And Russia will be the first to sign up!
I can see Comrade Putin thinking through all the money that would flow to Russia if he refuses to apply these new rules, and of course all the benefits that would accrue therefrom!
The G20 has backed an action plan from the OECD that would fundamentally rejig international rules on taxation. Major multinationals like Google, Apple and Amazon have excused their legal tax-dodging antics by shrugging their shoulders and telling governments that if they don't like it, they'll have to change the rules, and …
Yeah, but how many companies would seriously move to Russia, considering your ownership of a company marks you out for imprisonment in a Gulag, should you utter anything that Putin doesn't like. They're also going about rolling back any laws which could be considered progressive - it's no longer ok to be gay in Russia. The police are utterly corrupt. There is no free speech. The crime rate is astronomical. etc. etc.
For me to think about moving a company to Russia, the tax would have to be paid to me by the government, even then the prospect of five years in a salt mine don't fill me with positive thoughts.
Er ... if they aren't taxed how does Russia make more than peanuts?
The problem is that even the "Havens" are making very little out of these rich companies.
There are Russian companies based in Ireland, not for tax reasons, but for safety! Unless you are making or selling in Russia you wouldn't put your financial "eggs" in that basket.
Were you asleep/away for the Starbucks bit....
Tax is paid on profit - not income and when the likes of Starbucks spend several millions to "Licence the use of marketing materials" (i.e use the logo) then the profit is erroded - legally if somewhat imorally.
I call fake on this - lovely idea which will not be implmented this side of several general elections.
Charles
Sort of, yes. But it's not that simple. If you wish to tax at the turnover line then you will destroy utterly many of our manufacturers who are not multi-national. They can have huge turnovers but only a tiny profit because of the marginal cost of making [product X] can be vast. Think of a generic beige box PC, it's a commodity with pennies in profit per unit but quite a high intrinsic selling price. You sell bucketloads to make any real money. Taxing turnover would wipe out those pennies, and kill the maker, then the sector. That's a bigger problem than Google doing a Dutch Sandwich.
You need to bear in mind that corporate taxation is very different, for very sound reasons, from personal taxation. Most of the things you would call "tax deductible" are common sense, such as the material used in making [product X]. The problem comes with multinationals who, as another notes, simply send bills to high tax regime outposts from low tax regimes to move profit there.
In theory you could sort this by having one global tax rate, the same in every last jurisdiction. It would work, but there is no way all 200+ jurisdictions would agree to it. Ever.
I figured such a system would result in collateral damage, but your description helps visualize this. The system WOULD be disadvantageous to industries with unavoidably high costs of operation. That's why I qualified my earlier statement. Perhaps not removing the business expense deduction altogether but limiting it to distinguish between honest costs of operation and dodges. But here too will I acknowledge this as a "hard" problem where there may not be a cut-and-dry solution.
Well, once the rest of the gov.uk internet monitoring is all in place they can impose VAT, import duties and tariffs on downloads. As for the physical goods, I don't see Amazon doing a "free" next day delivery from outside the EU.
No doubt part of the legislation will be to tighten up on the allowable tax exemptions on licensing payments with regard to the "Starbucks Shuffle" such that if a company is claiming 99% of it's income is going outside the tax jurisdiction on intangibles that they claim to be making a loss, then they get forced into bankruptcy.
French ministers talking about the titsup "french economy" by taxation... Why is it titsup? Look at taxation and the cancer of government control and spending ... 50% of GDP generated by government farts, quite a lot of them fueled by the printing press, means DEATH any way you slice it.
Then you hear them say "social contract" and you picture a fat mafiosi talking about the good of "our community". Or you think about what happened when you last invoked that "contract" and tried to find a hospital on a weekend.
vomit_chan.jpg
Even if I agree about the stupid "MOAR TAXES" of the current french government and the need to cull the herd of civil servants (well, they're not that civil and some of them don't really serve), you asked for numbers, so...
- EADS -> 15% owned by the french state, via Sogeade
- AREVA -> 14.3 % owned directly by the french state, 2.5% more indirectly (CDC) and an extra 2.5% via EDF
- EDF and its 73 nuclear reactors (15 in the UK) -> 85% owned by the french state
- Arianespace -> 35%, via CNES (down from the 60% on its inception)
Shall I continue? I covered the nuclear power industry, aerospace business and space programs.
I'm sure if we just imposed, pay tax at profit earned source or we remove your rights to do business in the country. Change would happen overnight.
You wouldn't need every country to sign up just the UK, German and France in Europe would do; with a GDP of about $7 trillion companies couldn't afford not to do business with us.