Friday, June 04, 2021

This is obscene

We all know multinational corporations cheat on their taxes, using complicated legal arrangements to funnel money through different jurisdictions to avoid paying anything to support the societies that host them. How obscene are such arrangements? This obscene:

An Irish subsidiary of Microsoft made a profit of $315bn (£222bn) last year but paid no corporation tax as it is “resident” for tax purposes in Bermuda.

The profit generated by Microsoft Round Island One is equal to nearly three-quarters of Ireland’s gross domestic product – even though the company has no employees.

The subsidiary, which collects licence fees for the use of copyrighted Microsoft software around the world, recorded an annual profit of $314.7bn in the year to the end of June 2020, according to accounts filed at the Irish Companies Registration Office.

The company’s profits jumped from just under $10bn in the previous year and compare with Ireland’s 2020 GDP of €357bn ($433bn).

Three-quarters of a country's GDP, not a cent in tax. Multinationals are simply parasites.

To use another comparison: Ireland's 2020 government spending was ~105 billion Euros (~US$127 billion). If they taxed this single corporation at the usual Irish rate of 12.5%, it would provide ~US$39 billion - or just under a third of all government spending. Not taxing them means Irish people are paying more and/or getting worse government services than they would if Microsoft paid their fair share. I'd expect them to be pretty angry about that.

This shows the need for international cooperation to stop tax-cheating, with a global minimum corporate tax, and a financial blockade of tax havens and money laundries until they join the system. Until we do that, these parasites are going to keep robbing us blind.