Pornhub parent company pays no taxes
MindGeek, the parent company of Pornhub and other related entities on the web, has been found to pay no taxes, because although its headquarters is on Decarie Boulevard, it’s officially headquartered in tax haven Luxembourg.
MarcG 10:58 on 2022-03-04 Permalink
Capitalists gonna capitalize. Funny how this sort of thing is newsworhy when it’s the basis of our entire way of life.
Jim 17:52 on 2022-03-04 Permalink
The 1000+ people they employ do pay taxes – no different from many other multimedia giants with offices in MTL.
Kate 18:58 on 2022-03-04 Permalink
This isn’t about personal income tax, Jim.
steph 19:47 on 2022-03-04 Permalink
I’m dumbfounded that they make money. I’m just out of touch, but who pays for these sites? Do people really need more than the millions of free clips?
Kate 20:44 on 2022-03-04 Permalink
I don’t watch porn, but from comments and remarks I’ve seen around, I understood that the clips are designed to leave the viewer unsatisfied so that he’ll be willing to pay to see more. Is this not the case?
dhomas 04:33 on 2022-03-05 Permalink
I think what Jim was saying is that MindGeek is not alone in this practice. People are just more incensed by it because “OMG Porn!”.
I worked for a small (less than 50 people locally) European company from 2010 to 2017. Much of the profit was funneled out of the country, I’m sure, though I didn’t have an eye on the exact finances. What I did see (and had to report on as a mid-level manager) is that my engineers were getting their salaries subsidized by up to 30% under certain tax credits (CDAE, notably). I don’t know that our effective tax rate was zero, but I know that if it could have been, any company, porn peddlers or not, would do it.
As for how MindGeek makes any money, I would suspect they use the same “Freemium” model most other online entities use, along with a fair amount of advertising revenue. Basically, you offer a free service with the option of paying extra for additional services. Even if 80% of people never spend a dime, the other 20% that ARE spending money (“whales”) generate more than enough profit to keep things running for the entire user base.
As I’m writing this, I realize that what people want is for companies like these operate with respect to taxes the same way they operate their businesses. The people with loads of money (like MindGeek) should be paying a large amount in taxes to keep services running for the rest of the population.
Kate 10:30 on 2022-03-05 Permalink
Well, yes. If a company operates in a country, they should be paying corporate taxes there, not making up a fiction about how their headquarters is really in some offshore tax haven. Vast sums are bled away from communities by this method, which governments seem at a loss to stop.
dhomas 14:43 on 2022-03-05 Permalink
I completely agree, Kate. I wasn’t condoning the practice, just trying to clarify how widespread it is. We should be attacking tax avoidance in general, not only when a porn company does it.
Joey 15:18 on 2022-03-05 Permalink
I suppose that, similar to the video game industry, if the province decided to cut the wage subsidies to the sector the owners would pick up shop and move somewhere else, where the local authorities would be happy to cover 1/3 of their salary costs. Would we be better off if those jobs vanished? Perhaps.
Ian 12:45 on 2022-03-06 Permalink
I used to work for an online gambling company in Toronto that kept its business registered in the Isle of Man for this exact reason. It’s not just the porn industry, as dhomas points out.
FWIW there are some large companies, including one that I worked for for 8 years that I won’t name as I still know people that work there that really do all of their business in Toronto but their “head office” is in Montreal for regulatory reasons & because of the QC tech credits.
I think Mile End is well past the tipping point of gentrification but for sure the influx of Ubisoft employees contributed quite a bit to moving the needle in that direction. Certainly that’s what made St Viateur into an extended Ubisoft cafeteria. If QC tech credits were to be cancelled A LOT of those companies would move to Toronto before the ink on the signatures was dry, especially all the video game places.