This weekend, The New York Times told us that Europe is moving to close many of the tax loopholes that have attracted so many corporations to The Netherlands even when they have no interest in hemp or socialism.
This is bad news for Starbucks…and great news for financially-focused PR firms.
NYT notes that both the coffee behemoth and the notoriously regulation-averse Apple have signed with RLM Finsbury and its lobbying affiliates in recent years to help more effectively minimize their total tax bills.
The real product being sold here is expertise on international tax policies and those ever-shifting loopholes; one year you establish a tax shelter in Ireland, but next year who knows?
Here’s the key quote:
“In some ways, authorities are performing a futile task: As officials move to close certain loopholes, others are likely to pop up in their place.”
In a perfect world, a business that makes a majority of its profits within the United States would also pay a majority of its tax burden in this country. But as Steve Jobs (allegedly) told President Obama when asked why his company couldn’t manufacture more iPhones in the US:
“Those jobs aren’t coming back.”
…and when one loophole closes, another one opens. So no matter what European regulators do, companies will continue hiring firms and lobbyists to help them figure out how to pay as little money as they can by skirting the edge of both international and domestic law.
The work isn’t pretty, and it won’t make for an effective case study in business ethics. But it’s worth a whole lot of money!