Activision Blizzard has moved billions of dollars of profit into tax havens
taxwatchuk.org
taxwatchuk.org
As the oft-quoted US judge Learned Hand said:
> Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands
How ironic that you had to post (as of now) 24 times in this very thread defending this condescending viewpoint. You're not at all addressing what the article mentions.
I'll address what the article mentions. The article (quite clearly, in bold) mentions, at the top:
> The company is currently under investigation by tax authorities in the UK, Sweden and France over alleged transfer pricing irregularities and is is facing a potential bill of over $1.1bn in back taxes and penalties.
> In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m
It appears these steps may very well be not legal.
If you deal with your tax in countries such as:
> The multinational company has a complex structure with subsidiaries in a number of tax havens including Malta, the Netherlands, Barbados and Bermuda.
(Yes, I'm including my own country here.)
Then you're appearing to do something shady with regards to tax. You can expect something shady in return. And of course, since they're also using Delaware, it could very well be that they do pay fair (or "fair") tax over their US part. If so, would you argue Americans have no say in this, given that they're not losing out on tax from Activision-Blizzard?
There appears to be a lack of political willpower here in The Netherlands to combat this issue. No surprise, given how far right the current leading party (VVD) is. As a result, The Netherlands wins a little bit, but the EU as a whole loses out. Its stupid egoism like this which makes the EU lose on an international scale, akin to Germany allowing the NSA to tap data as long as it wasn't about Germans.
I don't think that word means what you think it means.
>You're not at all addressing what the article mentions
Weird, I think I've addressed pretty much everything your comment brings up.
However, I'd like to point out that there's nothing shady about structuring to minimize your tax burden. If the lawmakers didn't want you doing this, they'd simply write laws that don't allow it.
These rules themselves were created by the very people that now attack them. The logic is that any government doesnt get to tax what is not locally sourced.
So ok, a game is not created in the UK, and it does not benefit from the HRMC jurisdiction in terms of labor etx. But it generates oodles of cash in sales in the UK.
So now they are coming back and saying that, the cost of generating the sales in the UK is higher, not because of some actual physical activity, but simply because their sales are too high.
This ia basically a mafia don saying you are doing too good and therefore we must have a larger piece of the pie. Yet the dons themselves are the one that made the rules and made them necessarily obtuse and subjective in order to charge for things (a) that do not create value and (b) keep them employed
But true, the real punishment comes if you decide not to pay your taxes...
The -in this example- sales tax gets in a big chest. Some of that chest goes to healthcare. Same for smokers.
You may disagree how your government spends their income (part of which comes from taxation). I don't agree with a lot of things my government does either; still I pay tax.
In our democratic societies there are various ways to take action. For example, you're free to vote for a different leader. We (in "the West"), at least, have these liberties.
Additionally, despite the delusion that some companies and individuals may have, they damn well do have similar and perhaps greater obligation to work towards the betterment of society. For some reason, we seem to think that a group of people somehow have less ethical obligations than individuals.
I think it was PJ O'Rourke who said something like giving money and power to politicians is like giving whiskey and car keys to teenage boys.
In retort I'd offer the pithy quote by Churchill that democracy is the worst form of government, except for all the other ones. But as is usually the case I don't think Churchill ever even said it.
Maybe theocracies and military dictatorships are what happens when politicians have all the money and all the power, and thusly become theocracies and military dictatorships.
https://www.atlanticcouncil.org/blogs/iransource/rage-agains...
The big difference is that the elite here invent crazy-useful shit like online-shopping or iPhones or map-reduce. The elite in a theocracy or military dictatorship accomplish and contribute nothing.
No elite ever invented any such things. Engineers working for the elites (and getting shit all for their invention most of the times) did. Same way the Pharaohs didn't built the pyramids themselves...
That's very easy to disprove as a claim. Engineers in the US and elsewhere routinely get very wealthy from companies they found or are involved with and their inventions.
Robert Noyce invented the first practical integrated circuit and was quite wealthy. As a brilliant engineer he co-founded both Intel and Fairchild. There's probably nobody in the history of the semiconductor industry that had a greater impact. He's a big part of the reason Silicon Valley exists. Gordon Moore was another talented engineer along with Noyce and a co-founder of Intel (resulting in a ~$20b fortune).
Ray Dolby was a brilliant engineer that became a billionaire from his inventions and eponymous company.
Linus Torvalds, a very skilled engineer, created Linux and is now quite wealthy. He was a self-made millionaire in his 30s.
Thomas Edison was both relatively rich and a very prolific inventor.
George Westinghouse was a very skilled engineer as well as a prolific inventor and became extremely wealthy.
James Dyson is both an inventor and extraordinarily rich.
Robin Li was a skilled engineer and helped pioneer search engines.
John Carmack and Tim Sweeney are both inventors and rich (extraordinarily rich in the case of Sweeney).
Larry Page invented PageRank, which was a critical shift in the way search engines work versus all the existing peers at the time. It was in fact the very foundation of Google's dominance.
Bill Gates started the first software company. It's easy to argue he didn't invent much, however he did help blaze the trail of software as an industry unto itself.
Larry Ellison - a skilled engineer - along with his co-founders, launched one of the first relational database products.
The founders of Cisco were both skilled engineers and got very wealthy from their ownership (despite conflicting with the VCs and being tossed out later).
Steve Wozniak was both a very skilled engineer, an inventor, and someone who got relatively wealthy.
Paul Allen was both an inventor, skilled engineer and someone who got extraordinarily rich.
Jensen Huang was a skilled engineer and got extremely wealthy by founding nVidia.
Robert Metcalfe, a talented engineer that co-invented ethernet, got wealthy from 3Com and various companies he was involved with over the years.
Andy Bechtolsheim was a very talented engineer that became wealthy from Sun Microsystems, Arista and investments.
Marc Andreessen was an engineer that helped to co-create Mosaic and went on to found Netscape. Few people did more to spark Internet adoption than Andreessen's early browsers.
James Clark was a skilled engineer that founded Silicon Graphics.
Pierre Omidyar was a skilled engineer and helped write the early code for eBay, which was one of the first online auction sites.
This list keeps going. These people all fall into the "elite" category and they're all engineers.
Many of those (the ones who still do relevant work themselves) are hardly elites -- rather small change (e.g. Torvalds).
And the elite rest did their personal inventing before they become elites (Jobs or Ellison, for example, didn't do much inventing as billionaires).
Afterwards the inventing (when they were not actively stifling innovation, like Oracle and MS) was done by their employees...
...?
The first company founded to provide software products and services was Computer Usage Company in 1955.
https://en.wikipedia.org/wiki/Software_industry
Download the referenced article about CUC, Recollections of the First Software Company here:
It’s meant only as a critique.
Where’s the evidence to suggest the money would be used to build public transport, improve the education system, reduce poverty, build more public / affordable housing?
The preponderance of evidence suggests any and all of these things would be poorly managed, massively over budget, and approximately a decade behind schedule.
It's still perfectly legal to destroy the environment in many ways, it doesn't mean we can't complain about it.
If we don't talk about it, nothing happens.
Now sometimes you have tax laws that are poorly designed, where we don't like what happens when people follow the incentives they create. Or other times you have tax laws where people debated about what things to incentivize, and one side won the debate, and you might be on the other side. It's perfectly fair to want to change them. But it doesn't really make sense to criticize people for responding to incentives per se.
You're even more culpable if it is later discovered that you lobbied for the loophole.
Society's reaction should be to disseminate the surprising story and use it to drum up support to fix the law. At that point, the only reason to not pursue the matter further is to serve the higher principle of avoiding ex post facto legislation. It's an important principle, so we allow the crime to go unpunished, but the morality of the situation is still that the theft was wrong.
But overall you can't really stop anyone doing almost anything. If people don't want large companies to pay taxes, or favor property values instead of building more housing, or reward working in finance instead of engineering so be it. Just don't come and complain a few decades later when everyone is greedy and things are falling apart. Because if moving money around is the way to make money successful companies are going to be just as good at that as anything else.
In this exact scenario, people complain all the time. They start talking about how we need to raise other taxes to make up for the new shortfall in cigarette-related revenue.
Ah yes a terrible example for the argument you're trying to make. In NYC bodega's sell cigarette "illegally" imported from VA. It doesn't and hasn't stopped people from smoking, at all. It's a vanity bill. Also, it helps generate revenue because most people from outside of the city won't have a bodega that will sell them untaxed cigs, which is always the easiest way to pass taxes, have a non-local pay them. Does government run lotto help stop gambling? No, they just want a piece of the pie.
In general, the average income tax law (the basic stuff) isn't poorly designed, its just under enforced and the extra tax law makes the rest very difficult to work with. Right now, what is poorly designed in tax code is the effect of increased globalization, software and international tax treaties/law. a Also, not paying your taxes when you're using government benefits should be criticized, 100%. For example, Walmart formerly not paying a living wage and making the tax payers support some of their employees, while the founders kids are all billionaires, is totally broken.
The whole "nudge" practice because nosy people want to decide what's best for others drives me nuts.
in some sense tax havens are kind of like black market banks
Complain about the law.
E: CogitoCogito is absolutely right, there are companies spending lots of money around the world to push these regulations. I just seriously doubt that Activision Blizzard is one of these.
> Complain about the law.
Do you not suppose that these large corporations with so much money at stake do not in fact use their resources to ensure that laws take their current form? Do believe they are somehow innocent actors in this drama?
> The problem isn't with the corporations...
Are you saying that _none_ of the corporations with large money at stake are taking the financially rational approach of influencing the current state of the laws to have these "loopholes" or are you just saying that Activision Blizzard hasn't done so. If you're saying the latter, maybe you should edit the post I responded to to make that clear.
Edit: Small edits fixing terrible writing.
E: I edited my prior comment.
It’s easy to think only those people you disagree with are lobbyists, but even just sending a letter to your congressional representative is lobbying. And there are paid lobbyists on both sides of almost every issue.
So called grass roots lobbying generally involves well funded groups organizing or convincing individuals to do the talking. Pretending that’s somehow different from paid lobbyists is missing how politics works.
Companies and Unions for example are often at odds on specific issues, but they both get sincere individuals to be doing some of the communication.
Otherwise there is (or at least should be) no difference.
FTFY
But with the high cost of being elected, of course politicans follow the money and the corruption that goes with it.
Most people attempt to fill out their returns in a rather straightforward manner as laid out by the forms. The loopholes are not published in the tax forms.
Did you put money in a 401k?
Did you buy a house and calculate the tax deduction?
Did you hold onto a stock so you’d get the lower long term capital gains rate?
Did you contribute to an HSA or FSA?
The majority of people make decisions that optimize their tax rate.
Have an FSA or HSA?
You can cherry pick my examples.
Not by a long shot.
You are being dishonest in discourse to use that word with different definitions depending on who you apply it to. Either regular people are minimizing taxes when they use rules to reduce taxes, and thus so are corporations. Or neither regular people nor corporations are minimizing taxes because neither has achieved the absolute minimum.
> In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m.
Maybe not so legal?
I've personally been through such disputes with tax authorities and prevailed.
At best it's indicative of bad accounting, but for a company like Activision Blizzard and at that amount that seems unlikely.
And aside from wrong, the fact that they've agreed to pay a fine of $345 million means it was probably illegal. If they just phrased something wrong they could probably just correct the phrasing, and, more importantly, I think they probably tried really hard to get the phrasing right when transferring billions from one company to another.
I own offshore companies and minimize my tax burden, but let's call a spade a spade.
Choosing not to prosecute (especially because prosecuting tax fraud requires proof of willfulness) and simply collecting a tax deficit is pretty common, especially in cases of corporate tax evasion.
The disagreement in this case is called a tax deficit, and is what I meant by wrong. It's also the first necessary part of tax fraud.
EDIT: Also, if you read about the source of the $345 million tax bill (from the article), it's hard to see how this would've been a problem with "unclear phrasing"...
Just like FDSGSG wrote above, I went through a sizeable tax dispute (for an individual, outside of the US) and won. I have a good understanding of tax law yet it was nothing more than a bullshit money grab. No merit, nothing. More along the line; that's a very nice outcome for you but we don't really like it -- so pay up regardless. Like trying to shake a tree.
In this case, I can imagine for Activision (as a publicly traded company) it is better to settle a case for an OK amount than take it to court and run through the process. You have to make a risk reward analysis of whether it's worth spending time and resources on.
I wish both you and the thread OP would stop comparing this to A) personal (or small business) tax disputes and B) tax disputes that resulted in no additional tax liability. This dispute did result in additional tax liability.
Guess what happened - a year later they decided it wasn't ok, and of course the letter they wrote was worth as much as toilet paper in the court. It took 5 more years and a very decent amount of money to fight against it and finally get them to admit they were wrong and there is no issue. But of course no one will give you 5 years of not being able to run your business back.
With tax laws being so complicated these disputes are everyday stuff for anyone engaged in any "unusual" activities.
Though there are a bunch of unanswered questions in a lot of jurisdictions: How do you treat a fork?
Is it income? A dividend? A stock split? A spinoff? Some of these require the originator to file paperwork, and no crypto chain could possibly do that.
And what initial value? $0? Day1 trading value?
I did not mind paying the taxes, I did however mind the authorities trying to defraud me into paying non existent tax liabilities. They've since been forced to stop doing that.
I say, if players are right to complain about rewarding the wrong skill in the games, the public is right to complain about business being rewarded for their tax evasion skills.
You do know that we have the right to complain about whatever we want in democracies, and this can be one of the paths that change is enacted through, I assume. So why exactly are you trying to censor those that complain, because it makes you feel uncomfortable?
We will criticize tax evasion and even lawful-evil tax avoidance. You will have to live with it. If free speech becomes unbearable, I'm afraid the only solution right now is moving to North Korea, China or any of those countries where it's not tolerated.
The argument is "don't hate the player, hate the game". Complaining about the companies is wrongheaded is likely not going to get anywhere.
Targeting the tax system that got here, however, has at least a remote chance of affecting change.
Your and their argument is also incorrect. It's perfectly fine to dislike the player, because the player will be motivated to be less of a player and more of a good corporate citizen if they see that everyone dislikes them for their action.
The tax system is immensely complex, laws are slow to pass and change. It is faced with smart adversaries which try to use the tiniest loopholes to get an advantage, while regular Joe has to pay their taxes and they're condemned immediately when they try anything funny with their taxes (which they can't anyway, because they can't afford it).
This argument that the players are innocent and should not be criticized is either naive or malicious.
Gp is probably on your side in wanting this sort of thing over, and just trying to redirect your energy towards a legislative solution.
A legislative solution would be hard, but a moral solution enforced by shame is borderline impossible. There are too many corporations, if we damage the brand of one once a month it's still a risk worth ignoring.
jnwatson worded my actual arguments better than I would.
This company had a record revenue year and yet they decided to cut 800 jobs.
[1] https://www.independent.co.uk/news/uk/crickhowell-welsh-town...
Dunno, I feel that as a small business it is much easier for us to minimize our tax burden than it would be for a larger business.
Much easier for 4 friends working together to relocate than it is for a big business with thousands of employees. We've got far more tools at our disposal.
It isn't economically beneficial for people to spend vast sums on creative accountancy in order to minimise their taxation. Tax minimisation encourages investment in areas that do not promote growth or bring new products to market. Yes, there is a personal or individual corporate reward for avoiding tax but there are significant economic downsides too. Tax havens allow corruption, terrorism and organised crime to flourish giving them a way to siphon funds around which is a massive societal detriment.
Guess what: laws change, and some people think these laws should be changed so that these entities can no longer dodge the tax burden one might naively expect them to face if no loopholes existed. That's what people are talking about when these topics come up. Reducing that to "complain about [...] perfectly legal" is either disingenuous or ignorant on your part.
The article is not criticizing the laws. The article is criticizing Activision for following the law, exactly what the parent stated.
Maybe you read a different article focused on the law, not a single actor?
> The case of Activision Blizzard is just another example demonstrating the need for governments to introduce more effective measures to deal with royalty-based tax avoidance schemes. In the UK this means changing legislation to make sure that royalty payments made to companies in jurisdictions where the UK has a tax treaty are included in the charge to income tax.
That is not a criticism of Activision Blizzard. It is a straightforward statement of the fact that "more effective measures [are needed] to deal with royalty-based tax avoidance schemes". So, I don't really see what you're talking about. Let's try this: do you agree that they are "using offshore tax havens to reduce their tax burden"? If so, would you further agree that this is a "tax avoidance scheme"? Why or why not?
Some governments focus on low-hanging fruit or on flagrant tax evasion. They don't want a long running court case costing millions with an uncertain outcome.
So we never get to find out whether this scheme is legal avoidance or illegal evasion.
But, even if it's legal avoidance: I pay my tax. Why shouldn't this huge company who seeks to benefit from tax-payer funded institutions also pay their tax?
It wouldn’t be hard for the lawmakers to eliminate this uncertainty, they just want to remain competitive.
Everything you code has to be coherent, requirements change, and when they do it is hard to get everyone to agree on the details. You have 200 years of legacy code, have to be compatible with other states and countries, have to support all possible edge cases, and your code is interpreted not by a computer but by a human.
Are there broken laws? Sure. Is it easy to make good ones? Not so sure.
No they don’t. Even if a “poor person” wanted to, they have nowhere near the scope available to “arrange their affairs” such that they can minimise their taxes at the same percentage (of income) as the rich do. To believe otherwise is naive in the extreme.
--Anatole France
A person cheating on their spouse would pretty commonly be considered to be doing something "immoral"
Yet it would be ridiculous to make something like that illegal
I think the attempt to make moral and legal always align creates plenty of hazards itself
Especially if the moral code the law is based on something external and nowhere near universal (like religious sources, which disagree with each other, etc)
I can't even imagine a moral obligation to pay excess taxes, that's simply not how taxes work.
If your money is in a shell that you cannot reach/touch, do you really have it?
And if you can't, why is it on the balance sheet as if it were cash that you could reach?
And the same companies stuff all the non-US revenue into a low-tax subsidiary, even when it's effectively earned in high-tax ex-US jurisdictions to avoid their taxes too.
That's exactly the problem! These are extremely complex situations where there usually doesn't exist any clear answer. If there did, large corporations almost certainly would not take these steps.
If there were clear laws, then taking these steps could be criminal tax fraud. Blame the regulators.
There's nothing stopping nations from writing clearer tax laws.
I don't know, but I also doubt that anyone else really knows.
unless the idea is that any written tax rate is moral if it comes from the government, which also means any legal means to mitigate the tax rate is also moral because it comes from the government
You're suggesting that because you can imagine both a too strict and too lenient law, morality is an impossible concept?
no, not enough information has been provided to make that decision and that grandparent-OP should elaborate on their stance
That said, even if we all have different morals it seems they're mostly compatible.
But loopholes are different. If you discovered a loophole that made it so your landlord can not enforce rent collection, would you stop paying rent ? That's basically what these companies are doing.
Many, many people would believe it is just fine if they found a loophole that set their personal taxes to 0%. Even more would be fine with a loophole that reduced their taxes by 50%. Nearly everyone would be fine with loophole that reduced it by 5%.
There's only one way to handle this large moral gray area: pass laws and IRS rules to close the loopholes that experts deem excessive.
I certainly would. Thats why you have to be clear with the law and enforcement.
If you are doing it in such a way as to violate the social contract, then regardless of legality, I think a case could be made that it is immoral.
But more generally: I don't think anybody seriously believes that you should pay the government more than it's due. What people (myself included) believe is that the government is due more than it currently demands from the wealthy and from large corporations.
The gov’t is expecting tax players to optimize for the lowest tax rate!
> The case of Activision Blizzard is just another example demonstrating the need for governments to introduce more effective measures to deal with royalty-based tax avoidance schemes. In the UK this means changing legislation to make sure that royalty payments made to companies in jurisdictions where the UK has a tax treaty are included in the charge to income tax.
Also, it's clear in the header that it's not all "perfectly legal".
You're likely getting downvoted because you're explicitly violating the guidelines.
https://news.ycombinator.com/newsguidelines.html
> Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that."
How can we keep from publishing too many of those kinds of things?
That doesn't seem like an argument someone would intentionally make.
It should be obvious to anyone that some laws are unjust, insufficient, or overbearing.
It's up to us to have these conversations, and push our own, or our collective, agendas.
Yeah don't fault corporations for maximizing profits legally, that's literally their sole purpose.
But it is absolutely valid to say that the laws are bad laws and that we should change them.
And these laws are bad laws and we should change them.
I'm not saying Blizzard employees or owners should be jailed for doing this. I'm saying we should realize this is a problem we should consider solving
As long as this remains an impossible question to answer then they should probably pay the least amount possible.
I'm all for improving current tax regulations, but first we must agree that the problem is with the regulations.
They broke the law. They lost. That's what the courts determined.
What, do you not believe in the law or something? Because this is what the courts did. They said that blizzard was guilty, and therefore I judge them as such.
That is not what the courts said.
"In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m"
It looks like Blizzard was guilty enough of tax evasion that they had to settle the case for 345m$.
If you have to settle a case for 345m$, then you are guilty enough for me to condemn you.
> The company is currently under investigation by tax authorities in the UK, Sweden and France over alleged transfer pricing irregularities and is is facing a potential bill of over $1.1bn in back taxes and penalties. > In the United States, Activision Blizzard has recently settled a transfer pricing dispute with tax authorities for $345m
Also, there is nothing wrong with pointing out what they are doing, even if it is by the books legal. You can still push for change in the system to make their gaming of it less possible, which requires people to be informed about what is happening first.
> Also, there is nothing wrong with pointing out what they are doing
Of course not, but the real problem exists outside of Activision Blizzard. Pointing fingers at specific companies simply detracts from the real problem.
I paid. Fuck the tax man.
A criminal conviction for tax fraud could in fact be "significant evidence", a mere disagreement by itself is not.
If we want this fixed, our lawmakers need to change the laws.
"The company is currently under investigation by tax authorities in the UK, Sweden and France over alleged transfer pricing irregularities and is is facing a potential bill of over $1.1bn in back taxes and penalties."
Did you also not blame cigarette companies for advertising and selling what they knew was poison, or oil companies for keeping their knowledge about climate change secret?
For a less extreme example, what about Keurig's coffee DRM? Or the DRM on printer cartridges? Or Microsoft pushing the patented FAT32 (and now exFAT) filesystem? Or Disney lobbying for extended copyright? Google promoting AMP pages? Online stores using pressure tactics like "Hurry, only N left in stock!", and other dark patterns?
To be angry with someone when they simply defend their own interests is to either hate the person/entity or to be angry with nature itself. That was my only point.
For instance, someone is legally permitted to call me an asshole. They may choose to do so completely in self-interest. I am then permitted to ask my friends to shun him and they may. I may use this implicit threat to ensure no one calls me names. I am not required to change the law to prevent being called an asshole in order to reconfigure the incentives.
In the same way, I may determine it to be in my self-interest to have a large company pay my government extra taxes, even in an ex post facto manner (though the constitution bans laws, it does not ban agreements that clearly are mechanisms to bypass that prohibition). I may then bring other weapons to bear to get things to happen. The most common such technique is by directing public opinion in a certain manner.
If someone were to tell me that the company dumping, entirely legally, in the waterway is just acting in self-interest, that’s irrelevant. I still don’t want the waterway dumped in so I’ll tell everyone anyway and we’ll kick up a fuss and make life hard for them, even though they are acting legally and rationally in their interest.
Can't blame me right?
The title of the original article actually includes a prepended "How", which illustrates that it is primarily about the specific mechanisms of tax avoidance.
Why waste money on buying extra taxes?
Tax evasion does not count of course.
Starbucks develops a "new brew". They fly the best coffee connoisseurs to a Liberian-flagged, Korean-built ship sailing from Saipan to Nauru, and develop a new formula there with equal parts Arabic beans and Robusta beans. They sell this new product worldwide, with marketing from a PR team domiciled in Malta, but operating in the Netherlands.
Where was the value created?
However, at the same time, they claim that the entity that runs the DLC purchase system is in Malta, where Blizzard has no employees, but uses an outside legal and accounting firm.
They claim all the value is in Malta.
I tend to disagree.
We should send tax cases to juries for decisions.
See RamBam episodes (in Dutch, but contain some English too):
> S04E11 Nederland Belastingparadijs broadcasted 29 Apr 2015
> S05E05 Russische bedrijven in Nederland broadcasted 17 Feb 2016
[1] https://nl.wikipedia.org/wiki/Rambam_(televisieprogramma)
Game over.
It doesn't have to be high, maybe 1% or even less. It will drastically increase government revenue from company taxation and it would be much easier to administer.
They settled with the US government to the tune of $300 million over this setup, and European area governments are seeking $1.1 billion.
Setting up transfer pricing arrangement to tax havens literally involves paying kickbacks to the IRS via an advance pricing agreement before you start doing the IP revenue games.
Something went wrong.
My guess is that there also was some incompetence outside of the APA arrangement. I would see new employees interpreting something in a more and more warped way getting this messed up, along with incompetence in the island countries used changing rules under their feet.
The question is: why wouldn't they?
Big corporations exist for one reason which is brought about by a myriad of incentives from stakeholders (e.g. consumers, shareholders, employees and the state).
That reason is: to generate as much profit as possible. Some say it's about growth or revenue, IMO those are all indirect ways to potentially generate more profit.
That's it, that's why big corporations exist. They're quite mindless in that sense because this mostly comes about by the interaction of all the stakeholders.
So from Activision Blizzard its perspective, I applaud them. This is what they should be doing. There's less financial pressure on employees (aka layoff season is probably even further away now), shareholders see more signs of their favorite currency in their eyes, the regulator/state is simply picking a victim that isn't as savvy and the consumers can play new amazing Warcraft games for years to come! Oh, and the victim has trouble to organize itself, so that helps.
In short, they are doing well.
For the state and economics researchers I'd say: if you care about wealth distribution to the people, then figure out how to get their money.
I wonder, if the state wants tax money so badly and the state is represented by the public, then why doesn't the state compete or invest in companies? You can't tax Activision Blizzard, but you definitely can tax a state owned company (right? Or is there something I'm missing).
I also hate it when people do rationalize this, but at the same time not really. It depends on the perspective I have at the time. I switch in it. The rest of my comment shows how.
As a member of the public, consumer and human being I'm pretty mad about this and I don't like this type of analysis because it looks like a justification.
As an employee and in some cases as a consumer, I'm not mad about this and it's not a justification, it's just as I simply see how the world works. Companies are tigers, they kill other organisms. It sucks, but alright that's the state of the world. Humanity is driving other species extinct. Alright, that sucks, but it is the state of the world.
In all this confusion of perspectives, I do know one thing. If one doesn't dare to look at how they see the world is, that's when things go even more dark than they already are.
Which is why I'm simply stating how I view what I believe to be the self-interest of a global giant corporation: which is making profit.
It sucks, but it is how it works. I don't want it to work this way, but I don't have enough of an incentive to change it. Do you?
At least you pointed me to a new source of knowledge to look at, so I suppose that's something. If I had knowledge that would wield the power of change for a better world, I would've used it.