7 ms·

"Anyway, it seems like a mystery to me why tech firms like Google set up shop in small expensive Zurich instead of say cheaper, bigger Barcelona or Vienna, for

by guest 10y ago

"Anyway, it seems like a mystery to me why tech firms like Google set up shop in small expensive Zurich instead of say cheaper, bigger Barcelona or Vienna, for example." The reason is simple: tax-evation and the like, Swiss is well known for it around Europe. That it hasn't been dealt with is not strange since we live in the age of hidden plutocracy (trading outposts and the like exist in many countries for the rich to circumvent the law - this should put Brexit in a new light for some). Things are slowly changing for the better as people start to realise what is the real problem within society (or rather outside society), but seing as what happened to the "Panama" leak where the concentraded information wasn't released and basically ICIJ sat on it for a year or so (the initial estimates during that time dwindles from over $62T to less than $30T, the official cause was accounting for the same money several times).

tonfa 10y ago
> The reason is simple: tax-evation and the like Source? Switzerland is famous for its private banking sector and it used to be easy to hide assets for individuals (with FACTA and tax data sharing, I don't think it's as popular now, or at least the minimum amount required is way higher since banks don't want the risk). Unlike Ireland, I'm not aware of Switzerland being commonly used to reduce corporate tax (at least in IT).
- a3camero 10y ago
  Here's a well-known Canadian Supreme Court case about transfer pricing that highlights the role of a Swiss subsidiary in a scheme to dramatically reduce taxes on income earned from selling pharmaceuticals: https://en.wikipedia.org/wiki/Canada_v_GlaxoSmithKline_Inc https://en.wikipedia.org/wiki/Canada_v_GlaxoSmithKline_Inc
  - jomamaxx 10y ago
    Transfer pricing is not 'tax evasion' - it's 'tax avoidance'. To be clear, 'tax evasion' is illegal. Most companies do what they can to avoid paying taxes, which is rational in some ways, but they usually don't do anything illegal. It's important that we don't mix the two :)
    - woah 10y ago
      What's the difference? Does 'tax evasion' involve falsehoods?
      - rfrey 10y ago
        Tax avoidance is legal - it's reducing your income through legal means. Where it gets prickly is when companies game the system and find ways to reduce tax that the sovereign clearly would outlaw, but cannot for structural or political reasons. Still not illegal, but not exactly awesome either.
      - jomamaxx 10y ago
        The 'difference' is one is illegal. If you have $1M in a Swiss bank account earning capital gains, and don't declare it to the IRS - that's 'tax evasion'. If you have a company in Switzerland generating revenue, and decide not to bring back your profits to America to get hit with another tax, and just let it sit in Switzlerland - that's a 'tax avoidance' strategy. 'Tax evasion' = illegal. 'Tax avoidance' = doing everything you can within the boundaries of the law to not pay taxes. There are some wierd loopholes due to the way taxation works across borders.
      - mike_hearn 10y ago
        Yes, tax evasion involves lying to the tax authorities. Tax avoidance does not. It involves complete honesty with the tax authorities, who then charge you less tax, as the rules state they should. The definition of "avoidance" is therefore intensely political - avoidance tends to be defined as lawful behaviour by other people the speaker would prefer paying for government instead of them!
    - __jal 10y ago
      Important to whom? I intentionally do not make a distinction. I'm not going to start, because the point is important to me. The distinction matters to: decision-makers at the firm in question, shareholders of the firm in question, the sovereign collecting the taxes[1]. And given the the dispute resolution with large corps' tax issues rarely involves people going to jail or even admissions of fault, I'm not sure why anyone outside of that group should care about the (extremely blurry) legality boundaries. Bottom line: most of the rest of us have no obligation to care about their word-choice sensitivities and are free to use language for our own ends. [1] Possibly noninclusive list.
- Scoundreller 10y ago
  Iunno, Ebay likes to print in every email and invoice that I'm dealing with their Swiss subsidiary, even though I'm in Canada. I'm sure it's for tax purposes.
erispoe 10y ago
Switzerland managed to build a highly specialized economy in several high-value sectors: pharma, banking, computer science, micro-mechanics, manufacturing machines...
- tigershark 10y ago
  ok, why all the high tech industries that come to my mind are based in SV, UK, SE Asia, Japan but I can't thing of anything in Switzerland? Honestly it is the first time in my life that I hear the association computer science - Switzerland..
  - erispoe 10y ago
    Because you have no interest in micro-mechanics or manufacturing machines? ETH and EPFL are one of the best universities in the world for CS. No one else than yourself is responsible for your own biases.
    - tigershark 10y ago
      I don't care if you have the best university in the world. I was speaking about companies and there is no hardware/software world-leading class company in Switzerland that I know. I still didn't see one in all the comments and no down voter provided one single example.
  - vidarh 10y ago
    > Honestly it is the first time in my life that I hear the association computer science - Switzerland.. Some names you might recognize: * Niklaus Wirth (Pascal, Modula-II, Oberon etc.; retired professor at ETHZ) * Jurg Gutknecht (Oberon; EHTZ) * Erich Gamma (one of the "Gang of Four" behind the Design Patterns book; co-wrote JUnit; studied at University of Zurich) * Urs Hölzle (Google SVP of Technical Infrastructure at Google; studied at ETHZ) A lot of people can also be traced back to Wirth. E.g. Andreas Gal that did his thesis on trace trees for JIT compilation is German, and did his thesis at UC Irvine, but his advisor was professor Michael Franz who did his thesis on runtime code generation before Java was released under Niklaus Wirth.

by guest 10y ago

tonfa 10y ago

> The reason is simple: tax-evation and the like Source? Switzerland is famous for its private banking sector and it used to be easy to hide assets for individuals (with FACTA and tax data sharing, I don't think it's as popular now, or at least the minimum amount required is way higher since banks don't want the risk). Unlike Ireland, I'm not aware of Switzerland being commonly used to reduce corporate tax (at least in IT).

a3camero 10y ago
Here's a well-known Canadian Supreme Court case about transfer pricing that highlights the role of a Swiss subsidiary in a scheme to dramatically reduce taxes on income earned from selling pharmaceuticals: https://en.wikipedia.org/wiki/Canada_v_GlaxoSmithKline_Inc https://en.wikipedia.org/wiki/Canada_v_GlaxoSmithKline_Inc
- jomamaxx 10y ago
  Transfer pricing is not 'tax evasion' - it's 'tax avoidance'. To be clear, 'tax evasion' is illegal. Most companies do what they can to avoid paying taxes, which is rational in some ways, but they usually don't do anything illegal. It's important that we don't mix the two :)
  - woah 10y ago
    What's the difference? Does 'tax evasion' involve falsehoods?
    - rfrey 10y ago
      Tax avoidance is legal - it's reducing your income through legal means. Where it gets prickly is when companies game the system and find ways to reduce tax that the sovereign clearly would outlaw, but cannot for structural or political reasons. Still not illegal, but not exactly awesome either.
    - jomamaxx 10y ago
      The 'difference' is one is illegal. If you have $1M in a Swiss bank account earning capital gains, and don't declare it to the IRS - that's 'tax evasion'. If you have a company in Switzerland generating revenue, and decide not to bring back your profits to America to get hit with another tax, and just let it sit in Switzlerland - that's a 'tax avoidance' strategy. 'Tax evasion' = illegal. 'Tax avoidance' = doing everything you can within the boundaries of the law to not pay taxes. There are some wierd loopholes due to the way taxation works across borders.
    - mike_hearn 10y ago
      Yes, tax evasion involves lying to the tax authorities. Tax avoidance does not. It involves complete honesty with the tax authorities, who then charge you less tax, as the rules state they should. The definition of "avoidance" is therefore intensely political - avoidance tends to be defined as lawful behaviour by other people the speaker would prefer paying for government instead of them!
  - __jal 10y ago
    Important to whom? I intentionally do not make a distinction. I'm not going to start, because the point is important to me. The distinction matters to: decision-makers at the firm in question, shareholders of the firm in question, the sovereign collecting the taxes[1]. And given the the dispute resolution with large corps' tax issues rarely involves people going to jail or even admissions of fault, I'm not sure why anyone outside of that group should care about the (extremely blurry) legality boundaries. Bottom line: most of the rest of us have no obligation to care about their word-choice sensitivities and are free to use language for our own ends. [1] Possibly noninclusive list.
Scoundreller 10y ago
Iunno, Ebay likes to print in every email and invoice that I'm dealing with their Swiss subsidiary, even though I'm in Canada. I'm sure it's for tax purposes.

erispoe 10y ago

Switzerland managed to build a highly specialized economy in several high-value sectors: pharma, banking, computer science, micro-mechanics, manufacturing machines...

tigershark 10y ago
ok, why all the high tech industries that come to my mind are based in SV, UK, SE Asia, Japan but I can't thing of anything in Switzerland? Honestly it is the first time in my life that I hear the association computer science - Switzerland..
- erispoe 10y ago
  Because you have no interest in micro-mechanics or manufacturing machines? ETH and EPFL are one of the best universities in the world for CS. No one else than yourself is responsible for your own biases.
  - tigershark 10y ago
    I don't care if you have the best university in the world. I was speaking about companies and there is no hardware/software world-leading class company in Switzerland that I know. I still didn't see one in all the comments and no down voter provided one single example.
- vidarh 10y ago
  > Honestly it is the first time in my life that I hear the association computer science - Switzerland.. Some names you might recognize: * Niklaus Wirth (Pascal, Modula-II, Oberon etc.; retired professor at ETHZ) * Jurg Gutknecht (Oberon; EHTZ) * Erich Gamma (one of the "Gang of Four" behind the Design Patterns book; co-wrote JUnit; studied at University of Zurich) * Urs Hölzle (Google SVP of Technical Infrastructure at Google; studied at ETHZ) A lot of people can also be traced back to Wirth. E.g. Andreas Gal that did his thesis on trace trees for JIT compilation is German, and did his thesis at UC Irvine, but his advisor was professor Michael Franz who did his thesis on runtime code generation before Java was released under Niklaus Wirth.