still we should continue to think about them as a company
working to make the world a better place... Everything is fine.

~~~
jbob2000
This assumes that paying tax makes the world a better place. I am sure Bill
Gates has played similar accounting tricks and look, he's about to rid the
world of Malaria. Yes tax dollars are used for social good, but they also fund
the military and provide subsidies for all sorts of nefarious industries.

~~~
decebalus1
The fact that tax money is perceived as mismanaged is never an excuse to avoid
paying taxes. That's a different problem with it's own solution. At least a
citizen has the theoretical power to vote out people who mismanage tax money.
You don't get a say about how a billionaire spends his/hers money. Actually,
most of them are hoarding it. And the corporations holding the money become
more powerful, being able to greatly influence the aforementioned mechanism of
voting. It's a bad thing. A very bad thing and I'm very sad people are not
more outraged about this.

~~~
nv-vn
I hear this all the time but I don't understand what hoarding means in this
context. Surely you're not implying that the majority of any billionaire's
wealth is just cash under their mattress? I'm fairly sure that most of any
given billionaire's wealth is invested, often in equities or bonds. In that
sense, they are letting others borrow their money and funding economic
development. Same goes for money sitting in a bank that gets loaned out.

------
stevehawk
Intentionally trying to spur discussion/debate on this because I would like to
learn some counter points.

I personally don't believe in corporate taxes. I can't imagine that any
reasonably sized corporation would voluntarily forego effort to lower their
tax burden considering the relatively low cost of a few accountants /
accounting software. Because of that, I prefer a system where only individuals
pay taxes.

Now, skipping the fact that my suggestion requires most countries to rethink
their individual/person tax code regarding income, property, etc and speaking
in a largely hypothetical sense - would abandoning corporate taxes for
personal taxes not be easier to ensure that money gets back to the government?
As a person it's much harder for me to lower my "profits" in order to dodge
taxes. But as a company I can make myself 'break even' or just below it pretty
easily.

I'd like to hear counter points to this because normally when I ask my friends
the responses I get are more along the lines of "corporations are evil" more
than "could it even work economically".

~~~
lordnacho
Problem with that is people can then make companies and keep all their wealth
in there until they need it.

Which might mean nothing gets paid but a minimum.

~~~
smitherfield
You can already do this, but it would only result in being taxed twice—first
when you earn your wealth as ordinary income or capital gains, then again when
you draw the salary or dividends from the company. No such thing as a self-
licking ice cream cone (without committing tax fraud).

ETA: Getting your employer to pay your company instead of you would be tax
fraud.

~~~
lordnacho
> ETA: Getting your employer to pay your company instead of you would be tax
> fraud.

Isn't that what people do if they are contracting?

~~~
smitherfield
Contractors pay income tax.

~~~
lordnacho
I think this might be a US specific thing.

~~~
smitherfield
Dunno about other countries, but it seems unlikely it'd be different unless
their tax authorities were born yesterday. Then again, by US standards most
other countries make tax evasion a national sport, so I guess it's
conceivable.

~~~
lordnacho
So for instance in the UK you can have a company that pays corporation tax at
20%. If you don't pay yourself anything out of it, that's it. Why would you
have income tax to pay?

------
visarga
Don't be evil (to your shareholders, of course, not the public at large,
Google is still a corporation after all).

~~~
stevehawk
They officially dropped "Don't be evil" a long time ago.

[http://time.com/4060575/alphabet-google-dont-be-
evil/](http://time.com/4060575/alphabet-google-dont-be-evil/)

~~~
nbar1
It was never dropped, it is still in Google's Code of Conduct. It's not,
however, included in Alphabets.

[https://abc.xyz/investor/other/google-code-of-
conduct/](https://abc.xyz/investor/other/google-code-of-conduct/)

~~~
MrZongle2
Which pretty much means that they are empty words.

If your master has no such Code of Conduct, then _you_ have no such Code of
Conduct when push comes to shove.

~~~
Lio
"Don't be evil" was always meaningless corporate spiel.

It's like "we value your privacy" or "all natural ingredients", it means
nothing because you can define the terms anyway you like.

Defining meaning is really hard.

That's why English Common Law relies on precedence to fix details. "Codes of
Conduct", mission statements and advertising are all just meaningless fluff
because they are open to interpretation.

------
tonfa
My understanding is that since 2018, tax deferral is no longer possible and
all the offshore profit of US corporation has since been taxed.

Was that wrong?

Also my understanding is that even before, the income moved to tax haven was
still subject to US corporate tax, though companies were able to defer
taxation until it was repatriated.

[https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St...](https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#Tax_deferral)

~~~
fixermark
You are not wrong. Given that the timeframe of this story is "in 2017" (even
though the timestamp is recent), this is arguably old news.

------
gammateam
> as part of an arrangement that allows it to reduce its foreign tax bill

What this article and most of the discussion misses is that many of these tax
havens are just better for business in ways that have nothing to do with taxes

As the article alluded to: PART of an arrangement

You have a catalogue of Cantonal systems, Confederacies, Federations where you
can incorporate at the country level or an obscure state’s level (the US has
no way to incorporate at the federal level), Segregated Portfolio Companies
decades before similar entities were offered in more respected jurisdictions,
useful Trust laws with no supranational government undermining them, useful
information protection laws with no supranational government undermining them,
and thats before we even touch on banking and brokerage services and free
trade agreements

The ability to offer these without levying a lazy passive tax for the
privilege or “protection” is just icing on the cake

------
nbar1
This is just how business works at that level.

Don't like it? Me either, but Google is still playing by the rules.

~~~
sudden
They are certainly playing by government rules. People who arent happy with
this should complain about and to governments. and not to corporations.

~~~
noitsnot
The amount of lobbying $ by Google alone leads me to really question whether
anyone in Washington even rarely considers people complaining.

~~~
ucaetano
The loophole was closed, so I guess the lobbying either wasn't about that or
wasn't effective.

And EU tax laws aren't determined in Washington.

------
yueq
My tax haven is RothIRA.

~~~
rconti
Your contributions are post-tax.

Of course, when you retire.....

~~~
riku_iki
The same as those $23B? If shareholders will want to get them as income in US,
government will collect corp and income taxes on those money.

------
SovietDissident
The criticism here is that google's leaders and employees have explicitly
advocated on behalf of and contributed to leftist causes, which promote the
view that taxation should be greatly increased to decrease inequality, pay for
government programs, or myriad other reasons. When Trump was elected, they had
company-wide meetings concerning the sad state of the country, where
melancholy leftists could vent their unhappiness (no such reaction greeted
Obama's election). James Damore was harassed and eventually fired when he
accepted the (fake) invitation to challenge "Social Justice" orthodoxy
concerning gender. They didn't address his evidence, but rather went after his
livelihood.

My point being: they are one of the richest companies in the world, committed
to a leftist worldview. The fact that they do everything they can to funnel
money away from the poor, downtrodden, socioeconomically-disadvantaged,
marginalized, etc., which they so loudly proclaim "need our help!"\---the word
hypocrisy doesn't even cut it.

~~~
TulliusCicero
There's absolutely nothing hypocritical about it. The progressive viewpoint is
that taxes should be higher, not that people should just be willingly donating
way more money to the government.

~~~
bassman9000
This is not a will issue. It's not that against their will they're taxed. It's
that they've successfully managed not to pay, contravening the supposed stance
of the company.

Thus the hipocrisy.

[https://youtu.be/vayYdTU0FiA](https://youtu.be/vayYdTU0FiA)

------
nogbit
The floor is lava, if you touch it you die.

No it's not.

It is, because I say it is and that's the game we are playing.

OK, I'll play.

....

Here's this 3000 page book, it says you own me 30% of what you just made.

Really, let me read it. No, it says I owe you nothing.

Really, OK, I suppose it does.

------
sergiotapia
"Number One: In 1945, corporations paid 50% of federal taxes; now they pay
about 5%.

Number Two: In 1900, 90% of Americans were self employed; now it's about 2%."
\- Deus Ex

~~~
solarkraft
90% self employed? Woah? Were there virtually no companies?

~~~
pm90
There were likely less franchises and chains so every town had their own one-
off local Diners instead of Dennys, had a shoe store instead of Amazon etc.

The extent to which chains/internet has elliminated these mom and pop stores
is staggering... and also why there was so much "self-employment" back then

Disclaimer: I'm making an intelligent guess here; these views are not (AFAIK)
backed by any study

~~~
EduardoBautista
Operating a McDonald's, although a franchise, is just as self-employed as a
local diner.

------
rhacker
So like get a rogue country to finance a $200M private army to take over the
island.

~~~
tareqak
Your comment reminded me of a thought I had not too long ago: what would stop
a superpower like the United States from going around shaking down all the
supposed tax havens? They wouldn't have to declare war outright, they could
just impose a no-fly zone and put a navy cordon in international waters. In
the cases of land-locked tax-havens in Europe, the superpower would need to
negotiate with the tax havens of the bordering countries, so it's less
feasible, but still possible.

Edit: This would be specifically for individuals hiding their wealth abroad
and declaring a lower than actual income, and not for corporations that
publish their balance sheets.

~~~
fixermark
It would disrupt the delicate framework of trust that the top level of global
economics flows upon, and ultimately, the US economy is a trust-based animal.

The more interesting scenario would be a smaller government trying to
embarrass or blackmail the US by doing something similar with THEIR military,
and that's the stuff of James Bond movies. ;)

------
thelasthuman
Capital is free to move where it gets the most benefit, why aren't people this
free as well?

~~~
clairity
this is an underappreciated point. to make markets more free and efficient,
labor should have the same freedoms as capital. otherwise capital has an
unfair advantage (on top of all the existing information asymmetries).

------
samstave
If I were a financial terrorist - the countries internet connections I would
be going after would be all located in the Caribbean....

~~~
smcl
Genuine question - what do you think that would achieve?

edit: just to pre-empt any confusion, I'm not accusing you of wanting to do
this. I'm just curious what you think someone interested in this would expect
from it. Other than to bloody the noses of the elites and make them a little
uncomfortable for a short period, I can't see any real impact unless an
attacker goes further than DDOS or cutting cables (e.g. if they were to
_steal_ some of the money as well, or wipe records)

~~~
benologist
It will annoy them later when they want to evade more taxes and need to
transfer "their" money to the next corrupt tax haven, and can't sign in to
their bank.

~~~
manigandham
They do not "sign in to their bank" like that.

