Uber used 50 Dutch shell companies to dodge taxes

It makes a lot of sense considering the amounts of money that are flowing.

We're still looking at the same people forming a new government after 10 years so the majority of Dutch people must absolutely love their achievements like the worst housing crisis since the Second World War or capitalism-presented-as-religion shit like this.

I am really not holding my breath for this.

I am glad to see the awareness of tax avoidance (through postbusfirmas, 'double Irish with a Dutch sandwich', etc.) growing, yet until we do something about the root cause, all 'systemic solutions' proposed by the bourgeois political system will still be like proposing to cure a heart attack with a band aid (the heart attack here being mass exploitation by global capitalism [1]: exacerbated by climate change and impending civilizational collapse).

[1] Zak Cope, https://anti-imperialism.org/2012/09/18/understanding-and-ch...

But it really irritates me that:

- other companies with this tax deals pay almost nothing

- its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar.

I don't think any of the four largest parties made a particularly big deal out of this, so I wouldn't hold my breath.

It may take EU wide legislation to fix, but even that is no guarantee because companies may just opt to not operate in the EU.

Here is an excerpt from Treasure Islands: Tax Havens and the Men Who Stole the World[1]

> American corporations could cook up a version of what was known as a “Dutch Sandwich”—set up an offshore finance subsidiary in the Netherlands Antilles, then use it to issue tax-free Eurobonds and send the proceeds up to the American parent. The United States could argue that it did not have to tax this income from the Antilles, under the rules of its tax treaty with this former Dutch colony via its postcolonial relationship with the Netherlands. The U.S. Internal Revenue Service could easily have decided that the Dutch Sandwich was a sham and taxed the income. But it looked the other way. “These were Eurobonds, bearer bonds, which were virtually impossible to tax,” explained Michael J. McIntyre, a top U.S. expert on international tax, who was one of very few people in the United States to have opposed this at the time. “You British people were quite happy about (the tax-free, secretive Eurobond markets). And we wanted in. We wanted to attract the hot money too.”

> The United States sells financial secrecy not just at the federal level but at the state level too. Delaware is the biggest state provider of offshore corporate secrecy, but Nevada and Wyoming are the most opaque: They allow bearer shares, a vehicle of choice for mobsters and drugs smugglers, and they are particularly lax on allowing company directors and other officers to be named, hiding the identities of the real owners. Nevada does not share tax or incorporation information with the federal government and does not require a corporation to report where it does business. The IRS has no way of knowing whether a Nevada corporation has filed a federal tax return. Arkansas, Oklahoma, and Oregon are also routinely used for fraud by eastern Europeans and Russians, and, as noted, Texas and Florida are havens for illicit Latin American wealth. In the 1990s, the U.S. government gave millions in aid to help the former Soviet Union countries improve the security at their nuclear power plants. Much of it went missing. When the U.S. Department of Justice went looking for the money, investigators finally tracked it to anonymous shell companies in Pennsylvania and Delaware. Most cases involving financial market manipulations that the FBI has studied have involved U.S. shell companies from these states. The notorious “merchant of death” Viktor Bout, inspiration for the character played by Nicholas Cage in the Hollywood film Lord of War, alleged arms runner to the Taliban and other murderous organizations around the globe, operated through businesses in Texas, Delaware, and Florida.

[1] source: https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_a...

Tax policies, and other corporate friendly loophole machines are all about detail. At the detail level, both rhetorical slogans and technical theories have no meaning. Any given legislation can only be understood as accounting spreadsheets and scenario plans. There's no way to "narrate" it.

One side thinks in terms of objects that have independent moral implications, like shell companies. The other thinks in terms of objects that are a collection of accounting details, like pass-through entities.

There's an old business adage: "you name the price, I'll name the terms." In a startup context, that could mean investing in a company at valuation X, but with terms (eg liquidations preferences, performance goals, etc.) that make a mockery of X as a valuation. Many a vein founder has been scheisted this way. Proudly boasting their impressive, $X valuation and paper-wealth, while giving away the farm.

In corporate law and tax codes, one side has been consistently been winning this game.

We claim to want our systems to operate like chess, but they tend toward poker.

The global tendency toward populism is at least partially driven by the gut feeling that there are two systems: chess for thee, and poker for me.

Uber has its corporate head quarters for the EU in Amsterdam. For a company the size of Uber to have 50 different entities is not particularly special, you will find several other multinationals there with the same number. It makes sense to have one for each jurisdiction they operate in, for example. The term "shell companies" seems to imply something nefarious, and that may very well be the case, but in itself having 50 entities in The Netherlands is not really a sign of that.

It's also important to point out that they do not choose The Netherlands for low corporate tax rates, they are not the lowest in the EU by far, but because of "tax rulings". Those are agreements they can make with the tax authorities that ascertain them how much tax they will pay this year as long as revenue, costs, etc, stay within a certain bandwidth. In the US it can take over a year for them to get any certainty on what their tax bill would be for the previous year, and shareholders hate that uncertainty.

No one thinks it's a good idea to compete in a "race to the bottom" of attractive tax laws, but as far as I'm concerned competing on better service is fair game. Many politicians screaming at The Netherlands tend to conveniently forget the part where their own country just delivers very poor service tax-wise.

I'm more tired of being told "Billionaires and megacorps will pay for X" when we know they never will.

Taxes are only for the working and middle class.

As an aside, I find this (popular) sentiment quite amusing - what, exactly, is "trickle-down economics" and who can we credit for doing such an apparently thorough job of authoritatively debunking it?

Eliminating corporate tax is a fairly mainstream idea in economics, that is hamstrung by politics.

The Netherlands' primary business model is facilitating tax evasion (and thereby stimulating an influx of shell corporations here that pay a nominal amount of money for a "tax deal"). I'm genuinely confused why you think it doesn't make sense in this specific case (or in general?).

or at least, outrage of uninformed readers is potentially larger than outrage of the informed.

Uber, like all massive companies, are always doing dodgy tax avoidance things. But, even if they're doing tax avoidance, it's still legal as long as it's not blatant fraud.

Like all media companies, Business Insider has manipulated the content to cause outrage with their target markets for readers.

Though, on the topic of wording data, it's always interesting to see how media organizations & companies as a whole swing things, for example:

"Uber claimed $4.5 billion in global operating losses ... in reality, it brought in $5.8 billion in operating revenue" could've been written as:

"Uber brought in $5.8 billion in operating revenue, however, declared a loss of $4.5 billion"

or

"In a 2019 filing, Uber declared a $4.5 billion loss, despite earning $5.8 billion in operating revenue."

Not that I disapprove of that, I just wish I could pull the same trick with HMRC - I'm just not rich enough or in friendly terms with governments overseas to do that.

Is this equality?

Corporate taxes are paid on profit, not revenue.

As a consolation for those begrudging their tax accounting scheme, operating Cashflow is still negative, meaning they are bleeding cash. How would you turn a profit while losing money from operations?

If that does not improve, Uber in the end may not be a viable business.

https://finance.yahoo.com/quote/UBER/cash-flow/

At first I though it was kind of macabre, but then I got reminded that it's basically standard practice, exterminators frequently have bugs as their logo, bacon packages have happy pigs and so on.

https://en.wikipedia.org/wiki/Koninklijk

Besides the journalist apparently not understanding how taxation works, the phrasing is used to make the situation sound nefarious without providing any evidence. 50 shell companies? Ok...? What if it was 20, would that still be suspicious? Or just 1? How many are ok? What are they used for? No info at all. The entire 'article' is a bunch of random remarks with no context.

This is not journalism. This unresearched text belongs far down in somewhere in a comment field.

It's easier to workaround that endless fight by ensuring that it doesn't matter where tax is paid.

AFAIK, most countries like the US go for a tax on profits, but profits of a multinational country are extremely hard to "locate", as in: in which country was the profit made?

Some obvious examples are IKEA stores licensing the rights to the IKEA brand from some company in the Netherlands, which means most stores in the US almost have no profits. Or starbucks USA buying extremely expensive (but high quality they say) beans from a company in Switserland... which is also part of the multi-national Starbucks holding.

These are obvious examples, but it is almost inherently hard to define where profits are made for a multi-national company as they almost always have revenue streams going in many directions and who says which national company is really adding value while others are almost profitless?

Otoh a revenue based system would also be rather hard to manage, especially if you want to prevent double taxation (both countries in the equation taxing the same revenue) as that almost requires profit based taxation again.

Who elects them?