0 00:00:00,000 --> 00:00:30,000 Dear viewer, these subtitles were generated by a machine via the service Trint and therefore are (very) buggy. If you are capable, please help us to create good quality subtitles: https://c3subtitles.de/talk/899 Thanks! 1 00:00:14,540 --> 00:00:16,609 So in November, a huge investigative 2 00:00:16,610 --> 00:00:18,679 story hits the news, namely 3 00:00:18,680 --> 00:00:20,989 the Panama Papers, you may recall that, 4 00:00:20,990 --> 00:00:23,119 and they revealed how big companies like 5 00:00:23,120 --> 00:00:25,189 Apple or people with power 6 00:00:25,190 --> 00:00:27,529 and money use offshore the offshore 7 00:00:27,530 --> 00:00:30,049 tax industry to evade taxation. 8 00:00:30,050 --> 00:00:32,179 That's why this talk is important, 9 00:00:32,180 --> 00:00:34,639 because Vivoda is here now from 10 00:00:34,640 --> 00:00:37,159 the Open Knowledge Foundation, who 11 00:00:37,160 --> 00:00:38,989 will explain to you everything you need 12 00:00:38,990 --> 00:00:41,239 to know about Internet international 13 00:00:41,240 --> 00:00:43,339 taxation and why this 14 00:00:43,340 --> 00:00:45,319 should concern you as hackers. 15 00:00:45,320 --> 00:00:47,839 Please give an applause to avoid. 16 00:00:47,840 --> 00:00:48,840 Thanks. 17 00:00:54,130 --> 00:00:55,959 Yeah, good morning, Latin, and thank you 18 00:00:55,960 --> 00:00:57,759 for having me here so early and I will 19 00:00:57,760 --> 00:00:59,739 try to make this talk, although the topic 20 00:00:59,740 --> 00:01:01,959 is like really a dry and boring, 21 00:01:01,960 --> 00:01:04,659 as exciting as it can be for taxation. 22 00:01:04,660 --> 00:01:06,279 So I work for a knowledge foundation. 23 00:01:06,280 --> 00:01:08,499 I do normally data policy and 24 00:01:08,500 --> 00:01:10,089 transparency stuff. 25 00:01:10,090 --> 00:01:12,339 And, uh, I will present today 26 00:01:12,340 --> 00:01:14,619 why taxation is a perfect hooved 27 00:01:14,620 --> 00:01:16,809 issue and it's a worldwide issue 28 00:01:16,810 --> 00:01:19,509 and how it connects to the Internet, uh, 29 00:01:19,510 --> 00:01:21,669 C.C.C. and technology 30 00:01:21,670 --> 00:01:23,889 and also how we shape the society with 31 00:01:23,890 --> 00:01:26,169 it. So how we got here I'm 32 00:01:26,170 --> 00:01:27,639 from Austria is normal. 33 00:01:27,640 --> 00:01:29,049 I have to call. Excuse me. 34 00:01:29,050 --> 00:01:31,119 That's my cousin Daniel Blatche 35 00:01:31,120 --> 00:01:33,339 from Vienna and Harvard University. 36 00:01:33,340 --> 00:01:34,749 And we're trying to change something in 37 00:01:34,750 --> 00:01:35,979 that area. 38 00:01:35,980 --> 00:01:38,169 And, uh, talk will have three parts. 39 00:01:38,170 --> 00:01:40,329 So it's like the status quo, uh, intro 40 00:01:40,330 --> 00:01:42,939 and fine examples how you make, uh, 41 00:01:42,940 --> 00:01:44,929 tax loops working for your company. 42 00:01:44,930 --> 00:01:47,019 Uh, then the second part is why is that 43 00:01:47,020 --> 00:01:48,669 the policy and the history and the third 44 00:01:48,670 --> 00:01:50,889 one has done what you can do about it, 45 00:01:50,890 --> 00:01:52,120 politics and the future. 46 00:01:53,230 --> 00:01:55,389 So I got into the topic reading about an 47 00:01:55,390 --> 00:01:57,339 article about Exxon Mobile, which is the 48 00:01:57,340 --> 00:01:59,259 sixth largest company in the world by 49 00:01:59,260 --> 00:02:01,589 market cap and revenue, uh, 50 00:02:01,590 --> 00:02:03,849 and especially Exxon Mobile, Spain. 51 00:02:03,850 --> 00:02:05,949 So they had like 2009 and 52 00:02:05,950 --> 00:02:08,319 2008, one employee 53 00:02:08,320 --> 00:02:10,899 earning forty four K a year 54 00:02:10,900 --> 00:02:12,969 and making nine point nine billion net 55 00:02:12,970 --> 00:02:14,679 profits in just two years. 56 00:02:14,680 --> 00:02:16,569 So do understand this, that like effect 57 00:02:16,570 --> 00:02:18,819 of one hundred twelve thousand, uh, from 58 00:02:18,820 --> 00:02:21,309 his income to the profit for the company 59 00:02:21,310 --> 00:02:23,199 and as like. Well that's basically like 60 00:02:23,200 --> 00:02:25,389 this. John Doe from Spain is the state 61 00:02:25,390 --> 00:02:26,529 of capitalism. 62 00:02:26,530 --> 00:02:28,449 There's nobody else in the world who is 63 00:02:28,450 --> 00:02:30,669 outperforming this guy for two years. 64 00:02:30,670 --> 00:02:32,409 And that's basically just done through 65 00:02:32,410 --> 00:02:35,199 like making use of tax hold. 66 00:02:35,200 --> 00:02:36,579 So the take away is like some 67 00:02:36,580 --> 00:02:38,409 corporations pay not so much corporate 68 00:02:38,410 --> 00:02:40,779 taxes and it's a lot of dough in Germany. 69 00:02:40,780 --> 00:02:42,159 We say it's about skilled. 70 00:02:42,160 --> 00:02:43,659 And at the end of the day, if you have a 71 00:02:43,660 --> 00:02:45,639 billion here, billion there, pretty soon 72 00:02:45,640 --> 00:02:46,840 you're talking about real money. 73 00:02:48,160 --> 00:02:49,989 And other people say the only two things 74 00:02:49,990 --> 00:02:52,359 for certain life, that's death and taxes. 75 00:02:52,360 --> 00:02:54,169 Uh, we would like to add that second, 76 00:02:54,170 --> 00:02:55,869 third, uh, certain in life, and that's 77 00:02:55,870 --> 00:02:57,039 inequality. 78 00:02:57,040 --> 00:02:58,809 And while some discussing about reducing 79 00:02:58,810 --> 00:03:00,399 the taxes, we also want to talk about 80 00:03:00,400 --> 00:03:01,929 like reducing the inequality. 81 00:03:01,930 --> 00:03:04,419 And this will be to talk about and 82 00:03:04,420 --> 00:03:05,769 where everybody can agree on it. 83 00:03:05,770 --> 00:03:07,839 It's like the tax rates are too damn 84 00:03:07,840 --> 00:03:09,879 high. But you should also consider the 85 00:03:09,880 --> 00:03:11,949 taxes are always helping, uh, funding 86 00:03:11,950 --> 00:03:13,989 public goods like schools, transportation 87 00:03:13,990 --> 00:03:15,379 and so on. 88 00:03:15,380 --> 00:03:16,899 So in Germany, you have like Steuer 89 00:03:16,900 --> 00:03:18,969 Stoyanov, Doyon, it's like what 90 00:03:18,970 --> 00:03:21,639 kind of society we want to have and 91 00:03:21,640 --> 00:03:23,829 how to contribute it is to pay for it, 92 00:03:23,830 --> 00:03:25,269 in which direction we are moving. 93 00:03:25,270 --> 00:03:26,799 If you see that, it's like basically get 94 00:03:26,800 --> 00:03:28,359 tax being important. 95 00:03:28,360 --> 00:03:30,609 You want to achieve social goals 96 00:03:30,610 --> 00:03:32,529 or, uh, like stimulate economic growth 97 00:03:32,530 --> 00:03:33,699 with them. 98 00:03:33,700 --> 00:03:35,349 So the formula basically is if you have a 99 00:03:35,350 --> 00:03:37,579 tax revenue at the top, if 100 00:03:37,580 --> 00:03:39,879 city, for example, the company pays 101 00:03:39,880 --> 00:03:41,979 less taxes than somebody else 102 00:03:41,980 --> 00:03:44,199 has to pay more taxes or you have 103 00:03:44,200 --> 00:03:46,269 less tax revenue to fund 104 00:03:46,270 --> 00:03:47,270 those public goods. 105 00:03:48,280 --> 00:03:50,319 And this talk will mainly about like the 106 00:03:50,320 --> 00:03:52,119 legal optimization, there's a lot of 107 00:03:52,120 --> 00:03:54,139 illegal stuff going on, like in Germany 108 00:03:54,140 --> 00:03:56,319 of like the comics tax evasion, 109 00:03:56,320 --> 00:03:58,299 which is trying to think about OK, which 110 00:03:58,300 --> 00:03:59,859 adds up to 12 billion. 111 00:03:59,860 --> 00:04:01,779 Or you have to like the regular Swiss tax 112 00:04:01,780 --> 00:04:03,759 fund in Germany, like enervated. 113 00:04:03,760 --> 00:04:06,279 So like one point nine, one point eight 114 00:04:06,280 --> 00:04:08,379 billion. Well, just like Swiss Picart 115 00:04:08,380 --> 00:04:10,539 called finding the link for in 116 00:04:10,540 --> 00:04:11,540 Germany. 117 00:04:12,450 --> 00:04:14,799 And there's the famous quote from Barack 118 00:04:14,800 --> 00:04:16,898 Obama from 2006 Brazil. 119 00:04:16,899 --> 00:04:18,969 But all of this is legal, but that's 120 00:04:18,970 --> 00:04:19,929 exactly the problem. 121 00:04:19,930 --> 00:04:22,359 So we basically say legal, illegal 122 00:04:22,360 --> 00:04:23,259 is a girl. 123 00:04:23,260 --> 00:04:24,639 We're living in a time where we need to 124 00:04:24,640 --> 00:04:27,039 discuss about that, because we have 125 00:04:27,040 --> 00:04:29,259 basically, as Andreessen Horowitz 126 00:04:29,260 --> 00:04:31,029 said, software is eating the world. 127 00:04:31,030 --> 00:04:33,519 So I robots 128 00:04:33,520 --> 00:04:35,619 may eat the jobs or not and we 129 00:04:35,620 --> 00:04:36,859 end round of discussion. 130 00:04:36,860 --> 00:04:38,439 Should we have like a universal basic 131 00:04:38,440 --> 00:04:40,119 income or outcome. 132 00:04:40,120 --> 00:04:42,279 And this is the trend 133 00:04:42,280 --> 00:04:43,779 which is unique. So you have like the 134 00:04:43,780 --> 00:04:45,849 last decades, like basically to download 135 00:04:45,850 --> 00:04:46,989 Slope's. 136 00:04:46,990 --> 00:04:49,359 That's like the trend of corporate 137 00:04:49,360 --> 00:04:51,729 income tax as a share of GDP, 138 00:04:51,730 --> 00:04:54,909 and that's like the tax rate by itself. 139 00:04:54,910 --> 00:04:57,369 And that's like causing some issues. 140 00:04:57,370 --> 00:04:59,469 So the corporate tax rates basic rule is 141 00:04:59,470 --> 00:05:01,329 that the less profit, the less taxes you 142 00:05:01,330 --> 00:05:03,489 pay and you try to pay the 143 00:05:03,490 --> 00:05:05,409 taxes where the tax rate is lower. 144 00:05:05,410 --> 00:05:06,849 So when you're thinking about that and 145 00:05:06,850 --> 00:05:08,319 since we're here, you can always thinking 146 00:05:08,320 --> 00:05:10,389 about like hacking the tax code. 147 00:05:10,390 --> 00:05:12,639 And, uh, you have like 148 00:05:12,640 --> 00:05:14,919 hackers working 24/7 for the four 149 00:05:14,920 --> 00:05:17,289 big accounting firms, which would be 150 00:05:17,290 --> 00:05:19,539 PricewaterhouseCoopers, Ernst and Young, 151 00:05:19,540 --> 00:05:21,339 KPMG and Deloitte. 152 00:05:21,340 --> 00:05:22,929 And not only like they're hacking 153 00:05:22,930 --> 00:05:25,149 actively, some of them are also making 154 00:05:25,150 --> 00:05:27,249 like the smart move and writing back to 155 00:05:27,250 --> 00:05:29,019 us. That means like they're like involved 156 00:05:29,020 --> 00:05:31,029 in the process of writing the tax code, 157 00:05:31,030 --> 00:05:33,129 the law, what a leader will 158 00:05:33,130 --> 00:05:34,130 exploit it. 159 00:05:34,960 --> 00:05:37,149 So there's a lot of cyber going on, a lot 160 00:05:37,150 --> 00:05:38,889 of dough for the US that means like this 161 00:05:38,890 --> 00:05:41,439 to drill in US dollars overseas 162 00:05:41,440 --> 00:05:43,539 and any leaders like around 60 163 00:05:43,540 --> 00:05:45,729 billion, adding on top of it 164 00:05:45,730 --> 00:05:47,829 for the European Union, we are talking 165 00:05:47,830 --> 00:05:48,830 about somewhere around 166 00:05:50,620 --> 00:05:52,749 50 to 70 billion a year like 167 00:05:52,750 --> 00:05:54,309 where I come from. It's like a sixth of 168 00:05:54,310 --> 00:05:55,389 the schnitzel of Australia. 169 00:05:55,390 --> 00:05:57,969 That's like not a it's like 10 170 00:05:57,970 --> 00:05:58,970 billion airport. 171 00:06:00,520 --> 00:06:02,659 And the OED calls it 172 00:06:02,660 --> 00:06:04,649 a base erosion by shifting report it 173 00:06:04,650 --> 00:06:06,789 reaches there's other reports like 174 00:06:06,790 --> 00:06:09,039 some textualists that 175 00:06:09,040 --> 00:06:11,409 saying that up to like 500 billion 176 00:06:11,410 --> 00:06:13,869 annually and why this is happening, 177 00:06:13,870 --> 00:06:15,699 that's basically part of it increased in 178 00:06:15,700 --> 00:06:17,499 the last decades because we're moving 179 00:06:17,500 --> 00:06:19,629 from a economy really based 180 00:06:19,630 --> 00:06:21,699 on real goods to intangible 181 00:06:21,700 --> 00:06:23,889 goods. And that means like 182 00:06:23,890 --> 00:06:26,829 patents, trademarks 183 00:06:26,830 --> 00:06:27,830 and so on. 184 00:06:28,960 --> 00:06:32,049 And you can see that really nicely in how 185 00:06:32,050 --> 00:06:34,389 the top five market cap changed 186 00:06:34,390 --> 00:06:35,390 from. 187 00:06:36,170 --> 00:06:39,229 2006 to 2017. 188 00:06:39,230 --> 00:06:41,269 So you had like 2006, you had like Exxon 189 00:06:41,270 --> 00:06:43,009 Mobil, General Electric's Microsoft, 190 00:06:43,010 --> 00:06:45,229 British Petrol and Citigroup, 191 00:06:45,230 --> 00:06:47,689 which means banking, energy and industry. 192 00:06:47,690 --> 00:06:49,789 And then 11 years later, you have 193 00:06:49,790 --> 00:06:52,159 like basically like five tech companies. 194 00:06:52,160 --> 00:06:54,079 And those tech companies, the valuable 195 00:06:54,080 --> 00:06:55,729 stuff they're doing, like software code 196 00:06:55,730 --> 00:06:57,889 and so on, can easily jump from one 197 00:06:57,890 --> 00:06:59,569 zero two zero compared like if you have 198 00:06:59,570 --> 00:07:02,449 like BP like a oil refinery. 199 00:07:02,450 --> 00:07:04,639 So that's like makes it easy to move 200 00:07:04,640 --> 00:07:06,470 something around if it's just digital. 201 00:07:07,640 --> 00:07:10,009 And the most famous tax loophole 202 00:07:10,010 --> 00:07:12,859 was the double Irish, that sandwich, 203 00:07:12,860 --> 00:07:14,959 and that's basically what they 204 00:07:14,960 --> 00:07:16,459 need for there. You always need like two 205 00:07:16,460 --> 00:07:18,559 Irish companies, then you need 206 00:07:18,560 --> 00:07:19,519 a Dutch companies. 207 00:07:19,520 --> 00:07:21,059 Then you need like a company some and the 208 00:07:21,060 --> 00:07:23,119 mahmud's or what you call like offshore 209 00:07:23,120 --> 00:07:25,459 financial center and you transfer 210 00:07:25,460 --> 00:07:26,239 the money around. 211 00:07:26,240 --> 00:07:27,649 So there's like the Chinese version 212 00:07:27,650 --> 00:07:29,419 because it doesn't matter much. 213 00:07:29,420 --> 00:07:30,709 It's just about the flag. 214 00:07:30,710 --> 00:07:32,599 So you start like some in the US, then 215 00:07:32,600 --> 00:07:34,549 you have like some offshore company who 216 00:07:34,550 --> 00:07:35,899 holds like the patents or the 217 00:07:35,900 --> 00:07:37,999 intellectual property stuff, which 218 00:07:38,000 --> 00:07:39,979 gives it to one Irish company. 219 00:07:39,980 --> 00:07:42,109 And basically you go to another 220 00:07:42,110 --> 00:07:44,389 Irish company who has here like 221 00:07:44,390 --> 00:07:45,499 sales to the customers. 222 00:07:45,500 --> 00:07:47,419 So the customers are paying in here. 223 00:07:47,420 --> 00:07:49,009 Then they pay like some money to the 224 00:07:49,010 --> 00:07:50,869 Nederland company, then they pay the 225 00:07:50,870 --> 00:07:52,759 money to the Irish company. 226 00:07:52,760 --> 00:07:54,109 Then the Irish company pays it to the 227 00:07:54,110 --> 00:07:55,519 Bermuda company. 228 00:07:55,520 --> 00:07:57,379 The stuff feel like a little bit more 229 00:07:57,380 --> 00:07:59,509 detailed and it's the same stuff like 230 00:07:59,510 --> 00:08:00,439 going around here. 231 00:08:00,440 --> 00:08:01,999 So it's all is basically two Irish 232 00:08:02,000 --> 00:08:03,469 companies, one Dutch company, some 233 00:08:03,470 --> 00:08:05,929 company in a tax haven. 234 00:08:05,930 --> 00:08:08,139 And in that BROSSET what is happening 235 00:08:08,140 --> 00:08:10,729 really reduce the corporate tax rate 236 00:08:10,730 --> 00:08:13,099 to almost like nothing. 237 00:08:13,100 --> 00:08:15,349 And that's basically a trend among 238 00:08:15,350 --> 00:08:16,519 the big companies. 239 00:08:16,520 --> 00:08:17,839 Pretty much everybody does it. 240 00:08:17,840 --> 00:08:19,639 So it's Microsoft, Apple, Google, 241 00:08:19,640 --> 00:08:21,769 Facebook, Amazon, Starbucks, 242 00:08:21,770 --> 00:08:23,959 or is it a German company as 243 00:08:23,960 --> 00:08:26,449 or Inditex, which is the Spanish 244 00:08:26,450 --> 00:08:28,159 clothing company? 245 00:08:28,160 --> 00:08:30,139 And I want to point out one example. 246 00:08:30,140 --> 00:08:32,089 It's Google. So basically, Google has a 247 00:08:32,090 --> 00:08:34,548 worldwide revenue in 2014 248 00:08:34,549 --> 00:08:36,199 of forty six billion. 249 00:08:36,200 --> 00:08:38,329 And when you take it 250 00:08:38,330 --> 00:08:40,639 down to the UK, it's like a tenth of its 251 00:08:40,640 --> 00:08:42,349 four point six billion. 252 00:08:42,350 --> 00:08:45,049 And on this profit of 10 billion 253 00:08:45,050 --> 00:08:47,389 annually worldwide, they're paid 254 00:08:47,390 --> 00:08:49,729 somewhere around two point three billion. 255 00:08:49,730 --> 00:08:51,499 But in the UK they only paid like 13 256 00:08:51,500 --> 00:08:53,329 million. And that's because they're using 257 00:08:53,330 --> 00:08:55,669 like this Dutch sandwich to pay 258 00:08:55,670 --> 00:08:57,739 less profits on the revenue in the 259 00:08:57,740 --> 00:08:59,899 UK. And then when you take a look like 260 00:08:59,900 --> 00:09:02,119 where Google got famous in Europe lately, 261 00:09:02,120 --> 00:09:03,919 which is the digital news initiative, 262 00:09:03,920 --> 00:09:06,289 that's like 150 million they're using 263 00:09:06,290 --> 00:09:08,299 to spend on news organization. 264 00:09:08,300 --> 00:09:09,559 That's what it basically you can call 265 00:09:09,560 --> 00:09:11,629 them like peanuts, because that's 266 00:09:11,630 --> 00:09:13,849 basically less than what they save 267 00:09:13,850 --> 00:09:16,849 in one year just on the tax 268 00:09:16,850 --> 00:09:19,519 paying in the UK alone. 269 00:09:19,520 --> 00:09:20,599 Same goes with Apple. 270 00:09:20,600 --> 00:09:22,639 So Apple is sitting right now on a cash 271 00:09:22,640 --> 00:09:24,409 pile of 250 billion. 272 00:09:24,410 --> 00:09:26,689 And it's partly due because the same 273 00:09:26,690 --> 00:09:28,759 system or they had like a tax rate of 274 00:09:28,760 --> 00:09:31,429 just zero point five zero 275 00:09:31,430 --> 00:09:34,219 point zero zero five percent 276 00:09:34,220 --> 00:09:35,330 2014. 277 00:09:36,740 --> 00:09:37,759 Just put that in relation. 278 00:09:37,760 --> 00:09:40,069 That's like two thirds of the GDP 279 00:09:40,070 --> 00:09:42,199 of Austria, of like eight million people 280 00:09:42,200 --> 00:09:44,389 or two thirds of the depth of Greece, 281 00:09:44,390 --> 00:09:46,579 twice the GDP from Berlin or 282 00:09:46,580 --> 00:09:47,580 fifty upwards. 283 00:09:49,070 --> 00:09:51,409 And so, uh, the European 284 00:09:51,410 --> 00:09:53,539 Commission wanted to force 285 00:09:53,540 --> 00:09:55,849 Ireland to tax, uh, Apple higher. 286 00:09:55,850 --> 00:09:57,589 But of course they refused because that's 287 00:09:57,590 --> 00:09:59,719 partly their business model, taking 288 00:09:59,720 --> 00:10:02,029 less corporate taxes. 289 00:10:02,030 --> 00:10:04,159 And that 290 00:10:04,160 --> 00:10:06,109 was last year, 18 billion. 291 00:10:06,110 --> 00:10:08,329 And by December seventies, Ireland was 292 00:10:08,330 --> 00:10:10,609 forced to collect 13 billion from 293 00:10:10,610 --> 00:10:12,799 Apple because it's like about 294 00:10:12,800 --> 00:10:13,819 competition. 295 00:10:13,820 --> 00:10:15,139 We will see how that ends up. 296 00:10:15,140 --> 00:10:17,929 I hope somebody collects that. 297 00:10:17,930 --> 00:10:20,149 And 2014, 298 00:10:20,150 --> 00:10:22,639 Ireland was scraping the infamous 299 00:10:22,640 --> 00:10:25,099 double Irish tax, uh, 300 00:10:25,100 --> 00:10:26,419 sandwich loophole. 301 00:10:26,420 --> 00:10:29,389 And everybody was like, oh, finally. 302 00:10:29,390 --> 00:10:31,279 But then they also replaced at the same 303 00:10:31,280 --> 00:10:33,409 time called something like patent box or 304 00:10:33,410 --> 00:10:34,649 knowledge development box. 305 00:10:34,650 --> 00:10:36,139 So it's the similar stuff, a different 306 00:10:36,140 --> 00:10:38,239 name and a little bit less dodgy. 307 00:10:38,240 --> 00:10:40,339 But it will keep like tech companies and 308 00:10:40,340 --> 00:10:42,799 pharmaceutical companies, uh, ongoing. 309 00:10:42,800 --> 00:10:44,929 Doing the tax scheme and not 310 00:10:44,930 --> 00:10:46,879 a great example is an investment 311 00:10:46,880 --> 00:10:49,549 opportunity from Switzerland, 312 00:10:49,550 --> 00:10:51,979 Hungary and the Netherlands. 313 00:10:51,980 --> 00:10:53,959 So that was General Electric's on the 314 00:10:53,960 --> 00:10:56,419 21st of December 2015. 315 00:10:56,420 --> 00:10:58,489 At twelve o'clock, uh, the 316 00:10:58,490 --> 00:11:00,769 Dutch sold, uh, General 317 00:11:00,770 --> 00:11:03,589 Electric Swiss to, uh, 318 00:11:03,590 --> 00:11:06,019 Hungary for like forty thousand 319 00:11:06,020 --> 00:11:08,089 francs an hour later, 320 00:11:08,090 --> 00:11:09,529 they sold it again in a different 321 00:11:09,530 --> 00:11:12,199 direction for six point four billion. 322 00:11:12,200 --> 00:11:14,229 So that's like sixty minutes effect of 323 00:11:14,230 --> 00:11:16,189 sixty 167, five thousand. 324 00:11:16,190 --> 00:11:17,749 In order to understand that, that's like 325 00:11:17,750 --> 00:11:19,699 you upgrade your old modem to a six 326 00:11:19,700 --> 00:11:22,009 gigabit line or you upgrade your floppy 327 00:11:22,010 --> 00:11:24,260 disk to a 230 gigabyte hard drive, 328 00:11:25,280 --> 00:11:27,139 or you work only one point five hours in 329 00:11:27,140 --> 00:11:28,140 your whole life. 330 00:11:29,450 --> 00:11:31,099 And that's why I did that. 331 00:11:31,100 --> 00:11:33,559 It's basically they were selling some 332 00:11:33,560 --> 00:11:35,809 rights for eight billion and 333 00:11:35,810 --> 00:11:37,879 with the tax difference from Hungary to 334 00:11:37,880 --> 00:11:40,129 Switzerland, instead of paying 335 00:11:40,130 --> 00:11:42,379 18 percent taxes, the only two 336 00:11:42,380 --> 00:11:44,479 percent tax is saving one point four 337 00:11:44,480 --> 00:11:47,119 billion Swiss francs in one hour. 338 00:11:47,120 --> 00:11:48,619 And there are many more examples like 339 00:11:48,620 --> 00:11:51,319 that, especially from Luxembourg. 340 00:11:51,320 --> 00:11:53,569 Madeira is like a European island 341 00:11:53,570 --> 00:11:54,499 tax haven. 342 00:11:54,500 --> 00:11:56,869 IKEA has a hilarious 343 00:11:56,870 --> 00:11:58,939 tax example, but I don't want to bore 344 00:11:58,940 --> 00:12:00,829 you and I want to go quickly through what 345 00:12:00,830 --> 00:12:02,269 happened on the reporting side. 346 00:12:02,270 --> 00:12:04,309 So 2013, there was offshore leaks, which 347 00:12:04,310 --> 00:12:07,279 was the first big, uh, 348 00:12:07,280 --> 00:12:09,959 reporting addressing that issue. 349 00:12:09,960 --> 00:12:12,079 Then a year later, you had like Lux 350 00:12:12,080 --> 00:12:14,479 leaks addressing Luxembourg. 351 00:12:14,480 --> 00:12:16,009 Interesting. There was like it happened 352 00:12:16,010 --> 00:12:18,559 right after Juncker was like, uh, 353 00:12:18,560 --> 00:12:19,819 getting the head of the European 354 00:12:19,820 --> 00:12:22,089 Commission. Uh, you can read 355 00:12:22,090 --> 00:12:24,499 that up in the German duplicable, 356 00:12:24,500 --> 00:12:26,809 the slides online and 357 00:12:26,810 --> 00:12:28,639 everything linked. 358 00:12:28,640 --> 00:12:31,069 And it was like about, uh, twenty twenty 359 00:12:31,070 --> 00:12:33,379 eight thousand pages on like more 360 00:12:33,380 --> 00:12:35,479 than 500 ruling on companies how to get 361 00:12:35,480 --> 00:12:37,119 like special deals in Luxembourg. 362 00:12:37,120 --> 00:12:38,989 And did you have to understand why it is 363 00:12:38,990 --> 00:12:40,549 important for every country in Europe, 364 00:12:40,550 --> 00:12:41,959 basically just trying to lower the 365 00:12:41,960 --> 00:12:43,639 corporate tax rate in order to attract 366 00:12:43,640 --> 00:12:45,709 businesses. And he's now ahead of the 367 00:12:45,710 --> 00:12:47,569 European Union, which exactly should have 368 00:12:47,570 --> 00:12:50,059 waited. And 2016, 369 00:12:50,060 --> 00:12:51,769 two years after reporting there was 370 00:12:51,770 --> 00:12:54,199 actually four times more, uh, 371 00:12:54,200 --> 00:12:56,419 special deals in Luxembourg, then 372 00:12:56,420 --> 00:12:57,559 we had the Panama Papers. 373 00:12:57,560 --> 00:12:59,929 Uh, that was a done or 374 00:12:59,930 --> 00:13:01,999 made available by, uh, whistleblower. 375 00:13:02,000 --> 00:13:02,989 We don't know who it is. 376 00:13:02,990 --> 00:13:04,119 John Doe. 377 00:13:04,120 --> 00:13:07,009 The reporting started, uh, 2016. 378 00:13:07,010 --> 00:13:08,959 And it was mainly about, uh, Mossack 379 00:13:08,960 --> 00:13:11,239 Fonseca, which was one of the service 380 00:13:11,240 --> 00:13:13,819 providers. It was the biggest leap, 381 00:13:13,820 --> 00:13:14,749 uh, in data show. 382 00:13:14,750 --> 00:13:17,149 And I listen, uh, eleven million, 383 00:13:17,150 --> 00:13:19,399 um, documents and 384 00:13:19,400 --> 00:13:21,289 two point six terabytes. 385 00:13:21,290 --> 00:13:23,869 And, uh, one of the consequences 386 00:13:23,870 --> 00:13:24,979 of not consequent what happened 387 00:13:24,980 --> 00:13:27,139 afterwards was like the 16th October 388 00:13:27,140 --> 00:13:29,929 this year, uh, in Malta, where, uh, 389 00:13:29,930 --> 00:13:32,239 Daphnia, Guana, Galizia, uh, 390 00:13:32,240 --> 00:13:33,350 her car got bombed. 391 00:13:35,170 --> 00:13:37,479 And then in November, the Paradise 392 00:13:37,480 --> 00:13:39,579 paper came, uh, 393 00:13:39,580 --> 00:13:41,709 seem like almost similar to the 394 00:13:41,710 --> 00:13:44,199 Panama Papers, different and different 395 00:13:44,200 --> 00:13:47,019 companied was approved by everybody 396 00:13:47,020 --> 00:13:49,209 and it was like in nineteen Texas 397 00:13:49,210 --> 00:13:50,829 station and it was like high profile 398 00:13:50,830 --> 00:13:54,009 cases. So this leaks and papers 399 00:13:54,010 --> 00:13:55,329 are tremendous work. 400 00:13:55,330 --> 00:13:56,889 Really amazing. And I think it helps a 401 00:13:56,890 --> 00:13:59,289 lot of moving the discussion forward. 402 00:13:59,290 --> 00:14:01,629 I just want to remarket the system. 403 00:14:01,630 --> 00:14:04,359 The systematic place behind it 404 00:14:04,360 --> 00:14:05,739 were known before that. 405 00:14:05,740 --> 00:14:07,599 So I would say it's like don't hate the 406 00:14:07,600 --> 00:14:09,009 player, hate the game or hate the 407 00:14:09,010 --> 00:14:11,169 enablers. And the enablers are literally 408 00:14:11,170 --> 00:14:12,639 like those who are writing the law or 409 00:14:12,640 --> 00:14:14,529 like politicians. 410 00:14:14,530 --> 00:14:15,919 So sum it up. 411 00:14:15,920 --> 00:14:17,769 That's like a lot of talk pattengale. 412 00:14:17,770 --> 00:14:19,689 And we are going to the second part. 413 00:14:19,690 --> 00:14:21,249 How did that happened? 414 00:14:21,250 --> 00:14:23,349 So over the last 415 00:14:23,350 --> 00:14:25,749 century, we had basically three deals, 416 00:14:25,750 --> 00:14:27,549 how to get Texas done. 417 00:14:27,550 --> 00:14:29,289 That was like Swiss country based arm's 418 00:14:29,290 --> 00:14:31,239 length pricing and bilateral treaties. 419 00:14:32,350 --> 00:14:34,569 So big Swiss contrabass, that means 420 00:14:34,570 --> 00:14:36,639 like you tax where the production is 421 00:14:36,640 --> 00:14:38,199 happening. So if you have a car company 422 00:14:38,200 --> 00:14:40,419 in Germany, uh, it just 423 00:14:40,420 --> 00:14:42,789 happens their arm's length pricing 424 00:14:42,790 --> 00:14:43,899 when it's getting more complex. 425 00:14:43,900 --> 00:14:45,639 If a car company buying parts from 426 00:14:45,640 --> 00:14:47,559 Austria and it means that you have two 427 00:14:47,560 --> 00:14:49,869 separate units and you priced 428 00:14:49,870 --> 00:14:50,499 them where they are. 429 00:14:50,500 --> 00:14:52,299 So we need to and that's important. 430 00:14:52,300 --> 00:14:54,309 It's like you have to find out the price 431 00:14:54,310 --> 00:14:55,899 and that finding out a price paying for 432 00:14:55,900 --> 00:14:57,159 the Austrian company, if it's like a 433 00:14:57,160 --> 00:14:59,349 regular product, like some car. 434 00:14:59,350 --> 00:15:01,359 But it's easy because you have a market 435 00:15:01,360 --> 00:15:03,489 on there. You can't make up the 436 00:15:03,490 --> 00:15:05,769 margins like 10 or 100 times 437 00:15:05,770 --> 00:15:07,779 more if you do it with digital stuff. 438 00:15:07,780 --> 00:15:10,369 The question is like who knows how much 439 00:15:10,370 --> 00:15:12,489 is the Google algorithm versus so 440 00:15:12,490 --> 00:15:13,869 you can't prices because there's no 441 00:15:13,870 --> 00:15:15,819 market on it. The same goes with St. 442 00:15:15,820 --> 00:15:17,919 Marks. One famous case was like the 443 00:15:17,920 --> 00:15:18,879 Nike swoosh. 444 00:15:18,880 --> 00:15:21,039 So with real goods, if 445 00:15:21,040 --> 00:15:22,839 you have competitors, you know what the 446 00:15:22,840 --> 00:15:25,059 pricing will be with tangible goods, it's 447 00:15:25,060 --> 00:15:26,320 difficult to figure it out. 448 00:15:27,750 --> 00:15:29,579 So they're treating the Nationals as 449 00:15:29,580 --> 00:15:31,739 independent companies and making 450 00:15:31,740 --> 00:15:34,229 market prices for this and then 451 00:15:34,230 --> 00:15:35,649 moving, why these are the problems. 452 00:15:35,650 --> 00:15:37,739 So basically on the source, 453 00:15:37,740 --> 00:15:39,869 country based corporations can move the 454 00:15:39,870 --> 00:15:41,549 production from A to B. 455 00:15:41,550 --> 00:15:43,829 Let's say you have a car company you can 456 00:15:43,830 --> 00:15:44,910 produce in Poland 457 00:15:46,170 --> 00:15:47,309 cheaper than in Germany. 458 00:15:47,310 --> 00:15:49,139 Then you move the production or whatever. 459 00:15:49,140 --> 00:15:50,909 So arm's length pricing, you can make up 460 00:15:50,910 --> 00:15:52,859 the prices and shifting profits around. 461 00:15:52,860 --> 00:15:54,329 That's basically the case. 462 00:15:54,330 --> 00:15:56,609 What happened with 463 00:15:56,610 --> 00:15:57,809 Google and the Bermudas. 464 00:15:57,810 --> 00:15:59,909 So out of nowhere, Google headquarters 465 00:15:59,910 --> 00:16:01,709 for like algorithmic stuff is in the 466 00:16:01,710 --> 00:16:02,789 Bermudas. 467 00:16:02,790 --> 00:16:05,099 And then the third is bilateral 468 00:16:05,100 --> 00:16:07,199 treaties and bilateral treaties. 469 00:16:07,200 --> 00:16:08,669 You pay a bunch of lawyer really good 470 00:16:08,670 --> 00:16:10,739 money to figure out how to exploit the 471 00:16:10,740 --> 00:16:12,149 different tax treaties. 472 00:16:12,150 --> 00:16:14,069 That would be the case with the double 473 00:16:14,070 --> 00:16:16,590 Dutch are double Irish Dutch sandwich. 474 00:16:18,410 --> 00:16:20,599 And so we have two scenarios 475 00:16:20,600 --> 00:16:22,669 which adds up to are making promises to 476 00:16:22,670 --> 00:16:24,739 shift profits. We are counting move 477 00:16:24,740 --> 00:16:25,909 to actual production. 478 00:16:25,910 --> 00:16:27,859 And now that the kicks and the really big 479 00:16:27,860 --> 00:16:30,529 part is like it leads to tax competition 480 00:16:30,530 --> 00:16:32,639 between countries because you want to 481 00:16:32,640 --> 00:16:33,799 attract those companies. 482 00:16:33,800 --> 00:16:35,389 And that's basically what this graph 483 00:16:35,390 --> 00:16:38,329 where you see like from the 90s to 2016, 484 00:16:38,330 --> 00:16:40,459 we have different countries, Germany, 485 00:16:40,460 --> 00:16:42,559 Ireland, France, the 486 00:16:42,560 --> 00:16:44,359 lowering the corporate tax rate. 487 00:16:44,360 --> 00:16:46,489 So Germany started out with 60 and 488 00:16:46,490 --> 00:16:48,349 up the sudheer. 489 00:16:48,350 --> 00:16:50,509 Ireland was once up at 50 and 490 00:16:50,510 --> 00:16:52,249 is now 12 percent. 491 00:16:52,250 --> 00:16:54,169 So that's the business model attracting 492 00:16:54,170 --> 00:16:56,569 US companies and getting less corporate 493 00:16:56,570 --> 00:16:58,729 taxes compared to their European 494 00:16:58,730 --> 00:16:59,689 neighbors. 495 00:16:59,690 --> 00:17:02,089 Same goes with, uh, the US 496 00:17:02,090 --> 00:17:04,098 used to be stable long time. 497 00:17:04,099 --> 00:17:05,449 That's always like the difference between 498 00:17:05,450 --> 00:17:07,669 a statutory corporate tax rate and 499 00:17:07,670 --> 00:17:09,289 the effective. The effective is lower. 500 00:17:09,290 --> 00:17:10,969 That's basically what to really pay. 501 00:17:10,970 --> 00:17:13,129 And, uh, since we got a new president 502 00:17:13,130 --> 00:17:15,139 in the US, you can see like this is the 503 00:17:15,140 --> 00:17:18,199 historic chart from 1980, 504 00:17:18,200 --> 00:17:19,399 like a century. 505 00:17:19,400 --> 00:17:21,739 It used to go up before and 506 00:17:21,740 --> 00:17:24,019 after the Second World 507 00:17:24,020 --> 00:17:25,759 War. Then it was stable a long time. 508 00:17:25,760 --> 00:17:27,828 And in December it was announced that it 509 00:17:27,829 --> 00:17:30,829 will go from 35 down to 22. 510 00:17:30,830 --> 00:17:32,419 So you have like then an international 511 00:17:32,420 --> 00:17:34,159 competition for tax rate. 512 00:17:34,160 --> 00:17:35,899 So the question is like what can be done 513 00:17:35,900 --> 00:17:36,919 about that? 514 00:17:36,920 --> 00:17:38,959 And one of the proposals, among others, 515 00:17:38,960 --> 00:17:41,239 is like you put something in like a sales 516 00:17:41,240 --> 00:17:42,769 based apportionment tax. 517 00:17:42,770 --> 00:17:44,749 That means that you require from the 518 00:17:44,750 --> 00:17:47,119 multinational companies that the reported 519 00:17:47,120 --> 00:17:49,189 global profit and 520 00:17:49,190 --> 00:17:51,649 sales and taxes in the country. 521 00:17:51,650 --> 00:17:54,289 You multiply the global profit and 522 00:17:54,290 --> 00:17:55,699 buy the share of the global sales 523 00:17:55,700 --> 00:17:57,589 happening in that country which want to 524 00:17:57,590 --> 00:17:59,779 tax. And then you tax the percentage 525 00:17:59,780 --> 00:18:00,780 of this number. 526 00:18:03,230 --> 00:18:05,419 The question is how how can we get there 527 00:18:05,420 --> 00:18:06,949 or what we can do about that? 528 00:18:06,950 --> 00:18:08,599 Well, one thing is you can always pray 529 00:18:08,600 --> 00:18:10,729 about and pray that the brain will 530 00:18:10,730 --> 00:18:12,619 help changing tax structures or you can 531 00:18:12,620 --> 00:18:14,359 laugh about it when you remember, like 532 00:18:14,360 --> 00:18:16,489 Exxon Mobil saw Starbucks, 533 00:18:16,490 --> 00:18:18,709 IKEA, the big 534 00:18:18,710 --> 00:18:20,329 two came from regular phenomics because 535 00:18:20,330 --> 00:18:22,429 that's part of the problem 536 00:18:22,430 --> 00:18:24,289 because they told us it will trickle 537 00:18:24,290 --> 00:18:24,709 down. 538 00:18:24,710 --> 00:18:26,509 And what means trickle down is like one 539 00:18:26,510 --> 00:18:28,219 of the most important things, in my 540 00:18:28,220 --> 00:18:30,379 opinion, is realizing what trickle 541 00:18:30,380 --> 00:18:31,670 trickling down means. 542 00:18:34,100 --> 00:18:35,869 And that's basically when you take a look 543 00:18:35,870 --> 00:18:38,299 at this child's like in the 1980s, 544 00:18:38,300 --> 00:18:40,609 it started like you see like the change 545 00:18:40,610 --> 00:18:42,289 in shear of income. 546 00:18:42,290 --> 00:18:44,299 So you have like the top one percent, a 547 00:18:44,300 --> 00:18:46,009 gain of 120 percent. 548 00:18:46,010 --> 00:18:47,899 Then you have like the top 20 percent 549 00:18:47,900 --> 00:18:50,149 raising a little bit like above 550 00:18:50,150 --> 00:18:51,379 25 percent. 551 00:18:51,380 --> 00:18:53,779 And everybody else is losing out. 552 00:18:53,780 --> 00:18:55,969 That means that and they are 553 00:18:55,970 --> 00:18:58,519 charged. That is like you have from 554 00:18:58,520 --> 00:19:01,129 45 to as 555 00:19:01,130 --> 00:19:04,099 you're five productivity gains. 556 00:19:04,100 --> 00:19:06,139 And it used to align like pretty much 557 00:19:06,140 --> 00:19:07,579 like with real wages. 558 00:19:07,580 --> 00:19:09,109 So everybody got their fair share of 559 00:19:09,110 --> 00:19:11,369 that. But somewhere here, it's 560 00:19:11,370 --> 00:19:13,009 splitted way. So if, like productivity 561 00:19:13,010 --> 00:19:15,359 gains, but the real wages are stagnant. 562 00:19:15,360 --> 00:19:17,119 So you should ask yourself what happened 563 00:19:17,120 --> 00:19:18,379 to this pie? 564 00:19:18,380 --> 00:19:20,199 Where did it go? 565 00:19:20,200 --> 00:19:22,809 And so this also leads in to create two 566 00:19:22,810 --> 00:19:24,729 classes like those working for this 567 00:19:24,730 --> 00:19:26,889 company, taking the shit out of it, 568 00:19:26,890 --> 00:19:28,029 which is not always the case. 569 00:19:28,030 --> 00:19:29,589 If you take a look at, for example, 570 00:19:29,590 --> 00:19:31,299 workers leaving the Googleplex, they also 571 00:19:31,300 --> 00:19:33,519 have like two different, uh, 572 00:19:33,520 --> 00:19:35,619 working classes and those who are 573 00:19:35,620 --> 00:19:37,869 not and remember this like 574 00:19:37,870 --> 00:19:40,059 adds up to almost like a 100 Europea each 575 00:19:40,060 --> 00:19:42,189 European citizen each year on the 576 00:19:42,190 --> 00:19:43,959 conservative estimate. 577 00:19:43,960 --> 00:19:46,509 And that brings back like everybody's 578 00:19:46,510 --> 00:19:48,399 complaining about, like the the 579 00:19:48,400 --> 00:19:50,029 governments don't have money anymore. 580 00:19:50,030 --> 00:19:52,209 But if you add it up, you get like 581 00:19:52,210 --> 00:19:53,919 Ferrol since the financial crisis, 582 00:19:53,920 --> 00:19:55,209 roughly around five percent. 583 00:19:55,210 --> 00:19:57,669 So you would have in the instead 584 00:19:57,670 --> 00:19:59,859 of 90 percent, that 585 00:19:59,860 --> 00:20:02,169 GDP ratio only 85 586 00:20:02,170 --> 00:20:03,170 percent. 587 00:20:04,670 --> 00:20:07,129 So when you go to, uh, offshore 588 00:20:07,130 --> 00:20:09,739 wells, uh, the estimates 589 00:20:09,740 --> 00:20:12,259 from Tucumán, which I can recommend, 590 00:20:12,260 --> 00:20:14,929 is like a student of Picardy 591 00:20:14,930 --> 00:20:16,609 who made that calculation based on the 592 00:20:16,610 --> 00:20:18,859 Panama Papers, that an average 593 00:20:18,860 --> 00:20:21,319 of like 10 percent of the GDP hiding 594 00:20:21,320 --> 00:20:23,719 in the tax havens of Germany, 595 00:20:23,720 --> 00:20:26,209 for example, is like right here 596 00:20:26,210 --> 00:20:27,210 with around. 597 00:20:28,530 --> 00:20:30,749 I think it was summer 15, you 598 00:20:30,750 --> 00:20:32,629 have, uh. 599 00:20:32,630 --> 00:20:34,699 Spain with somewhere around 10, and 600 00:20:34,700 --> 00:20:36,349 then you have Greece, which is striking 601 00:20:36,350 --> 00:20:38,719 out at 35 or something like that, 602 00:20:38,720 --> 00:20:40,759 and why this is important, because 603 00:20:40,760 --> 00:20:43,009 normally the discussion right now is 604 00:20:43,010 --> 00:20:45,409 about some tax haven sitting somewhere 605 00:20:45,410 --> 00:20:46,339 on Zom Islands. 606 00:20:46,340 --> 00:20:47,839 But as you can see here, you talking 607 00:20:47,840 --> 00:20:49,639 about Switzerland, Hong Kong, USA, 608 00:20:49,640 --> 00:20:52,819 Singapore on the sixth place, you have 609 00:20:52,820 --> 00:20:54,919 on the fifth place, your sixth place, you 610 00:20:54,920 --> 00:20:57,129 have done Luxembourg and an eighth 611 00:20:57,130 --> 00:20:58,159 of Germany. 612 00:20:58,160 --> 00:20:59,779 So the framing of that, the the only 613 00:20:59,780 --> 00:21:01,879 effects like these tax havens 614 00:21:01,880 --> 00:21:03,979 on some small island, I would say 615 00:21:03,980 --> 00:21:06,769 it's not completely correct. 616 00:21:06,770 --> 00:21:08,749 And you can see the difference. 617 00:21:08,750 --> 00:21:11,299 Cool. So Pennyman 618 00:21:11,300 --> 00:21:13,699 discharge from tax 619 00:21:13,700 --> 00:21:15,799 to tax Justice Network only comes 620 00:21:15,800 --> 00:21:17,479 in at number 13 and you have like 621 00:21:17,480 --> 00:21:18,679 Switzerland, Hong Kong. 622 00:21:18,680 --> 00:21:20,329 So this is basically the problem we have 623 00:21:20,330 --> 00:21:22,639 to attack. It's not so much about like 624 00:21:22,640 --> 00:21:25,669 this completely dark money laundering, 625 00:21:25,670 --> 00:21:27,049 illegal money. 626 00:21:27,050 --> 00:21:28,699 It's like a lot of stuff happens, like 627 00:21:28,700 --> 00:21:31,069 right in your face, known to everybody 628 00:21:31,070 --> 00:21:32,149 for decades. 629 00:21:32,150 --> 00:21:34,429 So although the leaks were amazing, 630 00:21:34,430 --> 00:21:35,509 it was nothing new. 631 00:21:35,510 --> 00:21:37,069 And you have like other cases, like in 632 00:21:37,070 --> 00:21:39,469 Germany, the comics which 633 00:21:39,470 --> 00:21:41,869 are around like for more than 15 years 634 00:21:41,870 --> 00:21:44,209 and nothing is changing. 635 00:21:44,210 --> 00:21:46,939 And that's the sharing of the tax havens, 636 00:21:46,940 --> 00:21:47,940 given the. 637 00:21:49,670 --> 00:21:51,469 Started out with Switzerland, which is to 638 00:21:51,470 --> 00:21:53,359 be number one, our Asian tech segment 639 00:21:53,360 --> 00:21:54,859 coming up. But the issue is like you have 640 00:21:54,860 --> 00:21:56,989 still like city or around 30 641 00:21:56,990 --> 00:21:59,569 percent European 642 00:21:59,570 --> 00:22:00,570 tax havens. 643 00:22:01,820 --> 00:22:03,889 And why this is important, because 644 00:22:03,890 --> 00:22:05,959 some countries try to do something about 645 00:22:05,960 --> 00:22:07,819 it. And when they do something, that's 646 00:22:07,820 --> 00:22:10,429 the case with the Ukraine, where the 647 00:22:10,430 --> 00:22:12,109 people in Ukraine trying to find out 648 00:22:12,110 --> 00:22:14,239 where that money went, they got stuck 649 00:22:14,240 --> 00:22:16,489 in Germany because we couldn't provide 650 00:22:16,490 --> 00:22:17,989 them the information because they don't 651 00:22:17,990 --> 00:22:19,399 have, like beneficial ownership. 652 00:22:19,400 --> 00:22:21,619 In Germany, there's 653 00:22:21,620 --> 00:22:23,539 an initiative called ownership trying to 654 00:22:23,540 --> 00:22:25,609 solve that. And that's like once you have 655 00:22:25,610 --> 00:22:27,379 a weakest link where you block 656 00:22:27,380 --> 00:22:29,569 information, know who is 657 00:22:29,570 --> 00:22:31,729 the owner of the company, 658 00:22:31,730 --> 00:22:33,079 you can't get any further. 659 00:22:33,080 --> 00:22:35,179 So this one has to 660 00:22:35,180 --> 00:22:36,180 be addressed. 661 00:22:37,010 --> 00:22:39,169 And the positive note 662 00:22:39,170 --> 00:22:41,239 as to the Ettus abyssal. 663 00:22:41,240 --> 00:22:42,769 So there's like some progress going on. 664 00:22:42,770 --> 00:22:44,839 On December the 17th, there's a 665 00:22:44,840 --> 00:22:46,939 new anti money laundering 666 00:22:46,940 --> 00:22:48,859 directive from the European Commission. 667 00:22:48,860 --> 00:22:50,929 That was the first step after the 668 00:22:50,930 --> 00:22:51,930 Panama Papers. 669 00:22:53,210 --> 00:22:54,919 Basically, it means that all those 670 00:22:54,920 --> 00:22:57,079 companies registered in Europe 671 00:22:57,080 --> 00:22:59,419 has to be within the next 18 672 00:22:59,420 --> 00:23:02,299 months figuring making 673 00:23:02,300 --> 00:23:04,609 entry in the registry, which is available 674 00:23:04,610 --> 00:23:06,169 to the public. 675 00:23:06,170 --> 00:23:07,249 That's good in one way. 676 00:23:07,250 --> 00:23:09,439 Again, it's not addressing like those 677 00:23:09,440 --> 00:23:11,479 companies like Apple because it's like 678 00:23:11,480 --> 00:23:12,480 legal. 679 00:23:13,170 --> 00:23:15,499 Not a step would be like the European 680 00:23:15,500 --> 00:23:17,899 Parliament elections 2019. 681 00:23:17,900 --> 00:23:19,789 And you have to remember, this is a 682 00:23:19,790 --> 00:23:21,979 political question. Two years ago when 683 00:23:21,980 --> 00:23:24,079 we had, like the eurozone crisis, 684 00:23:24,080 --> 00:23:26,239 Mario Draghi, Super Mario, the 685 00:23:26,240 --> 00:23:28,399 head of the ECB, stepped 686 00:23:28,400 --> 00:23:30,469 up and basically said, whatever 687 00:23:30,470 --> 00:23:31,739 it takes, we will fix it. 688 00:23:31,740 --> 00:23:33,829 And I think for taxation, that needs to 689 00:23:33,830 --> 00:23:35,029 be done as well. 690 00:23:35,030 --> 00:23:36,769 And basically, we need structural 691 00:23:36,770 --> 00:23:37,770 reforms. 692 00:23:39,230 --> 00:23:41,179 That we avoid like having a situation 693 00:23:41,180 --> 00:23:43,279 like this again, that I I'm OK, I'm 694 00:23:43,280 --> 00:23:44,390 landed on the taxpayer 695 00:23:45,710 --> 00:23:47,929 and in one part of that, it's like 696 00:23:47,930 --> 00:23:50,329 a framing issue you should 697 00:23:50,330 --> 00:23:52,669 see, like paying the taxes when 698 00:23:52,670 --> 00:23:55,039 they are spent well, as a positive thing. 699 00:23:55,040 --> 00:23:57,259 And in the United 700 00:23:57,260 --> 00:23:58,959 States, there was a long discussion about 701 00:23:58,960 --> 00:24:01,189 if you call a tax death, 702 00:24:01,190 --> 00:24:03,829 tax or estate tax to conservatives 703 00:24:03,830 --> 00:24:05,509 label as a death tax, because then you 704 00:24:05,510 --> 00:24:08,539 frame it better, badly and 705 00:24:08,540 --> 00:24:10,219 on the person who is dying. 706 00:24:10,220 --> 00:24:12,769 And the opposite way would be like 707 00:24:12,770 --> 00:24:14,719 estate tax because the person is gone, 708 00:24:14,720 --> 00:24:16,699 something is left over and it's about 709 00:24:16,700 --> 00:24:18,679 contribution to the society. 710 00:24:18,680 --> 00:24:20,449 And not a thing is like this whole shit 711 00:24:20,450 --> 00:24:21,799 is like really boring. 712 00:24:21,800 --> 00:24:23,999 And I really don't 713 00:24:24,000 --> 00:24:24,979 think it's part of it. 714 00:24:24,980 --> 00:24:27,199 Like, it's boring and complicated to keep 715 00:24:27,200 --> 00:24:28,519 you falling asleep. 716 00:24:28,520 --> 00:24:29,929 So you should get familiar with certain 717 00:24:29,930 --> 00:24:31,729 things like too big to jail when it comes 718 00:24:31,730 --> 00:24:34,639 to justice. 719 00:24:34,640 --> 00:24:36,229 I will be gone. You will be gone. 720 00:24:36,230 --> 00:24:38,209 Like how incentives are split up and 721 00:24:38,210 --> 00:24:39,980 banking sector and uh, 722 00:24:41,220 --> 00:24:42,769 stuff I always recommend is the big 723 00:24:42,770 --> 00:24:43,939 short. It's like a movie about the 724 00:24:43,940 --> 00:24:45,619 financial crisis, which I think is 725 00:24:45,620 --> 00:24:48,049 brilliantly done and explains the things 726 00:24:48,050 --> 00:24:49,249 which normally sounds like really 727 00:24:49,250 --> 00:24:50,839 complicated, completely easy. 728 00:24:52,250 --> 00:24:54,199 And you should have a Europe world which 729 00:24:54,200 --> 00:24:56,109 exist in the Brexit of technology and 730 00:24:56,110 --> 00:24:57,949 that the purpose of tax optimization 731 00:24:57,950 --> 00:24:59,059 itself. 732 00:24:59,060 --> 00:25:01,159 And when you remember the opening 733 00:25:01,160 --> 00:25:03,229 keynote from Strauss, 734 00:25:03,230 --> 00:25:06,379 he called like old slow eyes 735 00:25:06,380 --> 00:25:07,489 cooperation's. 736 00:25:07,490 --> 00:25:09,679 And I think it would be easier to 737 00:25:09,680 --> 00:25:11,929 regulate those corporations on 738 00:25:11,930 --> 00:25:14,149 a tax level compared 739 00:25:14,150 --> 00:25:16,219 to attack level, because the 740 00:25:16,220 --> 00:25:18,589 framing and the time, 741 00:25:18,590 --> 00:25:20,239 it's not that crucial. 742 00:25:22,850 --> 00:25:24,979 Which let me do the one, Quada, when 743 00:25:24,980 --> 00:25:27,049 you have corporations are people. 744 00:25:27,050 --> 00:25:28,879 Why don't we have a corporate death 745 00:25:28,880 --> 00:25:30,199 penalty for companies? 746 00:25:30,200 --> 00:25:31,699 That was the case of smile and that was 747 00:25:31,700 --> 00:25:34,129 the Equifax data leak and insider 748 00:25:34,130 --> 00:25:36,380 trading this fall. 749 00:25:38,390 --> 00:25:40,579 So we have a certain responsibility to be 750 00:25:40,580 --> 00:25:43,789 successful because there's an alternative 751 00:25:43,790 --> 00:25:45,769 and I just want to say, remember, this 752 00:25:45,770 --> 00:25:46,699 isn't rocket science. 753 00:25:46,700 --> 00:25:48,529 It used to be there and see like it's 754 00:25:48,530 --> 00:25:50,809 natural duality. We need a level 755 00:25:50,810 --> 00:25:53,329 playing field for global corporations 756 00:25:53,330 --> 00:25:56,029 to like local companies, 757 00:25:56,030 --> 00:25:58,069 many shops, because they basically pay 758 00:25:58,070 --> 00:25:59,899 nothing. And so you divide up the product 759 00:25:59,900 --> 00:26:02,419 while you have net neutrality, despite 760 00:26:02,420 --> 00:26:04,489 what you can transport here to 761 00:26:04,490 --> 00:26:06,559 just like the idea of him, easier money 762 00:26:06,560 --> 00:26:07,759 flow. 763 00:26:07,760 --> 00:26:09,469 And so come to the end. 764 00:26:09,470 --> 00:26:11,179 That's like the ideas like solar punk, 765 00:26:11,180 --> 00:26:13,909 taxation, solar punk is like something. 766 00:26:13,910 --> 00:26:15,979 How does a sustainable civilization look 767 00:26:15,980 --> 00:26:17,839 like and how can we get anything? 768 00:26:17,840 --> 00:26:19,309 Taxation is probably one thing. 769 00:26:19,310 --> 00:26:21,439 We will be stuck in the near future. 770 00:26:21,440 --> 00:26:23,119 So we think we should think about it to 771 00:26:23,120 --> 00:26:25,219 have like this two scales lined 772 00:26:25,220 --> 00:26:27,709 up so we end up in a nice, sustainable 773 00:26:27,710 --> 00:26:28,849 civilization. 774 00:26:28,850 --> 00:26:30,709 So the takeaway is like things changing 775 00:26:30,710 --> 00:26:32,449 because of intangible goods and 776 00:26:32,450 --> 00:26:33,469 technology. 777 00:26:33,470 --> 00:26:36,649 Three ways companies pay less taxes. 778 00:26:36,650 --> 00:26:38,869 Somebody probably has to pay 779 00:26:38,870 --> 00:26:41,279 up, take up the bill. 780 00:26:41,280 --> 00:26:43,729 It's more than zero point five 781 00:26:43,730 --> 00:26:45,979 percent of the European GDP. 782 00:26:45,980 --> 00:26:47,959 And that was me. 783 00:26:47,960 --> 00:26:50,119 Remember the logo and 784 00:26:50,120 --> 00:26:52,309 the tax? Truthfully, that was is. 785 00:26:52,310 --> 00:26:53,310 Thank you so much. 786 00:27:01,700 --> 00:27:04,259 Yeah, it is light online, 787 00:27:04,260 --> 00:27:06,619 and if you have any questions after 788 00:27:06,620 --> 00:27:08,809 next for the Q&A, just contact 789 00:27:08,810 --> 00:27:11,149 me at at FAVORITO, 790 00:27:11,150 --> 00:27:13,219 that thing that we have 791 00:27:13,220 --> 00:27:16,219 time for a very few questions 792 00:27:16,220 --> 00:27:18,319 if you have one, and want to 793 00:27:18,320 --> 00:27:20,089 be lucky to be one of those, please line 794 00:27:20,090 --> 00:27:22,369 up at the microphones, but please 795 00:27:22,370 --> 00:27:23,479 signal Angel. 796 00:27:23,480 --> 00:27:24,799 Are there any questions from the 797 00:27:24,800 --> 00:27:26,389 Internet? Yes, they are. 798 00:27:26,390 --> 00:27:27,949 Go ahead. 799 00:27:27,950 --> 00:27:30,409 How will the universe universal basic 800 00:27:30,410 --> 00:27:32,839 income deal was too big to fail? 801 00:27:32,840 --> 00:27:34,609 As in, how will we deal with a company 802 00:27:34,610 --> 00:27:35,539 who does bad? 803 00:27:35,540 --> 00:27:37,189 Yet we are so dependent on their 804 00:27:37,190 --> 00:27:38,989 contribution to universal basic income 805 00:27:38,990 --> 00:27:40,549 that we can't punish them in any 806 00:27:40,550 --> 00:27:41,550 meaningful way. 807 00:27:43,800 --> 00:27:45,869 Can you maybe rephrase the question? 808 00:27:51,340 --> 00:27:53,649 How do you see the universal basic 809 00:27:53,650 --> 00:27:55,869 income in connection with that 810 00:27:55,870 --> 00:27:57,440 too big to fail phenomena? 811 00:27:59,150 --> 00:28:00,949 Well, I think the too big to fail 812 00:28:00,950 --> 00:28:03,379 phenomenon is one thing you normally 813 00:28:03,380 --> 00:28:05,449 at a certain level, you should speed up 814 00:28:05,450 --> 00:28:07,549 company that was done to 815 00:28:07,550 --> 00:28:10,039 the Dell years ago, to oil companies 816 00:28:10,040 --> 00:28:12,109 years ago. And one, you want 817 00:28:12,110 --> 00:28:14,089 to come to the situation that you have 818 00:28:14,090 --> 00:28:16,549 too big to fail and you're basically 819 00:28:16,550 --> 00:28:18,799 in game theory for leverage. 820 00:28:18,800 --> 00:28:19,999 We have seen that in banks. 821 00:28:20,000 --> 00:28:22,069 You couldn't let them go down because 822 00:28:22,070 --> 00:28:23,809 if they would have go down, that would be 823 00:28:23,810 --> 00:28:26,089 a systematic risk and it couldn't be at 824 00:28:26,090 --> 00:28:27,329 risk. 825 00:28:27,330 --> 00:28:29,449 Uh, that would 826 00:28:29,450 --> 00:28:31,399 be my answer to that. 827 00:28:31,400 --> 00:28:33,319 Independently from our universal basic 828 00:28:33,320 --> 00:28:35,779 income, we 829 00:28:35,780 --> 00:28:37,489 go, may we? 830 00:28:37,490 --> 00:28:38,989 Since we started a little bit later, we 831 00:28:38,990 --> 00:28:40,939 go until five past. 832 00:28:40,940 --> 00:28:43,249 So we have time for I see how 833 00:28:43,250 --> 00:28:44,749 the questions fit in. 834 00:28:44,750 --> 00:28:45,950 Microphone number two, please, 835 00:28:46,960 --> 00:28:49,429 I. Hello. I have two questions. 836 00:28:49,430 --> 00:28:51,779 Um, there is no 837 00:28:51,780 --> 00:28:54,049 alternative to Bitcoin called 838 00:28:54,050 --> 00:28:56,119 Geocache and Monero, and 839 00:28:56,120 --> 00:28:58,159 the advantage of those two cryptocurrency 840 00:28:58,160 --> 00:29:00,889 is that it's basically untraceable 841 00:29:00,890 --> 00:29:02,089 compared to Bitcoin. 842 00:29:02,090 --> 00:29:04,789 So my question is, in the future, 843 00:29:04,790 --> 00:29:06,919 if many more companies are going to 844 00:29:06,920 --> 00:29:09,769 adopt, adopt this untraceable 845 00:29:09,770 --> 00:29:11,959 cryptocurrency and start paying, 846 00:29:11,960 --> 00:29:15,009 for example, the employees with it, how 847 00:29:15,010 --> 00:29:17,569 how are you going to manage to tax those 848 00:29:17,570 --> 00:29:19,670 people or corporations? 849 00:29:20,810 --> 00:29:22,949 And the second question is a 850 00:29:22,950 --> 00:29:25,129 moral reflection on the State of the 851 00:29:25,130 --> 00:29:27,089 European Union. 852 00:29:27,090 --> 00:29:28,609 The EU was created 853 00:29:29,660 --> 00:29:31,819 and has opened the borders 854 00:29:31,820 --> 00:29:33,739 in 1992. 855 00:29:33,740 --> 00:29:36,139 And I'm part of a region 856 00:29:36,140 --> 00:29:38,659 from south of Belgium where everybody 857 00:29:38,660 --> 00:29:41,029 goes to Luxembourg to 858 00:29:41,030 --> 00:29:43,249 fetch their gas because 859 00:29:43,250 --> 00:29:45,439 it's cheaper. And it's still the case 860 00:29:45,440 --> 00:29:47,659 because we do have different 861 00:29:47,660 --> 00:29:48,949 member states that has very 862 00:29:50,600 --> 00:29:52,669 different fiscal laws 863 00:29:52,670 --> 00:29:54,889 that and at the EU level, there's 864 00:29:54,890 --> 00:29:56,510 no legislation 865 00:29:58,130 --> 00:30:00,349 as in the US, there's no legislation 866 00:30:00,350 --> 00:30:03,419 to harmonize those fiscal, 867 00:30:03,420 --> 00:30:04,820 uh, laws. 868 00:30:06,560 --> 00:30:08,989 And it's actually a 869 00:30:08,990 --> 00:30:10,049 union. I'm sorry. 870 00:30:10,050 --> 00:30:11,269 Well, what is your question? 871 00:30:11,270 --> 00:30:13,399 You asked one question and maybe you 872 00:30:13,400 --> 00:30:15,139 also don't have a lot of time. 873 00:30:15,140 --> 00:30:17,869 So India in the US, there's no fiscal 874 00:30:17,870 --> 00:30:19,429 there's fiscal competition between the 875 00:30:19,430 --> 00:30:21,469 states, the same in Europe. 876 00:30:21,470 --> 00:30:23,239 And I don't see with unanimity in the 877 00:30:23,240 --> 00:30:24,919 Council of Ministers that is going to 878 00:30:24,920 --> 00:30:26,239 change in the near future. 879 00:30:26,240 --> 00:30:28,279 The what you mentioned earlier, 880 00:30:28,280 --> 00:30:30,649 Luxembourg, Malta, 881 00:30:30,650 --> 00:30:32,809 Holland, apparently 882 00:30:32,810 --> 00:30:35,059 blocked this 17 883 00:30:35,060 --> 00:30:36,289 December initiative. 884 00:30:36,290 --> 00:30:38,479 So I don't see with unanimity like 885 00:30:38,480 --> 00:30:40,459 at some point one country like Luxembourg 886 00:30:40,460 --> 00:30:42,529 to fuck off and then we 887 00:30:42,530 --> 00:30:43,530 can't make any progress. 888 00:30:44,570 --> 00:30:46,409 So the first question with cryptocurrency 889 00:30:46,410 --> 00:30:48,710 is, I think 890 00:30:50,510 --> 00:30:52,009 the leverage on the state like so 891 00:30:52,010 --> 00:30:53,959 basically if Company A and company 892 00:30:53,960 --> 00:30:56,239 decides to go to see cash making 893 00:30:56,240 --> 00:30:58,669 the transactions 894 00:30:58,670 --> 00:31:00,409 anonymously, good luck with that, because 895 00:31:00,410 --> 00:31:02,929 then basically the tax 896 00:31:02,930 --> 00:31:04,559 system strikes back. 897 00:31:04,560 --> 00:31:06,979 Uh, I don't think there's like unless 898 00:31:06,980 --> 00:31:08,959 you want to go completely underground, 899 00:31:08,960 --> 00:31:10,369 there's no chance that you can avoid 900 00:31:10,370 --> 00:31:12,889 that. Maybe they have a certain advantage 901 00:31:12,890 --> 00:31:14,929 from the speed when they implement it, 902 00:31:14,930 --> 00:31:17,509 but you will not be able to 903 00:31:17,510 --> 00:31:19,579 provide the books you need for a tax 904 00:31:19,580 --> 00:31:21,259 audit and then they get you on something 905 00:31:21,260 --> 00:31:22,819 else if they want to get a deal with get 906 00:31:22,820 --> 00:31:25,459 you, even if everything else is fine. 907 00:31:25,460 --> 00:31:27,409 And the second one, yes, the European has 908 00:31:27,410 --> 00:31:29,479 a competition. The question is how far 909 00:31:29,480 --> 00:31:31,429 you want to let the competition go. 910 00:31:31,430 --> 00:31:33,499 And, uh, that's 911 00:31:33,500 --> 00:31:34,639 the same thing with your income. 912 00:31:34,640 --> 00:31:36,889 And Juncker did a phenomenal job for 913 00:31:36,890 --> 00:31:39,139 Luxembourg when he was the finance 914 00:31:39,140 --> 00:31:41,239 minister and prime 915 00:31:41,240 --> 00:31:43,309 minister. But, uh, it hurt 916 00:31:43,310 --> 00:31:44,899 like other countries. So at the end of 917 00:31:44,900 --> 00:31:46,609 the day, what we do in politics, you have 918 00:31:46,610 --> 00:31:48,169 to find a solution together, how you deal 919 00:31:48,170 --> 00:31:49,999 with it. Uh, the first step is that, uh, 920 00:31:50,000 --> 00:31:52,099 Ireland has to basically 921 00:31:52,100 --> 00:31:54,289 being forced to take the money from Apple 922 00:31:54,290 --> 00:31:55,390 because it's like, uh, 923 00:31:56,450 --> 00:31:58,939 not fair competition to everybody else. 924 00:31:58,940 --> 00:32:01,489 And then and it's a question the society 925 00:32:01,490 --> 00:32:03,079 has to ask you. You can go down this 926 00:32:03,080 --> 00:32:04,729 year, corporate tax if you say that you 927 00:32:04,730 --> 00:32:05,879 don't need it. There's some people 928 00:32:05,880 --> 00:32:07,409 arguing for that. And at the end of the 929 00:32:07,410 --> 00:32:09,529 day, somebody has to pay the bill or 930 00:32:09,530 --> 00:32:10,969 you basically say you privatize 931 00:32:10,970 --> 00:32:12,049 everything and you don't want to have a 932 00:32:12,050 --> 00:32:13,909 government that's like, uh, on the one 933 00:32:13,910 --> 00:32:16,279 side, there may be a middle ground. 934 00:32:16,280 --> 00:32:17,899 You have to find a solution how you make 935 00:32:17,900 --> 00:32:19,999 your revenue. And, uh, this is 936 00:32:20,000 --> 00:32:21,829 one part where you clearly see a trend 937 00:32:21,830 --> 00:32:23,779 that the revenue from that area goes down 938 00:32:23,780 --> 00:32:26,059 and maybe has some implications. 939 00:32:26,060 --> 00:32:27,499 I mean, we're living in Europe, which is 940 00:32:27,500 --> 00:32:28,609 half we're falling apart. 941 00:32:28,610 --> 00:32:30,019 And partly because of that reason, 942 00:32:30,020 --> 00:32:32,209 because, uh, if erosion of 943 00:32:32,210 --> 00:32:34,339 the tax base and, uh, at 944 00:32:34,340 --> 00:32:35,989 the end of the day, are people getting 945 00:32:35,990 --> 00:32:37,640 blamed for that, which they didn't cause? 946 00:32:39,140 --> 00:32:40,579 As I said, it's a political question. 947 00:32:42,350 --> 00:32:43,579 I'm sorry. We are up. 948 00:32:43,580 --> 00:32:44,929 We ran up with our time. 949 00:32:44,930 --> 00:32:47,569 Microphone one, you can reach avoider 950 00:32:47,570 --> 00:32:48,739 by Twitter or by email. 951 00:32:51,020 --> 00:32:53,419 I'm sorry. I will be around here if you. 952 00:32:53,420 --> 00:32:54,919 Yeah. So you can go directly to him and 953 00:32:54,920 --> 00:32:56,899 ask him. Thank you for coming here for 954 00:32:56,900 --> 00:32:58,749 this talk and please give a. 955 00:32:58,750 --> 00:33:00,459 Warm round of applause to avoid a thank 956 00:33:00,460 --> 00:33:01,460 you very much.