> Last year, French media outlet La Lettre reported that until 2021, Netflix in France minimised its tax payments by declaring its turnover generated in France to the Netherlands.
> investigators are trying to determine whether Netflix continued to attempt to minimise its profits after 2021.
Wasn't Uber or some other US company found doing something similar? First they were found to be in violation of some law/dodging taxes, said they'd fix it and later found to not have done anything about it? Is that behavior perhaps more accepted in the US than Europe?
It’s mind boggling how widespread it is, how accepted (legal) it is, and how it will seemingly never be fixed.
Yeah, but I think that's different than what happened in this case with Netflix. Declaring earnings from one country in another country is not just "tax optimizations" but straight up illegal. It's not using/abusing legal loopholes like most larger companies do, but going against the law.
If we consider the Irish sandwich mechanism that was recently “stopped”, somehow that hasn’t materially affected any of the innumerable companies that were using it. As we saw in the Apple vs EU case, most practices might’ve never been actually legal either.
So my personal opinion is that (almost) all tax “optimization” is at the minimum immoral, but most likely illegal too.
Edit: This reminds me of the idea of temporarily embarrassed millionaires. Your personal optimization is not what I’m talking about - corporations have legal teams the size of SMBs lobbying/creating/looking for secret loopholes, and people are talking about public self service methods.
If X is "install solar panels" or "provide affordable housing" or "reduce greenhouse gas emissions" then X is very likely moral.
If X is "lie to us about where your revenue came from" then X is very much immoral.
This becomes more difficult as more tax authorities better integrate with one another, which admittedly, is something many in in the U.S. fidget over, even if it is realized that the need for it is almost entirely a byproduct of these types of people's actions that necessitate that happening.
A few years ago they had to pay huge amounts of money to the Swedish government because of some tax-dodging loophole was deemed illegal by court-order. So Klarna went into a desperate attempt to last-minute cut costs to not tank the stock value due to much lower expected returns that quarter.
It was kinda funny because the employees of Klarna are unionized they couldn't just fire anyone on short notice like that, but they did let go pretty much all consultants in one swoop. If this was the US the CEO would have just fired a bunch of people because the CFO f-ed up. For a few months there was a major glut of former-Klarna consultants around in Stockholm, two of them ended up at my company at the time.
I couldn't find details about this tax dodging online (it was around 5 years ago), but here is another article about Klarna being in trouble over GDPR violations:
https://www.reuters.com/technology/swedens-klarna-fined-7330...
Until that moment it did the exact opposite including opening criminal investigations into the journalists calling it a scam.
Airbnb, they had to pay like 70k of tax a few years ago. There are employees who pay as much tax as single filers lol
They paid 18% less tax in 2016 than in 2013 while the number of flats available on the site went from 30k to 300k
https://www.lesechos.fr/2016/08/airbnb-na-paye-que-69168-eur...
Spending is the moment when the money shows its ugly head and does harm.
Why would it be risky to pay some percentage more on what you spend but not pay income tax at all?
It'd be risky because I have no idea if I'm actually going to make money or not. European states set very draconian rules like 1% daily interest on unpaid taxes - no way I'm taking this shit on.
Just do the same thing but with VAT...
VAT is already a purchase tax, just collected from the end consumer. You could just raise VAT and do away with income tax. But since the burden is on the end consumer only (not along the chain, because of 100% deductions) it would have to be raised very high. And VAT is with us long enough that many ways to exploit its edge cases were discovered. General purchase tax collected at all steps of production chain could spread the tax burden away from final consumer to the people who exploit them (aka businessmen) thus fulfilling the role that income tax currently fulfills. It would also have way less edge cases and could replace things like import tariffs and social security fees, excise taxes and many more.
> It'd be risky because I have no idea if I'm actually going to make money or not.
That's the inherent risk of business. You have to decide if it's worth it regardless of whether a server costs you $x or $x+10% purchase tax.
> European states set very draconian rules like 1% daily interest on unpaid taxes - no way I'm taking this shit on.
You would never have unpaid taxes because they'd be automatically collected by the bank at the moment of purchase. If you don't have money to pay for purchase tax you don't have money to make a purchase.
> Just do the same thing but with VAT...
We could do some of that if we reduced VAT deductions from 100%. But it would be worse because VAT is very limited and thus has a lot of edge cases where it comes in contact in systems outside it's domain. Those can be used to get away from paying by doing superfluous operations.
VAT could do a lot of the same things that I'm proposing (if the deductions weren't 100%) but is limited in scope. And because of that it has a lot of interfaces to other domains like real estate, import, labor, financial intruments. Interfaces that can be exploited to avoid paying taxes.
General purchase tax could replace all taxes and fees transfered from the markets to governments (and effectively goverment managed buckets like social security or public healthcare).
Taxes have this strong moral objection that they are punishment for creating value. Purchase tax could help with that by ostensibly being punishment for using up value not for creating value. It might also compose well with transition to stable state economy that will have to replace old economy based on unbounded growth.
What are the reasons to tax corporate income? The usual reason is so that it doesn't spend the money on executive wages, parties, and so on. The less public reason is so that it doesn't extract all money to a foreign corporation through license/patent fees (dividends are taxed more).
We can do so much more today with the computers we have than the primitive taxation schemes of 1980s Europe. We already have the infrastructure to audit corporate spending and investments - let's just keep using that to avoid the lavish parties and otherwise not serving the shareholders as efficiently as possible. Let's cap wages at 200k - if you want more, get some stock options and share the risk. Any out of country value transfer (money, gold, financial assets...) is taxed 50% (each individual gets an exemption up to 100k/year). Add a 5% inflation rate to discourage cash hoarding.
Now the fun stuff - let's use Land-Value Tax and Progressive Value Added Tax - VAT with progressive rate based on item class and price. Zero rate on basic needs in raw form + everyday items like hygiene. Everything is calculated automatically using the country's E-Cash Register system - absolutely zero bureaucracy, everything is clear upfront and there is no forward risk created by taxation. And it's super hard to avoid taxes when they won't give you the new Lambo unless you pay right there and now.
Most EU countries already have all of the infrastructure in place. Though this scheme would work best in a borderless, continent-wide European state.
Purchase tax would fix it by taxing money "on exit" on foreign purchases of anything. This also works as a tariff without singling out any foreign country as a target for tariff.
> VAT with progressive rate based on item class and price.
Here's your bureaucracy. VAT classification is huge catalog that many businesses are trying to gamble to jump to lower tax rate. Creating it, updating it, adhering to it is a huge pile of decentralized and distributed bureaucracy.
What you are proposing is a spaghetti of solutions. Every interface between the parts and every solution itself is an attack surface for tax dodgers.
Genral purchase tax is unified framework on all transactions that can consistently extract money from the rich through taxing all their spending that intrudes on the markets only when you specifically wish to and gives you clear tool for intrusion in the form of tax credits for specific market actors for whatever reason you wish.
This is also easily accomplished now that almost all payments are happening digitally, assigned to a taxpayer ID#. We can easily replace a W-2 or 1099 with total spending instead of taxing working.
Of course, this should also be paired with similarly designed land value and estate taxes to disincentivize hoarding.
Maybe my household LLC should buy all my groceries while I work for the LLC which employs me as the sole contractor and live in the house that I rent from the LLC which I am the sole owner of. For major purchases, I can hire a low-income person to do the purchase and then sell the item to me, or maybe they lease it to me.
I'm not a tax lawyer but it's pretty easy to see the many loopholes in alternative tax proposals.
Where are you getting this from? Sales tax has nothing to do with one's assets. Also, land value taxes make hiding assets moot, since all real assets have to be stored on land. Of course, copyright protections would need to be reformed to be for far shorter durations of time.
>Maybe my household LLC should buy all my groceries while I work for the LLC which employs me as the sole contractor and live in the house that I rent from the LLC which I am the sole owner of.
Why should LLC's be exempt from the tax?
>For major purchases, I can hire a low-income person to do the purchase and then sell the item to me,
How does this help? You are still purchasing the item. If you are referring to purchasing it with cash and committing tax evasion, the same is possible with income tax today.
>or maybe they lease it to me.
Renting something is still considered a sale. You get charged sales tax at hotels. Renting apartments is not usually subject to sales tax, but that is a policy choice.
Earlier you said
> And poorer people are automatically exempted from tax since the power law formula parameters be set to slowly ramp up
I too am very confused on how you envision this sales tax working where it's variable in some way that poor people don't get the tax but rich people do so I understand why OP is asking about asset tracking. If you're talking about it as a tax that increases the more you spend you've still got problems of hiding how much I'm spending through various legal entities. It also has a macro economic problem, at least how the consumer economy is structured, that could slow down the gears of business until society realigns (if it does) because people will be incentivized to consume less. You've got alternative models where you go after specific products and tax more for conspicuous consumption like yachts but that feels like it has all the inefficiencies of central planning a market.
Because poor people can't spend money (since they don't have it), hence they pay much less (or even no tax). The curve of a power law formula can be modified to whatever is socially acceptable. Otherwise, rich people who are hoarding assets will get taxed via land value taxes utilizing the same framework.
>you've still got problems of hiding how much I'm spending through various legal entities.
Same with income tax. Completely stamping out tax evasion is not a realistic goal with any system. Also, various legal entities are all tied to beneficial owners with taxpayer ID numbers. Databases would make quick work of sorting this kind of stuff out.
>It also has a macro economic problem, at least how the consumer economy is structured, that could slow down the gears of business until society realigns (if it does) because people will be incentivized to consume less.
Yes, that is why it is a pipe dream. But it would actually accomplish environmental goals as opposed to just pay lip service and pretend.
>You've got alternative models where you go after specific products and tax more for conspicuous consumption like yachts but that feels like it has all the inefficiencies of central planning a market.
Completely unnecessary to complicate things which also opens up avenues for corruption. A yacht is super expensive, it's obviously going to be hit with a ton of tax. Just come up with a tax curve (like we already do with the various income tax deductions/brackets) that provides the tax revenue and still allows people to spend enough money to provide for their basic needs.
Poor people can buy a car. Middle class families can buy 2 cars. Neither can buy 100 exotic cars. Is the purchase of each additional car going to increase the tax paid? Are exotic cars taxed more? You keep stating to use a power law formula but you're critically omitting what the inputs are to determine your tax rate. And now you've also admitted that assets determine your sales tax whereas you seemed to be arguing earlier that that wasn't the case when asked if the sales tax rate is dependent on your ability to hide assets.
> Otherwise, rich people who are hoarding assets will get taxed via land value taxes utilizing the same framework
Rich people hoard assets in all sorts of ways including collecting physical items which you can store where land is cheap if you wanted. That's why the income tax is effective - it's taxation at the moment the money changes hands / you've realized a gain.
Yes, tax liability = total spending during the year plugged into the power law tax formula.
>Are exotic cars taxed more?
Depends how much the taxpayer spends in a year. There is no tax rate for each specific item. The tax rate is for a total level of spending, which eliminates all loopholes.
> You keep stating to use a power law formula but you're critically omitting what the inputs are to determine your tax rate.
The input is total spend in a year. Just like right now, the input is income in a year.
> And now you've also admitted that assets determine your sales tax
No, I did not. The formula to calculate sales tax liability only requires inputting total spending. Land value taxes are a separate thing. We currently have land value taxes, except they are flat rate and too low because property taxes inefficiently tax improvements on the land more than the land itself.
> That's why the income tax is effective - it's taxation at the moment the money changes hands / you've realized a gain.
Sales tax can also be at the moment the money changes hands. It currently is. Even with the complication of a power law tax formula, I can’t see why the government can’t email you a monthly invoice.
Are services included in this sales tax? e.g. if I hire a cleaning company to clean my apartment? I'm assuming they would be right? Now what distinguishes that scenario from an employee being hired?
> Now what distinguishes that scenario from an employee being hired?
Not sure why this is relevant to this discussion, but the cleaning service’s employees do not become your employees because you don’t get to manage the cleaning service’s employees and it’s usually a limited time work engagement. There’s quite a bit more that goes into creating an employer / employee relationship.
My capital gains tax is immediately collected as my bank sees any capital gains. I physically can't dodge it.
Similarily I could have tax on every purchase I pay for with any kind of bank transfer immediately collected.
Also those are not only taxes on consumption but every purchase. Yacht might be too cheap in comparison of resources used but rich don't just buy yahts, they buy entire companies.
I'd go with same tax rates for everybody, but tax credits for useful activities. Since being a poor consumer is useful activity because those pay most attention to what they buy I'd be just giving people tax credit for existing and possibly for working if I wanted to incentivise that. Since purchase tax for individual consumers should be collected and paid by the sellers to save the individuals the burden of it and to ensure compliance then the best form of tax credit for consumers is just cashed given them directly from the government. Some for existing some possibly to supplement their salaries if they work. There's some risk that they won't spend it all to pay for their purchase tax but this can be forgiven as it'll mostly happen for the very poorest.
You can of course "own" things informally but then you don't get any support from courts when the paper owner decides you really own nothing.
I came up with the idea of puchase tax and progressive real estate tax myself, but I'm sure other people had same ideas before me.
Not enough, especially since everything is business expense for them.
This blind kind of tax also has horrible impact on the production of goods with high added value.
Money changes hands so it's taxed with a purchase tax as a general rule.
> it will become proportional. What is still not very good.
Progressive tax currently is just a theory. Rich actually pay regressive tax. I'd take proprtional tax over ostensibly progressive tax but in reality regressive tax any day.
That's called a "transaction tax". It has lots of well known issues that are incredibly hard to remedy.
I know it is used widely for larger transactions of private individuals like buying a car or a house albeit with a small rate of about 2%
Since ownership of houses and cars is carefully tracked it's pretty impossible to dodge.
Completely meaningless without also saying what their costs and investments were.
The French branch made 160k of profit while the Irish branch made more than all the other EU countries combined
FYI: france is the second market for airbnb after the US... do you really think they would even bother if they did make 160k there when they make 300m+ per year globally ? Do you really think their second market nets them < 0.1% of their total net income ? Do you really think the most touristic country in the world in absolute numbers brings 160k euros per year to airbnb ?
I dont't know much but I'm not a fool
https://en.wikipedia.org/wiki/World_Tourism_rankings
https://www.searchlogistics.com/learn/statistics/airbnb-stat...
https://www.rte.ie/news/business/2023/1127/1418779-revenues-...
https://www.breakingnews.ie/business/airbnb-ireland-records-...
It's nonsense of course. Companies should (in my opinion) shoulder their fair share of tax because otherwise that burden falls disproportionately on individual income tax.
> After pressure from the EU,[22] the Double Irish BEPS tool was closed to new users in 2015,[citation needed] however, new Irish BEPS tools were created to replace it:[23][24]
Not only do the original evaders get to continue doing it, they’ve also found new loopholes already.
My own experience with tax experts has left me pretty jaded about tax advice. It seems to me that often these companies have maybe 1 dude who actually understands tax and an army of people with powerpoint going out selling the "solution". I had a complex tax situation when setting up a business in the UK and US and got tax advice from one of the big four firms not to dodge tax but to make sure I understood the US system correctly and was paying everything I should. I paid so much tax that I got investigated in both the UK and US because they thought there must be some sort of fiddle because I seemed to be paying way more than I sholud be (this was what I told the accountants). I ended up getting rebates from the IRS and from the UK HMRC after the investigations but it took a couple of years to get it all sorted out.
Moreover, tax authorities have increasingly taken the position that the use of these planning methods constitutes tax evasion. The Dutch Sandwich and Double Irish were grandfathered in (meaning, not treated as criminal tax evasion) but a company utilizing similar schemes today would ultimately result in one or more of their executives spending time in jail.
Critically, most of tax law is actually regulation that implements statutes. Tax planning schemes that satisfy the technical letter of regulations but which violate the plain intent of the written statute can, and have, been deemed illegal years or even decades later (see, for example, the Bermudan tax loss harvesting scheme), and this has repeatedly passed constitutional muster.
Unsurprisingly the licensing fees for using Orange brand that the Polish company had to pay to France Telecom amounted to large percentage of taxable profits that the Polish company had. Overt theft from Polish company and Polish taxpayers.
No but seriously, this doesn't sound surprising? Why should France be against a French company buying up other companies and bringing revenue back to France
I also expect thieves to be protective of their own assets.
I'm just saying they are still thieves and any outrage in their name is misplaced.
Screw the French when they are robbed for the benefit of other countries, because they steal from other countries using their public companies as well.
For the people holding power one decade is an eyeblink, the only generation change will be when they'll install their own children as a replacement.
> Maybe they didnt understand the impact maybe regulators got paid off.
They got paid off and by Western standards it was a bargain.
https://www.eff.org/deeplinks/2013/05/update-email-privacy-l...
https://en.wikipedia.org/wiki/Electronic_Communications_Priv...
It's called "object lifecycle management", because I guess fraud was too catchy.
Either "the law" can be trusted, and there's no point to deleting data after a cut-off date, or the reverse is true and you're no worse off getting caught deleting data.
I believe the law actually provides a middle ground. You're liable for tax fraud for X years, but you're allowed to delete the data after Y years. Since X > Y you make it much harder for the tax office to sue you if you delete data. Plus make it pointless for them to use their other investigative powers against you, which is in reality more important, especially for smaller firms.
Or are you talking about deliberate destruction of accounting records, which are required to be held by the relevant law of the governments?
[0]:https://www.legaldive.com/news/doj-google-spoliation-hangout...
If you aren't -- you'll find the enforcement end of the tax authorities in ANY country are pretty efficient. Even in third world countries where many services are falling down the tax authorities will be a well oiled machine as the stability of the entire country rests on the government even corrupt ones to collect taxes.
If the state turns up at that address, and you tell them they’re at the wrong address, then the directors start becoming liable for fraudulent behaviour.
Sounds like it would make it easier for law enforcement. They no longer need a warrant against/for the company they're investigating, just the place where their data is stored. Get the warrant, raid the place and grab the drives, then continue the investigation. Done the right way, the company under investigation wouldn't even notice it.
And its sad to see the atrocious quality of the BBC article. Even high school students learn that a journalistic piece, should make sure it touches the Five Ws of good journalism...
https://en.wikipedia.org/wiki/Five_Ws
The Hollywood Reporter has much better quality reporting including context: https://www.hollywoodreporter.com/business/business-news/net...
Plus you can engage in some jurisdiction arbitrage where all the documents pertaining to country A is stored in country B, and all the documents pertaining to country B is stored in country A.
> Second are they really going to raid and take the drives at an AWS data center that has other customer’s information?
You can also ask AWS to produce the files/documents for you.
Not an AWS expert but how does that even work? Does AWS connect to your HSM remotely? Or is a cloud HSM that's also hosted by AWS?
I actually was imprecise with my wording.
A customer managed KMS key is any key that you make instead of using an AWS provided key. AWS still has the means to theoretically decrypt the data.
I am actually referring to a customer managed KMS key where you import your own key material
https://docs.aws.amazon.com/kms/latest/developerguide/import...
There is also CloudHSM
https://aws.amazon.com/cloudhsm/faqs/#:~:text=AWS%20CloudHSM....
I don’t know how far “AWS doesn’t have access to your keys go” when it comes to a government subpoena.
I do know that if anyone accesses anything on your account from AWS, all sorts of internal alarm bells go off at AWS and it would still show up in your CloudTrail logs.
I’m sure there is something that allows internal AWS employees to access your account in unauthorized ways. But I never heard about it in 3.5 years working there in the Professional Services department.
Raiding AWS: call Amazon, provide subpoena, Amazon can either give access to the account or provide copies of data. This would only allow access to non-customer encrypted data.
I played with encryption schemes and obfuscation pretty heavily for a long time, but at the end of the day companies operate within the legal frameworks of the countries they reside in. If you don’t cooperate, you could end up in jail anyway.
I think the conclusion I’ve come to is that you have to play by the rules. If you don’t like them, is it really worth falling on the sword for a corporate entity?
Isn't most data in the cloud heavily distributed and broken into shards across many racks and drives and such? And encrypted so is useless outside of the custom block storage system employed by the cloud provider?
They would need to decrypt and assemble the shards to get usable data out.
I have no clue how they would even know which drives out the tens of thousands to grab, and they would also have other customer's data on them.
https://leb.fbi.gov/articles/featured-articles/executing-sea...
Or in China, just take the entire data center. https://www.theregister.com/2018/01/11/icloud_china_goes_to_...
The police could just find the correct targets and raid their home instead.
I would hire homeless people to “run” the company.
Ultimately, if you really have bad intentions, you find a way. It’s a question of risk and responsibility if you want to put yourself in such a position or not.
It was a good listen. At first she needed to go empty handed, but then teamed up with competent tech guys. After that the smug faces stating, that the amount of data would be to much to handle for her little department quickly turned into concerned faces.
thanks much!
> Tim Pritlove: Okay, zweiter Bildungsweg. Welches Instrument haben Sie denn gespielt?
> Anne Brohrhilker: Klavierung, Pferdflöte.
Oh, AI transcribed. Nevermind.
As an American, I'd be really surprised if we let that happen. I looked and found it apparently happened once, in 2009 in Texas: https://www.cio.com/article/278564/data-center-when-the-fbi-...
It resulted in another company essentially being shut down, and suing for their data back. Crazy. There has to be a better way of doing that digitally (I assume there is, these days, and we won't see something like this again).
I was mentioning how things have moved to the cloud these days, and what the implications are for innocent unrelated parties’ data, given that the cloud involves this overlap of data on one device.
Afterward Uber helped Macron campaign who then ordered National Financial Prosecutor's office to "stop bothering them" so I don't think anything new happened since.
Edit: Some sources in below replies for infos on both. Turn out I'm wrong for 2nd part it started earlier than his campaign.
Isn’t that kinda definiton of corruption?
Pretty crazy to support a business designed to never pay tax. This bring nothing beside "precarious employment".
It’s been rebranded to “lobbying” and “campaign contributions”. Much cleaner. Better optics.
EDIT: Article on the kills switch https://www.theguardian.com/news/2022/jul/10/uber-bosses-tol...
You shouldn't really be able to have it both ways, should you?
Unless there is some international law or treaty mandating that?
Nor is it likely.
All the accounting, insurance, banking, regulatory, etc… paperwork legally necessary for even a large company in France can easily fit in a set of binders that fit in a single bookcase.
So it’s literally possible for all of it to be ready and available for inspection before anyone even touches a keyboard. And in fact that was the case for every company in France pre 1960s.
Preventing access to your accounts during an audit is quite fishy, especially for an onsite audit without warning which, in France, is supposed to happen only if the authorities have doubts that you could make some evidences disappear. During an audit, the CEO is supposed to provide the documents, the inspectors are not supposed to access your files themselves I think.
(So blocking access for security reasons is bullshit, to answer someone else, the right thing to do is to have all the pieces in order for when an audit happens anyway)
Clearly in this case Uber got a superior authority to do so, and in any future case that will still be a likely possibility.
Also when the government is really motivated, he can arrested the founders or executives directly (Pavel Durov). Which is what they should do to Netflix execs if they are doing business illegally.
You're in favor of holding executives hostage to demand access to data? If they actually did something illegal, they can be arrested/tried for that, but arresting executives as a means to coerce companies into doing stuff is a total perversion of the rule of law.
Turns out that witholding data as a company executive is outright illegal, so yeah, we're in favor of it and they can get arrested and charged for for it.
Except in this case it's not the executive that has the data. The data is sitting on some cloud server somewhere, and the executive no longer has access because the CISO got wind of the raid and locked his account. If you're holding the executive, you're not holding the executive because he's refusing to cooperate with a warrant, you're holding the executive as a hostage so HQ would turn over the document.
If executives don't want to sit in jail due to their company's shady tactics they can just not approve those tactics.
Alternative would be to shut the business down completely until they cooperate.
You think the VP of Uber France was involved in the approval of global IT policies regarding locking accounts when there's a raid?
This is a very emotional way of saying "you're in favour of enforcing contempt of court rulings against people who try to obstruct the judicial process".
it's not clear whether the executive has the ability to turn over the documents.
It is just a company--a group of people granted certain rights. They have databases...fancy filing cabinets. Just because the company is famous shouldn't preclude their filing cabinets from being searched (presuming legal processes are used and not abused).
That analogy doesn't work, because the "filing cabinets" are actually sitting somewhere else, possibly in another country/continent. It's not obvious that authorities in one country has authority over documents stored in another country.
No? Then the world is a lot more complex than property rights trumping everything else.
On one hand, if the condemning evidence can’t be provided by someone other than me, should the case be prosecutable?
On the other hand, any sentient human can come up with examples of cases where it might be reasonable to search my belongings for evidence; multiple independent witnesses point to me being guilty of murder and investigations have otherwise stalled. Or anything of the sort.
What if all the independent witnesses are not independent? What if I’m not the guy, but just a lookalike? What if I’m being set up by the authorities?
The easy thing to do here is to say well okay SOMETIMES it’s okay to search one’s belongings but not for like any silly reason or anything like it has to be a real serious one. Then it’s just a matter of where to draw the lines, and who should get to decide.
I like the more absolute stance I made earlier; the government shouldn’t have any business in my personal belongings. Some crimes will go unpunished and that’s a price I’m willing to pay.
I agree that customer data needs to be protected, but it is bold to assume that is the case at all with these powerful corporate entities: if they lie to the state when filing taxes what makes you believe they are ernest when it comes to the protection of their users privacy?
Maybe it is a weird ideology I am holding here, but the more powerful an entity is, the more transparent it should become — nowaday we got this completely reversed with poor people being naked in front of the state and big corps literally fooling everyone.
Edit: some also seem to think the state is the behemoth that jumps on the poor little companies here. To that I just have to think about the account of the German public prosecutor Bäumler-Hösl (of wirecard fame) where she told about a raid on a bank where she and 4 collegues were opposed by 130 (!) company lawyers.
In general this is not what they do. What they do is read the tax code carefully and structure their operations in such a way as to minimize taxes, e.g. because tax is paid on "profits" (revenues minus expenses) so they shift more expenses into jurisdictions with high tax rates etc., causing "profits" to go down in those jurisdictions and up somewhere else.
Then they don't pay any taxes in the jurisdictions with higher tax rates and politicians go on TV and complain about the companies following the laws that the politicians enacted. Because if they actually fixed the laws, the taxes would be paid based on the extent to which the company does business in that jurisdiction, and then companies could only avoid taxes by not doing business there (costing the country jobs) or, for taxes associated with local sales, by raising prices there. Neither of which the politicians actually want to do, so instead they pass laws that allow companies to avoid taxes and then complain about it when the companies do it.
For companies that deliberately obstruct justice work? Have the board and a healthy amount of executives serve 20 years in a high security prison, seize the assets and investigate their investors' due dilligence process. Gather proof with infiltrated workers.
Tech leaders need to learn that criminal conspiracy is not part of a good business plan. If they start using mafia tactics, so can Justice.
If we're trying for a metaphor that would be a similar situation pre-digitization, the cloud servers containing business documents could be considered head office, and the office being raided would be the branch office. The branch office would continually be communicating with head office for their operations, and that communication would be shut down during the raid.
This isn't a great metaphor because the "head office" has become sort of stateless and ephemeral with digitization, but that's part of the interesting question the OP was posing, how does law enforcement collect evidence when that evidence is hosted on cloud servers in nebulous datacenters?
There's already "a law for seizing the IT system of a company", it's called discovery or a subpoena.
“””
United States v. Bridges, 344 F.3d 1010 (9th Cir. 2003)
There was probable cause to search the defendant’s office based on the information in the application that documented his efforts to provide illegal tax advice to various clients, including undercover agents. The search warrant in this case, however, was overly broad. It listed, among the items to be seized, “All records . . . documents . . . computer hardware and software . . .” Though this list was detailed, it was too expansive. There was simply no boundary to what could be seized. In addition, the warrant did not specify the crimes that were the subject of the search (nor did the warrant incorporate the application) so there was no limitation in that manner. Though the application was detailed, the warrant was not. All evidence should have been suppressed. (No discussion of Leon).
“””
https://casetext.com/analysis/search-and-seizure-particulari...
At that point, whether you are in contempt or not depends on the answer to the question "did you know that the cops were entering to look for evidence before you threw the keys?" Whether the judge holds you in contempt or not is a function of the free choice of the judge and is not related to the answer to the first question (though whether or not the judge should hold you in contempt is a function of what the judge believes about what you believed).
[0]https://arstechnica.com/tech-policy/2020/02/man-who-refused-...
If the judge receives a call from the ministry of justice, they will care a great deal about the distinction.
And if a corporate entity finds a way to openly defy a national government, it tends to happen that those governments find a way to change the law (they're the ones making it, right? :P) for that defiance to become punishable by other parts of those governments which can sanction the corporation, prevent their operations within the country or even throw people in jail.
One is, what does the law say? Did they violate it? Is it illegal for a foreign subsidiary to temporarily shut off access to a branch office? How would we like this to work? Policy arguments about law enforcement vs. due process and government overreach.
The other is, politics. If the local government is captured by a cartel of taxi medallion holders who don't like Uber, the government is going to find a way to screw Uber, regardless of whether Uber is complying with existing law. But then it's politics and Uber is a multi-billion dollar corporation, so they have the option to capture the government themselves.
Of course, that leaves the meta argument. Maybe deciding what should happen based on the second method is worse than the first, so how do we prevent that from being what happens?
Did you miss all the screaming of US corporations in relation to EU Acts like DMA? Those changes are exactly what happens when you start to think that law and people behind it are separate.
What if the safe was never in your house at all, but it was in a foreign country across an ocean? And when the cops showed up, you simply threw the keys across the ocean too?
If the cops know of something particular in the safe, then maybe the judge could find you in contempt for not producing that thing when ordered by the court, but otherwise, I don't see how they have any legal leg to stand on.
IIRC, they did it in the US too.
Do you have any articles about this? Because this is insane if true.
We had a raid in one of my previous company due to copyright violation due to a user uploaded content. Authorities came in to take in all the codebase, reports and even employee devices. Basically once given court permission, police would try to collect all the unrelated things which could be taken in the permission, so that they could extort you later.
I know nothing about French law, but this whole thing gives me “organised crime” vibes. In many jurisdictions the punishment dramatically increases when a crime is commited as an organised group whose purpose is to commit said crime. As i said i know nothing about French law so i don’t know if the same concept is present there, let alone if the letter of the law would fit the situation.
But yeah i agree with you they won’t care unless they are sitting in a cell with the chance of sitting a lot more in a cell.
I have no idea what french law says about it but I think it's morally fine and don't care that uber did it.
These seem like closer real-world analogies for what exactly a warrant to search someone's computer should entitle the police to do.
$COMPANY is $COMPANY all around the world and if $COMPANY wants to do business in $COUNTRY (which is not an obligation, they choose to), then yes, they have to entirely cooperate with $COUNTRY.
If they don’t want to, they can still do business elsewhere.
This is the thing which is not the case. The subsidiary in the US is nearly always a different company than the one(s) in Europe. They'll have different management and different lawyers etc. Sometimes they even have different owners, e.g. because one of them is a joint venture with some other company, or a franchise. And they have to be different, because different countries have different laws and those laws often conflict with each other. So the subsidiary in the US follows US law and the one in France follows the law in France.
You could try to make it otherwise, but it's pretty obvious what would happen then. Companies couldn't formally operate in multiple countries because their laws are incompatible, so instead there would be a straw front company in any given country that nominally isn't owned by the conglomerate, but is effectively just reselling their product/service in that country for an additional margin that only pays the salary of local management. To prevent this you would have to ban companies from having foreign suppliers, which is not very practical.
And since countries know that's what would happen, they allow foreign subsidiaries to be regarded as separate entities even if they have shared ownership, instead of demanding the charade.
Well Netflix is nice and all but I prefer social security and teachers in school.
https://fred.stlouisfed.org/series/FYFRGDA188S
Basically flat since the end of WWII, significantly lower before the war. At the height of the New Deal, less than half of what it is now. And that's in the face of significant growth in real GDP per capita. Probably not a dissimilar story in most other Western countries.
The problem isn't in the amount of taxes being collected, it's in where the money is going.
Can a French prosecutor use Uber's systems to deliver a malicious payload to my phone to gather evidence? If so, is Uber required to assist them in this task?
Regardless, the government violating an individual's rights doesn't mean we should yell at uber, it means we should yell at the government.
Ross could argue he forgot his password to unlock the data in a single users case.
In the corporate case it would be hard for Uber to argue that the entire company now has no access to any of the subpoenaed data.
Also we can claim whatever we want but that doesn’t mean it’ll protect us in court.
And the 2nd half just reads like pure corruption to me, they paid off some politician (who just so happens to wield the most power in the whole country) to pressure him to get them to stop their investigation into their illegal acts? In what universe could that 2nd sentence be construed as anything other than slimy, corrupt behavior?
Why did you conclude that?
There were some user uploaded pirated content in our platform. As far as I know, some media company won approval by some judge for a raid to discover the extent of piracy. It's just in the police rulebook to get everything during the raid where there could be pirated content, including employees laptops.
Might be wrong...
> under penalty (you shall bring with you)
[0]: https://www.merriam-webster.com/dictionary/subpoena%20duces%...
It’s pretty obvious to them and would be counted as obstruction of evidence
But things are changing. It seems... These are the developments in The Netherlands. Most of it somewhere over the horizon. Interested to know if other countries with similar tax evasion rules change their rules?
It's in dutch so use your popular translation tool for these links:
- https://www.rijksoverheid.nl/documenten/brochures/2023/10/11... - https://theses.ubn.ru.nl/server/api/core/bitstreams/a384a151... - https://open.overheid.nl/documenten/44e45809-c66e-4378-9fc8-... - https://www.nu.nl/economie/6286473/nederland-nummer-een-bij-...
- because companies heavily use government resources like roads and stuff.
- because losses can be offset against profits. These tend to be middled out over multiple years. You can port losses to other years.
- a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax.
These losses expire (different from country to country)!! Plus, inflation is not taken into account.
> a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax.
Tax on dividends is not corporate income tax. Dividend tax is classified as capital gains tax, which is entirely separate. My point is that anyone taking out money must pay taxes through personal income tax or dividend tax. So corporate income tax is just money that would be taxed anyway - or invested/used by the company. So no real purpose other than producing another cash inflow for the government.
It is baffling to think that for-profit corporations should be allowed to use public services without paying for them: before a company makes further internal investments with new revenue, it should chip in to society for building the infrastructure that made the revenue possible. A corporate income tax is perfectly natural.
Reasonable corporate taxes are a net positive for the economy of the county that issues them.
Some amount of revenue must be raised. Suggest an alternative. Not taxing corp profits will result is less overall tax income (it wont be made up in shareholder taxes).
There is no double taxation. Transactions are taxed, not money.
You also generally can't tax the revenue instead of profits (except perhaps few percent of revenue as the minimal tax), because different companies have hugely different amounts of revenue and expenses.
Speaking of taxing revenue instead of profits, that's another reason the current tax regime is so galling (at least speaking from a USian perspective). Individuals essentially are taxed on revenue and can't deduct things that would otherwise be straightforward deductions in a business context, as necessary and proper expenses required to earn that revenue.
For 99,9% of companies, you get audited every 5—25 years by getting a visit from your local tax authority.
Remember: Small/medium companies have comparable companies and you can easily spot the tax dodgers. Or tax dodging is unofficially tolerated to some degree — think restaurants only accepting cash.
Most companies are not as blatantly illegal as Uber..
They also raid anyone else they don't like, such as people who run Tor exit nodes... but random small businesses are not in that group.
It's not so much breaking laws, but unnecessary restrictions and harassment by Europeans states.
The US is business friendly. It's industry friendly. We don't needlessly harass the business of sovereign individuals, and the state apparatus isn't being used as an excuse as to exert power or influence over the population. Not to the same paternalistic extent of Europe.
In Europe the liberal state apparatus that replaced the monarchies are acting an awful lot like the monarchies.
You're right, the U.S. is very business and industry friendly, which explains why the American people have been getting poorer and poorer while corporations and their shareholders get richer and richer.
We understand it, because we travel there on, our paid, vacations.
My last time in America I went to San Francisco, lots of money, I have not seen a worst place to live in my life.
Americans don't understand the quality of life other places have.
Especially Europe. Europeans don’t even seem to understand how large America is, which is why so few have passports.
We worked for a small company, so we knew that they're here for the big company that does credit card transactions, but it was both surprising and ... absolutely uneventful, they didn't even talk to us. (As we were leaving we didn't even run into them - at least I don't recall any interaction.)
Later the sysadmins of the big company had amazing stories about how the tax authorities wanted copies of every hard drive. And when they told them that, sure, sure, but things are on a RAID and without the config and the card it'll be useless. They didn't care of course :)
I expect my polkticians not to let themselves be dazzled by the complexity of their tax schemes and tax them the same amount they would if I sold that service here.
Does not seem too controversial.
China is a little more arbitrary and political, that makes it less predictable and bad for business.