Settling a tax dispute with $345 million owed is indicative of doing something wrong. It's different than you just being audited.

At best it's indicative of bad accounting, but for a company like Activision Blizzard and at that amount that seems unlikely.

Not really, taxation at this level is extremely complex. $345 million could just be because of unclear phrasing.

It's kind of a joke though, isn't it? Like, Blizzard isn't doing any real work in Barbados or Bermuda. So you could probably argue it's wrong, unless you feel like arguing that all taxation is wrong from an Individualist perspective (which I'd be fine with).

And aside from wrong, the fact that they've agreed to pay a fine of $345 million means it was probably illegal. If they just phrased something wrong they could probably just correct the phrasing, and, more importantly, I think they probably tried really hard to get the phrasing right when transferring billions from one company to another.

I own offshore companies and minimize my tax burden, but let's call a spade a spade.

It doesn't matter. Like I said, either way, it is indicative of doing something wrong.

Not really, it's simply indicative of a disagreement. wrong tends to suggest tax fraud.

I think you're being a little consciously naive.

Choosing not to prosecute (especially because prosecuting tax fraud requires proof of willfulness) and simply collecting a tax deficit is pretty common, especially in cases of corporate tax evasion.

The disagreement in this case is called a tax deficit, and is what I meant by wrong. It's also the first necessary part of tax fraud.

EDIT: Also, if you read about the source of the $345 million tax bill (from the article), it's hard to see how this would've been a problem with "unclear phrasing"...

It all depends on the amounts being moved. Transfer pricing is complex because what is market rate in situation A is not market rate in situation B. $345 million could be a minor difference of a few percentage points on tens of billions in revenue.

Just like FDSGSG wrote above, I went through a sizeable tax dispute (for an individual, outside of the US) and won. I have a good understanding of tax law yet it was nothing more than a bullshit money grab. No merit, nothing. More along the line; that's a very nice outcome for you but we don't really like it -- so pay up regardless. Like trying to shake a tree.

In this case, I can imagine for Activision (as a publicly traded company) it is better to settle a case for an OK amount than take it to court and run through the process. You have to make a risk reward analysis of whether it's worth spending time and resources on.

Yes, obviously the settlement reflects analysis by Activision Blizzard, which is exactly the point. The expected outcome of challenging an assessed tax deficit is part of that analysis, so the choice to settle must be viewed with that in mind.

I wish both you and the thread OP would stop comparing this to A) personal (or small business) tax disputes and B) tax disputes that resulted in no additional tax liability. This dispute did result in additional tax liability.

If it was a problem with “clear phrasing” it’d be called tax fraud, no?

I think in regards to OP, it'd only be called tax fraud if it was prosecuted criminally, regardless of the phrasing.

I regularly write cheques for $345m because of unclear phrasing. Who doesn't???

In the article they mention that they moved money to countries that are in a EU blacklist so for now i am siding with tax authorities

Doesn't sound "perfectly legal" when tax authorities are running after you.

At a certain level of complexity even the tax authorities can't decide what is legal and what isn't and they will basically try legal action against you to see what the court decides. I've pursued an official statement from my country's tax authority about a tax issue I had pertaining paying taxes when you do business in several countries at once, and after months of hassling the tax office through a lawyer we finally got a letter saying that "we cannot see anything wrong with what you are trying to do, but this letter is not binding, it is neither a promise nor a guarantee that we will never take any legal action against you if we decide differently at any point in the future. This is all advice that we will be providing on the matter".

Guess what happened - a year later they decided it wasn't ok, and of course the letter they wrote was worth as much as toilet paper in the court. It took 5 more years and a very decent amount of money to fight against it and finally get them to admit they were wrong and there is no issue. But of course no one will give you 5 years of not being able to run your business back.

Dunno, in my case the court agreed that my actions were "perfectly legal".

Care to share the details?

Nothing exciting, the government felt that imaginary internet money should not be treated like other similar assets. Luckily the courts disagreed in the end.

With tax laws being so complicated these disputes are everyday stuff for anyone engaged in any "unusual" activities.

Heh, the amount of people that think crypto is an asset class that would be taxed differently than any other asset class is astounding. Sounds like your tax jurisdiction was in that group (!).

Though there are a bunch of unanswered questions in a lot of jurisdictions: How do you treat a fork?

Is it income? A dividend? A stock split? A spinoff? Some of these require the originator to file paperwork, and no crypto chain could possibly do that.

And what initial value? $0? Day1 trading value?

Do you shelter your money into "tax havens" ? If so, why do you cheat the system this way (note: I didn't ask the question "is this legal", so please don't bake that affirmation into your response).

Yes I do! After I got sick and tired of the nonsense games my local tax authority was playing, I moved out of the country and took all of my assets with me.

I did not mind paying the taxes, I did however mind the authorities trying to defraud me into paying non existent tax liabilities. They've since been forced to stop doing that.