back to article G20 gives Google, Microsoft, Apple et al tax deadline

The world's top 20 finance ministers have signalled once again that they're sick of their taxes disappearing offshore and have signalled a strong intention to get their cash back. The ministers in question are all members of the Group of Twenty (G20) and gathered in Sydney, Australia, over the weekend. The Communiqué (PDF) …

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Meh

If the price of "favourite gewgaws" could be higher, surely it would be? Otherwise someone is doing bad business!?

Or did a board meeting go:

Woman1: "You know, we're paying less taxes than we sorta should, so let's put the price for our products lower than we could do!"

Man1: "That's a brilliant idea"

Idiot1: "But, shouldn't we be maximizing profit? Aren't we obligated to do so, for our stockholders and what not?"

Woman1 & Man1: "Naah, don't worry about it!"

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Profit maximisation is an oft quoted, or rather mis-quoted, obligation for companies. They are actually required to run the company in the best interests of the shareholders and I would argue that pissing off tax authorities the World over is not aligned to that objective.

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share holder value

Or you could maximise profit and return to shareholders and they can make their own judgement on how much extra tax they pay? On top of you know their dividends and realised equity gains being taxed.

Annoying the tax authorities should not affect the behaviour and judgment of an objective civil servant should it?

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I think the point Eguro was making was that the price of the end product is unlikely to change and the paying of tax will have to come out of their (vast) profits because if they could've charged the customer more for a product they would have anyway, regardless.

In a capitalist economy with normal market forces major companies will generally charge the highest amount they can to the consumer/retailer/distributor to generate the greatest amount of profit.

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That's completely true - in a monopoly. While companies are driven to make a profit, they also pressure each other to lower prices. Tax avoidance can be used to lower prices (increasing the company's competitiveness) instead of just increasing profits.

Depends on how competitive the company's product is in other ways. Much better than competition, more fashionable, etc.

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Big Brother

Who's gonna pay for the ministers' private jets and cars?

The world's top 20 finance ministers have signalled once again that they're sick of their taxes disappearing offshore and have signalled a strong intention to get their cash back.

There is just one little problem: It is not "their" cash (which, however, they take upon themselves to boldy destroy by inflationary actions). Robbers and highwaymen of the lower classes (those with guns in hand) and of the higher classes (those with boys in blue with guns in hand) may lay claim to the contents of your purse, not to mention your actual physical existence, but there are some slight moral problems with that kind of attitude. Which, in our sufficiently "social" welfare-warfare permafail "nation states" are wont to be hushed up or delicately covered by random political noise.

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Anonymous Coward

Re: Who's gonna pay for the ministers' private jets and cars?

If you want to use infrastructure in the G20 nations then pay taxes there, not some desert island.

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Thumb Down

But... MUH INFRASTRUCTURE!

The last time I checked, I haven't undersigned anything about participating in the "Global War on Stuff", which includes the 5-trillion boondoggle about wrecking Iraq. Did I mention yearly 3 billion pumpout to "the sole democracy in the Middle East"?

"Infrastructure" my ass. If taxes went to "infrastructure" we would have skyhooks by now.

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Anonymous Coward

Re: But... MUH INFRASTRUCTURE!

"which includes the 5-trillion boondoggle about wrecking Iraq. Did I mention yearly 3 billion pumpout to "the sole democracy in the Middle East"

Ah, the forum anti-Semite, alive and whining.

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"Haven't undersigned anything..."

So you think you should only pay taxes in proportion to what percentage of government you'd like to have? Or that you won't pay taxes at all unless the government is only doing stuff you agree with?

Do you have kids? Not everyone does, maybe they want to defund education...why should their taxes go to educating your kids? The fundamentalists down south might want to defund NASA, what's the point of exploring space, the Bible tells us all we need to know about what's up there. Some guy that's afraid of flying doesn't want to pay for the TSA - or air traffic controllers. His neighbor who doesn't drive doesn't want to pay for the roads.

Follow that to its logical conclusion and I hope you never have to call the fire department.

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Re: But... MUH INFRASTRUCTURE!

I quite like jews. I married one.

However, Israel is pretty damn close to a fascist state and it's certainly "rogue" by any normal measure of the word.

You can dislike a political entity without being a racist.

Racism is stupid anyway, there's far too many white people around to be hated to leave any time for it.

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Re: But... MUH INFRASTRUCTURE!

"You can dislike a political entity without being a racist."

Not these days you can't, that's why Dieudonné has been barred from entering the UK.

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WTF?

Re: Who's gonna pay for the ministers' private jets and cars?

Yeah you're totally right. And that money's much better staying where it is now in Google, Apple, and Microsoft's Cayman Island tax-free accounts instead of being spent on *something* in the countries in which it was earned isn't it?

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Tax Havens

Whilst we're on the subject of tax havens and tax avoidance etc... Can the G20 also ensure that "Everyone Else" also pays their tax.....that means ministers, business men, anyone that has money in Switzerland that does not work on Switzerland ( Switzerland could be any of those damned Hide your Finance countries)..

These loopholes only exist because ministers and their sidekicks created them so that they too could profit.....

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Anonymous Coward

All of the G20 should do the following:

1. Change the tax laws and use harmonisation to ensure the same rate is applied across the G20.

2. Totally ignore any lobbying from these big companies and ignore their demands.

3. Listen to the people who pay their taxes, ie. the working masses and give them what they want.

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Facepalm

Yep, these tricks are well known and are totally internally consistent. The people who implement these generally feature arm brassards with wild symbols. General socialistic well-being ensues.

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In your dreams.

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Uh, no.

What, for the example, Britain could do is -

1. Clear down any obstructive EU treaties. This is important.

2. Make it illegal to sell any kind of item or service in the UK except from a tax registered UK company or individual.

3. Make it illegal to borrow money in the UK from any non-UK based company.

4. Tax the UK-based companies.

Thank you and goodnight.

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Trollface

Those pigs are flying under the radar at breakneck speed.

“engage with, and support low-income and developing countries so that they benefit from our work on tax.”

Yeah, right. We will be totally forgetting about mercantilism, trade blocks, punitive import taxes and generally about f*cking brown people up their wazoo because we need to pull in the goods all of a sudden ....

A likely story.

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High time.

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Looking for a new round of fat brown envelops

The rich and powerful will make sure they continue to pay less tax then their secretaries. Corporations will do what they can to make sure money goes to stock options and bonuses for the same rich and powerful.

They will just change the loop holes to make it look like something is being done, but there will be new ones to replace any closed.

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Re: Looking for a new round of fat brown envelops

Big companies (and very rich individuals) want complexity in business and tax law. They want that complexity because it weights things in their favour by forming barriers that only larger companies can overcome and loopholes that only they can exploit.

Loopholes like this provide a monetary benefit to those already in a strong position, while denying that same benefit to smaller companies. Excluding all other concerns, that fact alone makes it worth all this attention.

Of course, that's not what the aforementioned finance ministers/treasurers are looking at but the best we can hope for from politicians seems to be them accidentally doing a good thing in the course of their greed and self-aggrandisement.

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Re: Looking for a new round of fat brown envelops

Your approach to the rich and powerful would appear to include anyone with a pension plan

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G20 actions

Still missing the point really. Tax codes are complex - our simple one* is a mere 5000** pages.

A multinational will have to comply with every such tax code, and no guarantee of consistency. Blaming companies for contrived tax affairs is a bit like blaming the cup cake for its shape.

So:

1) Simple and consistent codes.

2) Profits should be taxed where economic activities deriving the profits are performed and where value is created. Now apply that to a software R&D lab (that's at least tax deductible anywhere in the world, often super tax deductible in the UK - not least as countries would rather be a locus for highly qualified, highly paid people who you know pay taxes) . The software is created in one place and profits and economic benefits of use elsewhere on either sale or use.

3) Ireland is not in the G20 and has a different approach to taxation - attract employment, tax employees.

Solve 1) , 2) and 3) simultaneously.

Anything that is not legally minimising taxation is by definition voluntary - and companies do a lot of voluntary and charity work and support around the world. CSR, 1%'ers whatever. Giving more money to taxation authorities is of course one of the worst ways to effectively achieve the desired objectives***. Nothing stops employees and shareholders doing the same , and again many do give to charities and more.

If you tax at a 'moral' rate then you have all sorts of non objective analysis on tax matters that will again by definition be discriminatory and imposing unpredictable judgements, further disincentivising investment.

Of course it can't be the G20 finance ministers fault, oh no must be those nasty companies that er provide most of the employment and tax revenues any way ...

*it must be , we have an Office of Tax Simplification and they say it is.

** after amending, redefining and dedupe, actually you may have to comply with up to 17,000 if you have any historical compliance.

*** according to Keynes

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Re: G20 actions

I like what you're saying.

Perhaps I misunderstood you but it seems there is something missing: The tax should also be impartial - no breaks, except for a differentiation of tax payer type - individual or organization - no other types allowed, period.

Tax rate is determined by income amount and location of income received (e.g. your point "1" maskes sense). After that, it actually does become a "simple" tax law - in less than 10 pages...

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Re: G20 actions

The purpose of taxation is to benefit the people of the state levying those taxes. (Whether that happens in practice is of course an entirely different matter . . . )

Making a tax system as you describe is unlikely to provide the greatest overall benefit to a state and the people. Providing tax incentives to a given company or industry may seem counter-productive as it will result in less tax revenue from that company but the flow-on effects in related industries might well make up for it.

Likewise, offering lower tax rates may help to entice foreign companies to invest locally, creating jobs and infrastructure.

While flat, immutable tax rates may well make a tax system 'simple' they are unlikely to make it effective.

Not that I have any love for such loopholes - the changes to FBT in Australia for cars is a great idea and will stop much rorting from people who are already well enough off - just that the goal should not be to simplify the tax system as an end in itself.

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Paris Hilton

Que?

at:

"means of paying rather less tax than the spirit of the law intends"

It sort of depends upon who set the law in a sense and it too has consequences.

For example, who advised Ministers of the levels and specifics of applying the law and were they remiss in their remit? If these were civil servants it will probably be end of story, were they private consultants it could mean getting them in for a flaming public scrutiny session (that will not happen were the individuals civil servants tho').

In either event, if Ministers and MPs consider that the specifics of a law do not meet the spirit of the proposed law or fuller intentions of the proposed law then their first duties are to identify those parties and permit them opportunity to explain why. Also to identify potentially systematic weaknesses that permit spirit of a proposed law to be at variance with the actual law as & when it were made real.

Once that is done then they can go after the likes of g, m$, happl, star$, … and wouldn't their energies be better spent at home sorting out chaos of floods and utilities mayhem?

ps: all recent builds in flooded places were approved so should those making approvals not face litigation for consequential damage? (rather than letting insurance companies pick up the tab innit?)

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Due diligence doodz

… and it seems our politicos and (un)civil serventia have neither.

On the other hand(s) maybe it is a great way to make a law look effective and earn super spondoolies on the side whether one were Minister, MP, civil servant adviser or private consultant?

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Joke

pps(3) with apologies

g, m$, happl, star$, ... could all argue that they are not aware of the spirit of the law and can only consider the law as enacted and made, well, law.

If parliament seriously wishes to set precedence so that all will appreciate the spirit of a proposed law even if that is at variance with the actual law when it is actually actualised then perhaps all meetings, discussions, draft proposals, and so forth in the transition from propsed law as an enacted ideal to actual law as passed by parliament should be released into public domain.

(If you heard a swishing noise then it probably was the a**eholes of civil servants squeaking shut at about the same time. Don't be surprise if the topic sort of dies a natural death and sort of withers away even from memory?)

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Wrong targets

They should be giving warnings to Ireland, Lichtenstein and The Netherlands that they need to bring their tax regimes in line with the rest of us or fuck off from our "common" economic area.

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Downvote me straight away...but.

Taxing a company on profit is immoral and frankly, theft. Taxing a company for anything is simply taxing the end user or consumer without being direct about it. Companies do not pay tax on their profits; you pay their tax on their profits!

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Paris Hilton

Re: Downvote me straight away...but.

True, true.

Very, very true and why should UK Treasury want to slurp up all the cash in UK?

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Re: Downvote me straight away...but.

>why should UK Treasury want to slurp up all the cash in UK?

What people overlook is that the various governments around the world have tied it together with commerce. We've brought down trade barriers over the years.

The other thing people overlook is that the UK Treasury does make money from Apple in the way of VAT, and every other country has an equivalent sales tax. When an iPad is brought into the UK and sold at £400, £80 of that went straight to HMG Treasury (there is no reclaim on the item as it's an import from China).

So the corporate tax liability is peanuts as they chase it through the ever more complex tax system that they themselves wrote!

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