LEAVE the Conservative Party and save your country!

Pross

You're not alone - from the BBC

"A number of leading media websites are currently not working, including the Guardian, Financial Times, Independent and the New York Times.

The UK government website - gov.uk - is also down.

Affected websites displayed the message: "Error 503 Service Unavailable".

Early reports have suggested it could be related to Fastly, a cloud computing provider, which underpins a lot of major websites."

pangolin

https://www.techradar.com/news/major-internet-outage-brings-down-top-websites-heres-why-they-were-down

Issues at Fastly knocked sites including Reddit, eBay, Amazon, Twitch and Gov.uk offline for users across the world.

Among the sites that saw issues or outages were:

TechRadar
Amazon
eBay
Reddit
BBC
Etsy
PayPal
Vimeo
Square
Squarespace
Giphy

Dorset_Boy

surrey_commuter said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

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.

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).

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.

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.

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.

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.

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, Ireland

Which as you nicely put it, is a problem.
The Corporation Tax should be paid in the domicile the order is fulfilled from and sold from, and profits should not be able to be manipulated to avoid that, which patently goes on at present, even if Stevo refuses to recognise the fact.

If I was to buy something from a French wine producer, based in France but shipped to the UK, I expect the profit to be taxed in France, not Bermuda or Ireland. The same would apply to me buying a bike from Canyon, I'd expect the profit to be taxed in Germany as that is where the sale is coming from.

I don't expect Starbucks to sell a coffee in England, have another Starbucks company based in Bermuda, or Luxembourg create an articifial loan to the UK company to mean there is no profit on that coffee sale.

It's not hating big business or big tech, it is ensuring a degree of fairness for all.

surrey_commuter

kingstongraham said:

rick_chasey said:

This counts for formal get up in Bermuda. That's all you need to know to gtf out of there.

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.

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.

I once saw a Nigerian looking gentleman walking down Jermyn St in a suit with short sleeves

pblakeney

ddraver said:

So...is most of the internet down for anyone else?

News sites, amazon, reddit etc etc...

All fine for me. Read it on the news...
Just checked Amazon, Eurosport and Netflix.

john80

Stevo_666 said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

kingstongraham said:

I think the important bit isn't the minimum tax rate.

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.

What do you think the important part is?

I'm not getting excited about the rate mentioned.

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.

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.

What do you think is new here?

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.

Give me some real examples and I'll comment on them.

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.

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?

I am not doubting they have good lawyers and are working to the rules. Where we differ is you seem happy with the rules that allow vast sums of money that was earned in the UK to leave the country. I don't think it is a good business model for a country. You want to access a market this is the cost of entry. It's not that hard to understand.

shirley_basso

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

kingstongraham said:

I think the important bit isn't the minimum tax rate.

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.

What do you think the important part is?

I'm not getting excited about the rate mentioned.

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.

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.

What do you think is new here?

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.

Give me some real examples and I'll comment on them.

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.

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?

I am not doubting they have good lawyers and are working to the rules. Where we differ is you seem happy with the rules that allow vast sums of money that was earned in the UK to leave the country. I don't think it is a good business model for a country. You want to access a market this is the cost of entry. It's not that hard to understand.

Stevo doesn't really care about the morals, simply what falls within and without the rules. I'm not sure how your comprehension skills can be so bad that you don't at least understand that much.

elbowloh

Rules can be changed.

ballysmate

shirley_basso said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

kingstongraham said:

I think the important bit isn't the minimum tax rate.

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.

What do you think the important part is?

I'm not getting excited about the rate mentioned.

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.

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.

What do you think is new here?

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.

Give me some real examples and I'll comment on them.

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.

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?

I am not doubting they have good lawyers and are working to the rules. Where we differ is you seem happy with the rules that allow vast sums of money that was earned in the UK to leave the country. I don't think it is a good business model for a country. You want to access a market this is the cost of entry. It's not that hard to understand.

Stevo doesn't really care about the morals, simply what falls within and without the rules. I'm not sure how your comprehension skills can be so bad that you don't at least understand that much.

You think tax accountants around the world should ignore the rules in place and ensure that their employers pay more tax than they are required to do do because somebody thinks it's the right thing to do? ie literally not do the job they are paid for.

Ah bless!

shirley_basso

ballysmate said:

shirley_basso said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

kingstongraham said:

I think the important bit isn't the minimum tax rate.

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.

What do you think the important part is?

I'm not getting excited about the rate mentioned.

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.

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.

What do you think is new here?

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.

Give me some real examples and I'll comment on them.

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.

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?

I am not doubting they have good lawyers and are working to the rules. Where we differ is you seem happy with the rules that allow vast sums of money that was earned in the UK to leave the country. I don't think it is a good business model for a country. You want to access a market this is the cost of entry. It's not that hard to understand.

Stevo doesn't really care about the morals, simply what falls within and without the rules. I'm not sure how your comprehension skills can be so bad that you don't at least understand that much.

You think tax accountants around the world should ignore the rules in place and ensure that their employers pay more tax than they are required to do do because somebody thinks it's the right thing to do? ie literally not do the job they are paid for.

Ah bless!

I presume you're talking to john80 here?

ballysmate

Well anyone who thinks that any tax accountant working for a company will not use the rules to ensure tax efficiency, rather than arbitrarily deciding the 'moral' amount to pay.
Surely if you are paid and employed to ensure tax efficiency, you are morally obliged to do it to the best of your ability?

shirley_basso

Just doesn't make sense in response to what I said the way it's quoted

rjsterry

ballysmate said:

Well anyone who thinks that any tax accountant working for a company will not use the rules to ensure tax efficiency, rather than arbitrarily deciding the 'moral' amount to pay.
Surely if you are paid and employed to ensure tax efficiency, you are morally obliged to do it to the best of your ability?

Surely that's the bleeding obvious. In any case the discussion is about a change to the rules, not how accountants should interpret them.

pblakeney

rjsterry said:

ballysmate said:

Well anyone who thinks that any tax accountant working for a company will not use the rules to ensure tax efficiency, rather than arbitrarily deciding the 'moral' amount to pay.
Surely if you are paid and employed to ensure tax efficiency, you are morally obliged to do it to the best of your ability?

Surely that's the bleeding obvious. In any case the discussion is about a change to the rules, not how accountants should interpret them.

Ultimately, it comes down to both.
How the rules are intended to be applied v how they are actually applied.

kingstongraham

ballysmate said:

Well anyone who thinks that any tax accountant working for a company will not use the rules to ensure tax efficiency, rather than arbitrarily deciding the 'moral' amount to pay.
Surely if you are paid and employed to ensure tax efficiency, you are morally obliged to do it to the best of your ability?

Exactly right, which is why the rules are changing, not the accountants.

rick_chasey

Not THAT kind of free speech

https://twitter.com/gavinwilliamson/status/1402329761565843461?s=21

Stevo_666

kingstongraham said:

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.

Sorry, bit of a break to deal with house sale and purchases...

Got a link to the facts?

Stevo_666

rick_chasey said:

Stevo_666 said:

Also please note what I said above about corporate tax being less than 10% of total tax revenues. Priorities...

This is about making markets more competitive again, and not giving non-multinational firms a tax disadvantage.

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.

As I've said above, it is more about where the tax is paid rather than how much.

Typically those shouting loudest are countries who most need to top up their coffers at the expense of other countries. All this talk of global cooperation is a cover for national interests, as usual.

Stevo_666

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

kingstongraham said:

I think the important bit isn't the minimum tax rate.

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.

What do you think the important part is?

I'm not getting excited about the rate mentioned.

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.

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.

What do you think is new here?

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.

Give me some real examples and I'll comment on them.

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.

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?

I am not doubting they have good lawyers and are working to the rules. Where we differ is you seem happy with the rules that allow vast sums of money that was earned in the UK to leave the country. I don't think it is a good business model for a country. You want to access a market this is the cost of entry. It's not that hard to understand.

You're assuming things there. In any event, this cuts both ways in an international system where there is healthy tax competition.

Stevo_666

Dorset_Boy said:

surrey_commuter said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

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.

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).

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.

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.

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.

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.

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, Ireland

Which as you nicely put it, is a problem.
The Corporation Tax should be paid in the domicile the order is fulfilled from and sold from, and profits should not be able to be manipulated to avoid that, which patently goes on at present, even if Stevo refuses to recognise the fact.

If I was to buy something from a French wine producer, based in France but shipped to the UK, I expect the profit to be taxed in France, not Bermuda or Ireland. The same would apply to me buying a bike from Canyon, I'd expect the profit to be taxed in Germany as that is where the sale is coming from.

I don't expect Starbucks to sell a coffee in England, have another Starbucks company based in Bermuda, or Luxembourg create an articifial loan to the UK company to mean there is no profit on that coffee sale.

It's not hating big business or big tech, it is ensuring a degree of fairness for all.

In which case, why all the furore over companies that sell things to UK customers from abroad and pay tax on the profits abroad? A lot of the noise around the big tech companies boils down to that.

Stevo_666

shirley_basso said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

john80 said:

Stevo_666 said:

rick_chasey said:

Stevo_666 said:

kingstongraham said:

I think the important bit isn't the minimum tax rate.

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.

What do you think the important part is?

I'm not getting excited about the rate mentioned.

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.

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.

What do you think is new here?

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.

Give me some real examples and I'll comment on them.

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.

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?

I am not doubting they have good lawyers and are working to the rules. Where we differ is you seem happy with the rules that allow vast sums of money that was earned in the UK to leave the country. I don't think it is a good business model for a country. You want to access a market this is the cost of entry. It's not that hard to understand.

Stevo doesn't really care about the morals, simply what falls within and without the rules. I'm not sure how your comprehension skills can be so bad that you don't at least understand that much.

Worth adding to that an old piece of UK case law on tax (still applicable today), which gives the lie to this guff about morals somehow trumping the law.

Lord Clyde, President of the Court of Session, ruled: “No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores.

“The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.”

Stevo_666

And lets see how big an issue this big corporate taxa avoidance is in the scheme of things, using the UK as an example and HMRC's own figures:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/907122/Measuring_tax_gaps_2020_edition.pdf

A quick look at page 5 will show you that the majority of the 'tax gap' in the UK is down to sectors other than big business (which accounts for £5.3bn out of £31bn) and that avoidance accounts for £1.7bn out of the £31bn (just over 5% of the total). Of which avoidance related to tax havens will be a small part of the £1.7bn).

So it doesn't take a genius to work out that this mythical tax haven black hole for taxes is a small piece of the puzzle. But it makes good headlines and many politicians think they get kudos for bashing those seen to have deep pockets. Their energy is better directed elsewhere if they actually want maximise tax revenues.

kingstongraham

Stevo_666 said:

kingstongraham said:

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.

Sorry, bit of a break to deal with house sale and purchases...

Got a link to the facts?

https://www.theregister.com/2021/06/03/microsoft_subsidiary_ireland/

Or Google Microsoft Round Island One and take your pick.

john80

Stevo_666 said:

And lets see how big an issue this big corporate taxa avoidance is in the scheme of things, using the UK as an example and HMRC's own figures:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/907122/Measuring_tax_gaps_2020_edition.pdf

A quick look at page 5 will show you that the majority of the 'tax gap' in the UK is down to sectors other than big business (which accounts for £5.3bn out of £31bn) and that avoidance accounts for £1.7bn out of the £31bn (just over 5% of the total). Of which avoidance related to tax havens will be a small part of the £1.7bn).

So it doesn't take a genius to work out that this mythical tax haven black hole for taxes is a small piece of the puzzle. But it makes good headlines and many politicians think they get kudos for bashing those seen to have deep pockets. Their energy is better directed elsewhere if they actually want maximise tax revenues.

If this is I suspect a report highlighting small business for non payment whilst missing out all the global corporates legitimate off shoring then it does not paint the complete picture.

Amazon did 26 billion of sales in the UK in US dollars in 2020. If we assume they make 10% profit of turnover and paid 20% on this as corporation tax then this is 520 million. Whilst this is a crude calculation one major company is potentially gaining this amount going offshore.

As always you are arguing for tax competition when the reality this is always a race to the bottom which benefits only a few. Tax competition is nonsense as even if they were made to pay the 20% tax with no offshoring only a moron would shut down Amazon's UK business as revenge or seek to run the business more inefficiently to save tax by being less profitable.

elbowloh

This is not about companies not paying enough / evading tax under the current rules is it? This is about changing the rules to make it "fairer" and so smaller companies (especially bricks and mortar companies) can compete isn't it?

Stevo_666

kingstongraham said:

Stevo_666 said:

kingstongraham said:

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.

Sorry, bit of a break to deal with house sale and purchases...

Got a link to the facts?

https://www.theregister.com/2021/06/03/microsoft_subsidiary_ireland/

Or Google Microsoft Round Island One and take your pick.

Not a lot of specifics to go on, but if a company is registered in Ireland but tax resident in Bermuda then presumably it has the requisite substance and activity/management and control in Bermuda. Were the Irish tax authorities objecting to this?

john80

elbowloh said:

This is not about companies not paying enough / evading tax under the current rules is it? This is about changing the rules to make it "fairer" and so smaller companies (especially bricks and mortar companies) can compete isn't it?

You are correct. One of the potential errors in this 15% minimum rate is that the tech tax which I saw as more levelling is being dropped.

Stevo_666

elbowloh said:

This is not about companies not paying enough / evading tax under the current rules is it? This is about changing the rules to make it "fairer" and so smaller companies (especially bricks and mortar companies) can compete isn't it?

On the basis that its about where you pay the tax I'm not clear how you come to that conclusion? Smaller companies typically pay lower rates of tax anyway and are exempt from many of the admin burdens that face multinationals.

Also I'm not sure that the tax system should compensate one type of business model because they are struggling g to compete, surely that is for businesses to work out?

Stevo_666

john80 said:

Stevo_666 said:

And lets see how big an issue this big corporate taxa avoidance is in the scheme of things, using the UK as an example and HMRC's own figures:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/907122/Measuring_tax_gaps_2020_edition.pdf

A quick look at page 5 will show you that the majority of the 'tax gap' in the UK is down to sectors other than big business (which accounts for £5.3bn out of £31bn) and that avoidance accounts for £1.7bn out of the £31bn (just over 5% of the total). Of which avoidance related to tax havens will be a small part of the £1.7bn).

So it doesn't take a genius to work out that this mythical tax haven black hole for taxes is a small piece of the puzzle. But it makes good headlines and many politicians think they get kudos for bashing those seen to have deep pockets. Their energy is better directed elsewhere if they actually want maximise tax revenues.

If this is I suspect a report highlighting small business for non payment whilst missing out all the global corporates legitimate off shoring then it does not paint the complete picture.

Amazon did 26 billion of sales in the UK in US dollars in 2020. If we assume they make 10% profit of turnover and paid 20% on this as corporation tax then this is 520 million. Whilst this is a crude calculation one major company is potentially gaining this amount going offshore.

As always you are arguing for tax competition when the reality this is always a race to the bottom which benefits only a few. Tax competition is nonsense as even if they were made to pay the 20% tax with no offshoring only a moron would shut down Amazon's UK business as revenge or seek to run the business more inefficiently to save tax by being less profitable.

The 'race to the bottom' phrase is a lazy leftie phrase with no real substance.

Tax competition is not fundamentally different from from other types of competition. If you are looking online for (say) a new phone and one website offers you a better price than the rest, you don't moan that its a 'race to the bottom' on phone prices, do you? That's what competition is about, however some people seem to think it shouldn't apply where they don't want it to apply.

elbowloh