658 posts • joined Monday 10th March 2008 14:53 GMT
Yes it is.
The US corporation licenses its intellectual property to the Luxembourg entities who are allowed (under the terms of the license) to sub-license to other EU entities. Royalties are set by contractual agreement between the parties and that is how 'profits' can be shifted out of the UK tax net
This is an overly simplistic analysis for the real world of international tax law is very complex where one country may view an arrangement entirely differently from another, eg. Australia considers contracting through a company for purely personal expertise (ie. 'IT Contracting') as a complete and utter sham, while the UK allows it to go on but with restriction via IR35. Anyone who thinks IT Contracting through a company is not a form of tax avoidance is deluded. All tax avoidance is perfectly legal, just like what Amazon, et. al. are doing.
As to non-resident IT Contractors out there (Aussies, Kiwis, etc.) why stop at IR35? Why not really shag the UK tax base for all its worth and license your intellectual property/personal services through a series of offshore companies a-la Amazon? As long as it's legal, I won't have an issue with you doing it. But I will be mighty pissed off with my MP for allowing it to happen.
"...to feature such an innovation"
I agree. A dedicated, Facebook button is the type of innovation I've long been looking for. I'm surprised Microsoft have missed this trick with their 'Surface'. Had they the foresight to see the exponential profit growth that this innovation brings to the consumer space then they wouldn't be seeing their sales figures every time they look down the swanny after they've dumped.
I'm amazed at the simplicity of the structure. It's ingenious. And perfectly legal.
It's become very clear to me that Governments all over the world are failing to come to terms with the way international business is now being done. Double Tax Agreements negotatiated decades ago could not have foreseen how powerful the internet would become as a means of effecting trade (that's 'effect', not 'affect').
The fact that Google, et. al. are able to do this means those Governments have been caught with their trousers down and are now pointing at Google, et. al. saying "don't look at me althought I look absolutely ridiculous, please look at Google instead who are obeying all tax laws I've created".
What a farce.
If Google was an individual born in the UK, they'd be getting a CBE by now like another, well known user of tax avoidance schemes - Gary Barlow. Yes. Let's all give Google a CBE as I fail to see the difference.
What REALLY pisses me off are the fools who swallow the Government's misdirection and start slagging off the tax avoiders WHEN IT IS THE LEGISLATORS' FAULT. FFS, people, stop being idiots and start complaining to your MP for the piss-poor performance in letting this type of thing happen.
P.S. IT Contractors (ie. those alienating income from personal exhertion into lower-taxed corporate vehicles) should think twice before complaining - what's good for the goose is good for the gander.
Everything was cheaper to buy on one side of the street, so guess where people go shopping
I agree with what you're saying but what is your definition of 'profits', eg. do you allow deductions for interest on borrowings? if so, what about shareholder loans? how much can a company borrow (and therefore, get tax relief on interest) before you deny them the ability for tax relief? 100% leverage, 80% leverage, 79.9% leverage? what about payments on perference shares - interest or dividends? do you allow deductions for raw materials bought offshore - if so, how much is a reaonsable mark up for the vendor? what if the vendor is related to the purchaser (ie. transfer pricing) - what markup is acceptable then?
Re: @Geoff Campbell
Geoff, the very point is that to interpose a tax efficient vehicle (in this case, a company) between two parties to a contract for services that can only be provided by personal exertion is perfectly legitimate in the UK but in other jurisdictions it is considered artificial/a sham eg. Australia where it is called a 'Tupicoff Scheme' (after the 1984 tax law case involving Mr Tupicoff - yes, that's right, 1984 when this sort of thing was outlawed 'Down Under').
So, one jurisdiction (UK) says it's a legitimate exercise while another (Oz) says it's completely bogus. Such is international tax law.
As to any claims about the 'quite artificial' nature of these types of transactions, there are provisions within UK tax law (eg. Ramsay) where the Courts can set aside transactions which are considered 'artificial'. So either the Inland Revenue is not doing its job or the transactions have passed muster and are not, as you put it, 'quite artificial'. Or perhaps you know something the Inland Revenue doesn't? In which case you should contact the Inland Revenue as soon as possible and point out to them where they're going wrong.
It's very easy to join the bandwagon and cry 'aritifical', 'sham', 'immoral', etc. but to do so misses the point: it is the Government which sets the law and it will be a much more profitable exercise to vent frustration at them than to swallow their misdirection and blame the multinationals for following the law.
"None of the three companies were able to change the Public Accounts Committee's mind that they may be avoiding tax legally..."
There you have it. They're not doing anything illegal. So who should the public be venting their anger at? THE LAWMAKERS, ie. Parliament. Why haven't Parliament done anything about it over all of these years?
If the public keep shouting about it, they could even close one of the biggest IT "loopholes" there is: alienation of personal services income.
A "contractor" (through a company) - eg. Jeremy Paxman, Fiona Bruce, Jimmy Carr - legitimately enjoys lower tax rates and deductions for expenses that a non-corporate contractor can't make, etc. while at the same time providing the recipient (eg. employer) with exactly the same personal service. Insurance is available for the individual, so why "contract" through a company? Answer: the tax breaks available to a corporate are greater than those available to the individual, eg. lower tax rates, capital allowances, income splitting, non-residency - to name but a few.
So while on the subject of the 'immorality' or otherwise of tax avoidance, just give a thought closer to home. The only difference between Starbucks, et. al. and contracting for personal services is scale.
This is getting tedious. Apple need to be bitch-slapped BIG TIME for their small mindedness.
This is voyeurism at its worst. Facebook has successfully plumbed new depths. I am anxiously awaiting Facebook to monetise the XXX version of these images to see whether or not I should cancel my subscription to Readers' Wives.
Re: And so it begins
The fact that the Germans have a word for it speaks volumes about them as a whole.
As does The Kaiser, Hitler, Hans Reiser and lots of other notorious Germans.
Keeping the skeleton in the closet
sudden departure vs. historical pattern of lingering = wanting to keep something secret. I too hope it's not a health issue.
Re: Selling well?
That joke was pants.
"...claiming back the cost of connectivity on expenses"
"...getting staff to use their own connectivity is becoming an unmeasured expense in many businesses"
WTF? The only way it's not being measured is if it's not being claimed. If that's the case, why would the employer give a shit?
Seriously, who writes this shit?
Re: alan sugar huh?
Alan Sugar has been hugely successful at selling the brand: "Alan Sugar".
Labour loved him. They made him a Lord, they gave him a job in Government. I even suspect one of the then Cabinet gave him a blowjob.
As to anything other than the brand "Alan Sugar", success is an orphan to him.
I fail to see what grammatical accuracies of the English language has to do with the Law of Trademarks in England and Wales.
Perhaps you've missed your calling and should be drafting statutes, not posting on Tech forums.
As long as Total Ltd keeps winning, they have!
the Galaxy was "not as cool" as the iPad.
That is not at all what Judge Birss said.
He was referring to the Registered Design, no the iPad - read paragraph 190 of his Judgement if you don't believe me.
Re: Any old iron?
..but nothing beats pr0n rendered on a desktop PC.
30K is HUGE.
30,000 units is an AMAZING figure. It's 'probably' more than 3 times the iPhone 5's first day sales (Apple only say what they want you to hear - including their sales figures).
This is 'probably' the MOST AWESOME sales debut ever.
It'll 'probably' set a GUINESS WORLD RECORD.
They'll 'probably' have them on the ISS with the next Dragon delivery.
The space crew will 'probably' use them to phone their wives (or boyfriends).
Somewhere, someone will 'probably' drop it down the shitter.
And they'll 'probably' fish it out with their bare hands.
What's the fuss? I had no problems.
I got online after 5mins and successfully ordered 20. They should all be here tomorrow and I'll list them on eBay and make £££s.
fruity fanbois troll.
It's Political Grandstanding, that's all
The fact is: successive Governments from either side of the House have failed to stop Tax Avoidance. It's been going on since the Middle Ages and it will continue to go on. The fact that this Government and the previous Labour Government have totally failed to stop it say it all. MPs are wasting their time 'grandstanding' in PACs and should be in the House passing legislation.
Full props to Troy Alstead (CFO of Starbucks) who told the MPs to, effectively, 'fuck off, it's none of your business' when asked about Starbucks' Dutch operations. He knows: 'there's nothing you can do because what we've done is perfectly legal - that's why it's called Tax Avoidance and not Tax Evasion. Try and stop us - you can't. Decades of successive Governments have all tried and failed. Yours is no different.'
After the expenses scandal, it's repulsive for an MP to even feel they're in a position to judge the morality of another.
Another fine example of quality journalism
"Apple has been the one losing out in the UK, forced to post a statement in newspapers and on its website stating that Samsung's Galaxy Tab 10.1 does not copy its iPad."
1. Apple's 'loss' applies to the whole of the EU, not just the UK.
2. The iPad had nothing to do with the Court case as the Judges were at pains to point out.
I'm lovin' your posts...
...only because of the responses they get. What you say is complete an utter crap and you know it, but your intention in posting them is working: people are taking the bait. lol.
Australia's Carbon Tax is working!
How is this 'news'? El Reg trying to improve their numbers?
I must be missing something. This stuff has been out in the open for weeks. What is 'new' about it?
Is this a cynical attempt by El Reg to improve their numbers?
US-Centric. The rest of the world can ignore this article.
Those insane Yanks have done it agin.
Lost the Plot
Going from a device with no moving parts to one with moving parts?
Going from a device with no noisy fan to one with a noisy fan?
WTF? This is sooooooooooooo retro, I'm staggered to believe it.
This is further proof that Apple have lost their way since Steve Jobs died.
Tim Cock is not doing a good job and should be fired.
The title lead me to believe this was a story about Apple.
the thing is near identical to look at
Not from the back. It looks remarkably different.
But If you want to limit the comparison to the front view only, then go ahead and compare the iPad (2010) to the Ozolins (2004) and LG Flatron (2004) and see where that gets you.
Apple hoisted on their own petard
serves 'em right, the Patent Jihadis.
But will Tim Cock and the rest of the Apple board get 72 virgins when they go? 72 virgin donkeys perhaps?
Android is winning. People allover the world have spoken with their £££s... and they want Android!
While the Jihadi Apple Corp. continues to lose respect from all good people, Android is gaining in stature. And market share.
Meanwhile, Microsoft clutches its Win8 bog-brush and continues to work hard cleaning public lavatories.
AND perhaps the media should stop idolising the guy and reporting anything and everything he says.
You do know that every penny they move offshore increases your tax bill don't you?
I don't agree with that viewpoint.
I believe politicians would squander any additional revenues they gained.
They've been caught with their snouts in the trough over expense claims.
Any additional funds would be used to buy votes from the electorate and WOULD NOT be passed back to the PAYE taxpayer. Anyone who thinks they would is deluded.
Full props to the HMRC for pointing out that they are NOT going to be the Government's Whipping Boy.
MPs can complain all they like but only they make the laws. Their constant calls of 'immorality' is yet another indication of their inherent incapability to acknowledge their own failings. Just like expense claims, politicians will always try to deflect any valid criticim against them by trying to divert public attention from the real issue: their incompetence.
This sort of thing (tax evasion) has been going on for decades under successive Governments - both Labour and Conservative. To 'cry foul' now is complete hypocrisy.
It's not just you.
You are correct. Apple are losing left, right and centre(er?). Losing Court cases. Losing market share. Losing respect.
Meanwhile, Android is winning. Winning market share. Winning Court cases. Winning the hearts and minds of good people all over the world.
When Samsung wins its US appeal - thereby overturning the demonic jury decision - it will be the final nail in the coffin of Apple's misguided Jihad.
With Apple fast gaining a reputation for not innovating, Apple will ultimately lose this war of their own making and the world will revert back to a peaceful place with Google reigning supreme and Microsoft cleaning the toilets.
"practically sold out"
"Practically". I love that. It reminds me of Larry Ellison's quote "We're number one in applications, behind SAP". ie. they're not #1, they're #2.
The same goes for this quote. "We practically sold out of iPad Minis." ie. They didn't sell out of iPad Minis. That's all that can be inferred from the quote.
The consumer £££s have spoken... and they want Android!
Not some virus-ridden-whore-of-an-OS, nor some hey-I'm-in-the-walled-garden-now-so-take-a-dump-on-me-from-your-iMap-sized-A-hole.
Full congratulations to the author. He/she has been very generous to Apple and in no way apologises for their product.
Never has an Apple product (ie. the iPad Mini) been so unkindly received by the media and the tech community.
This review is the personification of King Canute.
Re: Anyone else notice...
Yes, because that's what they were told to say and that's what the Court case was about.
One of the tragedies is Apple's implicit (and the Media's actual) attribution of the soundbite "It is a cool design" to the iPad.
If you read Judge Birss's judgement - he wasn't talking AT ALL about the iPad, he was talking entirely about the Registered Design, in particular, the diagrams in Appendix A of the judgement.
The perversion is, If you look at those diagrams, even the iPad, iPad2 and iPad3 don't conform 100% to the Registered Design. Apple was (counter) suing over the Registered Design which, in law, has nothing to do with their iPad models. Sadly, that didn't stop the media (incl. El Reg) from swallowing the soundbite.
Judges are not stupid. To be a judge you do, actually, have to be very intelligent and understand the law. I believe Judge Briss QC selected his words very carefully to justify a 'policy decision'. He new the media would lap them up and this would deflect attention away from the decision he was making on the grounds of policy: to grant in favour of Apple would be to grant a patent on a rectangle with rounded corners and thereby set a dangerous precedent that would hinder competition.
Re: When they only pay 2.5% corp tax
Cheers for divert the thread momentarily by stating something completely pointless!
Re: It'll all end in tears...
Agreed. Apple are imploding.
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