Hacker News Reader

Comment by tchaffee | Hacker News Reader

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

View on HN

Or rather, if they can't find a legal loophole they'll use billions of dollars they have in their pockets because of previous tax avoidance efforts to lobby for new legal loopholes.

The EU is increasingly fining and cracking down on tax avoidance. Seems like things are headed in a good direction, if slowly.

The DAC-6 legislation should help with this.

That initial 'if' is extremely unlikely. There are hundreds of jurisdictions that would love to be persuaded to pass favorable laws.

Yes, but that takes time, and it involves the company trusting their money to a third party that is trustworthy in inverse proportion to how much tax leniency they are willing to grant.

"You can't stop us from dodging taxes so don't even try" is what they want us to believe, because if we believe it then they can dodge taxes every year without inconvenience.

Do you think that the accountants at Google, Apple, et al. have failed to foresee this sort of pushback? I personally don't doubt they've been planning alternative tax-avoidance scenarios for years. That would include lobbying other jurisdictions for favorable tax treatment in any rational scenario.

To date, they have suffered no serious financial or reputational consequences for tax evasion, so there's no reason to think they won't continue to avoid taxes as part of their overall financial strategy.

> Do you think that (strawman)

No, I do not.

The correct move is to push harder, not roll over.

And even Ireland still remains one of those jurisdictions: while they were successfully pressured into passing this new general legislation, Ireland have refused to accept Apple's unpaid taxes and are spending millions fighting the EU ruling in court[0]

[0] https://www.forbes.com/sites/isabeltogoh/2019/09/16/apple-an...

> 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.

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.

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.

"A loophole is an ambiguity or inadequacy in a system, such as a law or security, which can be used to circumvent or otherwise avoid the purpose, implied or explicitly stated, of the system." [1]

A loophole is by definition legal, otherwise it would be fraud.

[1] https://en.wikipedia.org/wiki/Loophole

> What Google did is not illegal.

That's why it's called a 'loophole' - when the letter of the law is followed, but the intent is subverted (or what people imagine what the intent should have been).

I guess nothing it's illegal if you are not prosecuted/convicted for the said activities. Not even if you are a war criminal (see the recent Trump saga). The tax rules are confusing and complex enough so that only the wealthy can benefit(i.e. use loopholes).

"What Google did is not illegal."

Sure. Now try to funnel your consulting income through Irish corp. Tax man will quickly explain what is legal what is not.

Individuals can (and do) use similar transfer pricing schemes. They're just really expensive to set up and maintain.

Reply on news.ycombinator.com