EA looking to get billion dollar tax break

Discussion in 'Frontpage news' started by Hilbert Hagedoorn, Jul 31, 2019.

  1. Hilbert Hagedoorn

    Hilbert Hagedoorn Don Vito Corleone Staff Member

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    Game publisher EA expects a tax benefit accumulating upwards to 1.7 billion dollars as a result of changing taxes in Switzerland where their HQ is stationed. As a result of the tax benefit, EA's ear...

    EA looking to get billion dollar tax break
     
  2. TheDeeGee

    TheDeeGee Ancient Guru

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    We need a dislike button, just for any thread related to EA.
     
  3. Andrew LB

    Andrew LB Maha Guru

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    As much as I hate EA, they're just doing things according to the tax code as passed by lawmakers. It's like how here in the U.S. if your company takes substantial losses one year, those losses can be written off in future years which is why for example, Amazon is paying hardly any tax this year.
    It makes me laugh watching people running for president railing against this practice, pounding the podium demanding they pay their fair share, even though every single one of them does the exact same thing. (i can't believe i sat though just over half of that insanity tonight)
     
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  4. Brit90

    Brit90 Member Guru

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    Tax Laws are written by the people who benefit from them, not the country itself.
    This shows greed is still number 1 priority in the world along with apathy.
     

  5. Loobyluggs

    Loobyluggs Ancient Guru

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    Fair points.

    Corporate TAX is on profits, not revenue - this leads to companies trying to find ways of making every cent of their revenue swallowed up in CAPEX and OPEX, and trying to find the path of least resistance.

    This, is why having offices in other countries with different names means you can give these other offices/companies (which you own) your IP, and get them to charge you (even though you are one and the same) a 'fee' for using that IP.

    "It's the other company that is charging us to use their IP!"

    No...it's a tax dodge, especially when the other company also do the same, then it becomes deliberate.

    The big problem for games companies is they are listed on the stock exchange, which means a tonne of extra cash to be made based on the stock price and a whole bunch of other stuff relating to tax exemptions. This is also why the following headlines appear in the news:

    "XXX super-mega corp today announced the sacking of 8,000 staff due to low profits...they last year made $34bn in profit and as they only made $33bn in profit, they have to lay people off due to dissappointing stock performance"

    There is not a soul on the planet that can understand how, if a company is profitable, they need to sack staff...the very staff that made them profitable. I also do not think there is a person on the planet that can understand WHY a company that is worth $100bn is on the stock market in the first frickin' place!

    The whole point (according to my lectures) of a stock exchange is for companies looking to get funding/investment in the early days of a company so they can grow, instead of going to a bank and getting a business loan. There is NO REASON for these companies to be on the stock exchange whatsoeverinanywayever, yet they are.

    The only answer to these questions is that they can fleece the current tax systems globally, and pay their executives in stocks and shares, incentivising them to increase/maintain stock value. That's it. That's all.

    If an executive were to suggest at an interview to delist the company, they would not be hired. Too many interested parties at companies who depend on having someone at or near the top who is interested in purely pushing the share price up - regardless of the cost.
     
  6. Clouseau

    Clouseau Ancient Guru

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    Am sure that you also must be aware of that worth has very little to do with what the company has in cash and cash equivalents. Cash and cash equivalents makes up a very small percentage of a organization's worth. Also am sure that are aware no company ever started out being worth $100bn on day one. So the question becomes how much cash is available to buy back the stock. Going public is not cheap. There is the five years of audited financials along with the underwriting fee. Plus there had to be somewhere in all those lectures that once a company goes public, it is very long time to go private again.

    EDIT: capex, opex, what the heck. Name one expense that does not fall into either of those two categories that also does not fall under cash provided by investment activities.
     
    Last edited: Jul 31, 2019
  7. Loobyluggs

    Loobyluggs Ancient Guru

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    Your point pertaining to mine, that companies are motivated to increase stock price/value, no matter what?

    In a roundabout answer to your question, financial activity that can be hidden in capex or opex to another paper company is a tax dodge, plain and simple.

    Your other remark on delisting, well, it would mean the company is no longer answerable to investors and is no longer motivated in a way that involves sacking people for no 'good' reason.
     
  8. airbud7

    airbud7 Ancient Guru

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    there should not be a corporate tax....every employee of a corporation already paid taxes...

    the government wants the jugular vein of every dollar....

    the first person to be fired in the government should be the one riding around trying to see how much money you're worth so they can get more!
     
    Last edited: Jul 31, 2019
  9. rm082e

    rm082e Master Guru

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    I'm sure they'll use all that money to continue making groundbreaking games that delight and please audiences the world over. Heck, with that kind of money, they can get rid of all the lootboxes, trash DLC and worthless skin junk in their games. I can't wait to see what new interesting mechanics and compelling story lines they come up with. Maybe we'll finally get the M-rated, single-player Star Wars bounty hunter game we've been waiting for!

    [​IMG]
     
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  10. DownwithEA

    DownwithEA Member

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    Oh that's nice. Glad EA is finally given a break. After all, they treat us so well. What's not to like. Just hap hap happpy
     
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  11. fantaskarsef

    fantaskarsef Ancient Guru

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    Another example how people vote for stuff they don't understand, since that tax break money is NOT spent on Swiss citizens.

    "Democracy has a major issue: the dumb are also allowed to participate."
     
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  12. D3M1G0D

    D3M1G0D Ancient Guru

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    A corporation is considered a legal person, separate from the people who run it. As such, it needs to pay taxes like any other person.
     
  13. TieSKey

    TieSKey Member Guru

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    Sir, our corporate partners indicate you must be part of some sort of religious extremist terrorist cell. If you are willing to confess to your crimes and mention the names in the attached pdf, a comfy cell will be waiting for u in Guantanamo. Otherwise plz maintain your position until our friendly drones can drop a love filled package. </sarcasm>
     
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  14. Loobyluggs

    Loobyluggs Ancient Guru

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    What corporation tax SHOULD be doing is making investing in your company MORE profitable than NOT investing in your company.

    The reasoning is very simple: if you invest in your company, the money goes to either staff or resources to make the company better. This in turn will mean less people without a job, and B2B expenditure on goods and services increasing to, say, improve a building, increase staff training, increase staff benefits like healthcare and pensions and so on. Hiring more people could be part of a company expansion, or it could be just opening an R&D division to improve the company offering to the market.

    All of these things put profit into the economy, reduce unemployment, increase GDP etc etc etc, all of which makes the necessity to tax citizens less, because there is less of a demand on a government to pay for stuff, like benefits for employment seekers.

    That is what corporation tax is geared to do, because you can make corporation tax 100% and it will neverevernowayever impact a company because you are NOT taxing a company on revenue, but profits.

    The extreemist POV would be that it should be illegal to sack people if your company is profitable (GMC notwithstanding) and there is certainly a point to made on that, but I would need the research iron-clad before making such a point.
     
  15. 0blivious

    0blivious Ancient Guru

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    Apples and oranges. You are talking about payroll taxes on the employees. This EA story is about taxing the products and business profits. Plus, it's in Sweden.

    Do you want businesses to pay no taxes or corporations, specifically, to pay no taxes while the small, mom and pop businesses still have to? Or exempt every business? I'm not sure how that works. "You didn't build that" was Obama replying to this notion. Roads and infrastructure (and so much more) are built with tax money. It's just how a Country/State/City pays for things. With taxes. Are they the things we want them to spend on? That's a whole other debate.

    How our government allows lobbyists and special interest money to affect tax law, is my biggest issue. On top of that, no amount of money is ever too much for Military spending but anything that helps citizens gets cut at the first opportunity, even when it's literally a drop in the bucket compared to military. But that's touching on that whole other debate.

    I have no problem with business paying their share.
     

  16. Gomez Addams

    Gomez Addams Member Guru

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    That is not true. A private company answers just as much if not more to its investors who are also its direct owners. It is still motivated to make a profit but it doesn't have to worry about its quarterly statement to the SEC any more.

    I have worked at both types of companies and I'll take a private company over a public one every chance I get. The public companies I have worked for did too much stupid stuff to make their quarterly and annual statements look better. The private ones tended to think much more in the long term. That's why I have the computer I have today to work on : they see the potential value it can bring to the company from the R&D I am using it for. I would never have it at the public companies I worked at. It would be too big a hit to their R&D budget which was always minuscule.
     
  17. nhlkoho

    nhlkoho Ancient Guru

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    That's funny you say that because according to Citizen's United which I'm sure you're all for, corporations are essentially considered persons. So why aren't they paying taxes?

    And no, I can guarantee you that the multi-billionaire CEO's pay close to nothing in taxes so not every employee of said corporations pay
     
    Last edited: Aug 1, 2019
  18. BetA

    BetA Ancient Guru

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    im sorry i just have to post this video..
    Because EA aint the only one of those parasites..
    Rockstar DOES NOT PAY TAXES but gets TAX RETURNS... Gotta love those parasites...



    it is related..

    THX... Good evening all..


    EDIT:

    For the ones that dont like this Jim Sterling, here you go, all in Text..

    Gaming the TAX System
    https://www.taxwatchuk.org/reports/gaming-the-tax-system/
     
    Last edited: Aug 1, 2019
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  19. Loobyluggs

    Loobyluggs Ancient Guru

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    I was speaking globally in case. A private company does not answer to investors, as they are happy so long as they get paid. They cannot control or countermand what the actual owner does on a day to day basis. Investors of private companies are more like business partners than anything, offering advice and support when needed.

    Shareholders and public companies are some of the worst things on the planet earth right now. With so many loopholes, companies in this bracket are fleecing the system for bonuses and staff are being sacked for no reason other than to protect shareholders.

    It's like computer games have become glorified spreadsheets, and the people playing them are worker bees as the cannon fodder for the executive paychecks.

    Lootboxes and all types of MT do concern me, because the kids spending this money are typically 11 years old, easily motivated/encouraged by peers to spend, hyped up on Monster Energy drinks, ADD drugs (with parents on xanax) and little to zero physical exercise and a gut full of junk food. And, that is a positive example! The types of psychological and pathological behaviour that can come out of this at the extremes could be life-altering. A young, bright child with the world in the eyes can be changed in a very short period of time given the right stimuli. Remember y'all, games are addictive!
     
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  20. RealNC

    RealNC Ancient Guru

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    Who knew that tax evasion is lucrative. Whatasurprise.

    Here's a very enlightening video about tax evasion by AAA publishers from someone who knows what he's talking about:

     
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