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Comment by ChuckMcM | Hacker News Reader

As others have pointed out this can happen in France given the way in which laws are prosecuted, my sister lives there part time and really likes this aspect of the country.

That said, its really interesting to watch such powerful interests dance around (in a more general sense) shooting each other. The whole scheme which companies like Apple, Google, others use to "legitimately" minimize their tax burden and the financial pressure being put on the people of the EU by the immigration situation and general financial mismanagement, has really created a fascinating pressure vector.

The pressure point is this; If these companies paid their "fair" taxes in the countries where they do business, then there would be extra tax money to support the government obligations and less need for austerity programs.

Interesting times.

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>this can happen in France given the way in which laws are prosecuted,

I am a French lawyer.

So I have to disagree. This is not the case here. The prosecutors are plainly saying that Google did something outright illegal by misinterpreting on purpose a clause in the French Irish tax convention.

According to the prosecutors in this case Google used a clause sheltering pure advertisement and research subsidiaries of Irish companies from having to pay French tax. But this clause is clearly intended to protect subsidiaries doing market research and advertising a product in advance of actually selling it in France (And also for subsidiaries doing purely informative business (tech support, warranty management etc.) and pure research).

So Google is saying that they do advertisement, so that this clause apply to them, but a reading of the part of the convention that was made public by the prosecutors, clearly show that this is apparently wrong. But the fact that I still haven't found the full convention is a huge caveat :).

So most of developed countries would have enough to prosecute.

Is this pressure enough to force out "legitimate methods of EU tax avoidance" via legislation?

It's really, really hard for me to sympathize with US tech companies given their financial situation:

> "Apple, Microsoft and Google Hold 23% Of All US Corporate Cash Outside the Finance Sector

> Apple leads the pack with $215.7 billion in cash, followed by Microsoft at $102.6 billion, and Google at $73.1 billion.

http://www.geekwire.com/2016/apple-microsoft-google-hold-nea...

I agree, back when the UK was complaining about Google I was hoping that would push them into unifying tax policy.

The challenge though is getting everyone on board, without a common vision of how it should work, you won't get progress.

> I agree, back when the UK was complaining about Google I was hoping that would push them into unifying tax policy.

It's not just tax policy. The countries that have less well educated workers or less wealthy consumers want to give companies some incentive to come there. If the tax rules were the same they would use lower rates. If the rates were also the same then would use the tax revenue to fund subsidies or projects that act as de facto tax breaks.

Your choices are essentially "countries compete with each other for investment capital" and "world government with completely uniform laws." And the second one is Very Bad: Monoculture, nowhere to run if it goes wrong, single target for corruption and capture, etc.

> Is this pressure enough to force out "legitimate methods of EU tax avoidance" via legislation?

The problem is still that nobody can answer this question: If an international company designs its products in America, manufactures them in Asia, sells them in France and has its headquarters in Ireland, what portion of its total income is it supposed to report in each country?

Any kind of non-circular definition effectively converts the "income tax" into a tax on the thing that happens in the country where the income has to be reported, which nobody wants to admit (because people don't like sales taxes or job taxes), and which nobody even actually wants because it will then discourage that thing from happening in that country.

What people want is for the money to come from the corporation without that fact altering anyone's behavior in any way. But that's not how taxes work. If you want to collect taxes from companies that sell things in your country, you have a de facto sales tax and everything that comes with it. Either accept that and call it what it is or admit that you would rather get the money from somewhere else (or not have it).

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