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Comment by _the_inflator | Hacker News Reader

> 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.

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"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).

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.

"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.

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).

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