Topic: Corporation Tax

[thejbs]

http://www.bbc.co.uk/news/business-41582844

The UK arm of eBay paid only £1.6m in corporation tax last year, even though its US parent had total revenues from its UK operations of $1.32bn (£1bn).
Ebay's UK accounts record only £200m in revenues, which came entirely from a Swiss parent firm, seemingly for acting as its advertising agency.
The company declined to explain how its UK revenues were not booked though its UK business.
However, an eBay spokesman said its tax affairs were entirely legal.
"In all countries and at all times, eBay is fully compliant with national, EU and international tax rules including those of the OECD, including the remittance of VAT to the appropriate authorities," he said.
The pre-tax profit eBay UK made on its revenues in 2016 was £7.7m, according to the accounts, and it was on this figure that the UK corporation tax was levied.
Ebay is a huge international business that makes money mainly from advertisers and the commission on sales made through its auction site.
The total revenues of $1.32bn that the parent US business generated from the UK included those from subsidiaries such as the Stubhub ticket exchange and Gumtree classifieds site.
Within the group, the UK arm of eBay is wholly owned by eBay International, which is based in Switzerland and is itself owned by eBay in the US.
The firm's UK accounts describe the role of eBay UK as providing "services to eBay International by recommending market penetration and advertising strategies for the UK internal marketplace and related third party advertising sales in the UK, Germany, Italy, Belgium and Australia".
The seeming ability of the company to shelter most its UK profits from the UK tax authorities raises again the ability of big international companies to route their revenues to the countries with the most favourable tax regimes.
This has led in the past few years to intense scrutiny of the tax practices of big firms such as Apple, Amazon, Google and Starbucks.
Ebay in the US, whose international revenues hit $9bn last year, acknowledged that its tax affairs were under scrutiny in several countries, which may leave it with more tax to pay.
"The material jurisdictions where we are subject to potential examination by tax authorities for tax years after 2002 include, among others, the US (Federal and California), Germany, Korea, Israel, Switzerland, United Kingdom and Canada," its US accounts said.

Added to this, Netflix paid £300,000 tax in the same period.

This is the shit that the people of our country should be up in arms about. 

[SP]

It is a shit tax that discriminates against SMEs in favour of multinationals. It is favoured by politicians as it appears to be a victimless tax. They would rather ignore the obvious weaknesses as the corporations shoulder the fall out. Corporation Tax only works effectively in a closed economy, or one where there is effective international co-operation rather than a race to the bottom zero rates.

[filopastry]

It is a shit tax that discriminates against SMEs in favour of multinationals. It is favoured by politicians as it appears to be a victimless tax. They would rather ignore the obvious weaknesses as the corporations shoulder the fall out. Corporation Tax only works effectively in a closed economy, or one where there is effective international co-operation rather than a race to the bottom zero rates.

Nothing to add to that!

[killer-heels]

For all their posturing about how socially conscious and liberal they are, these tech companies really are a gang of crooks.

[Nobby Reserve]

It is a shit tax that discriminates against SMEs in favour of multinationals. It is favoured by politicians as it appears to be a victimless tax. They would rather ignore the obvious weaknesses as the corporations shoulder the fall out. Corporation Tax only works effectively in a closed economy, or one where there is effective international co-operation rather than a race to the bottom zero rates.

There is nothing wrong with the tax itself, indeed it is essential.

The problem is with the nefarious methods deployed by multinationals to dodge their social responsibilities in not paying the correct levels of tax - and with the sort of corporate-stooge governments that dominate in western/developed countries, who allow the loopholes to remain wide open.

Until there is international cooperation on measures to counter this scandal, nothing can be done. And there will never be international cooperation because too many governments are under the influence/control of multinational corporations - the most in thrall being the US.

I used to have a pipe dream that the EU could be a 'force for social good', and part of this would the implementation of a uniform corporation tax rate, and with any multinational corporation having to pay tax on profits arising from each individual market (accounts dissected by tax lawyers to ensure compliance) and any non-EU corporation found not adhering to both letter & spirit of the laws would be subject to huge fines and tariffs on imports.

But the EU sadly fell under the control of the 'corporate elite' some years ago, and they're regrettably not much better than the US in terms of allowing corporations & banks to dictate policy.

[Titi Camara]

It is a shit tax that discriminates against SMEs in favour of multinationals. It is favoured by politicians as it appears to be a victimless tax. They would rather ignore the obvious weaknesses as the corporations shoulder the fall out. Corporation Tax only works effectively in a closed economy, or one where there is effective international co-operation rather than a race to the bottom zero rates.

Whilst this is some what over my head, as some daft c*nt who's paid his dues his entire working life, in my simplistic view if it's earned in the UK then you pay tax in the UK. Simple as that. I don't give a shit where they're based for tax purposes. You trade here, you pay here. End of story.

Sick to death of these companies doing what the fuck they like and the government doing fuck all to stop them. It's obviously a complicated business but in my eyes it shouldn't be. Get the loop holes closed and make the system cast iron!

[classycarra]

...and any non-EU corporation found not adhering to both letter & spirit of the laws would be subject to huge fines and tariffs on imports.

But the EU sadly fell under the control of the 'corporate elite' some years ago, and they're regrettably not much better than the US in terms of allowing corporations & banks to dictate policy.

Something like this?

https://www.cnbc.com/2017/06/27/the-largest-fines-dished-out-by-the-eu-commission-facebook-google.html

[Nobby Reserve]

Something like this?

https://www.cnbc.com/2017/06/27/the-largest-fines-dished-out-by-the-eu-commission-facebook-google.html

Something like that, yes. But for tax-dodging rather than for things unrelated to tax-dodging.

[classycarra]

Something like that, yes. But for tax-dodging rather than for things unrelated to tax-dodging.

Like this big paragraph in there?

Special mention: Apple – 13 billion euros (in unpaid taxes)
This wasn't a fine, but an order to pay taxes. In August 2016 the Commission ruled that tech giant Apple had received illegal tax benefits from Ireland worth up to 13 billion euros.

An investigation by the Commission into State aid found that favorable tax rulings issued by Ireland to Apple meant the company "paid an effective corporate tax rate that declined from 1 percent in 2003 to 0.005 percent in 2014 on the profits of Apple Sales International," according to the Commission.

Ireland was ordered to recover the unpaid tax from Apple, plus interest.

Find it weird someone who could come out with this line..:

"The problem is with the nefarious methods deployed by multinationals to dodge their social responsibilities in not paying the correct levels of tax - and with the sort of corporate-stooge governments that dominate in western/developed countries, who allow the loopholes to remain wide open."

..wouldn't be very interested in tackling collusion by multinationals. Only tax. What gives?

[Peabee]

Whilst this is some what over my head, as some daft c*nt who's paid his dues his entire working life, in my simplistic view if it's earned in the UK then you pay tax in the UK. Simple as that. I don't give a shit where they're based for tax purposes. You trade here, you pay here. End of story.

Sick to death of these companies doing what the fuck they like and the government doing fuck all to stop them. It's obviously a complicated business but in my eyes it shouldn't be. Get the loop holes closed and make the system cast iron!

They can have one of their overseas companies make a charge, e.g., a management charge, that wipes out most of their profits.  The overseas company could be based somewhere with a lower or NIL tax rate.  Hence, UK profits and taxes are reduced.   

One way would be to levy such charges or disallow them in tax computations.

[Nobby Reserve]

Like this big paragraph in there?

Find it weird someone who could come out with this line..:

"The problem is with the nefarious methods deployed by multinationals to dodge their social responsibilities in not paying the correct levels of tax - and with the sort of corporate-stooge governments that dominate in western/developed countries, who allow the loopholes to remain wide open."

..wouldn't be very interested in tackling collusion by multinationals. Only tax. What gives?

I am interested, but I thought we were talking about Corporation Tax, and that you, in trying to defend the EU, were drawing a comparison that wasn't completely relevant.

And note that the Ireland government, in response to the EU Commission instructing it to levy additional tax on Apple, has responded by saying "no".

[classycarra]

I am interested, but I thought we were talking about Corporation Tax, and that you, in trying to defend the EU, were drawing a comparison that wasn't completely relevant.

And note that the Ireland government, in response to the EU Commission instructing it to levy additional tax on Apple, has responded by saying "no".

I dunno, I feel it was relevant to your point on the EU. We were talking about corporation tax, and you brought in multinationals colluding (though I think you prefer calling it "nefarious methods") so I brought up examples of times the EU tried to tackle those methods.

Also, Apple are fighting a legal challenge - not quite the 'Ireland said no, end of story' you present. No need to resort to lying/misrepresenting just to defend your view.

Also, you said this on the EU:

But the EU sadly fell under the control of the 'corporate elite' some years ago, and they're regrettably not much better than the US in terms of allowing corporations & banks to dictate policy.

In light of your point on Ireland, which is it? Are the EU a corporate elite that also likes to make sure multinationals pay their fair share of taxes as a side-hustle? Or are Ireland the nefarious corporate elite in this? Did the USA do this? Be interested in how you qualify the Ireland/Apple/EU case.

[Nobby Reserve]

I dunno, I feel it was relevant to your point on the EU. We were talking about corporation tax, and you brought in multinationals colluding (though I think you prefer calling it "nefarious methods") so I brought up examples of times the EU tried to tackle those methods.

Also, Apple are fighting a legal challenge - not quite the 'Ireland said no, end of story' you present. No need to resort to lying/misrepresenting just to defend your view.

http://www.bbc.co.uk/news/world-europe-37299430
https://www.theguardian.com/business/2016/dec/19/apple-ireland-eu-tax-ruling-european-commission-us-irs

These two articles suggest that the Irish government rejects the ruling, but if the situation has evolved, I'm happy to be corrected.

Also, you said this on the EU:
In light of your point on Ireland, which is it? Are the EU a corporate elite that also likes to make sure multinationals pay their fair share of taxes as a side-hustle? Or are Ireland the nefarious corporate elite in this? Did the USA do this? Be interested in how you qualify the Ireland/Apple/EU case.

The EU are heavily influenced & controlled by corporations & banks.

If you look at their actions regarding Greece, this is clear. The EU has essentially used the ECB to remove the risk from commercial banks (principally but by no means exclusively Deutsche Bank) by purchasing 'bad asset' derivatives owed by the Greek state, replacing them with new debt instruments placed on Greece, and owed to the ECB, which is financially backed by EU governments/taxpayers. In short a transfer of risk from commercial interests to the public.

Of course, they will at times go after corporations that blatantly flout the rules, and I did say that the EU was not as bad as the US.


Incidentally, in case you think I'm a rabid Wrexiteer, I'm not. I'm an ardent Remainer who believes the UK leaving the EU will be an economic disaster. Doesn't stop me seeing the huge faults within the EU, though.

[Elmo!]

Like this big paragraph in there?

Well as your quote says, it wasn't a fine, just an order to pay taxes that should have been paid. A fine on top of that would be nice.

[blert596]

I think you'll find a TV series 0n poor old Joey who does a job cash in hand for twenty quid so he can feed his family is a much easier target to portray to the masses as a blight on our economy.

Wankers the fucking lot of them

[filopastry]

They can have one of their overseas companies make a charge, e.g., a management charge, that wipes out most of their profits.  The overseas company could be based somewhere with a lower or NIL tax rate.  Hence, UK profits and taxes are reduced.   

One way would be to levy such charges or disallow them in tax computations.

How do you define which are allowed and disallowed though, there are already rules on that.

For instance where I work we employ a load of people in our European head office in the UK, we can't get any tax relief for all of those costs in the UK as the services provided don't relate solely to the UK business, so we actually need to charge these costs to all of our markets using some kind of fair and agreed methodology, otherwise we don't get tax relief for the costs anywhere, which is equally hardly fair.

[Peabee]

How do you define which are allowed and disallowed though, there are already rules on that.

For instance where I work we employ a load of people in our European head office in the UK, we can't get any tax relief for all of those costs in the UK as the services provided don't relate solely to the UK business, so we actually need to charge these costs to all of our markets using some kind of fair and agreed methodology, otherwise we don't get tax relief for the costs anywhere, which is equally hardly fair.

Therein lies the problem.  I've also worked for such a company where a charge is justified. 

However, it's only going to be large companies that benefit from setting up a shell company overseas, so if there was some sort of self-assessed scheme, which would amount to tax evasion if ignored?  Any company, such as yours, with good reason would be okay while the multinationals that charge an arbitrary amount would have to pass an audit if it's material.

[BobOnATank]

These two articles suggest that the Irish government rejects the ruling, but if the situation has evolved, I'm happy to be corrected.


The EU are heavily influenced & controlled by corporations & banks.

If you look at their actions regarding Greece, this is clear. The EU has essentially used the ECB to remove the risk from commercial banks (principally but by no means exclusively Deutsche Bank) by purchasing 'bad asset' derivatives owed by the Greek state, replacing them with new debt instruments placed on Greece, and owed to the ECB, which is financially backed by EU governments/taxpayers. In short a transfer of risk from commercial interests to the public.

Yes the Irish government is fighting to protect their self interests by keeping a lot of jobs within the country however it is the EU that is holding the government to account to ensure that Ireland is applying the correct taxation to the company rather than give it preferential treatment - the EU is clearly the body ensuring that the correct legal application of tax law in this case. I'm not sure how you see them as being complicit in the avoidance of tax when it is the complete opposite. BTW I say all of this as an Irish man. I assure you the irony is not lost on taxpayers.

The Greece position is the only way that all countries eventually responded to the credit crisis in 2008. For example the Bank of England started the special liquidity scheme - without EU involvement because it was never required nor mandated in any way - to cleanse toxic assets, to not do this would have collapsed the system and therefore impoverished the citizens of the countries. In this case you seem to be saying the painful yet successful cure was the issue rather than the problem that caused the injury in the first place. To attack the last resort cure as a money making scheme is not accurate, IMO.

[Red-Soldier]

I think he could possibly be an infamous, previously banned poster, who voted to leave the EU and kept banging on about it being a "bureaucratic superstate" etc. etc. etc.

[stevensr123]

I think he could possibly be an infamous, previously banned poster, who voted to leave the EU and kept banging on about it being a "bureaucratic superstate" etc. etc. etc.

the EU is though? Not one person can deny their are some bad points to being in the EU, it's fucking obvous. It's just leaving the EU is far worse than staying in it in many ways as well. Unless people think the EU can do no wrong - which I would reply have you seen there response lately to Catalonia? Greece and how they systematically sold off the people of greeces organisations and assets and give them to " Germanys" control.

[Red-Soldier]

the EU is though? Not one person can deny their are some bad points to being in the EU, it's fucking obvous. It's just leaving the EU is far worse than staying in it in many ways as well. Unless people think the EU can do no wrong - which I would reply have you seen there response lately to Catalonia? Greece and how they systematically sold off the people of greeces organisations and assets and give them to " Germanys" control.

Depends what your definition of a 'bureaucratic superstate' is I guess.

Of cpurse there are some bad points about the EU and it isn't perfect.  But, and there are lots of buts.  Here's one example; EU Directives, namely the Bird and Habitats Directives, plus EU funding has had huge positive impacts on the environment in this country.

I also mention the EU has been fining our own government for a number of years for breaching it's own clean air targets.  There are many other things I could list.

I like to have a Union that watches over our environment, wildlife, workers rights etc and keeps our government accountable to their obligations.

It's not perfect, never said it was, but it's by far the better option for most things if we in., compared to being out.

[SP]

the EU is though? Not one person can deny their are some bad points to being in the EU, it's fucking obvous. It's just leaving the EU is far worse than staying in it in many ways as well. Unless people think the EU can do no wrong - which I would reply have you seen there response lately to Catalonia? Greece and how they systematically sold off the people of greeces organisations and assets and give them to " Germanys" control.

Most of the bad points are down to the individual states throwing their weight around rather than the EU structures being inherently evil. Germany, not the EU, mauled Greece.

[Nobby Reserve]

I think he could possibly be an infamous, previously banned poster, who voted to leave the EU and kept banging on about it being a "bureaucratic superstate" etc. etc. etc.

I'll plead innocence on that one, genuinely. You have the wrong person completely.

[Nobby Reserve]

I'm still not the "infamous, previously banned poster, who voted to leave the EU and kept banging on about it being a "bureaucratic superstate" etc. etc. etc." mentioned, though

[SP]

These days, there's little to choose between them. The EU has become a tool for the corporatocracy.

For even considering this, we the people should march on Brussels, drag the EU Commissioners from their ivory towers, and use the lampposts for an alternative purpose.

When the level of the issues one finds to be imperfect are constantly growing, it's an option.

Anyway, I absolutely believe a close 'Leave' vote would not be accepted as the end here in Britain, but rather spun by the Govt as a bargaining tool to secure 'more' reform, before a further referendum.

As such, I'll be voting Brexit, because the more people who do, the bigger & more dramatic the implosion of the Tory Party would be.

[Nobby Reserve]

It'd be fairer if you gave some context to both posts. The first wasn't in connection to the referendum; the second was actually me saying that I didn't believe a narrow 'leave' vote  would lead to us leaving, so would vote leave out of a [misguided as it happens] belief that the result would tear the Tory Party apart.

Neither post, by the way, back-up the original claim that I was an 'infamous poster who kept banging on about the EU being a bureaucratic superstate, etc. The person who posted that had someone else in mind. I hardly posted, and I seriously doubt anyone remembers Weby72 or any of his posts.

[Johns_Barn]

Whilst this is some what over my head, as some daft c*nt who's paid his dues his entire working life, in my simplistic view if it's earned in the UK then you pay tax in the UK. Simple as that. I don't give a shit where they're based for tax purposes. You trade here, you pay here. End of story.

Sick to death of these companies doing what the fuck they like and the government doing fuck all to stop them. It's obviously a complicated business but in my eyes it shouldn't be. Get the loop holes closed and make the system cast iron!

You'd also have to analyse the revolving door between directorship roles and civil service. It is so grubby but they're a cabal in their own feedback loop. I

Fighting it, would need to be a grass roots thing spread by the people for the absolute and sole benefit of the people.
Re-education is also needed...trying to convince family members that actually using Amazon only entrenches their behaviour is like trying to capture a fart.

Sent from my SM-G900F using Tapatalk

[richiedouglas]

I run a small company employing 6 people. It's frustrating that you can compare our corporation tax bill to netflix at all. We paid something like 10% of their bill and they are huge!

[Charlie Adams fried egg]

You'd also have to analyse the revolving door between directorship roles and civil service. It is so grubby but they're a cabal in their own feedback loop. I

Fighting it, would need to be a grass roots thing spread by the people for the absolute and sole benefit of the people.
Re-education is also needed...trying to convince family members that actually using Amazon only entrenches their behaviour is like trying to capture a fart.

Sent from my SM-G900F using Tapatalk

I'd love to see something like a transaction tax on Amazon so that a % of each sale to a UK address is taxed. First, it ensures that an entity the size of Amazon is actually paying towards the UK when it does a fair chunk of business here. Second, it helps level the playing field with retailers that actually have a high street presence and the overheads that go with it.
I think that there needs to be more public shaming of companies that pay abnormally low corporation tax so that people can make a more informed choice whether or not to do business with them. Sadly many people don't see the bigger picture and will go for the cheapest.

[SP]

 

I'd love to see something like a transaction tax on Amazon so that a % of each sale to a UK address is taxed. First, it ensures that an entity the size of Amazon is actually paying towards the UK when it does a fair chunk of business here. Second, it helps level the playing field with retailers that actually have a high street presence and the overheads that go with it.
I think that there needs to be more public shaming of companies that pay abnormally low corporation tax so that people can make a more informed choice whether or not to do business with them. Sadly many people don't see the bigger picture and will go for the cheapest.

We could call it VAT?

[Charlie Adams fried egg]

We could call it VAT?

Which would do nothing to level the playing field with onshore retailers. I'm not a VAT expert but I think there may be enough flexibility in the rules to charge a different rate for the likes of Amazon.

[SP]

Which would do nothing to level the playing field with onshore retailers. I'm not a VAT expert but I think there may be enough flexibility in the rules to charge a different rate for the likes of Amazon.

I would change business rates to charge Internet retailers a level of rates far closer to that charged to a shop servicing a similar number of customers.

[Trada]

Jeremy went on Tax avoidance scheme on the Isle of Man in PMQs.

There is meant to be a lot happening this weekend when data from a Bermuda hack is released that could be as big as the panama papers.

BBC's Panorama are doing a program on it next week could be interesting.

 

[Johns_Barn]

Shocking stuff oozing out.

Sent from my SM-G900F using Tapatalk

[Dull Tools]

These company's do all pay a lot of tax though through employer's NI. It's not as large as it should be but look in any company's account and the figure for NI is always huge.

[CraigDS]

I also don't know why they don't just tax revenue. It is so much easier to calculate and the revenue figures for these companies are always huge in the UK.

Because a huge revenue doesn't mean you make a huge profit, and for a lot of companies a set rate of tax on revenue would probably cripple them.

Or you just have a company's VAT amount so that every time you buy something on Amazon a certain amount (say0.5%) goes to HMRC.

20% already goes to HMRC in VAT. So you're suggesting a VAT increase to 20.5%?

[Lush is the best medicine...]

If they taxed on revenue your Food bill will go through the roof

[Nobby Reserve]

Harmonise Corporation Tax rates across the EU, and coordinate measures to tackle tax-dodging by multinationals, imposing punitive tariffs on their goods/services sold within the EU if they don't provide full transparency and comply with the applicable EU taxation laws.

[Lush is the best medicine...]

Harmonise Corporation Tax rates across the EU, and coordinate measures to tackle tax-dodging by multinationals, imposing punitive tariffs on their goods/services sold within the EU if they don't provide full transparency and comply with the applicable EU taxation laws.

theyre doing this aren’t they around 2019?

[Nobby Reserve]

theyre doing this aren’t they around 2019?

Whilst any move to crack down is to be welcomed, I don't think it goes far enough - and there's certainly no move to harmonise CT rates across the EU.

I know that Apple's dodgy arrangement in Ireland was investigated, but Amazon base their European operations out of the tax haven of Luxembourg, which is in the bloody heart of the EU (and home to many other 'tax HQs')