With conflict flaring over censorship of Twitter in Turkey around the time of March elections, the Turkish government has reportedly demanded that the company open an office there. Tim Worstall over at PandoDaily writes:
Why not just stick one employee there, as an “office” and make the local government happy? The answer being that having an office in a country changes the tax position completely and the important phrase to understand here for non-accounting types is “permanent establishment.”
Tim rightly points out that taxation of Internet businesses that flow across porous international borders is a thorny subject. The largest, most successful services are understandable targets for tax authorities. Nevertheless, in the case of countries like Turkey, I think the discussion of taxes, while valid, is mostly political theater. The main issue in my opinion is free speech, or rather the desire to manage and squash it. Continue Reading
