Just Pay Your Tax::: God damn

RideOnTime

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

joelsim

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Exactly.

This today.

From @jujikucz #EU Commission is to propose a common (in 2020) consolidated (in 2022) corporate tax base for large companies (>€750m) #CCCTB

Of course we could miss out as we may not be part of the EU.

Stevo_666

RideOnTime wrote:

Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Are you saying that they are not paying what is legally due?

bompington

Stevo 666 wrote:

RideOnTime wrote:

Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Are you saying that they are not paying what is legally due?

No, it's just that they're not paying what an ad hoc committee of the right minded have determined they should.

But leaving that aside, there are a lot of good arguments that corporation tax is so hard to apply to multinational businesses that it might as well be scrapped altogether. Would be a lot simpler if governments just took it off punters directly: seems more unfair, but where does money for corporation tax come from in the first place?

joelsim

bompington wrote:

Stevo 666 wrote:

RideOnTime wrote:

Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Are you saying that they are not paying what is legally due?

No, it's just that they're not paying what an ad hoc committee of the right minded have determined they should.

But leaving that aside, there are a lot of good arguments that corporation tax is so hard to apply to multinational businesses that it might as well be scrapped altogether. Would be a lot simpler if governments just took it off punters directly: seems more unfair, but where does money for corporation tax come from in the first place?

There are simply too many loopholes. And for the likes of Google to get away with paying next to nothing on massive profits is tantamount to thievery.

The Rookie

While it is immoral, in most cases it is not illegal.

The 2 small EU economies of Eire and Luxembourg do very well out of luring big corporations (Google, Ebay, Apple etc.etc.) to register in their countries on the basis of them paying next to no corporation tax, the genuinely local companies are happy as it means they pay less as that small percentage of a big amount in a small country is still significant, the larger economies like ours, Germany or France could never do this. Even Boots (effectively a solely UK company, they don't trade anywhere else) is now an overseas company for tax purposes.

There is also the IP issue, Starbucks for example pay almost not corporation tax as they claim most their profits go back to the parent company as IP payments, so no 'actual' profits in the UK so no corporation tax - that is legal as long as the IP is not being artificially over valued, lots of companies manipulate this including for example Toyota and Honda manufacturing in the UK.

A lot of Apple profits get syphoned off to the subsidiary that owns the IP which is of course registered in a tax haven - the Bahamas I believe in their case.

Don't blame the companies, blame the politicians who structure the law to let them do it!

tangled_metal

Boots was bought by a US equity firm in 2007 then Walgreen in 2014, another US entity that's registered on USA. It's on NASDAQ as WBA (Walgreen Boots Alliance. IIRC it's been registered out of uk since its merger with Alliance.

Whilst it's not the ideal it's not illegal to trade and register in different authorities AFAIK.

Even small companies can play the tax system. Anecdotally a very distant relative had a UK based and operating company that according to the relative only made profits when it had to. Small company that had very crafty accountant / tax planner. It's now quite a decent sized company with many millions of pounds turnover each year apparently. The years of efficient tax planning helped it to grow.

rick_chasey

Just cos it's legal doesn't mean it should be.

rick_chasey

On the most basic level tax is vital to the smooth running of society. It falls apart without it.

The legal side is only put in place to make it work for society. Regulatory arbitrage is an unfortunate consequence, but given the social value of efficient tax receipts, is not one that should be encouraged.

Tax pays for a lot of things companies and people take for granted. Fire engines will turn up to apple's buildings when they are on fire, and police will protect them and their employees.

In the U.K., the NHS will even help keep their employees from dying and getting severely ill.

So I put it to those who encourage regulatory arbitrage; just because you can do it doesn't mean you should. We only tolerate it because it's so difficult to eradicate efficiently.

tangled_metal

Is that not a bit like TUEs? They're to the rules but there's a stink to them at times.

Or mountain.bikes on footpaths. Not strictly criminal but not right according to the spirit of the "rules" created around them by society.

Probably loads of better analogies than those but my point is that there's so much that's not right with the world. Perhaps this is just one part that's worth your time to actively try to change through some type of legal activism. I'm sure there's groups out there trying to change the system.

tangled_metal

"Just because you can doesn't mean you should" is a phrase that could apply to a lot of things. If you came across that thing you can do but it's better if you don't, what was your decision?

My example was tax credits. I was fully entitled to them but I decided that I could struggle through without them. My partner couldn't claim without my details so she had to go along. BTW she didn't take much persuading. Just as well because I'm under the thumb so she'd have got her way if it was opposite to mine.

So what have you forgone that's legal but perhaps morally or ethically questionable? Or do you just preach about other's business?

rick_chasey

About £3k of jobseekers' allowance.

wallace_and_gromit

Corporation tax raises little on the grand scale of things. Its political significance is far greater than its financial significance.

The "tax-dodging" multinationals handover large amounts of business rates and employers' NICs and their employees hand over large amounts of income tax and NIC and then buy stuff on which VAT is levied.

Corporation tax was only introduced when it was, as at the time, it was easier to collect than income tax. There's no particular moral argument for companies paying it.

I say phase it out over time and phase in larger taxes on distributions to compensate. This simplifies the tax regime and gets rid of unintended consequences of government attempts to encourage certain behaviour via the corporation tax regime. The downside would be that the bogeyman of tax-dodging multi-nationals would no longer exist, so there would be few things for the disaffected to blame.

Tashman

Wallace and Gromit wrote:

Corporation tax raises little on the grand scale of things. Its political significance is far greater than its financial significance.

The "tax-dodging" multinationals handover large amounts of business rates and employers' NICs and their employees hand over large amounts of income tax and NIC and then buy stuff on which VAT is levied.

Corporation tax was only introduced when it was, as at the time, it was easier to collect than income tax. There's no particular moral argument for companies paying it.

I say phase it out over time and phase in larger taxes on distributions to compensate. This simplifies the tax regime and gets rid of unintended consequences of government attempts to encourage certain behaviour via the corporation tax regime. The downside would be that the bogeyman of tax-dodging multi-nationals would no longer exist, so there would be few things for the disaffected to blame.

I was just typing along these lines - The NIC's and VAT are significant but don't make such good headlines

wallace_and_gromit

Tashman wrote:

I was just typing along these lines - The NIC's and VAT are significant but don't make such good headlines

Indeed. Latest figures I can find related to 2013/14 where total UK tax receipts were £490b. This comprised:
- Income tax £157b
- NIC £108b
- VAT £105b
- Alcohol and fuel duty £47b
- Corp tax £39b

So corporation tax was just 8% of the UK's tax base.

The amount of NICs is a bit scary.

Tashman

Wallace and Gromit wrote:

Tashman wrote:

I was just typing along these lines - The NIC's and VAT are significant but don't make such good headlines

Indeed. Latest figures I can find related to 2013/14 where total UK tax receipts were £490b. This comprised:
- Income tax £157b
- NIC £108b
- VAT £105b
- Alcohol and fuel duty £47b
- Corp tax £39b

So corporation tax was just 8% of the UK's tax base.

The amount of NICs is a bit scary.

It is a bit but when you consider it amounts to approx 25% when you add employers and employees togetgher it soon adds up *I know it's not on the whole amount earned

RideOnTime

Stevo 666 wrote:

RideOnTime wrote:

Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Are you saying that they are not paying what is legally due?

No I understand what they do is legal. Just immoral and carefully avoided. As I say they operate in the UK, they use our public services and our public infrastructure. Just pay some tax.....

Stevo_666

Have a look at the dreadfully small amount of UK contribution by 100 of the largest UK companies - a measly £80 billion last year. String them up!
http://www.pwc.co.uk/services/tax/total-tax-contribution-100-group.html

Best check the facts before saying the 'X pays no tax' Corporation tax is one of approx 25 taxes levied on business and is a relatively small proportion of the total now.

It simply isn't a workable system to have on one hand the law setting out what you should pay and on the other hand a random bunch of the self righteous and not very tax knowledgeable unilaterally deciding that isn't enough for whatever reason.

slowmart

Stevo 666 wrote:

Have a look at the dreadfully small amount of UK contribution by 100 of the largest UK companies - a measly £80 billion last year. String them up!
http://www.pwc.co.uk/services/tax/total-tax-contribution-100-group.html

Best check the facts before saying the 'X pays no tax' Corporation tax is one of approx 25 taxes levied on business and is a relatively small proportion of the total now.

It simply isn't a workable system to have on one hand the law setting out what you should pay and on the other hand a random bunch of the self righteous and not very tax knowledgeable unilaterally deciding that isn't enough for whatever reason.

any business regardless of size has tax obligations . of course most of the larger companies will have shareholders who are hungry for dividend payments and the directors have a fuduciary duty to maximise profits and the returns to the shareholders. some of the highest bonus payments are paid to tax experts who minimise the company tax. Ex inpsectors who go private earn an eye watering amount of money from their expertise built up as public servants.

Simply the legislation is outdated and the digital revolution is continuing which means the old mechanisms for tax collection falls short. The political will to remedy the issue isn't there, simply due to the power of lobbyists arguing for the status quo and since most politicians have a short shelf life its not going to change unless you have a Bernie or Jeremy in charge. But then even st jeremy isn't beyond self interest and appointing people that lead "independent reviews" into the House of Lords and the shadow cabinet.

Same shit, different label.

Maybe we do need a trump to sort the corruption out....then again even that maybe a little extreme. A trump light maybe.

pblakeney

Just a thought, but AFAIK you can only pay dividends on declared profits.
A company has to pay Corporation Tax on declared profits. Dividends is not the work around.

slowmart

PBlakeney wrote:

Just a thought, but AFAIK you can only pay dividends on declared profits.
A company has to pay Corporation Tax on declared profits. Dividends is not the work around.

True but dividends are overtaken by the share price which doesn't always rise on profits but the projection of profits

Amazon is a prime example

But then it's the shareholders return on their ownership and the capital risk they endure.

pblakeney

My experience in the past 2 years is that dividends have outstripped share price increase.
But that is share choice dependent.

Stevo_666

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Going back to the specific case of Mondelez, maybe the OP can post a link to what the company is allegedly doing. I did a quick google and the last article I could find on this was from 2015.

Maybe if there are a few facts then I can give a view on this one.

TheBigBean

The introduction of BEPS from April next year should make it harder for companies to avoid paying corporation tax as it restricts the traditional gear up and fund through Luxembourg option.

I don't know whether it will have any impact on Amazon pretending that everything is sold from Luxembourg though. This is particularly amusing because apparently Luxembourg residents need to buy through the German version as there isn't an actual Luxembourg Amazon.

Alternatively Brexit / EU commission might bring a bit of order to Luxembourg.

I would have presumed that as soon as one loophole closes another will open, but apparently the IRS is a bit miffed over this BEPS thing, as they see American company profits as theirs to tax.

Stevo_666

TheBigBean wrote:

The introduction of BEPS from April next year should make it harder for companies to avoid paying corporation tax as it restricts the traditional gear up and fund through Luxembourg option.

I don't know whether it will have any impact on Amazon pretending that everything is sold from Luxembourg though. This is particularly amusing because apparently Luxembourg residents need to buy through the German version as there isn't an actual Luxembourg Amazon.

Alternatively Brexit / EU commission might bring a bit of order to Luxembourg.

I would have presumed that as soon as one loophole closes another will open, but apparently the IRS is a bit miffed over this BEPS thing, as they see American company profits as theirs to tax.

BEPS does lots of things but the Lux type structures are a pretty specific case. It still allows 'vanilla' gearing up and in some cases will increase debt capacity when the balance sheet type debt/equity ratios are replaced with % of EBITDA limits.

The Amazon Lux point may be more to do with the permanent estblishment/taxable presence issues as the anti fragmentation rules appear to be specifically tailored to catching Amazon. May be a bit sensitive for the EU as Juncker was deeply involved in the deal that brought Amazon to set up a European hub in Luxembourg

I reckon the US see issues like Amazon and Apple as the EU trying to do a bit of fit for tat after the fines dished out to European HQ'd companies operating in the US. Expect more of this sort of thing.

Stevo_666

Stevo 666 wrote:

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Going back to the specific case of Mondelez, maybe the OP can post a link to what the company is allegedly doing. I did a quick google and the last article I could find on this was from 2015.

Maybe if there are a few facts then I can give a view on this one.

No evidence or facts then.....?

RideOnTime

Stevo 666 wrote:

Stevo 666 wrote:

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Going back to the specific case of Mondelez, maybe the OP can post a link to what the company is allegedly doing. I did a quick google and the last article I could find on this was from 2015.

Maybe if there are a few facts then I can give a view on this one.

No evidence or facts then.....?

http://finance.yahoo.com/news/mondelez- ... 00314.html

http://www.birminghammail.co.uk/news/bu ... t-12036547

ballysmate

RideOnTime wrote:

Stevo 666 wrote:

Stevo 666 wrote:

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Going back to the specific case of Mondelez, maybe the OP can post a link to what the company is allegedly doing. I did a quick google and the last article I could find on this was from 2015.

Maybe if there are a few facts then I can give a view on this one.

No evidence or facts then.....?

http://finance.yahoo.com/news/mondelez- ... 00314.html

http://www.birminghammail.co.uk/news/bu ... t-12036547

I will defer to my tax expert associate who I am sure will be along shortly but from the Birmingam Mail article, the phrase that jumps out is


The figures are revealed in newly filed accounts and, based on the standard tax rate, Mondelez UK should have paid around £36 million in corporation tax.

It is reported that the company avoided paying corporation tax by using legal accountancy techniques including a one-off gain of £42 million related to the sale of its coffee business which was exempt from tax.

Any wrongdoing there? :?

rick_chasey

Dependa doesn't it.

Sounds to me like they could tighten the laws up.

Every bit helps with the deficit dunnit?

rick_chasey

How prescient.

http://www.telegraph.co.uk/business/201 ... september/

The amount of income central Government received in September totalled £49bn, an increase of 2.6pc on a year ago. There were higher contributions from National Insurance, VAT receipts, income tax-related payments and fuel duty.

Corporate tax, however, slumped by nearly 9pc to £2.3bn.

Stevo_666

Ballysmate wrote:

RideOnTime wrote:

Stevo 666 wrote:

Stevo 666 wrote:

RideOnTime wrote:

So we have Trump spouting on about how clever he is not paying any corporation taxes in the US...
Now we have Mondelez International, who just sound way to dodgy, jumping every loophole so Cadbury (in the UK) pay no corporation tax...
then we have the local MP spouting about how wonderful they are investing in the local economy.

I don't care, just pay tax...
Why should we all have to pay tax and you think you don't need to...
Just pay your tax...

Going back to the specific case of Mondelez, maybe the OP can post a link to what the company is allegedly doing. I did a quick google and the last article I could find on this was from 2015.

Maybe if there are a few facts then I can give a view on this one.

No evidence or facts then.....?

http://finance.yahoo.com/news/mondelez- ... 00314.html

http://www.birminghammail.co.uk/news/bu ... t-12036547

I will defer to my tax expert associate who I am sure will be along shortly but from the Birmingam Mail article, the phrase that jumps out is


The figures are revealed in newly filed accounts and, based on the standard tax rate, Mondelez UK should have paid around £36 million in corporation tax.

It is reported that the company avoided paying corporation tax by using legal accountancy techniques including a one-off gain of £42 million related to the sale of its coffee business which was exempt from tax.

Any wrongdoing there? :?

Indeed Bally, no wrongdoing. If a UK company sells the shares of a subsidiary and that subsidiary is an active business, the gain on sale is tax free. The exemption from tax on sale of a business is by operation of law - there is no planning here, it is simply a question of fact. As the article mentions the sale of a coffee business, perfectly reasonable to assume it is an active business that was sold. This reduces the effective rate of tax seen in the accounts because there is an accounting gain but no tax on the gain.

If they had made a loss on sale of that business, there would be no tax relief and the accounts would then look like they had paid too much tax. Although you never see lefties praising companies whose accounts look like that, even if it is for the wrong reason

Other links also mention that Mondelez has invested approx £200m in the UK over the last 5 years. Mondelez is primarily a food manufacturer. Assuming that a reasonable proportion of that investment is invested in certain types of assets or R&D, these can generate tax deductions that exceed the accounting P&L cost - again this would reduce the effective rate of tax seen in the accounts.

Measuring whether a company has paid 'enough' tax based on taking their accounting profit and multiplying by the tax rate is a very crude tool and almost always wrong for reasons like those above. This unfortunately is what happens when people combine a misplaced sense of indignance on tax with a lack of knowledge of how tax works.

So I'm really not clear on what basis the OP is saying "Now we have Mondelez International....jumping every loophole so Cadbury (in the UK) pay no corporation tax..."?

But I can see why the local MP was happy about "how wonderful they are investing in the local economy." when they have invested £200m in the last 5 years in the UK.

And let's not forget all the income tax, NIC, VAT, business rates etc etc that Mondelez will be contributing to the UK coffers.