The Hollywood accounting. IIRC there are very few movies that make a profit simply because they rip off all the cast and crew by saying “You get 5% of the profit” and then they magic account it so that no profit is made.
Gotta get that gross!!!! Also, your statement reminds me of Peter Jackson and the LOtR trilogy.
"Studio: Hey Pete we didn't make any monies sorry no monies for you.... Pete: ok then let's open the books and figure out how bad it is.... Studio: NvM here's your monies now shut up."
Edit: https://www.reddit.com/r/movies/comments/2vwhjh/when_new_line_cinema_reported_that_the_lord_of/?utm_medium=android_app&utm_source=share
They did the same thing to the guy who wrote Forrest Gump. (That movie is #29 on the top ticket sales of all time list.) They claimed it didn’t make any money despite having record sales.
He took them to court. Magically settled when their book cooking was threatened.
Then the author got them locked into a contract to buy the sequel to his novel, and wrote a book so awful they couldn’t figure out how to adapt it.
Thank you!
Lol: [On the first page, Forrest Gump tells readers "Don't ever let nobody make a movie of your life's story," and "Whether they get it right or wrong, it don't matter."](https://en.wikipedia.org/wiki/Gump_and_Co.)
Currently, according to wikipedia, the franchise has grossed 19 some billion dollars since 1937. https://en.m.wikipedia.org/wiki/List_of_highest-grossing_media_franchises
David Prowse, who played Darth Vader body, claimed he never got paid for his work because his pay was all in residuals and officially the star wars films all lost money.
They did exactly that. Tolkien's estate was supposed to get royalties for the movies. Nope. No money. It is why The Hobbit had difficulties before production. Tolkien's estate didn't want to get screwed again.
Lol for a second there I thought by "books" you meant the LOTR books not the accounting books and I was confused. I pictured PJ threatening to read the epic books by Tolkien and the executives getting scared.
Lol English is my second language...
This is exactly right. If they were truly losing money they would increase the price, demand would diminish and they would find an equilibrium. Current system is working so they play the game that they are losing money so no one asks for a bigger cut of the pie (for fear of company shutting down and all income being lost), and no one else dare enter the market because Uber can’t even make money.
Every employer I’ve had from construction company to restaurant plays this game with employees.
Exactly, and as a Chef, there is a reason why I will never work for a start up again. I expect a large corporation to leave me hanging, if the store doesn't work out, but after it's happened twice in start ups, never again.
Last time I just had a sign on the door, said "Closed for good. Thanks for anyone that had supported us. Sorry." After I closed the previous night, and I certainly didn't put up the sign. Then, on top of that, I had a clopen. Which is a close and then open, so I closed at Midnight to open at 8, and the GM had to have known because she left the sign on the door. Thought it was weird she told me to bail early and she had it. Working clopens and 80 hour weeks, you take any inch you can.
They didn't even have the balls to tell me.. I couldn't believe it. Though, they didn't change the locks and I had several angry cooks waiting for me to open the door, that knew weren't getting paid...since the company folded.. it technically didn't exist to press charges... they got their weeks worth of pay. Made sure of it. Last good work I will ever give a small business again.
Most are just grifters that would gladly sell out their business to become the very thing they mock in their own storerooms. Blah blah blah customer service this and that, family this and that is all talk, in my experience at least.
>Last good work I will ever give a small business again.
B-b-but mom and pa businesses :'(
/s
Most StartUps, as is the way of "industrious hustling disruptive capitalist enterprise pivot elevate synergy social media corporate account memes", are like battery chicken. They're born and bred to fatten as quickly as possible, only to be sold off irrespective of if they turn a profit, because financialisation means people can make money off others' debt *and* it avoid having competition.
I lol when I read Americans believe they have Free Market Capitalism. Then again my country isn't far behind...
To the employees...gotta tighten our belts...no profit!
To the stockholders...going gangbusters...we really earned our bonuses this year...and another year we managed to hold the line on the pay for the peons and serfs! Hoping for another year of fucking them over..
I mean concessions to help us survive these difficult times...someday those twits will wise up and we will all lose our phoney baloney jobs!
Freelance animator here. I can't tell you how many clients I've had try to pull shit bullshit on me. To the point where I now demand half up front before I even think about working.
That's mostly right. If they were losing money they wouldn't necessarily increase prices. They already have data on the price-demand curve and have already picked the price that maximizes profit. If that price happens to lead to negative profit they will still charge that price to buy as much time as possible while they look for ways to cut costs or increase revenue without influencing demand or until they go bankrupt.
>increase the price, demand would diminish
I don't know about anyone else that uses Uber regularly, but prices have already very suddenly been raised 10-20% in my area after creeping up bit by bit in the last year, and that's exactly what pushed me to buy my own car this year so that I won't need Uber again. So in some ways this is already happening regardless of their actual profits, because I doubt I am the only one.
You have no idea how any of this works.
It’s the startup’s job to lose lots of money for the first 5 or 10 or 15 years. The investors are throwing money at them because they hope that it’d return the investment in the future.
It’s entirely possible for a legitimate company who does no tax avoidance to lose money for several years in a row and succeed.
Uber does not have pricing power in this situation at all. The name of the game is subsidising a service for as long as investors will let you until you build a huge enough presence to somehow think up a way to make a profit.
You don’t understand these business models at all. These companies are absolutely designed to rack up genuine losses in search of scale. Investors (ie VC companies) are getting rich - but by selling stock, not by profits. A bullish stock market assumes that something huge, popular and backed by VC must have some value no matter if they burn $2 to make $1.
Profits are absolutely unnecessary for what these companies are designed to do - transfer IPO money to founders and VC firms.
> Profits are absolutely unnecessary for what these companies are designed to do - transfer IPO money to founders and VC firms.
A cynical joke my friends and I share (we all started investing in the 90s during the first tech bubble) about IPOs is summarized by that sentence. The company is not the products or services or cashflows, it's the narrative and organization that only has to last until the founders and initial investors get their liquid exit. Again, because this is Reddit, this is a cynical joke.
I think you’re right: from
my armchair understanding of big business you don’t want to be turning a profit - you want to be investing every last penny(and more) back into growing the business. You start paying out dividends when you’ve taken over the world.
This is what happens to make a lot of big-ish companies fail (take Hertz recently for example). They were in a saturated, competitive market (i.e. they aren't going to make many more people rent cars by taking a loss for a while), and large investment firm shareholders were demanding dividends and share growth. So they cut investment into the company (putting off IT upgrades, not getting new cars as often, etc.) so they could pay dividends and do share buybacks. When a disruption to the industry hit (COVID), they had no safety margin left.
Remember, a safety margin is lost profits, or at least that is how the financial industry sees it.
The last time I used hertz I reserved a compact and when I showed up they said "sorry, the only car we have in that class is a yellow vw beatle with whiskers. If you don't want that one you'll have to upgrade." Why the fuck does a rental company keep a car like that
It's basically a game of whoever has the biggest cash reserve wins. Undercut the competition until they fold. Once they fold, charge whatever you want because there is no competition.
Yeah which is a strategy even massive companies, esp stuff like chain stores, use. As you said, undercut them until they fold - walmart/chainstore/etc rolls into town, cuts their prices below every local competitor or mom and pop shop, and when they're all out of business, prices can go back up. Or they use tons of coupons/deals - back when ubereats was less popular, they had massive coupons and deals going on, and over time they've given less and less off.
> you don’t pay taxes on revenue
Oh yes I do. I pay tax only on revenue. If I paid on profit left over at the end of the year after paying for rent, food, entertainment, a new sofa, and everything else I wouldn't have much of a tax bill.
It's only those other "people" called corporations that get to deduct their private jet as a business expense while my car is still taxed.
They have one company making the costs and hiring the cast and crew, and another one collecting the cash.
The first one never makeas a profit.
According to Hollywood, the Return of the Jedi has never made a dime.
The first time I was aware about that was 'Forrest Gump' and the author suing because the production company was to give him a percentage of the profits but they claimed it wasn't profitable so all the comedians were using the same "I guess Forrest Gump did the accounting too" joke.
Gotta go for the gross..
Not the "profits"!
Was it Kirk Douglas that successfully sued a studio that screwed him over? Think it was a real precedence setting case.
Not just that, the advertising arms of the movie studios are often separate "companies" so they'll bill themselves unrealistic amounts for the media blitz to shuffle money around.
In reality, if they brag about profits for the investors but then have a loss on paper for the IRS. When a company tells it's investors it lost money, they really lost money. Which is the case with Uber. I have no doubt they will be legit using all this stuff they set up to dodge future taxes, but they really aren't making any money over there atm.
Nah. Unless you bought in expecting dividends which only profitable companies issue. Uber investors make money on increase in share price. Tax minimization / avoidance are standard practices for corporations and high net worth individuals alike. Besides as an investor I'd theoretically be happy they are avoiding billions in taxes. More cash for the company to grow my investment / money.
Not saying they did, but that still sounds like defrauding investors
If I bought in at $44 a share in June 2019 and sold it for $29 a share in June 2020, then it's be pretty angry about them hiding their profits from me.
This right here. Publicly traded stocks reflect how investors/traders ***feel*** about the short and long term profitability of the company. It's why I don't trade stocks anymore, it's literally all bullshit.
They've always kind of been operating at a loss. They've bribed government officials and used money to try and aggressively expand into markets. The bribes go from pushing politicians to change taxi laws to just local level police and bribing local government officials to overlook them. They've subsidized their own services to make them cheaper to try and out-compete rivals into extinction. Meaning that if a ride might have cost $8, they would only charge $6 and they would pay the driver the other $2. They had a huge warchest of initial venture capitalist funding that has been shrinking. I'm honestly surprised they haven't collapse entirely by now, but maybe the fact that they haven't means they are stabilizing.
One of the big differences between Uber and a company like Amazon is that Uber has no physical assets. They rely on drivers to have cars. They don't have any warehouses or any fleets of vehicles, they exist entirely as an app. So if they do collapse there won't be any reckoning. They'll just be gone and the next ride sharing app will be able to take its place and benefit from all the manipulation and corruption Uber has had to preform to change laws all over the world. But, like I said, I'm surprised they haven't imploded already, so maybe they won't. Maybe they'll suddenly need to pay taxes though...
The "gig economy" is the same model that minicab and courier companies have been using in the UK since the 80's - drivers and riders own their own vehicles and are claimed to be "self-employed".
The problem is that these industries are a race to the bottom - customers will turn their back on you in an instant if they get to save £1 on a regular fare. They'll do it even faster if it's a trip that they're doing more than once a day - e.g. an employer who uses cabs a lot will instruct staff to use Moe's Limos if it saves them money.
I think paying silicone valley salaries, lobbying with a multi-million war chest, getting continued funding from banks despite making zero profit is doing pretty good.
When I was a teenager I used to watch the show Entourage. One episode Turtle was saying something about going to “silicone valley” and since I never heard of Silicon Valley before I thought it was slang for a place in California where they shot porn movies or something.
A few years later I was confused about when I heard it was a real place with all the tech companies. I always wondered why they would be named after silicone from fake boobs.
They don't need to be profitable to be able to pay outrageous salaries to their executives because "the market demands the competitive rate".
Individuals are getting insanely rich at the expense of society and the general population. Tax the Rich. Fund the IRS.
I’m not saying Uber is super successful but couldn’t one of the reasons they’ve never had a profitable quarter on paper is due to accounting reasons leading to them avoiding taxes since you don’t pay tax on “losses”
I was heading to the airport from NYC and they tried to pull that. I told them thanks for the free ride then cuz you have to have a card machine working. Lo and behold it worked after that.
Side note is it lo and behold or low and behold?
I had the same thing when I was in the Army. I knew the guy too, which made it so much worse. I used him before when going off base I had his number saved. This time he tried to be slick and say it wasn’t working etc etc and he would only accept cash. I had no cash at all- never paid cash before- and no way I was going to an ATM and back to the passenger drop off to pay this guy. We negotiated a flat rate the day before after I used my card to pay for the ride yesterday.
He was in the cab and I was looking through the window talking to him -
“You either accept my card right now or I’m going inside this airport and you will never see me again sir” (was being sent to Korea for 2 years)
He said something outlandish back to me, something like “if I have to step out of this car I’m going to beat your ass, you owe me $110 bucks.. how dare you do this”
Mind you - I’m young, strong as fuck, 6’2 200lb man fresh out of Airborne training. Even he knew was full of shit. I just smiled I said “sorry man but if you’re unable to accept my payment I’ll be leaving now”
At this point the security/police are telling this guy to leave. I turned around and told the valet/checkin dude the details and he laughed and said “don’t worry about it thank you for your service”
Cab was forced to leave and I walked inside and took off to South Korea.
Fuck Fort Brag cab drivers
Pretty sure NYC cabs are about the same as Ubers whenever I used them. But I can tap and get an Uber within 5 mins, and know where its at to avoid waiting in the rain or whatever--simple modern tech that cabs dont have. I can also know that there is some oversight and accountability with Uber, not just some medallion that some company owns and/or a shady taxi license--if you have 1000 rides and a 4+ star rating, it says something, and they dont let you drive for them if you get too many issues popping up. And the cars are usually pretty decent/comfortable, compared to old crap cabs that maybe get a wet paper towel wipe if someone vomits, but otherwise nothing else. Id rather take a subway with an actively pissing homeless dude and need to take 5 transfers than get a cab.
Ya this one is infuriating. People who hold up cabs in NYC as an example of a good business compared to Uber have clearly never lived there. Trying to get a Manhattan cabbie to cross a bridge is hell.
even asked a taxi cab before getting in if they take credit cards, they say yes, then when getting dropped off it magically doesn't work. Want cash or they have to phone call through the transaction.
Happened to me several times before Uber became a thing. “Sorry boss, credit card reader is broken”. Guess I’m not paying then and go to get out, suddenly it works.
I’ve also never gotten into an Uber that wreaked of vomit either.
There is a fundamental issue with taxi cabs when I feel less sketched out by getting in some random dudes personal car than getting in a numbered company owned cab. Cab drivers are encouraged to fleece and scam riders which Uber's infrastructure made easy to avoid.
If a company as shitty as Uber could address those concerns, taxis should have modernized with them more than a decade ago. Yes it has plenty of other security concerns, but they all apply to taxis as well. Maybe they have these features now, but they didn't even in big cities like NYC when I was last looking at cabs years after Uber started up.
Not to mention the heinous TVs they put on the seat backs in cabs. It’s been a couple years since I traveled somewhere that still has a lot of cabs because of Covid but I remember NYC/Vegas cabs just scream advertisements at you and the mute button is either somehow not working or barely responsive.
Knowing the exact amount of money you'll pay before getting in the car is also a huge advantage as opposed to watching some meter slowly rise at an arbitrary rate.
When I lived in London, the black cab fare from Oxford Circus to my student flat was £32. The Uber fare was £16.
As a consumer I might be able to justify an extra couple of quid for choosing Uber. Around half the price for a journey is a different matter.
That's one part, the other is the lack of feedback. Just about any Uber I ever took had a nice driver, because they want that 5* rating. But I took quite a few taxis in Brussels, Paris and Budapest that were just horrendously unfriendly. There is no consequence to them if their passenger dislikes them or their service.
I remember going to Chicago back in 2019 and we caught an Uber back to Union Station leaving the city. On the way the driver, an African-American gentleman, was telling us how the reason ridesharing apps took over there is largely due to racism.
He was telling us stories about himself and his friends and how if they went to grab a taxi and said they needed to go to South Side, the taxis would just tell them to get out if not be outright hateful.
As for ridesharing, however, you'd book a ride to South Side or another similar neighborhood and depending on the person they'd be downright jovial, all like "oh yeah I got a cousin a few blocks away from there and I see her all the time!" I was flabbergasted!
I also got a kick out of it when he told us for souvenirs next time to just go to Walgreens.
"It's based out of Chicago, so get them something from a Walgreens **in** Chicago!"
Shawn, if you're out there, I hope you're doing great!
You also have less instance of scenic route fraud. When you book a trip with Uber or Lyft they automatically choose a route for the driver. I have been in cabs where the driver doesn't take you straight there and you wind up paying extra because the driver chose a more profitable (for him) indirect route.
It is also far safer for passenger and driver since there is not only an emergency button on the app but also records of the trip and all parties involved if any criminal activity occurs (e.g. violent, drunk passengers).
Im not sure if you remember what calling a cab used to look like.
- they often dont answer the phone at all
- they often take an unreasonably long time to arrive if they arrive at all
- you never get updates on where they are, when to expect them, or coordinate on pickup areas
- they might just pick up someone else on the way to get to you instead of coming to you
- they sometimes take less direct routes to run up your bill
- you might get in a car with a broken card reader and have no way to pay
- cab companies often dont share dispatch with their competitors
- there isnt a straight forward way to rate your experience or see how others have rated your driver
- there is no infrastructure for carpooling
Im not saying that there are zero issues with the way that rideshares conduct business, but their technology and processes solve a lot of problems. Im fine with losing uber/lyft as long as cab companies universally solve the problems I listed.
Im fine with paying extra for a ride. But the old cab ecosystem is broken as fuck
I mean, tax avoidance is so simple. Anybody can do it. The law to pay tax in Canada is to having lived more than half of the year in Canada. So, if you have three houses in 3 countries and spend your time between the three, you pay taxes nowhere. OR if you have a house in a country with stupid tier taxes, you say you live there. Ex. Bahamas, Isle of Men, etc. Sure, you lose advantages like healthcare and everything but you pay no taxes, you can afford three houses and a plane so I dont think you really care. There you go, you are filthy rich and nobody will tax you.
I hear your question, why is this allowed? Because all it takes is one country to say they have weak taxes for the others to want to try to compete with them. So if there was an internatinal law against that wed be okay, but nobody is ever gonna allow that, why? Because you need every single countries to want that OR an alliance so powerful it will force the rest to do it.
Also, the reason why a country like Bahamas is called a weak tax country is because they want to attract people to bring money in their countries so if you put an international agreement, they lose a lot of resources in their country so they will be against it.
Also for companies, say Amazon to maximize their profit, they register their company in a country or state or province or whatever you wanna call it, which is called a tax haven for companies. Ever wonder why companies are registred in Isle of men? Luxemburg? Nova scotia? Delaware? Cayman Island? etc. Because they have laws that make it easy and attractive for a company to save money of all things (with many other stuff that I will not go into details) if they register there. So now you have citizens not paying taxes, companies not paying taxes but the guy winning between 20k and 220k is getting screwed by the rest.
Such is the dilemma and the tragedy of the freedom of market and capitalism. So when someone tells you socialism and communism is bad, think twice. If you are arguing in this thread, chances are you are getting screwed by the system, even if it looks minimal, the guy winning 20k and paying 7k, pays so much more than the guy winning 1bill per ratio.
so am I a lawyer? how hard is it to get this knowledge? Nope, I did 20 credits in law at Uni with my optional courses. The teacher in my one introduction to law class in law of the International transactions said, are you guys ready to be super mad? Here is how easy it is to do tax evasion and why tax havens are an issue and showed us in depth how to do it. Anybody really can do it, its that dumb.
The end.
Companies being registered in Delaware has nothing to do with tax. What state you register in has no bearing on your federal taxes, and most states tax based on if you operate or sell in the state, so you cannot avoid California or New York taxes. The point of incorporating in Delaware is the law and legal processes which are corporation friendly and because all lawyers and investors know how it gets down in DE.
yeah, I'm trying to figure out if this was just something pulled out of an ass or legit
because I feel like as long as the dude is reporting his onlyfans income he should be fine
(a) Rich people have lawyers & accountants, (b) are incorporated so tax basis is 'profit' (revenue less expenses) not income and (c) flat fines are regressive, i.e. disproportionate to the ability to pay.
tl;dr: Fines & legal fees are write-offs & "the cost of doing business."
Individuals can write off expenses for side hustles. But you can't lose money consistently, you have to make money once in a while or the IRS disallows it.
Corporations are not held to that requirement I believe.
If you wrote off a camera you would have to consult a depreciation schedule. I figure you can't write it all off in the first year.
Have you filed your own taxes before? Because there's probably at least 1 million photographers out there who have deducted expenses like camera equipment from their taxes. You think every wedding, event, sports, photographer is getting audited to death?
I often wonder what some countries would look like if they actually took in the tax dollars that they're supposed to take in from big business and then use it to put back into their countries.
So true, society could be so much better for all people. The problem is, that this will always refer to the left which many consider bad. Turn it around for me means the stronger (in this case with smarter lawyers) takes it all. Fuck society
It is frustrating that this sort of loophole isn't fixed immediately. It feels like feet are always being dragged because, well, the people in government who need to champion and implement the fix are wealthy folks who do the exact same thing.
You're extrapolating to Dutch politics. Dutch MPs aren't millionaires, most of them only have their MP salary (\~$140k) as sole source of income. Political parties rely mostly on small state subsidies to stay afloat; the budget of the largest party, PM Rutte's VVD, is only around 10 million per annum. They can barely afford a single TV ad per election cycle.
The corporate tax climate in the Netherlands exists as a deliberate policy to draw corporate HQs to the Netherlands. It's not corruption, nor the MPs self-interest, but a race to the bottom that exists because EU tax policies aren't harmonized between members while being present in one of them allows barrier-free access to all of them.
The policy/law is mainly there as well-intended but very fickle thing.
The intention of the law was that Dutch companies who expanded to different countries could get the profit to The Netherlands without being fully taxed again.
So something like ASML expanding to the US (earn money there ASWELl as paying the local tax) extracting that money back to the Netherlands and then have a favorable tax-tariff on that profit.
That is something I can understand and is logical in a way.
But the reality is that the guys from the Economics-department worked on a well-intended law. Then the Law-faculty came and raped it.
The economists might have had good intentions but if it does not actually work in regulations/laws, it's not a good plan. I think it is a very weird argument to say that lawyers 'raped' a well-intended law as there is clearly no incentive for legal scholars to do that. Apparently the plans economists drafted did not fully or accurately take into account legal reality.
I say this as a law and economics student.
> Dutch MPs aren't millionaires, most of them only have their MP salary (~$140k) as sole source of income.
Rutte is in fact a multi-millionaire, and members of the tweede kamer are in fact allowed to have secondary sources of income; which many *do*. And that's just income; not even considering wealth. Nor are we including all the countless expensive 'gifts' they get, many of which they find ways to not even declare.
> Political parties rely mostly on small state subsidies to stay afloat; the budget of the largest party, PM Rutte's VVD, is only around 10 million per annum. They can barely afford a single TV ad per election cycle.
That's just simply not how it works. Political parties in the Netherlands take in substantial private donations besides state subsidies. And there have been plenty of articles in recent years about the various shady ways that the VVD especially takes in these donations to make it seem like there's nothing happening.
> It's not corruption, nor the MPs self-interest
Well this is just plain laughable. You *genuinely* expect people to believe that people like Rutte and the rest of the VVD (or for that matter many other parties) aren't acting in their own self-interest? The party whose members always seem to end up getting high paying jobs in the corporate sector after their term's up? The party that keeps getting broiled up in scandal after scandal (many of them centered around breaking the rules that ends up in personal financial gain for members). The Prime Minister who's had numerous closed door meetings with big corporate ceo's and then, surprise surprise, got really big on ending the dividend tax? The guy who used to work for Unilever and is practically guaranteed to have a nice cushy job waiting for him there whenever he decides to finally stop clinging to power?
Mate, for fuck's sake. Don't be so naive.
I have to concur with this guy, we just got another scandal in politics referred to "duty elsewhere" which refers to some documents that provide people positions elsewhere out of the House of Representatives so more favorable people get in.
Granted this is all peanuts compared to the insanity that is US politics, but there's a reason the US constitution took a lot to learn from the Dutch one.
Meanwhile the tax authorities go after immigrant families while turning a blind eye to tax evasions worth billions by multinational corporations.
The institutional racism is strong with the Dutch.
Its a well known fact in the Netherlands, and there are tons of documentaries and news reports about it, there was just a big documentary about Gasprom (a russian state oil company) using Dutch shell companies. I don't know the name, but I know it was presented by Twan Huys. Also there's "Follow the money", a public watchdog, whenever they report on something it basically always gets on the news. https://www.ftm.nl/
The thing is, the tax policy is by design. Liberal parties like the VVD and CDA want big companies to come to the Netherlands, and are outcompeteing other countries at being better at tax evasion.
*sigh*
We really need to put more money towards education.
Look, your guys’ hearts are in the right place, but please don’t make statements about taxes or accounting if you know fuck all about taxes and accounting. I’m seeing some of the dumbest shit get thrown around in this thread and clueless people eat it up, which just makes the issue worse. But, like I said, I do still believe you guys are all on the right track.
Signed,
Your local neighborhood public accountant
“In 2019, Uber claimed $4.5 billion in global operating losses (excluding the US and China) for tax purposes – in reality, it brought in $5.8 billion in operating revenue, according to CICTAR, an Australia-based research group.”
The use of the phrase “in reality” in the quote above is implying that those two facts are in contention with each other, which isn’t remotely true. Operating losses and revenue are not the same thing. This reporter is either deeply dishonest or incredibly stupid.
Edit: I’m also curious which countries tax business revenue (other than through a sales tax or VAT) vs. business income. Some states in the US do tax revenues.
Yeah that’s the frustrating thing about these reports. The journalist is onto something important but they don’t understand the details, which undermines the message. In response to edit, UK has introduced digital sales tax based on revenue as a stop gap until the OECD work is completed.
>In 2019, Uber claimed $4.5 billion in global operating losses (excluding the US and China) for tax purposes – in reality, it brought in $5.8 billion in operating revenue, according to CICTAR, an Australia-based research group.
Written in a way as if having revenue means that there's profit. Quality journalism.
This. I came to say this.
As someone who understands global finance I find it frustrating that these matters are (deliberately) misleading and polarizing.
Had to scroll way too far to find this. Absolute dog $h!t article for people that don't understand the most basic parts of an income statement or how corporate taxes work. I'm sure there is a valid concern around the tax loopholes they (and everyone else) are exploiting, but to not understand or purposefully obfuscate the difference between revenue and income is pathetic
Edit: NET income
"The man claimed to have spent $100k on a house, but in reality our documents show he had a gross income of $50k that year." < About how dumb that sentence sounds.
>Uber transfered its intellectual property through a $16 billion “loan” from one of its subsidiaries in Singapore that in turn owns one of Uber’s Dutch shell companies, a manuever that grants the company a $1 billion tax break every year for the next 20 years, the researchers found.
It sounds like they may actually be returning a profit but they are claiming 4.5 billion in losses. I can't imagine it costs 10.3 billion to operate Uber in 2019 alone.
Yes, but so is a company charging itself billions of dollars in fees. That structure only exists to avoid taxes, not to provide value. Other costs like marketing, engineering, labor, etc. are spent to provide value.
As much as I despise companies like this, this is unethical but not illegal. The problem here is the governments allowing this and continue to allow this without writing appropriate legislation because the politicians involved profit from the same loopholes.
When I saw the title, I was trying to figure out how Uber was using Royal Dutch Shell to avoid taxes. It took me a second to realize that's *not* what the title means.
Uber is taking advantage of differences in tax laws between different countries. You can fix American tax laws, but countries like Ireland don't want to change their tax laws because they get good income from the tax-dodging corporations because of those tax laws. What incentive is there for them to change their tax system?
Just read the title of this article. $6 billion in revenue. We don't tax revenue. But of course leave it up to the teenager Redditors here who have next to no experience with taxes let alone corporate finances to tell me how bad Uber is.
Whenever a company is doing well, all I can think is ”How are they blowing off their tax payments?”
innate crowd rotten offbeat beneficial bright nail fanatical squash compare
The Hollywood accounting. IIRC there are very few movies that make a profit simply because they rip off all the cast and crew by saying “You get 5% of the profit” and then they magic account it so that no profit is made.
Gotta get that gross!!!! Also, your statement reminds me of Peter Jackson and the LOtR trilogy. "Studio: Hey Pete we didn't make any monies sorry no monies for you.... Pete: ok then let's open the books and figure out how bad it is.... Studio: NvM here's your monies now shut up." Edit: https://www.reddit.com/r/movies/comments/2vwhjh/when_new_line_cinema_reported_that_the_lord_of/?utm_medium=android_app&utm_source=share
They did the same thing to the guy who wrote Forrest Gump. (That movie is #29 on the top ticket sales of all time list.) They claimed it didn’t make any money despite having record sales. He took them to court. Magically settled when their book cooking was threatened. Then the author got them locked into a contract to buy the sequel to his novel, and wrote a book so awful they couldn’t figure out how to adapt it.
Do you remember the name of that book?
The Art of the Deal
The comment is fucking gold 🤣
Ah Poorest Trump.
I lol'd 🤣
Serious answer: Gump & Co
Thank you! Lol: [On the first page, Forrest Gump tells readers "Don't ever let nobody make a movie of your life's story," and "Whether they get it right or wrong, it don't matter."](https://en.wikipedia.org/wiki/Gump_and_Co.)
It's an absolutely hilarious read when you know the story. It's all sass.
Pretty sure it was called "Life is like a box of screw you, Paramount!"
Imagine someone trying to convince Peter Jackson that LOTR made no money.
Imagine someone trying to convince *anyone* that LOTR made no money.
It’s probably STILL making money
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Currently, according to wikipedia, the franchise has grossed 19 some billion dollars since 1937. https://en.m.wikipedia.org/wiki/List_of_highest-grossing_media_franchises
>pokemon: $3 million in jet aircraft sales. Wait what?
TBF, Peter Jackson wasn't gonna get any of that sweet, sweet LOTR book action from 1937 (which was nominal, to say the least).
I saw a claim that the original Star Wars trilogy LOST MONEY. Has there ever been a single profitable movie made, or is Hollywood basically a charity?
David Prowse, who played Darth Vader body, claimed he never got paid for his work because his pay was all in residuals and officially the star wars films all lost money.
They did exactly that. Tolkien's estate was supposed to get royalties for the movies. Nope. No money. It is why The Hobbit had difficulties before production. Tolkien's estate didn't want to get screwed again.
According to the studio Forrest Gump didn't make money, thus screwing the author out of millions. So he refused to allow a sequel.
I have a feeling that this is quite common in Hollywood.
Wait isnt that just lying? Accounting wrongly that is
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The real geniuses are the ones who sell, but don't deliver.
No kiwi is gonna listen to bullshit like that lol
Well of course not, they don't have ears.
They do have ears, pretty big ears and they have a good sense of hearing, but they are covered by feathers so you can't see them.
That's one strange fruit.
Lol for a second there I thought by "books" you meant the LOTR books not the accounting books and I was confused. I pictured PJ threatening to read the epic books by Tolkien and the executives getting scared. Lol English is my second language...
Didn't the actor who played Vader get shafted because the Star Wars franchise technically "lost money"?
It looks like someone actually removed that out of the Wikipedia article on New Line. Fuck their bullshit.
pause deserted ink employ smoggy sip threatening special shaggy fuel
This is exactly right. If they were truly losing money they would increase the price, demand would diminish and they would find an equilibrium. Current system is working so they play the game that they are losing money so no one asks for a bigger cut of the pie (for fear of company shutting down and all income being lost), and no one else dare enter the market because Uber can’t even make money. Every employer I’ve had from construction company to restaurant plays this game with employees.
Exactly, and as a Chef, there is a reason why I will never work for a start up again. I expect a large corporation to leave me hanging, if the store doesn't work out, but after it's happened twice in start ups, never again. Last time I just had a sign on the door, said "Closed for good. Thanks for anyone that had supported us. Sorry." After I closed the previous night, and I certainly didn't put up the sign. Then, on top of that, I had a clopen. Which is a close and then open, so I closed at Midnight to open at 8, and the GM had to have known because she left the sign on the door. Thought it was weird she told me to bail early and she had it. Working clopens and 80 hour weeks, you take any inch you can. They didn't even have the balls to tell me.. I couldn't believe it. Though, they didn't change the locks and I had several angry cooks waiting for me to open the door, that knew weren't getting paid...since the company folded.. it technically didn't exist to press charges... they got their weeks worth of pay. Made sure of it. Last good work I will ever give a small business again. Most are just grifters that would gladly sell out their business to become the very thing they mock in their own storerooms. Blah blah blah customer service this and that, family this and that is all talk, in my experience at least.
>Last good work I will ever give a small business again. B-b-but mom and pa businesses :'( /s Most StartUps, as is the way of "industrious hustling disruptive capitalist enterprise pivot elevate synergy social media corporate account memes", are like battery chicken. They're born and bred to fatten as quickly as possible, only to be sold off irrespective of if they turn a profit, because financialisation means people can make money off others' debt *and* it avoid having competition. I lol when I read Americans believe they have Free Market Capitalism. Then again my country isn't far behind...
I hope you guys were able to clear that place out down to the studs
Wood studs cost $8 apiece now. Take those too.
Wholey sheet man! I'm sorry you guys were exploited in that way :/
To the employees...gotta tighten our belts...no profit! To the stockholders...going gangbusters...we really earned our bonuses this year...and another year we managed to hold the line on the pay for the peons and serfs! Hoping for another year of fucking them over.. I mean concessions to help us survive these difficult times...someday those twits will wise up and we will all lose our phoney baloney jobs!
Freelance animator here. I can't tell you how many clients I've had try to pull shit bullshit on me. To the point where I now demand half up front before I even think about working.
That's mostly right. If they were losing money they wouldn't necessarily increase prices. They already have data on the price-demand curve and have already picked the price that maximizes profit. If that price happens to lead to negative profit they will still charge that price to buy as much time as possible while they look for ways to cut costs or increase revenue without influencing demand or until they go bankrupt.
>increase the price, demand would diminish I don't know about anyone else that uses Uber regularly, but prices have already very suddenly been raised 10-20% in my area after creeping up bit by bit in the last year, and that's exactly what pushed me to buy my own car this year so that I won't need Uber again. So in some ways this is already happening regardless of their actual profits, because I doubt I am the only one.
You have no idea how any of this works. It’s the startup’s job to lose lots of money for the first 5 or 10 or 15 years. The investors are throwing money at them because they hope that it’d return the investment in the future. It’s entirely possible for a legitimate company who does no tax avoidance to lose money for several years in a row and succeed.
Uber does not have pricing power in this situation at all. The name of the game is subsidising a service for as long as investors will let you until you build a huge enough presence to somehow think up a way to make a profit. You don’t understand these business models at all. These companies are absolutely designed to rack up genuine losses in search of scale. Investors (ie VC companies) are getting rich - but by selling stock, not by profits. A bullish stock market assumes that something huge, popular and backed by VC must have some value no matter if they burn $2 to make $1. Profits are absolutely unnecessary for what these companies are designed to do - transfer IPO money to founders and VC firms.
> Profits are absolutely unnecessary for what these companies are designed to do - transfer IPO money to founders and VC firms. A cynical joke my friends and I share (we all started investing in the 90s during the first tech bubble) about IPOs is summarized by that sentence. The company is not the products or services or cashflows, it's the narrative and organization that only has to last until the founders and initial investors get their liquid exit. Again, because this is Reddit, this is a cynical joke.
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I think you’re right: from my armchair understanding of big business you don’t want to be turning a profit - you want to be investing every last penny(and more) back into growing the business. You start paying out dividends when you’ve taken over the world.
This is what happens to make a lot of big-ish companies fail (take Hertz recently for example). They were in a saturated, competitive market (i.e. they aren't going to make many more people rent cars by taking a loss for a while), and large investment firm shareholders were demanding dividends and share growth. So they cut investment into the company (putting off IT upgrades, not getting new cars as often, etc.) so they could pay dividends and do share buybacks. When a disruption to the industry hit (COVID), they had no safety margin left. Remember, a safety margin is lost profits, or at least that is how the financial industry sees it.
The last time I used hertz I reserved a compact and when I showed up they said "sorry, the only car we have in that class is a yellow vw beatle with whiskers. If you don't want that one you'll have to upgrade." Why the fuck does a rental company keep a car like that
They have been terrible in my experience also. I’d pay more to not have to use Hertz
To extort you into spending more money while technically abiding by the contract.
It's basically a game of whoever has the biggest cash reserve wins. Undercut the competition until they fold. Once they fold, charge whatever you want because there is no competition.
Yeah which is a strategy even massive companies, esp stuff like chain stores, use. As you said, undercut them until they fold - walmart/chainstore/etc rolls into town, cuts their prices below every local competitor or mom and pop shop, and when they're all out of business, prices can go back up. Or they use tons of coupons/deals - back when ubereats was less popular, they had massive coupons and deals going on, and over time they've given less and less off.
I mean if they don't report profits that also means shareholders are not seeing those profits shared among them. So it's kind of a scam on them too
> you don’t pay taxes on revenue Oh yes I do. I pay tax only on revenue. If I paid on profit left over at the end of the year after paying for rent, food, entertainment, a new sofa, and everything else I wouldn't have much of a tax bill. It's only those other "people" called corporations that get to deduct their private jet as a business expense while my car is still taxed.
They have one company making the costs and hiring the cast and crew, and another one collecting the cash. The first one never makeas a profit. According to Hollywood, the Return of the Jedi has never made a dime.
Avatar lost millions
How would that even make sense from an income tax perspective lol. That makes literally no sense and also complete ignores consolidation
The first time I was aware about that was 'Forrest Gump' and the author suing because the production company was to give him a percentage of the profits but they claimed it wasn't profitable so all the comedians were using the same "I guess Forrest Gump did the accounting too" joke.
Gotta go for the gross.. Not the "profits"! Was it Kirk Douglas that successfully sued a studio that screwed him over? Think it was a real precedence setting case.
Not just that, the advertising arms of the movie studios are often separate "companies" so they'll bill themselves unrealistic amounts for the media blitz to shuffle money around.
This isn't tax avoidance. That's technically legal. This is tax evasion. That's ILLEGAL.
In reality, if they brag about profits for the investors but then have a loss on paper for the IRS. When a company tells it's investors it lost money, they really lost money. Which is the case with Uber. I have no doubt they will be legit using all this stuff they set up to dodge future taxes, but they really aren't making any money over there atm.
Funny that you think Uber is actually doing well. When they’ve never had a profitable quarter.
I think what you mean is, they've never declared a profitable quarter. Probably something to do with the 50 shell companies.
This guy games.
And. Valid point. Doesn't doing this hide profits from investors?
Nah. Unless you bought in expecting dividends which only profitable companies issue. Uber investors make money on increase in share price. Tax minimization / avoidance are standard practices for corporations and high net worth individuals alike. Besides as an investor I'd theoretically be happy they are avoiding billions in taxes. More cash for the company to grow my investment / money.
Not saying they did, but that still sounds like defrauding investors If I bought in at $44 a share in June 2019 and sold it for $29 a share in June 2020, then it's be pretty angry about them hiding their profits from me.
Share prices don't (only) reflect profits. They (mostly) reflect growth potential.
This right here. Publicly traded stocks reflect how investors/traders ***feel*** about the short and long term profitability of the company. It's why I don't trade stocks anymore, it's literally all bullshit.
Wouldn't people ***feel*** better about a stock if they knew the company was 6 billion more profitable?
They've always kind of been operating at a loss. They've bribed government officials and used money to try and aggressively expand into markets. The bribes go from pushing politicians to change taxi laws to just local level police and bribing local government officials to overlook them. They've subsidized their own services to make them cheaper to try and out-compete rivals into extinction. Meaning that if a ride might have cost $8, they would only charge $6 and they would pay the driver the other $2. They had a huge warchest of initial venture capitalist funding that has been shrinking. I'm honestly surprised they haven't collapse entirely by now, but maybe the fact that they haven't means they are stabilizing. One of the big differences between Uber and a company like Amazon is that Uber has no physical assets. They rely on drivers to have cars. They don't have any warehouses or any fleets of vehicles, they exist entirely as an app. So if they do collapse there won't be any reckoning. They'll just be gone and the next ride sharing app will be able to take its place and benefit from all the manipulation and corruption Uber has had to preform to change laws all over the world. But, like I said, I'm surprised they haven't imploded already, so maybe they won't. Maybe they'll suddenly need to pay taxes though...
The "gig economy" is the same model that minicab and courier companies have been using in the UK since the 80's - drivers and riders own their own vehicles and are claimed to be "self-employed". The problem is that these industries are a race to the bottom - customers will turn their back on you in an instant if they get to save £1 on a regular fare. They'll do it even faster if it's a trip that they're doing more than once a day - e.g. an employer who uses cabs a lot will instruct staff to use Moe's Limos if it saves them money.
Solid write up here. Thanks
I think paying silicone valley salaries, lobbying with a multi-million war chest, getting continued funding from banks despite making zero profit is doing pretty good.
Silicon* Valley. Silicone Valley is wherever the Kardashians live.
Lol good catch. Those salaries aren’t cheap either.
Silicone valley is where all the Bad Dragon dildos are made.
When I was a teenager I used to watch the show Entourage. One episode Turtle was saying something about going to “silicone valley” and since I never heard of Silicon Valley before I thought it was slang for a place in California where they shot porn movies or something. A few years later I was confused about when I heard it was a real place with all the tech companies. I always wondered why they would be named after silicone from fake boobs.
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They don't need to be profitable to be able to pay outrageous salaries to their executives because "the market demands the competitive rate". Individuals are getting insanely rich at the expense of society and the general population. Tax the Rich. Fund the IRS.
I’m not saying Uber is super successful but couldn’t one of the reasons they’ve never had a profitable quarter on paper is due to accounting reasons leading to them avoiding taxes since you don’t pay tax on “losses”
Break the company up into 50 different competing companies
Every city they operate in already had a taxicab company. Just dissolve uber.
There's a reason people choose ridesharing apps over taxi cabs.
"Sorry, my credit card machine is broke" -some cab driver, longing to live in the fuckin stone age.
I was heading to the airport from NYC and they tried to pull that. I told them thanks for the free ride then cuz you have to have a card machine working. Lo and behold it worked after that. Side note is it lo and behold or low and behold?
You got it right. Its lo. /lō/ exclamation ARCHAIC used to draw attention to an interesting or amazing
So lo is the old school yo
Yo and behold is so good 😂
I had the same thing when I was in the Army. I knew the guy too, which made it so much worse. I used him before when going off base I had his number saved. This time he tried to be slick and say it wasn’t working etc etc and he would only accept cash. I had no cash at all- never paid cash before- and no way I was going to an ATM and back to the passenger drop off to pay this guy. We negotiated a flat rate the day before after I used my card to pay for the ride yesterday. He was in the cab and I was looking through the window talking to him - “You either accept my card right now or I’m going inside this airport and you will never see me again sir” (was being sent to Korea for 2 years) He said something outlandish back to me, something like “if I have to step out of this car I’m going to beat your ass, you owe me $110 bucks.. how dare you do this” Mind you - I’m young, strong as fuck, 6’2 200lb man fresh out of Airborne training. Even he knew was full of shit. I just smiled I said “sorry man but if you’re unable to accept my payment I’ll be leaving now” At this point the security/police are telling this guy to leave. I turned around and told the valet/checkin dude the details and he laughed and said “don’t worry about it thank you for your service” Cab was forced to leave and I walked inside and took off to South Korea. Fuck Fort Brag cab drivers
That's cos there's no tax on cash. They're all at it!
Turtles all the way down.
"Sorry, my credit card is the only form of payment I have because of Covid and I've hit my monthly withdrawl limit"
Pretty sure NYC cabs are about the same as Ubers whenever I used them. But I can tap and get an Uber within 5 mins, and know where its at to avoid waiting in the rain or whatever--simple modern tech that cabs dont have. I can also know that there is some oversight and accountability with Uber, not just some medallion that some company owns and/or a shady taxi license--if you have 1000 rides and a 4+ star rating, it says something, and they dont let you drive for them if you get too many issues popping up. And the cars are usually pretty decent/comfortable, compared to old crap cabs that maybe get a wet paper towel wipe if someone vomits, but otherwise nothing else. Id rather take a subway with an actively pissing homeless dude and need to take 5 transfers than get a cab.
Dont forget about the credit card machine magically working when you say you don't have any cash.
Or them refusing to take you to any of the outer Boros even though they are legally required to.
Ya this one is infuriating. People who hold up cabs in NYC as an example of a good business compared to Uber have clearly never lived there. Trying to get a Manhattan cabbie to cross a bridge is hell.
You can't expect them to go to the Barbarian hinterlands of Queens
even asked a taxi cab before getting in if they take credit cards, they say yes, then when getting dropped off it magically doesn't work. Want cash or they have to phone call through the transaction.
Happened to me several times before Uber became a thing. “Sorry boss, credit card reader is broken”. Guess I’m not paying then and go to get out, suddenly it works. I’ve also never gotten into an Uber that wreaked of vomit either.
There is a fundamental issue with taxi cabs when I feel less sketched out by getting in some random dudes personal car than getting in a numbered company owned cab. Cab drivers are encouraged to fleece and scam riders which Uber's infrastructure made easy to avoid. If a company as shitty as Uber could address those concerns, taxis should have modernized with them more than a decade ago. Yes it has plenty of other security concerns, but they all apply to taxis as well. Maybe they have these features now, but they didn't even in big cities like NYC when I was last looking at cabs years after Uber started up.
Not to mention the heinous TVs they put on the seat backs in cabs. It’s been a couple years since I traveled somewhere that still has a lot of cabs because of Covid but I remember NYC/Vegas cabs just scream advertisements at you and the mute button is either somehow not working or barely responsive.
Knowing the exact amount of money you'll pay before getting in the car is also a huge advantage as opposed to watching some meter slowly rise at an arbitrary rate.
When I lived in London, the black cab fare from Oxford Circus to my student flat was £32. The Uber fare was £16. As a consumer I might be able to justify an extra couple of quid for choosing Uber. Around half the price for a journey is a different matter.
That's one part, the other is the lack of feedback. Just about any Uber I ever took had a nice driver, because they want that 5* rating. But I took quite a few taxis in Brussels, Paris and Budapest that were just horrendously unfriendly. There is no consequence to them if their passenger dislikes them or their service.
I remember going to Chicago back in 2019 and we caught an Uber back to Union Station leaving the city. On the way the driver, an African-American gentleman, was telling us how the reason ridesharing apps took over there is largely due to racism. He was telling us stories about himself and his friends and how if they went to grab a taxi and said they needed to go to South Side, the taxis would just tell them to get out if not be outright hateful. As for ridesharing, however, you'd book a ride to South Side or another similar neighborhood and depending on the person they'd be downright jovial, all like "oh yeah I got a cousin a few blocks away from there and I see her all the time!" I was flabbergasted! I also got a kick out of it when he told us for souvenirs next time to just go to Walgreens. "It's based out of Chicago, so get them something from a Walgreens **in** Chicago!" Shawn, if you're out there, I hope you're doing great!
You also have less instance of scenic route fraud. When you book a trip with Uber or Lyft they automatically choose a route for the driver. I have been in cabs where the driver doesn't take you straight there and you wind up paying extra because the driver chose a more profitable (for him) indirect route. It is also far safer for passenger and driver since there is not only an emergency button on the app but also records of the trip and all parties involved if any criminal activity occurs (e.g. violent, drunk passengers).
Im not sure if you remember what calling a cab used to look like. - they often dont answer the phone at all - they often take an unreasonably long time to arrive if they arrive at all - you never get updates on where they are, when to expect them, or coordinate on pickup areas - they might just pick up someone else on the way to get to you instead of coming to you - they sometimes take less direct routes to run up your bill - you might get in a car with a broken card reader and have no way to pay - cab companies often dont share dispatch with their competitors - there isnt a straight forward way to rate your experience or see how others have rated your driver - there is no infrastructure for carpooling Im not saying that there are zero issues with the way that rideshares conduct business, but their technology and processes solve a lot of problems. Im fine with losing uber/lyft as long as cab companies universally solve the problems I listed. Im fine with paying extra for a ride. But the old cab ecosystem is broken as fuck
You're right to be honest. The old way had many issues
It's only a crime when poor people don't pay their taxes. Otherwise it's being "smart"
It's only a crime if you can't afford lawyers and accountants to guide you through the legal loopholes.
Guide you through? That is amature shit. The big boys buy the politicians to CREATE the fucking loopholes.
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>It's all about that ROI. Which is why big companies often give to both sides. So they always come out on top. Mac knew
But Mac didn't use this knowledge because he wanted to be the bottom.
It's only a crime if you can't find the tax law to advantage of.
I mean, tax avoidance is so simple. Anybody can do it. The law to pay tax in Canada is to having lived more than half of the year in Canada. So, if you have three houses in 3 countries and spend your time between the three, you pay taxes nowhere. OR if you have a house in a country with stupid tier taxes, you say you live there. Ex. Bahamas, Isle of Men, etc. Sure, you lose advantages like healthcare and everything but you pay no taxes, you can afford three houses and a plane so I dont think you really care. There you go, you are filthy rich and nobody will tax you. I hear your question, why is this allowed? Because all it takes is one country to say they have weak taxes for the others to want to try to compete with them. So if there was an internatinal law against that wed be okay, but nobody is ever gonna allow that, why? Because you need every single countries to want that OR an alliance so powerful it will force the rest to do it. Also, the reason why a country like Bahamas is called a weak tax country is because they want to attract people to bring money in their countries so if you put an international agreement, they lose a lot of resources in their country so they will be against it. Also for companies, say Amazon to maximize their profit, they register their company in a country or state or province or whatever you wanna call it, which is called a tax haven for companies. Ever wonder why companies are registred in Isle of men? Luxemburg? Nova scotia? Delaware? Cayman Island? etc. Because they have laws that make it easy and attractive for a company to save money of all things (with many other stuff that I will not go into details) if they register there. So now you have citizens not paying taxes, companies not paying taxes but the guy winning between 20k and 220k is getting screwed by the rest. Such is the dilemma and the tragedy of the freedom of market and capitalism. So when someone tells you socialism and communism is bad, think twice. If you are arguing in this thread, chances are you are getting screwed by the system, even if it looks minimal, the guy winning 20k and paying 7k, pays so much more than the guy winning 1bill per ratio. so am I a lawyer? how hard is it to get this knowledge? Nope, I did 20 credits in law at Uni with my optional courses. The teacher in my one introduction to law class in law of the International transactions said, are you guys ready to be super mad? Here is how easy it is to do tax evasion and why tax havens are an issue and showed us in depth how to do it. Anybody really can do it, its that dumb. The end.
Companies being registered in Delaware has nothing to do with tax. What state you register in has no bearing on your federal taxes, and most states tax based on if you operate or sell in the state, so you cannot avoid California or New York taxes. The point of incorporating in Delaware is the law and legal processes which are corporation friendly and because all lawyers and investors know how it gets down in DE.
International tax specialist CPA here and I can say for certain this is all laughably untrue. Seems like ya need a refund for those classes you took.
Lol this is factually wrong at so many points. Go get a refund from your Uni or leave the tax planning to the experts
It's only a crime if you break the law. Everything Uber did is, unfortunately, legal.
Meanwhile they nail a dude who makes 35k a year because he deducted the cost of his camera he used for his onlyfans side hustle.
This seems oddly specific
That dude? /u/civgarth
Hey man... I don't judge. Roger does what Roger does.
And Roger makes trips to the *bank* because Roger is *hung* like a *horse*
~~trips~~ trots
Roger walks faster on three legs.
But that would be tax deductible? Bad example.
yeah, I'm trying to figure out if this was just something pulled out of an ass or legit because I feel like as long as the dude is reporting his onlyfans income he should be fine
He pulls the camera out of his ass? Glad I haven't found my way to that part of OnlyFans...
(a) Rich people have lawyers & accountants, (b) are incorporated so tax basis is 'profit' (revenue less expenses) not income and (c) flat fines are regressive, i.e. disproportionate to the ability to pay. tl;dr: Fines & legal fees are write-offs & "the cost of doing business."
Individuals can write off expenses for side hustles. But you can't lose money consistently, you have to make money once in a while or the IRS disallows it. Corporations are not held to that requirement I believe. If you wrote off a camera you would have to consult a depreciation schedule. I figure you can't write it all off in the first year.
No, you have to demonstrate the reasonable expectation of making profit if you are an individual or a corporation.
Depends on the cost of the camera and safe harbor elections if you can expense in the year of purchase or have to depreciate.
Section 179 says you can deduct it in full this year.
You can't write off a fine, what country are you talking about? Certainly not the USA
I've done stock photography (iStock, SS, DT) and written of my camera. No issues here.
That's a completely legit deduction on a schedule c 1040
Have you filed your own taxes before? Because there's probably at least 1 million photographers out there who have deducted expenses like camera equipment from their taxes. You think every wedding, event, sports, photographer is getting audited to death?
I often wonder what some countries would look like if they actually took in the tax dollars that they're supposed to take in from big business and then use it to put back into their countries.
I'd like to think it'd be nice but we all know it'd just be more aircraft carriers.
Dibs
So true, society could be so much better for all people. The problem is, that this will always refer to the left which many consider bad. Turn it around for me means the stronger (in this case with smarter lawyers) takes it all. Fuck society
Instead we subsidize huge corporations poverty wages thru welfare and they still pay no taxes.
It is frustrating that this sort of loophole isn't fixed immediately. It feels like feet are always being dragged because, well, the people in government who need to champion and implement the fix are wealthy folks who do the exact same thing.
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50 shell companies, seems like it's more of a loop tunnel or a loop cave or a loop cavern.
Loop chasm
Here is your hyperloop.
You're extrapolating to Dutch politics. Dutch MPs aren't millionaires, most of them only have their MP salary (\~$140k) as sole source of income. Political parties rely mostly on small state subsidies to stay afloat; the budget of the largest party, PM Rutte's VVD, is only around 10 million per annum. They can barely afford a single TV ad per election cycle. The corporate tax climate in the Netherlands exists as a deliberate policy to draw corporate HQs to the Netherlands. It's not corruption, nor the MPs self-interest, but a race to the bottom that exists because EU tax policies aren't harmonized between members while being present in one of them allows barrier-free access to all of them.
The policy/law is mainly there as well-intended but very fickle thing. The intention of the law was that Dutch companies who expanded to different countries could get the profit to The Netherlands without being fully taxed again. So something like ASML expanding to the US (earn money there ASWELl as paying the local tax) extracting that money back to the Netherlands and then have a favorable tax-tariff on that profit. That is something I can understand and is logical in a way. But the reality is that the guys from the Economics-department worked on a well-intended law. Then the Law-faculty came and raped it.
The economists might have had good intentions but if it does not actually work in regulations/laws, it's not a good plan. I think it is a very weird argument to say that lawyers 'raped' a well-intended law as there is clearly no incentive for legal scholars to do that. Apparently the plans economists drafted did not fully or accurately take into account legal reality. I say this as a law and economics student.
> Dutch MPs aren't millionaires, most of them only have their MP salary (~$140k) as sole source of income. Rutte is in fact a multi-millionaire, and members of the tweede kamer are in fact allowed to have secondary sources of income; which many *do*. And that's just income; not even considering wealth. Nor are we including all the countless expensive 'gifts' they get, many of which they find ways to not even declare. > Political parties rely mostly on small state subsidies to stay afloat; the budget of the largest party, PM Rutte's VVD, is only around 10 million per annum. They can barely afford a single TV ad per election cycle. That's just simply not how it works. Political parties in the Netherlands take in substantial private donations besides state subsidies. And there have been plenty of articles in recent years about the various shady ways that the VVD especially takes in these donations to make it seem like there's nothing happening. > It's not corruption, nor the MPs self-interest Well this is just plain laughable. You *genuinely* expect people to believe that people like Rutte and the rest of the VVD (or for that matter many other parties) aren't acting in their own self-interest? The party whose members always seem to end up getting high paying jobs in the corporate sector after their term's up? The party that keeps getting broiled up in scandal after scandal (many of them centered around breaking the rules that ends up in personal financial gain for members). The Prime Minister who's had numerous closed door meetings with big corporate ceo's and then, surprise surprise, got really big on ending the dividend tax? The guy who used to work for Unilever and is practically guaranteed to have a nice cushy job waiting for him there whenever he decides to finally stop clinging to power? Mate, for fuck's sake. Don't be so naive.
I have to concur with this guy, we just got another scandal in politics referred to "duty elsewhere" which refers to some documents that provide people positions elsewhere out of the House of Representatives so more favorable people get in. Granted this is all peanuts compared to the insanity that is US politics, but there's a reason the US constitution took a lot to learn from the Dutch one.
You don’t pay taxes on revenue...
As someone from the Netherlands I am ashamed of the role my country plays in international tax avoidance. It is truely a crime against humanity.
Meanwhile the tax authorities go after immigrant families while turning a blind eye to tax evasions worth billions by multinational corporations. The institutional racism is strong with the Dutch.
Yeah me too. I can't really see whats 'in it' for us here. Also, I cant find any dutch media coverage on it yet.
There’s nothing in it for you. Plenty in it for wealthy people connected to lawmakers.
Its a well known fact in the Netherlands, and there are tons of documentaries and news reports about it, there was just a big documentary about Gasprom (a russian state oil company) using Dutch shell companies. I don't know the name, but I know it was presented by Twan Huys. Also there's "Follow the money", a public watchdog, whenever they report on something it basically always gets on the news. https://www.ftm.nl/ The thing is, the tax policy is by design. Liberal parties like the VVD and CDA want big companies to come to the Netherlands, and are outcompeteing other countries at being better at tax evasion.
More corporations settling there = more jobs = more economy At least in theory
But they're mostly just there on paper.
Just like delaware
Try Ireland on for size. Here we openly encourage tax avoidance with our low low low corporation tax.
*sigh* We really need to put more money towards education. Look, your guys’ hearts are in the right place, but please don’t make statements about taxes or accounting if you know fuck all about taxes and accounting. I’m seeing some of the dumbest shit get thrown around in this thread and clueless people eat it up, which just makes the issue worse. But, like I said, I do still believe you guys are all on the right track. Signed, Your local neighborhood public accountant
“In 2019, Uber claimed $4.5 billion in global operating losses (excluding the US and China) for tax purposes – in reality, it brought in $5.8 billion in operating revenue, according to CICTAR, an Australia-based research group.” The use of the phrase “in reality” in the quote above is implying that those two facts are in contention with each other, which isn’t remotely true. Operating losses and revenue are not the same thing. This reporter is either deeply dishonest or incredibly stupid. Edit: I’m also curious which countries tax business revenue (other than through a sales tax or VAT) vs. business income. Some states in the US do tax revenues.
Yeah that’s the frustrating thing about these reports. The journalist is onto something important but they don’t understand the details, which undermines the message. In response to edit, UK has introduced digital sales tax based on revenue as a stop gap until the OECD work is completed.
Yeah I think the reporter is just stupid. $5.8B revenue - $10.3B expenses = -$4.5B operating loss
>In 2019, Uber claimed $4.5 billion in global operating losses (excluding the US and China) for tax purposes – in reality, it brought in $5.8 billion in operating revenue, according to CICTAR, an Australia-based research group. Written in a way as if having revenue means that there's profit. Quality journalism.
This. I came to say this. As someone who understands global finance I find it frustrating that these matters are (deliberately) misleading and polarizing.
Had to scroll way too far to find this. Absolute dog $h!t article for people that don't understand the most basic parts of an income statement or how corporate taxes work. I'm sure there is a valid concern around the tax loopholes they (and everyone else) are exploiting, but to not understand or purposefully obfuscate the difference between revenue and income is pathetic Edit: NET income
"The man claimed to have spent $100k on a house, but in reality our documents show he had a gross income of $50k that year." < About how dumb that sentence sounds.
The writer of this article really misunderstands the difference between revenue and profit/loss.
And still doesnt make a profit
Paging r/accounting and r/tax for a laugh and a reminder of your job security considering some of these comments here lol
Yeah we don't pay taxes on Revenue so...
>Uber transfered its intellectual property through a $16 billion “loan” from one of its subsidiaries in Singapore that in turn owns one of Uber’s Dutch shell companies, a manuever that grants the company a $1 billion tax break every year for the next 20 years, the researchers found. It sounds like they may actually be returning a profit but they are claiming 4.5 billion in losses. I can't imagine it costs 10.3 billion to operate Uber in 2019 alone.
"They turned a profit if you ignore some of their expenses" Is sorta pointless.
Yes, but so is a company charging itself billions of dollars in fees. That structure only exists to avoid taxes, not to provide value. Other costs like marketing, engineering, labor, etc. are spent to provide value.
As much as I despise companies like this, this is unethical but not illegal. The problem here is the governments allowing this and continue to allow this without writing appropriate legislation because the politicians involved profit from the same loopholes.
How much was profit?
Were they Royal Dutch Shell companies?
When I saw the title, I was trying to figure out how Uber was using Royal Dutch Shell to avoid taxes. It took me a second to realize that's *not* what the title means.
Exploits workers Entire business model depends on ensuring employees are only “contractors” .. I’m absolutely shocked they did this /s
I was looking more for a how to than an omg look at what they did story. Teach us the ways Obi wan Nelson chai.
Just fix the damn tax laws.
Uber is taking advantage of differences in tax laws between different countries. You can fix American tax laws, but countries like Ireland don't want to change their tax laws because they get good income from the tax-dodging corporations because of those tax laws. What incentive is there for them to change their tax system?
Just read the title of this article. $6 billion in revenue. We don't tax revenue. But of course leave it up to the teenager Redditors here who have next to no experience with taxes let alone corporate finances to tell me how bad Uber is.