Comment by dosinga | Hacker News Reader

Comment by dosinga | Hacker News Reader

this is probably an unpopular opinion, but isn't this working as intended:

  * Palantir started in the US as a start up and burned a lot of money building the systems they are running today and that are finally profitable
  * Those systems are used from the UK subsidiary but if a different consultancy would use them, they would be billed accordingly. That's transfer pricing

The article says as much. Before Palantir has to pay taxes in the US, they first work through previous losses which to a large extent are stock options for their employees. Early employees took a risk working there, it paid off, that gets deducted from the profits. Same for other early spending.

If they want the tax benefits of a different consultancy using their systems then they can sell their systems to other consultancies. Obviously there is an advantage to operating in the U.K. otherwise they wouldn’t do it so obviously they should pay taxes on their income earned in the U.K from their U.K. operations.

There's some of that, but a large part of the "Palantir magic" is the on-premises services - integration, customisation, training & support. There's almost 1000 UK employees that got paid 40% of revenue.

It's working as designed, not working as intended.

> this is probably an unpopular opinion, but isn't this working as intended:

Not sure how trustworthy it is, but assuming what https://palantir-uk-tax-evasion.pagey.site/ writes is true, then:

> a profit-allocation structure that lets most UK revenue/profit be recorded with the US parent instead of the UK subsidiary [...] Both only work because of a third factor: the US isn't taxing it either, so shifting profit "back" to the US isn't costly.

Seems a bit weird, they're not getting properly taxed anywhere in the world apparently. If they were properly taxed in the UK OR the US, things would have been different. But as noted, nothing here is illegal seemingly, just not good for anyone except Palantir.

Reply on news.ycombinator.com