LEAVE the Conservative Party and save your country!
Comments
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It is hard when we all see what is happening and he’s denying it can happen.ballysmate said:
Tbf Stevo seems to be criticising posters on here rather than anyone else.pangolin said:We've entered a twilight zone where Rick is applauding the conservative chancellor and Stevo is coming dangerously close to criticising him.
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Their coffee does seem quite "unique" which is a good thing. I prefer the non-copyrighted stuff that is drinkable.Stevo_666 said:
That's the one where HMRC investigated their transfer pricing arrangements and found nothing wrong, so not a good example. So that does imply that their IP has a value in line with what was being charged. Or maybe that they just didn't make as much profit from their operations as everyone assumed they should?john80 said:
Starbucks is a good one. Little to no intellectual property of note and leverages a lot of bull about trademarks such as the manner in which they give you coffee to reduce their UK tax liability to pretty much naff all. It's not great is it for society.Stevo_666 said:
Give me some real examples and I'll comment on them.john80 said:
The problem is that you don't have to look very hard to find companies paying low single digit taxes compared to their profits in the countries in which they operate and generated those profits. So if the rules are working so well then why is there so many examples of companies paying 1-5% tax rates on the profits in countries such as the UK. My limited company does not pay such a low rate so why is your low tax rate related to scale of the business is what all small to medium enterprises in the UK are asking.Stevo_666 said:
You clearly don't understand the issue. Companies cannot just 'book the profit' wherever they choose and there are existing controlled Foreign Company (CFC) regs to deal with that which I've already referred to above, ones which specifically have substance tests/look at location of economic activity etc and impose tax on the shareholder where these are not met. On top of this there are the transfer pricing regs which impose arms length requirements on all intra-group transactions.rick_chasey said:
I'm not getting excited about the rate mentioned.Stevo_666 said:
There is so much more to tax than rates, but it is rates which grab the headlines. That's why Rick is getting so excited.kingstongraham said:I think the important bit isn't the minimum tax rate.
What do you think the important part is?
I'm excited at the idea that big economies are working together to try and close the tax haven loophole, by making corporate tax about where the economic activity occurs and not where the corporation decides to book the profit.
What do you think is new here?0 -
He doesn't actually say it's not happening, he's carefully perched on that fence.rick_chasey said:
It is hard when we all see what is happening and he’s denying it can happen.ballysmate said:
Tbf Stevo seems to be criticising posters on here rather than anyone else.pangolin said:We've entered a twilight zone where Rick is applauding the conservative chancellor and Stevo is coming dangerously close to criticising him.
- Genesis Croix de Fer
- Dolan Tuono0 -
Now answer the questionrick_chasey said:
It’s not changing rules it’s adding new ones.Stevo_666 said:
You've just demonstrated that journos know roughly as much about international tax as you do.rick_chasey said:So Stevo is at odds with all reputable news outlets, and all the finance ministers of the G7?
https://www.ft.com/content/95dd0c00-7081-4890-bcef-b9642312db4d
https://www.bbc.co.uk/news/world-57368247Why did they want to change the rules?
Governments have long grappled with the challenge of taxing global companies operating across many countries.
That challenge has grown with the boom in huge tech corporations like Amazon and Facebook.
At the moment companies can set up local branches in countries that have relatively low corporate tax rates and declare profits there.
That means they only pay the local rate of tax, even if the profits mainly come from sales made elsewhere. This is legal and commonly done.
The deal aims to stop this from happening in two ways.
Firstly the G7 will aim to make companies pay more tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits.
Secondly, they want a global minimum tax rate so as to avoid countries undercutting each other with low tax rates.
Now answer my question above if you can.
So if your tax bill for the economic activity in said country is less than 15% of what you’re declaring in that country (as you are using tricks to declare it elsewhere with a lower tax rate) said country can charge them the difference.
If transfer pricing etc worked we wouldn’t see multiple firms play f@ck all tax nor would the leaders of the G7 spend the vast majority of their time at the summit agreeing this.
A federal reserve study into transfer pricing and tax avoidance
https://www.federalreserve.gov/econres/ifdp/files/ifdp1214.pdfThis paper employs unique data on export transactions and corporate tax returns of UK multinational firms and finds that firms manipulate their transfer prices to shift profits to lower-taxed destinations
It’s just another Stevo Merry go round.
We can all see firms paying far less tax on their economic activity than the base rate, and they are declaring this in low tax areas.
Stevo says this cannot happen because existing rules cover it. But it is. We all see it.0 -
All I am saying is that this is not the big win that you and the other big business haters think it is, because of the rules that are already in place.rick_chasey said:
It’s not changing rules it’s adding new ones.Stevo_666 said:
You've just demonstrated that journos know roughly as much about international tax as you do.rick_chasey said:So Stevo is at odds with all reputable news outlets, and all the finance ministers of the G7?
https://www.ft.com/content/95dd0c00-7081-4890-bcef-b9642312db4d
https://www.bbc.co.uk/news/world-57368247Why did they want to change the rules?
Governments have long grappled with the challenge of taxing global companies operating across many countries.
That challenge has grown with the boom in huge tech corporations like Amazon and Facebook.
At the moment companies can set up local branches in countries that have relatively low corporate tax rates and declare profits there.
That means they only pay the local rate of tax, even if the profits mainly come from sales made elsewhere. This is legal and commonly done.
The deal aims to stop this from happening in two ways.
Firstly the G7 will aim to make companies pay more tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits.
Secondly, they want a global minimum tax rate so as to avoid countries undercutting each other with low tax rates.
Now answer my question above if you can.
So if your tax bill for the economic activity in said country is less than 15% of what you’re declaring in that country (as you are using tricks to declare it elsewhere with a lower tax rate) said country can charge them the difference.
If transfer pricing etc worked we wouldn’t see multiple firms play f@ck all tax nor would the leaders of the G7 spend the vast majority of their time at the summit agreeing this.
A federal reserve study into transfer pricing and tax avoidance
https://www.federalreserve.gov/econres/ifdp/files/ifdp1214.pdfThis paper employs unique data on export transactions and corporate tax returns of UK multinational firms and finds that firms manipulate their transfer prices to shift profits to lower-taxed destinations
It’s just another Stevo Merry go round.
We can all see firms paying far less tax on their economic activity than the base rate, and they are declaring this in low tax areas.
Stevo says this cannot happen because existing rules cover it. But it is. We all see it.
Unfortunately you know nothing about the existing rules so are not in a place to debate the point, so you just keep banging your little drum. Maybe educate yourself about those rules and reconsider. Or it may be easier if you get the view of an experienced tax professional if you don't believe this one
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]1 -
If you mean US or UK govts, possibly not a lot. The whole idea of tax competition is to attract business and investment to a country. However if they have set their CFC rules appropriately they can still get a cut of the corporate tax.kingstongraham said:
I'll try again.Stevo_666 said:
Your question wasn't clear and tbh it still isn't that clear.kingstongraham said:
Doesn't answer my question.Stevo_666 said:
The rate differential is less but there will still be tax competition. And other taxes - CT is less that 10% of the total tax take but there is a disproportionate focus on it from the rule setters. Also there is more to it that the rate - the breadth of the base that is taxed for example, cash flow reliefs, credits for investment etc.kingstongraham said:One group unlikely to be adversely affected are tax specialists.
I don't understand why it doesn't mean any company that can, moves to a 15% (or whatever it comes down to) jurisdiction. What's in it for the USA or the UK with higher rates? Or is it just the differential is reduced, so it is less worth it?
There are several factors in terms of where to locate operations, of which tax is often one.
And you seem to be missing the point that the whole aim of this is to reduce the effect tax rates have on where to locate "operations".
Surely it doesn't matter to you what the rules are, as long as you know what they are. If more tax comes to the UK rather than Ireland, all good right?
It still won't stop tax competition for the reasons explained above.
Also think about the places that have rates below 15% - they tend to be pretty small/out of the way and in most cases not the sort of places suited to large scale operations that would generate those sort of profits that would make a difference. (Ireland is probably the largest example). Hence my point that this is more about grandstanding than substance.
Why do you put the word operations in speech marks?
Tax competition will still exist because the 15% minimum is lower than the UK, US etc rate.
In what way will it benefit the US or the UK if companies have their taxable location somewhere with 15% tax rate, rather than somewhere with a 9% rate?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Also please note what I said above about corporate tax being less than 10% of total tax revenues. Priorities...Stevo_666 said:
All I am saying is that this is not the big win that you and the other big business haters think it is, because of the rules that are already in place.rick_chasey said:
It’s not changing rules it’s adding new ones.Stevo_666 said:
You've just demonstrated that journos know roughly as much about international tax as you do.rick_chasey said:So Stevo is at odds with all reputable news outlets, and all the finance ministers of the G7?
https://www.ft.com/content/95dd0c00-7081-4890-bcef-b9642312db4d
https://www.bbc.co.uk/news/world-57368247Why did they want to change the rules?
Governments have long grappled with the challenge of taxing global companies operating across many countries.
That challenge has grown with the boom in huge tech corporations like Amazon and Facebook.
At the moment companies can set up local branches in countries that have relatively low corporate tax rates and declare profits there.
That means they only pay the local rate of tax, even if the profits mainly come from sales made elsewhere. This is legal and commonly done.
The deal aims to stop this from happening in two ways.
Firstly the G7 will aim to make companies pay more tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits.
Secondly, they want a global minimum tax rate so as to avoid countries undercutting each other with low tax rates.
Now answer my question above if you can.
So if your tax bill for the economic activity in said country is less than 15% of what you’re declaring in that country (as you are using tricks to declare it elsewhere with a lower tax rate) said country can charge them the difference.
If transfer pricing etc worked we wouldn’t see multiple firms play f@ck all tax nor would the leaders of the G7 spend the vast majority of their time at the summit agreeing this.
A federal reserve study into transfer pricing and tax avoidance
https://www.federalreserve.gov/econres/ifdp/files/ifdp1214.pdfThis paper employs unique data on export transactions and corporate tax returns of UK multinational firms and finds that firms manipulate their transfer prices to shift profits to lower-taxed destinations
It’s just another Stevo Merry go round.
We can all see firms paying far less tax on their economic activity than the base rate, and they are declaring this in low tax areas.
Stevo says this cannot happen because existing rules cover it. But it is. We all see it.
Unfortunately you know nothing about the existing rules so are not in a place to debate the point, so you just keep banging your little drum. Maybe educate yourself about those rules and reconsider. Or it may be easier if you get the view of an experienced tax professional if you don't believe this one"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Thanks. I think we're neither of us naive enough to think that it would be happening if there wasn't an expected benefit to the USA, so maybe neither of us fully understand it.Stevo_666 said:
If you mean US or UK govts, possibly not a lot. The whole idea of tax competition is to attract business and investment to a country. However if they have set their CFC rules appropriately they can still get a cut of the corporate tax.kingstongraham said:
I'll try again.Stevo_666 said:
Your question wasn't clear and tbh it still isn't that clear.kingstongraham said:
Doesn't answer my question.Stevo_666 said:
The rate differential is less but there will still be tax competition. And other taxes - CT is less that 10% of the total tax take but there is a disproportionate focus on it from the rule setters. Also there is more to it that the rate - the breadth of the base that is taxed for example, cash flow reliefs, credits for investment etc.kingstongraham said:One group unlikely to be adversely affected are tax specialists.
I don't understand why it doesn't mean any company that can, moves to a 15% (or whatever it comes down to) jurisdiction. What's in it for the USA or the UK with higher rates? Or is it just the differential is reduced, so it is less worth it?
There are several factors in terms of where to locate operations, of which tax is often one.
And you seem to be missing the point that the whole aim of this is to reduce the effect tax rates have on where to locate "operations".
Surely it doesn't matter to you what the rules are, as long as you know what they are. If more tax comes to the UK rather than Ireland, all good right?
It still won't stop tax competition for the reasons explained above.
Also think about the places that have rates below 15% - they tend to be pretty small/out of the way and in most cases not the sort of places suited to large scale operations that would generate those sort of profits that would make a difference. (Ireland is probably the largest example). Hence my point that this is more about grandstanding than substance.
Why do you put the word operations in speech marks?
Tax competition will still exist because the 15% minimum is lower than the UK, US etc rate.
In what way will it benefit the US or the UK if companies have their taxable location somewhere with 15% tax rate, rather than somewhere with a 9% rate?0 -
Currently. If there was a minimum global rate, what could that rise to?Stevo_666 said:
Also please note what I said above about corporate tax being less than 10% of total tax revenues. Priorities...Stevo_666 said:
All I am saying is that this is not the big win that you and the other big business haters think it is, because of the rules that are already in place.rick_chasey said:
It’s not changing rules it’s adding new ones.Stevo_666 said:
You've just demonstrated that journos know roughly as much about international tax as you do.rick_chasey said:So Stevo is at odds with all reputable news outlets, and all the finance ministers of the G7?
https://www.ft.com/content/95dd0c00-7081-4890-bcef-b9642312db4d
https://www.bbc.co.uk/news/world-57368247Why did they want to change the rules?
Governments have long grappled with the challenge of taxing global companies operating across many countries.
That challenge has grown with the boom in huge tech corporations like Amazon and Facebook.
At the moment companies can set up local branches in countries that have relatively low corporate tax rates and declare profits there.
That means they only pay the local rate of tax, even if the profits mainly come from sales made elsewhere. This is legal and commonly done.
The deal aims to stop this from happening in two ways.
Firstly the G7 will aim to make companies pay more tax in the countries where they are selling their products or services, rather than wherever they end up declaring their profits.
Secondly, they want a global minimum tax rate so as to avoid countries undercutting each other with low tax rates.
Now answer my question above if you can.
So if your tax bill for the economic activity in said country is less than 15% of what you’re declaring in that country (as you are using tricks to declare it elsewhere with a lower tax rate) said country can charge them the difference.
If transfer pricing etc worked we wouldn’t see multiple firms play f@ck all tax nor would the leaders of the G7 spend the vast majority of their time at the summit agreeing this.
A federal reserve study into transfer pricing and tax avoidance
https://www.federalreserve.gov/econres/ifdp/files/ifdp1214.pdfThis paper employs unique data on export transactions and corporate tax returns of UK multinational firms and finds that firms manipulate their transfer prices to shift profits to lower-taxed destinations
It’s just another Stevo Merry go round.
We can all see firms paying far less tax on their economic activity than the base rate, and they are declaring this in low tax areas.
Stevo says this cannot happen because existing rules cover it. But it is. We all see it.
Unfortunately you know nothing about the existing rules so are not in a place to debate the point, so you just keep banging your little drum. Maybe educate yourself about those rules and reconsider. Or it may be easier if you get the view of an experienced tax professional if you don't believe this one0 -
I might have to give you a simple example as you still don't get it. If I am a business in say Ireland with a customer in say the UK that customer orders a product from me which I ship to the UK, where is that revenue recognised and taxed? Answer = Ireland. However the view seems to be that I have UK revenues and I'm not paying tax on them. This is one of the perceived problems and it seems that lots of politicians either believe this or simply see an opportunity to fill their coffers. Its not necessarily about how much tax is paid, but where it is paid. The EU likes the idea because it is taking a slice out of the nasty big tech pie and big tech is predominantly US based.rick_chasey said:
The thing is Stevo, we all can see what the firms are doing. SO when you say "transfer pricing regulations cover this" plainly they do not, as firms are paying zilch tax in countries where they have massive revenues.Stevo_666 said:
As mentioned above the CFC and transfer pricing regs already cover the vast majority of this so it's hard to see how this will have a large impact beyond creating work for accountants. As I mentioned above, there a a fair bit of grandstanding and it was also tied up with the US/EU arguments over the EU pillar 1 proposals which the US felt was penalising the big tech companies (which are nearly all American).Dorset_Boy said:The likes of Starbucks / Costa use their Luxembourg (or other very low corporate tax located companies) comapnies to create loans to their UK companies so the repayment costs offset any profits they generate in the UK. They copy this across the globe so create artifically low profits or losses in the higher taxed regimes and increased profits in the low tax regimes.
That is what Rick and many others want prevented (and I'm firmly in Rick's camp on this one).
Corporation tax works for national companies, but it doesn't work for global companies and as a result there isn't a level playing field.
It looks good for the headlines but a group of countries all of which have corporate tax rates above 15% agreeing that rates shouldn't be lower than 15% is not exactly a major achievement. Turning this into a Global cartel when quite a few smaller countries rely on tax competition so as not to be reliant on agriculture and tourism will be more interesting.
You can't go into every tax debate armed only with a vague sense of injustice, a dislike of big business, a willingness to believe the headlines rather than understand the details and an ignorance of the tax system."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
You also can't go in thinking that because "this is the way it works", that's the way it has to work.1
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If you can explain how the Microsoft example with Bermuda and Ireland passes a "well that actually seems reasonable now you've explained it" test, I'll happily bow to your greater knowledge.
"It's currently legal" is not enough when discussing potential rule changes.0 -
This is about making markets more competitive again, and not giving non-multinational firms a tax disadvantage.Stevo_666 said:
Also please note what I said above about corporate tax being less than 10% of total tax revenues. Priorities...
Starbucks should not have to pay materially less tax on the profit from each coffee sold than the local coffee shop because they are a multi-national and so can play accounting tricks to reduce their tax burden.
That is market distorting and is not fair competition.0 -
This is the issue. All those 'Amazon paid no tax on EU sales of [huge number]' headlines neglect to mention all the VAT that will have been levied within the EU and the CT paid somewhere else.Stevo_666 said:
I might have to give you a simple example as you still don't get it. If I am a business in say Ireland with a customer in say the UK that customer orders a product from me which I ship to the UK, where is that revenue recognised and taxed? Answer = Ireland. However the view seems to be that I have UK revenues and I'm not paying tax on them. This is one of the perceived problems and it seems that lots of politicians either believe this or simply see an opportunity to fill their coffers. Its not necessarily about how much tax is paid, but where it is paid. The EU likes the idea because it is taking a slice out of the nasty big tech pie and big tech is predominantly US based.rick_chasey said:
The thing is Stevo, we all can see what the firms are doing. SO when you say "transfer pricing regulations cover this" plainly they do not, as firms are paying zilch tax in countries where they have massive revenues.Stevo_666 said:
As mentioned above the CFC and transfer pricing regs already cover the vast majority of this so it's hard to see how this will have a large impact beyond creating work for accountants. As I mentioned above, there a a fair bit of grandstanding and it was also tied up with the US/EU arguments over the EU pillar 1 proposals which the US felt was penalising the big tech companies (which are nearly all American).Dorset_Boy said:The likes of Starbucks / Costa use their Luxembourg (or other very low corporate tax located companies) comapnies to create loans to their UK companies so the repayment costs offset any profits they generate in the UK. They copy this across the globe so create artifically low profits or losses in the higher taxed regimes and increased profits in the low tax regimes.
That is what Rick and many others want prevented (and I'm firmly in Rick's camp on this one).
Corporation tax works for national companies, but it doesn't work for global companies and as a result there isn't a level playing field.
It looks good for the headlines but a group of countries all of which have corporate tax rates above 15% agreeing that rates shouldn't be lower than 15% is not exactly a major achievement. Turning this into a Global cartel when quite a few smaller countries rely on tax competition so as not to be reliant on agriculture and tourism will be more interesting.
You can't go into every tax debate armed only with a vague sense of injustice, a dislike of big business, a willingness to believe the headlines rather than understand the details and an ignorance of the tax system.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
I would imagine those countries that charge a higher rate would like to reduce the incentives for businesses to base themselves elsewhere.kingstongraham said:
Thanks. I think we're neither of us naive enough to think that it would be happening if there wasn't an expected benefit to the USA, so maybe neither of us fully understand it.Stevo_666 said:
If you mean US or UK govts, possibly not a lot. The whole idea of tax competition is to attract business and investment to a country. However if they have set their CFC rules appropriately they can still get a cut of the corporate tax.kingstongraham said:
I'll try again.Stevo_666 said:
Your question wasn't clear and tbh it still isn't that clear.kingstongraham said:
Doesn't answer my question.Stevo_666 said:
The rate differential is less but there will still be tax competition. And other taxes - CT is less that 10% of the total tax take but there is a disproportionate focus on it from the rule setters. Also there is more to it that the rate - the breadth of the base that is taxed for example, cash flow reliefs, credits for investment etc.kingstongraham said:One group unlikely to be adversely affected are tax specialists.
I don't understand why it doesn't mean any company that can, moves to a 15% (or whatever it comes down to) jurisdiction. What's in it for the USA or the UK with higher rates? Or is it just the differential is reduced, so it is less worth it?
There are several factors in terms of where to locate operations, of which tax is often one.
And you seem to be missing the point that the whole aim of this is to reduce the effect tax rates have on where to locate "operations".
Surely it doesn't matter to you what the rules are, as long as you know what they are. If more tax comes to the UK rather than Ireland, all good right?
It still won't stop tax competition for the reasons explained above.
Also think about the places that have rates below 15% - they tend to be pretty small/out of the way and in most cases not the sort of places suited to large scale operations that would generate those sort of profits that would make a difference. (Ireland is probably the largest example). Hence my point that this is more about grandstanding than substance.
Why do you put the word operations in speech marks?
Tax competition will still exist because the 15% minimum is lower than the UK, US etc rate.
In what way will it benefit the US or the UK if companies have their taxable location somewhere with 15% tax rate, rather than somewhere with a 9% rate?1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Yes, but a 6% advantage is not inconsiderable, even if it is not as much as an 8.25% advantage (using Ireland vs USA as an example).rjsterry said:
I would imagine those countries that charge a higher rate would like to reduce the incentives for businesses to base themselves elsewhere.kingstongraham said:
Thanks. I think we're neither of us naive enough to think that it would be happening if there wasn't an expected benefit to the USA, so maybe neither of us fully understand it.Stevo_666 said:
If you mean US or UK govts, possibly not a lot. The whole idea of tax competition is to attract business and investment to a country. However if they have set their CFC rules appropriately they can still get a cut of the corporate tax.kingstongraham said:
I'll try again.Stevo_666 said:
Your question wasn't clear and tbh it still isn't that clear.kingstongraham said:
Doesn't answer my question.Stevo_666 said:
The rate differential is less but there will still be tax competition. And other taxes - CT is less that 10% of the total tax take but there is a disproportionate focus on it from the rule setters. Also there is more to it that the rate - the breadth of the base that is taxed for example, cash flow reliefs, credits for investment etc.kingstongraham said:One group unlikely to be adversely affected are tax specialists.
I don't understand why it doesn't mean any company that can, moves to a 15% (or whatever it comes down to) jurisdiction. What's in it for the USA or the UK with higher rates? Or is it just the differential is reduced, so it is less worth it?
There are several factors in terms of where to locate operations, of which tax is often one.
And you seem to be missing the point that the whole aim of this is to reduce the effect tax rates have on where to locate "operations".
Surely it doesn't matter to you what the rules are, as long as you know what they are. If more tax comes to the UK rather than Ireland, all good right?
It still won't stop tax competition for the reasons explained above.
Also think about the places that have rates below 15% - they tend to be pretty small/out of the way and in most cases not the sort of places suited to large scale operations that would generate those sort of profits that would make a difference. (Ireland is probably the largest example). Hence my point that this is more about grandstanding than substance.
Why do you put the word operations in speech marks?
Tax competition will still exist because the 15% minimum is lower than the UK, US etc rate.
In what way will it benefit the US or the UK if companies have their taxable location somewhere with 15% tax rate, rather than somewhere with a 9% rate?
My assumption is that it also affects the rules that allow companies to be based in Ireland and tax resident elsewhere, however that works, so where the effective rate is much lower, even though the headline rate is closer to 15% already.
I can't see it being just about increasing global competition by making the playing field more level between those who have the ability/scale to base themselves in a low tax location and those that don't, as it seems to be mostly USA companies that get the advantage.0 -
The US has a big issue with US companies declaring revenue outside of the US.kingstongraham said:
Yes, but a 6% advantage is not inconsiderable, even if it is not as much as an 8.25% advantage (using Ireland vs USA as an example).rjsterry said:
I would imagine those countries that charge a higher rate would like to reduce the incentives for businesses to base themselves elsewhere.kingstongraham said:
Thanks. I think we're neither of us naive enough to think that it would be happening if there wasn't an expected benefit to the USA, so maybe neither of us fully understand it.Stevo_666 said:
If you mean US or UK govts, possibly not a lot. The whole idea of tax competition is to attract business and investment to a country. However if they have set their CFC rules appropriately they can still get a cut of the corporate tax.kingstongraham said:
I'll try again.Stevo_666 said:
Your question wasn't clear and tbh it still isn't that clear.kingstongraham said:
Doesn't answer my question.Stevo_666 said:
The rate differential is less but there will still be tax competition. And other taxes - CT is less that 10% of the total tax take but there is a disproportionate focus on it from the rule setters. Also there is more to it that the rate - the breadth of the base that is taxed for example, cash flow reliefs, credits for investment etc.kingstongraham said:One group unlikely to be adversely affected are tax specialists.
I don't understand why it doesn't mean any company that can, moves to a 15% (or whatever it comes down to) jurisdiction. What's in it for the USA or the UK with higher rates? Or is it just the differential is reduced, so it is less worth it?
There are several factors in terms of where to locate operations, of which tax is often one.
And you seem to be missing the point that the whole aim of this is to reduce the effect tax rates have on where to locate "operations".
Surely it doesn't matter to you what the rules are, as long as you know what they are. If more tax comes to the UK rather than Ireland, all good right?
It still won't stop tax competition for the reasons explained above.
Also think about the places that have rates below 15% - they tend to be pretty small/out of the way and in most cases not the sort of places suited to large scale operations that would generate those sort of profits that would make a difference. (Ireland is probably the largest example). Hence my point that this is more about grandstanding than substance.
Why do you put the word operations in speech marks?
Tax competition will still exist because the 15% minimum is lower than the UK, US etc rate.
In what way will it benefit the US or the UK if companies have their taxable location somewhere with 15% tax rate, rather than somewhere with a 9% rate?
My assumption is that it also affects the rules that allow companies to be based in Ireland and tax resident elsewhere, however that works, so where the effective rate is much lower, even though the headline rate is closer to 15% already.
I can't see it being just about increasing global competition by making the playing field more level between those who have the ability/scale to base themselves in a low tax location and those that don't, as it seems to be mostly USA companies that get the advantage.
So apple has a few hundred billion of cash sitting outside of the US as they know if they bring it in they will get hit with a monster corporate tax bill.
I think in an ideal world that tax would have been paid over the period the cash was earned regardless so then apple wouldn't be incentivised to keep its cash away from the US in a massive pile.
In the current settup everyone loses - apple can't use that cash in the US, and the gov't doesn't get the tax revenue for it.
In the new settup if it's done right apple has to pay the tax anyway, so what difference does it make where they hold it?0 -
You are an American business with a sales force in the UK who sell a deal to a UK based customer that is fulfilled from the UK. Question where is tax paid. Answer, IrelandStevo_666 said:
I might have to give you a simple example as you still don't get it. If I am a business in say Ireland with a customer in say the UK that customer orders a product from me which I ship to the UK, where is that revenue recognised and taxed? Answer = Ireland. However the view seems to be that I have UK revenues and I'm not paying tax on them. This is one of the perceived problems and it seems that lots of politicians either believe this or simply see an opportunity to fill their coffers. Its not necessarily about how much tax is paid, but where it is paid. The EU likes the idea because it is taking a slice out of the nasty big tech pie and big tech is predominantly US based.rick_chasey said:
The thing is Stevo, we all can see what the firms are doing. SO when you say "transfer pricing regulations cover this" plainly they do not, as firms are paying zilch tax in countries where they have massive revenues.Stevo_666 said:
As mentioned above the CFC and transfer pricing regs already cover the vast majority of this so it's hard to see how this will have a large impact beyond creating work for accountants. As I mentioned above, there a a fair bit of grandstanding and it was also tied up with the US/EU arguments over the EU pillar 1 proposals which the US felt was penalising the big tech companies (which are nearly all American).Dorset_Boy said:The likes of Starbucks / Costa use their Luxembourg (or other very low corporate tax located companies) comapnies to create loans to their UK companies so the repayment costs offset any profits they generate in the UK. They copy this across the globe so create artifically low profits or losses in the higher taxed regimes and increased profits in the low tax regimes.
That is what Rick and many others want prevented (and I'm firmly in Rick's camp on this one).
Corporation tax works for national companies, but it doesn't work for global companies and as a result there isn't a level playing field.
It looks good for the headlines but a group of countries all of which have corporate tax rates above 15% agreeing that rates shouldn't be lower than 15% is not exactly a major achievement. Turning this into a Global cartel when quite a few smaller countries rely on tax competition so as not to be reliant on agriculture and tourism will be more interesting.
You can't go into every tax debate armed only with a vague sense of injustice, a dislike of big business, a willingness to believe the headlines rather than understand the details and an ignorance of the tax system.0 -
The obvious answer is Bermuda.surrey_commuter said:
You are an American business with a sales force in the UK who sell a deal to a UK based customer that is fulfilled from the UK. Question where is tax paid. Answer, IrelandStevo_666 said:
I might have to give you a simple example as you still don't get it. If I am a business in say Ireland with a customer in say the UK that customer orders a product from me which I ship to the UK, where is that revenue recognised and taxed? Answer = Ireland. However the view seems to be that I have UK revenues and I'm not paying tax on them. This is one of the perceived problems and it seems that lots of politicians either believe this or simply see an opportunity to fill their coffers. Its not necessarily about how much tax is paid, but where it is paid. The EU likes the idea because it is taking a slice out of the nasty big tech pie and big tech is predominantly US based.rick_chasey said:
The thing is Stevo, we all can see what the firms are doing. SO when you say "transfer pricing regulations cover this" plainly they do not, as firms are paying zilch tax in countries where they have massive revenues.Stevo_666 said:
As mentioned above the CFC and transfer pricing regs already cover the vast majority of this so it's hard to see how this will have a large impact beyond creating work for accountants. As I mentioned above, there a a fair bit of grandstanding and it was also tied up with the US/EU arguments over the EU pillar 1 proposals which the US felt was penalising the big tech companies (which are nearly all American).Dorset_Boy said:The likes of Starbucks / Costa use their Luxembourg (or other very low corporate tax located companies) comapnies to create loans to their UK companies so the repayment costs offset any profits they generate in the UK. They copy this across the globe so create artifically low profits or losses in the higher taxed regimes and increased profits in the low tax regimes.
That is what Rick and many others want prevented (and I'm firmly in Rick's camp on this one).
Corporation tax works for national companies, but it doesn't work for global companies and as a result there isn't a level playing field.
It looks good for the headlines but a group of countries all of which have corporate tax rates above 15% agreeing that rates shouldn't be lower than 15% is not exactly a major achievement. Turning this into a Global cartel when quite a few smaller countries rely on tax competition so as not to be reliant on agriculture and tourism will be more interesting.
You can't go into every tax debate armed only with a vague sense of injustice, a dislike of big business, a willingness to believe the headlines rather than understand the details and an ignorance of the tax system.0 -
On that subject. I have been asking for years why the global companies I am working for in this internet age don't set up a design office in Bermuda.kingstongraham said:
The obvious answer is Bermuda.surrey_commuter said:
You are an American business with a sales force in the UK who sell a deal to a UK based customer that is fulfilled from the UK. Question where is tax paid. Answer, IrelandStevo_666 said:
I might have to give you a simple example as you still don't get it. If I am a business in say Ireland with a customer in say the UK that customer orders a product from me which I ship to the UK, where is that revenue recognised and taxed? Answer = Ireland. However the view seems to be that I have UK revenues and I'm not paying tax on them. This is one of the perceived problems and it seems that lots of politicians either believe this or simply see an opportunity to fill their coffers. Its not necessarily about how much tax is paid, but where it is paid. The EU likes the idea because it is taking a slice out of the nasty big tech pie and big tech is predominantly US based.rick_chasey said:
The thing is Stevo, we all can see what the firms are doing. SO when you say "transfer pricing regulations cover this" plainly they do not, as firms are paying zilch tax in countries where they have massive revenues.Stevo_666 said:
As mentioned above the CFC and transfer pricing regs already cover the vast majority of this so it's hard to see how this will have a large impact beyond creating work for accountants. As I mentioned above, there a a fair bit of grandstanding and it was also tied up with the US/EU arguments over the EU pillar 1 proposals which the US felt was penalising the big tech companies (which are nearly all American).Dorset_Boy said:The likes of Starbucks / Costa use their Luxembourg (or other very low corporate tax located companies) comapnies to create loans to their UK companies so the repayment costs offset any profits they generate in the UK. They copy this across the globe so create artifically low profits or losses in the higher taxed regimes and increased profits in the low tax regimes.
That is what Rick and many others want prevented (and I'm firmly in Rick's camp on this one).
Corporation tax works for national companies, but it doesn't work for global companies and as a result there isn't a level playing field.
It looks good for the headlines but a group of countries all of which have corporate tax rates above 15% agreeing that rates shouldn't be lower than 15% is not exactly a major achievement. Turning this into a Global cartel when quite a few smaller countries rely on tax competition so as not to be reliant on agriculture and tourism will be more interesting.
You can't go into every tax debate armed only with a vague sense of injustice, a dislike of big business, a willingness to believe the headlines rather than understand the details and an ignorance of the tax system.
Tax free and think of all the clients who would just love site visits! 🤣😎The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
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Who bothers with formal wear these days?The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Insurance is massive in Bermuda and they're all into formal stuff.
All the big US insurers and reinsurers are based in Bermuda to service us corporates - of course, our resident tax advisor will tell us that can't be for tax reasons because transfer pricing rules means it makes no difference.0 -
I did a couple of days work out there for the reinsurance arm of Tate and Lyle about 25 years ago in my first real job. This was genuinely how they dressed for the office back then. And my work travel never got as good as that ever again.rick_chasey said:
This counts for formal get up in Bermuda. That's all you need to know to gtf out of there.
Based on that one experience, I would say this work attire would not be enough for me to say it's a bad place to work.1 -
I'm not in insurance and quite happy to ignore nobbers.
Hang out elsewhere....The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
I think it's Nevada, actually. Make of that what you will...rick_chasey said:
So apple has a few hundred billion of cash sitting outside of the US as they know if they bring it in they will get hit with a monster corporate tax bill.
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Nope. Maybe you are being investigated for some dodgy online activity and your IP has shut you down. You should have listened to that phone call and not treated it as a potential fraud!ddraver said:So...is most of the internet down for anyone else?
News sites, amazon, reddit etc etc...0
