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With the UK being the biggest userbase in the EU for Dropbox its a shame they've decided to open up in Dublin, as my accountant would say its a good "tax optimi

With the UK being the biggest userbase in the EU for Dropbox its a shame they've decided to open up in Dublin, as my accountant would say its a good "tax optimisation" strategy. Sure, hate the game not the player, but they could have scored some major plus points on the day Public Accounts Committee in the UK have poured scorn on Google, Amazon and Starbucks: http://www.bbc.co.uk/news/business-20559791 http://www.bbc.co.uk/news/business-20559791

mseebach 14y ago
> they could have scored some major plus points on the day Public Accounts Committee in the UK There's nothing like politicians calling businesses who are obeying the law "insulting" in a play to stir up outrage to attract new businesses to a country. Come here, and be publicly harangued. Instead Dropbox seems to have scored major plus points with IDA Ireland.
- BenjaminDyer 14y ago
  Maybe, however in these times of austerity there's also nothing like a large corporate playing smart to irritate the natives (speaking as a UK income and corporate tax payer). I would love to see the impact the UK boycott of Starbuck has had on their bottom line. Sure, not everyone cares but clearly enough people have forgone their red cups over the past few weeks for Seattle to take notice based on todays headlines.
  - mseebach 14y ago
    People practically never follow through on actual actions to back up their "principles" - to the point where the Starbucks next to the Occupy London was, well, occupied. If not even people who sleep in tents on the pavements for weeks are principled enough to forego Starbucks coffee, don't count on the average guy to be. So I'd venture a guess that Starbucks UK haven't seen any real decrease in sales - rather, it's probably their PR people who figures it's better to be seen as "responsible", as you put it, to not irritate the natives.
cemerick 14y ago
I continue to have difficulty understanding the gnashing of teeth around various "tax minimization" strategies, e.g. being "immoral" and all that. Setting aside those companies that deal in 'hard goods' (e.g. Amazon-the-store, Starbucks, etc), could someone explain the rationale of taxation w.r.t. corporate domicile? Say I offer a software-based service in the U.S. (i.e. all the servers, billing, admin, dev, etc are done there), and by dint of luck/happenstance, a majority of the userbase ends up being in the EU. I (or my ISP) or my customers (or their ISP) are paying for the pipe between us (which is presumably taxed however the relevant localities have chosen); beyond that, I am not benefiting from any government services in the EU. Should I nevertheless pay taxes in the EU (perhaps proportionately to each member nation based on the mix of nationalities of my userbase)? When I set up a European office, shall I be shamed into setting up HQ in whatever country houses the majority of my customers that year? What happens when that mix changes such that the majority of my customers are in a different nation? All of this sounds absurd, but it sounds like the standard (or something similar to it) being applied to Dropbox in this case.
- Osmium 14y ago
  I think the argument is that if you're making a profit off a country's citizens, you should also be paying taxes to that country's government, otherwise there'll be a large net flux of money out of that country (e.g. with Amazon, Starbucks in the UK). Let me put it another way, you say that: >beyond that, I am not benefiting from any government services in the EU. but you are benefiting from the government. Without a stable and moderately successful government, your customers wouldn't be in a position to be able to pay for your services. And that's exactly why most of your customers could, conceivably, come from the EU, but are unlikely to come from a developing country. I'm not saying I agree with this; I don't know enough about how this sort of taxation affects the system as a whole, but I believe that's the logic.
  - mseebach 14y ago
    The problem with corporate tax is that it's not a tax on a specific, quantifiable activity, like "income", "capital gain" or "sale". These are pretty difficult to fudge. Rather, corporate tax is a tax on making a profit. Consider the battle between development and sales - who's making the profit? To the very untrained eye, sales, because they're the ones bring the cheques home, and, indeed, salaries and bonuses in that department seems to confirm that. But without a good product to sell, there would be no sales, so it's obvious that devs deserve a cut as well - but how much? That's essentially the same discussion Mrs Hodge is trying to have with Starbucks. Are the profits generated by sales (the stores in the UK) or by devs and backoffice (marketing, branding, sourcing, supply chain, finance etc etc etc), conveniently, but legitimately, placed outside the UK?

mseebach 14y ago

> they could have scored some major plus points on the day Public Accounts Committee in the UK There's nothing like politicians calling businesses who are obeying the law "insulting" in a play to stir up outrage to attract new businesses to a country. Come here, and be publicly harangued. Instead Dropbox seems to have scored major plus points with IDA Ireland.

BenjaminDyer 14y ago
Maybe, however in these times of austerity there's also nothing like a large corporate playing smart to irritate the natives (speaking as a UK income and corporate tax payer). I would love to see the impact the UK boycott of Starbuck has had on their bottom line. Sure, not everyone cares but clearly enough people have forgone their red cups over the past few weeks for Seattle to take notice based on todays headlines.
- mseebach 14y ago
  People practically never follow through on actual actions to back up their "principles" - to the point where the Starbucks next to the Occupy London was, well, occupied. If not even people who sleep in tents on the pavements for weeks are principled enough to forego Starbucks coffee, don't count on the average guy to be. So I'd venture a guess that Starbucks UK haven't seen any real decrease in sales - rather, it's probably their PR people who figures it's better to be seen as "responsible", as you put it, to not irritate the natives.

cemerick 14y ago

I continue to have difficulty understanding the gnashing of teeth around various "tax minimization" strategies, e.g. being "immoral" and all that. Setting aside those companies that deal in 'hard goods' (e.g. Amazon-the-store, Starbucks, etc), could someone explain the rationale of taxation w.r.t. corporate domicile? Say I offer a software-based service in the U.S. (i.e. all the servers, billing, admin, dev, etc are done there), and by dint of luck/happenstance, a majority of the userbase ends up being in the EU. I (or my ISP) or my customers (or their ISP) are paying for the pipe between us (which is presumably taxed however the relevant localities have chosen); beyond that, I am not benefiting from any government services in the EU. Should I nevertheless pay taxes in the EU (perhaps proportionately to each member nation based on the mix of nationalities of my userbase)? When I set up a European office, shall I be shamed into setting up HQ in whatever country houses the majority of my customers that year? What happens when that mix changes such that the majority of my customers are in a different nation? All of this sounds absurd, but it sounds like the standard (or something similar to it) being applied to Dropbox in this case.

Osmium 14y ago
I think the argument is that if you're making a profit off a country's citizens, you should also be paying taxes to that country's government, otherwise there'll be a large net flux of money out of that country (e.g. with Amazon, Starbucks in the UK). Let me put it another way, you say that: >beyond that, I am not benefiting from any government services in the EU. but you are benefiting from the government. Without a stable and moderately successful government, your customers wouldn't be in a position to be able to pay for your services. And that's exactly why most of your customers could, conceivably, come from the EU, but are unlikely to come from a developing country. I'm not saying I agree with this; I don't know enough about how this sort of taxation affects the system as a whole, but I believe that's the logic.
- mseebach 14y ago
  The problem with corporate tax is that it's not a tax on a specific, quantifiable activity, like "income", "capital gain" or "sale". These are pretty difficult to fudge. Rather, corporate tax is a tax on making a profit. Consider the battle between development and sales - who's making the profit? To the very untrained eye, sales, because they're the ones bring the cheques home, and, indeed, salaries and bonuses in that department seems to confirm that. But without a good product to sell, there would be no sales, so it's obvious that devs deserve a cut as well - but how much? That's essentially the same discussion Mrs Hodge is trying to have with Starbucks. Are the profits generated by sales (the stores in the UK) or by devs and backoffice (marketing, branding, sourcing, supply chain, finance etc etc etc), conveniently, but legitimately, placed outside the UK?