back to article European nations told to sort out 'digital tax' on tech giants by end of year

Warring European governments have been urged to quickly come to an interim agreement on a levy on tech giants’ revenues – and could drop plans to tax the sale of users’ data to get there. The Austrian presidency of the EU is pressing for member states to agree to a temporary solution for the bloc. The presidency is reported to …

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Paris Hilton

I'm pretty sure that UK will act unilaterally about this pretty soon. Once they're out of the EU, there's no reason for them not to tax the UK profits of EU companies, is there?

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"I'm pretty sure that UK will act unilaterally about this pretty soon. Once they're out of the EU, there's no reason for them not to tax the UK profits of EU companies, is there?"

More than that, the whole Irish double Dutch sandwich with extra ketchup bullshit won't apply any more.

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Beware of False Profits

You can only tax profits if they're reported, though. The problem isn't inherently the double-Dutch-Irish-malarkey, it's companies using that to shift profits to a lower-tax jurisdiction. Inside or outside of the EU, who's to say what's a fair level of payment to corporate HQ for use of the logo, or for ingredients, or as a contribution to the global advertising budget? All these (and others) can easily be used to shift gross profit out as overhead, thus reducing the level of operating profit that remains.

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there's no reason for them not to tax the UK profits of EU companies, is there?

Well, the other option would be to drop corporation taxes as far as possible, and out-compete Ireland as a tax haven. Raising taxes unilaterally would just give companies another reason to pull out of the UK after brexit.

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>there's no reason for them not to tax the UK profits of EU companies, is there?

Amazon will claim not to make any profits on physical sales and since the AWS server farms aren't in the UK any profits on them are nothing to do with the UK govt.

Microsoft will claim the same with Azure while demanding a tax rebate for any UK saless to keep jobs in the UK.

Google will book all advertising sales in the USA - the post Brexit UK isn't about to impose an embargo on USA firms.

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Except Britain has industry (for now)

Ireland can afford to drop corporation tax because the amount it earns from FANG, even at 1%, is more than it loses from native industry ie. makers of Father Ted memorabilia and religious statues.

If Britain lowered tax to attract Apple it would have to apply the same tax rates to Rolls-Royce, HSBC, ICI, Shell, etc etc

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Re: Beware of False Profits

The point of this digital revenue tax is that it'll be the revenue inside the EU that will be taxable at 3%, *not* profit, regardless of whether it slips into a Double Dutch Irish sandwich or not. That's why Luxembourg and Ireland are dead-set against it. They know they'll have a lot of their 'digital giants' possibly moving to the Channel Islands (as a certain tech giant has already investigated and done) or elsewhere in the bloc where the tax (levy, whatever you wanna call it) won't apply. Except, the way I understand it, if it's sold into the EU (regardless of where you're headquartered), it will be subject to this levy.

But like others have pointed out, it makes the attractive DDI tax efficiency mechanism not so attractive anymore. Not for digital revenues anyway (like Amazon's AWS services, Apple's iTunes and Apple Music, Google and Facebook's ad income). Of course, the cat-and-mouse game of what's digital revenue will start, and the whole cycle will go around again... *sigh*

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Taxing revenue is inherently unfair

Compare Google, Apple, and Amazon. Rounding off for simplicity, they have gross margins of 60%, 40% and 20% respectively. That means one out of every five dollars of revenue is margin for Amazon, but two out of every five for Apple and three out of every five for Google.

A 3% tax on revenue therefore hits Amazon 3x as hard as it hits Google. How is that fair? I get that the EU wants to do something about companies finding ways to skirt taxes, but this seems like a really bad way to go about it.

The worst part is that companies like Google or Facebook that have very high margins because every additional ad they sell has near zero cost associated with it, are the ones who are most easily able to game the system and move costs to high tax areas and profits to low tax areas. The worst abusers will be hurt the least by this tax! It is pretty hard for Amazon to shift costs, since if you buy a TV for €1000 that cost them €800, they can't shift that cost elsewhere.

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"Well, the other option would be to drop corporation taxes as far as possible, and out-compete Ireland as a tax haven. Raising taxes unilaterally would just give companies another reason to pull out of the UK after brexit."

A plan that would result in many Japanese corporations withdrawing their HQs from the UK due to the Japanese government actively deterring use of tax havens. No idea how this affects other nationalities, perhaps Japan are unique in this respect. But, for me, the benefits of undertaking dramatic cuts in corporation tax cut are not entirely clear in the current global rush to deter corporations making good use of havens.

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Google have shown the way re corporation tax. They give most of the profit to staff as bonuses. So, the bonus being quite high, the staff pay 40% income tax on it rather than Google paying 20-odd % corporation tax. So are HMRC rolling it it or are they rolling in it? Some lefty complaints really do show up the paucity of thought going on in that domain.

Yeah, go on downvote me. Do I care a flying f***?

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Re: Taxing revenue is inherently unfair

>A 3% tax on revenue therefore hits Amazon 3x as hard as it hits Google. How is that fair?

They can tax Amazon AWS separately from Amazon retail - Amazon already break out their financials into the different businesses.

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>They give most of the profit to staff as bonuses. So, the bonus being quite high, the staff pay 40% income tax on it

Except they don't, the first 10K of gains is tax free and the rest is taxed as capital gains - that's why companies pay in stock options. There is also no NI paid on stock grants.

Here on the left pond, there is a lifetime $800K tax free for stock grant gains if your company jumps through the right hoops ;-)

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Re: Beware of False Profits

Simple taxes are best - just charge them €1 each time they sell a punters information. That should put an end to it.

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Re: Taxing revenue is inherently unfair

So your solutions is? You are very quiet about that - note that "taxing profits" has proved to be a complete failure ... the FANG companies don't make profits "on the books".

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Re: Taxing revenue is inherently unfair

I didn't advocate a solution, I just pointed out a problem with what the EU is proposing. Maybe there's a way to adjust it by the gross margin, to make it less unfair (which is about all you can hope for when taxing multinationals)

Though unless you could get a company to report its worldwide gross margin you'd have to figure out what to use. Trusting Google or Facebook not to game that isn't going to work, that's for sure.

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Re: Taxing revenue is inherently unfair

"A 3% tax on revenue therefore hits Amazon 3x as hard as it hits Google. How is that fair? I get that the EU wants to do something about companies finding ways to skirt taxes, but this seems like a really bad way to go about it."

If only I could persuade HMRC to only tax me on my "profits", eg after I've paid for gas, leccy, water, food etc, instead of being taxed on my "revenue", then I'd be a happy chappy.

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Re: Taxing revenue is inherently unfair

@YAAC, correct. From what I understand, purely digital stuff is levied at 3%. Is AWS digital only? Possibly. Amazon Retail is not (obviously). The Amazon Payments system cut may however be.

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I'm pretty sure that UK will act unilaterally about this pretty soon. Once they're out of the EU, there's no reason for them not to tax the UK profits of EU companies, is there?

Assuming we ever actually get "out of the EU", then the rEU become our competition for tax revenues. There's nothing to stop us attracting their companies here by ensuring our rate of Corporation Tax is lower than theirs, thus getting a slightly smaller slice of a much larger pie. In essence, lowering the rate in order to increase the revenue extracted.

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More than that, the whole Irish double Dutch sandwich with extra ketchup bullshit won't apply any more.

Sure it will.

I realise lots of people really don't like the "Irish double Dutch sandwich with extra ketchup bullshit" strategy, but there's no reason at all why this won't work afterwards. Arguably, it'll work even better than it does now.

The only difference is that we could substitute ourselves for any part of that arrangement, knocking Ireland or Holland out of contention. Or both, if we chose. I'm not suggesting we should, simply explainin that we could.

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Re: Beware of False Profits

The problem isn't inherently the double-Dutch-Irish-malarkey, it's companies using that to shift profits to a lower-tax jurisdiction.

There's just so very many ways to achieve this, and so many companies doing it, that to focus only on the tech giants is to really misunderstand the scale of the industry.

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If Britain lowered tax to attract Apple it would have to apply the same tax rates to Rolls-Royce, HSBC, ICI, Shell, etc etc

All of whom already engage in some level of tax planning. Don't assume that because the rate payable is reduced that the amount garnered would also fall. All economic evidence points to the contrary.

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LOL ? the UK together with Ireland and Luxembourg (where amazon is located) has been the reason why the EU cannot properly tax these companies.

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Physical presence provides an extremely strong drag on being able to go jurisdiction shopping, and companies alter their tax affairs to suit the rules over a number of years. Added to the fact that the companies will be trying to minimise their overall bill rather than their bill for a specific tax and "all economic evidence" gets very murky indeed.

Sure, if you are Luxembourg the potential tax-take from you tiny physical economy is dwarfed by the revenue you can make by undercutting other countries on the world stage, and making sure you continue to match or undercut all other EU countries is certainly going to maximise your tax take, however low that forces you.

If you are the UK you will quite quickly cut the tax take from all the physically-present companies mentioned. Worse, in the slightly longer term you will end up pushing an even larger percentage of your workforce into fake self-employment. The self employment bit may even cover the Corporation Tax losses from the physically present companies, causing Corporation Tax to register an increase and making the policy look like a success.

But hold the champagne... Income Tax and National Insurance will be down. Way down. It turns out that the hopelessly simplistic analysis you bought into wasn't just bad because it made us unpopular tax haven pariahs. It has actually cost us billions of pounds.

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Re: Taxing revenue is inherently unfair

Is that fair? Probable yes as Amazon are directly responsible for decimating retailers everywhere as a result of undercutting everyone due to the tax arrangements and all the incentives they get.

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Re: Beware of False Profits

The point of this digital revenue tax is that it'll be the revenue inside the EU that will be taxable at 3%, *not* profit, regardless of whether it slips into a Double Dutch Irish sandwich or not.

Ok, so lets say I have revenue of £100M. You now take £3M in envy tax.

The other £97M gets taxed at 20% on the profit part. Ok, but if your complaint stems from my not having made enough profit to pay you the Corp Tax you think you deserve, then I'll be making zero profit or less using the new system. Most of the tech giants have an operating profit margin in the UK & EU of close to or less than the proposed envy tax.

Thus, what you have achieved is at best, that I pay you 3% evny tax to operate here, when I'm already probably paying something similar anyway via Corporation Taxes. You've moved the money from one pot, to another, but not increased your £s taken.

However, this is where things take a turn for the worse for you. If your envy tax pushes me into making a loss for Corp Tax, I can roll that over for many years. A little legal entity restructuring and I can spin off the corp tax loss into its own vehicle and sell that vehicle from my offshore parent company to someone else who wants to operate here, thus regaining some of my envy taxes while you then lose out on somone elses CT.

Corporate taxation is an internationally competetive market place. It's not quite winne rtakes all, but its close enough to that to mean that if you want a share of the international CT, you are going to have to compete to get it. That'll not be popular, but then, the real world isn't about being popular.

Me/you being substitiutes for a FAANGM style operation and the tax man respectively.

This is my specialist area of IT, but I'm an IT specialist not a tax specialist, and even I can see mile wide roads down which to travel that don't lead to a cent/penny more in taxes becoming due.

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Re: Taxing revenue is inherently unfair

So your solutions is? You are very quiet about that - note that "taxing profits" has proved to be a complete failure ... the FANG companies don't make profits "on the books".

Sure they do - they just don't make them on the books of non-competetive tax regimes.

You have two realistically workable options for adjusting the tax amount paid, and really only two. They are:

1) An internationally accepted and levied flat tax

2) Be a competetive place to pay CT - and by competetive I really mean cheap (low CT, say 5% and you'd corner the market with ballooning tax take)

Anything else is just playig the same game we play now, but with marginally different rules. Two guesses who's better at playing the game within whatever rules have been devised? Hint: It's not now, never was, and never will be the tax man.

I can almost feel the hate from here, but I'm not condoning or condemning the players or game, I'm just explaining how it works in reality rather than intent. There's no moral or spiritual component to taxation, there's only a balance due created by applying a rule set. It is what it is.

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Physical presence provides an extremely strong drag on being able to go jurisdiction shopping

It creates no drag at all. See Boots for an example.

If you are the UK you will quite quickly cut the tax take from all the physically-present companies mentioned.

Leaving them more money to invest in growth which then leads to a higher tax base.

Worse, in the slightly longer term you will end up pushing an even larger percentage of your workforce into fake self-employment.

The difference is nearly double already. Dropping it further won't inentivise anyone that isn't already playing that game.

It turns out that the hopelessly simplistic analysis you bought into wasn't just bad because it made us unpopular tax haven pariahs. It has actually cost us billions of pounds.

No, I'm afraid its just that you don't understand taxation or economics sufficiently well to reason through the proposition. This is what I do for a very well paid living. Sorry, but you really are so far wide of the mark as to leave me baffled as to how you've arrived at the position you have.

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Re: Taxing revenue is inherently unfair

@ hoola

"Amazon are directly responsible for decimating retailers everywhere"

Great isnt it! If you dont like it then dont use them, you are free to do so. But if you want something specific you can find it on Amazon, even find used and new for less! Now imagine you are low income, maybe a student and you need resources. Do you waste your time looking manually at all the physical stores for what you want and maybe order it in at high cost? Or search amazon and get it from somewhere in the world and probably cheaper.

The best part is that retail accessibility is available regardless of your income, so that means we all get an increase in our disposable income by reducing the expenses (its cheaper). Amazon uses a few warehouses in cheap out of the way property vs high street expensive outlets which also reduces cost.

If you dont want any of that feel free not to use them, it is free choice. But there is more than just not being ripped off by the tax man that makes amazon a benefit in this country and others.

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Double Irish With A Dutch Sandwich - it's dead(ish) Jim

I realise lots of people really don't like the "Irish double Dutch sandwich with extra ketchup bullshit" strategy, but there's no reason at all why this won't work afterwards. Arguably, it'll work even better than it does now.

Nope, the Irish government closed their part of the loophole in 2015 and pre-existing structures can only run until 2020.

See here for an explanation of the whole thing.

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Re: Double Irish With A Dutch Sandwich - it's dead(ish) Jim

Nope, the Irish government closed their part of the loophole in 2015 and pre-existing structures can only run until 2020.

Sure the particular instance of that strategy has issues, but don't for one second assume that any more tax will be payable. My business unit are already migrating whats left of our version of this to something else. Rather obviously, I can't tell you specifically what. I can tell you that nobody is expecting to leave Ireland as a result of the changes, and that Ireland isn't expecting to garner any extrat tax revenue from the change - its only being implemented to appease the EU.

Holland is still the best place for royalties (U2 still have their hedgefund there I believe), and Delaware is still Delaware. For as long as a company is taxed on profits, moving them via trade, loans, or IP will always ensure most of the profit ends up where its taxed less.

The Irish jig is missing several steps to be a properly aggressive strategy anyway - its just the one the papers know about. A proper strategy leaves you a tax loss in the expensive jurisdictions (double dipping the money-go-round enables simultaneous loss claims, its just harder than it used to be) as well as profit in a tax free location. Tax losses are more valuable in some respects than taxable profit, because you can offset it for 100% of the gain when you decide you need to make profit somewhere, or package it up and flog the vehicle to someone who needs to declare an onshore profit.

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Re: Beware of False Profits

Corporation tax is internationally competitive because individual countries compete. If the EU decided to get its shit together, it would have the same economic clout as the US to say 'You can operate here or you can take the piss. Your choice.'

The EU however has a further decision: the FANGs are essentially a privatised US intelligence service. And the EU is a client continent of the US. If the EU cut of part of the revenue stream, the US might demand the EU pays for its own defence/protection racket in more direct ways.

When it comes to a united EU versus corporations, the EU wins. When it comes to the EU versus US quango-corporations, the US has a history of winning.

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Megaphone

taxation vs economic activity

If you want an economic activity to be IMPAIRED, tax it.

If you want an economic activity to INCREASE, cut taxes on it (or make it 'tax free').

Since one of the things 'at issue' here is the economics of monetizing people's personal data, then (if you really want to) TAX IT INTO OBLIVION [especially if that's the only way it can be stopped]. I hate saying that, but it would WORK.

As for getting gummint revenue, "making corporations pay their fair share" is a stupid way of getting revenue, and succeeds in dividing the haves from the have-nots even MORE than before.

"Corporations" don't pay tax. It's the people who OWN the corporation [through stock, equity, etc.] that pay the tax. Many of these people are regular working stiffs with a retirement portfolio. Think about it. And if a tax increase on a corporation causes them NOT to hire [or to do layoffs], you get what you deserve, more people demanding unemployment compensation.

["the rich" already HAVE their wealth; taxing income won't transfer it to "the poor" - they'll alter whatever behavior or investment, as necessary, to avoid the 'new tax'. What it *WILL* do is put yet another roadblock in the path of someone working hard trying to BECOME "the rich", who can't afford to do tax evading things]

Also gummint needs to CUT BACK ON SPENDING at least in proportion to ANY tax increases. If you force the people to tighten THEIR belts, you gummint weenies BETTER be SETTING THE EXAMPLE by DOING IT YOURSELF. But like all arrogant (corrupt?) politicians and bureaucrats, they'll *EXEMPT* *THEMSELVES* from the negative effects.

And 'austerity' needs to go, too (it's just a means to promise the moon to people, so that they will vote for YOU to get it).

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Re: taxation vs economic activity

""Corporations" don't pay tax. It's the people who OWN the corporation [through stock, equity, etc.] that pay the tax. Many of these people are regular working stiffs with a retirement portfolio. Think about it. And if a tax increase on a corporation causes them NOT to hire [or to do layoffs], you get what you deserve, more people demanding unemployment compensation."

Fine, but these are corporations based overseas, so it's wealthy foreigners who would pay the tax.

I'm not too bothered about making American hedge fund managers pay tax on the profits shovelled out of EU markets.

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Re: taxation vs economic activity

Which is all fine if everybody plays the game and takes their income from the company (whether salary, bonuses, stock, dividends etc) on-shore, and pays their local taxes. However, when both the companies and the large recipients of the payouts are nicely hidden in tax havens, or are playing the Double-Dutch Irish Sandwich games, then NO revenue comes back to the nation(s). Likewise for companies building up massive offshore cash mountains, which isn't really helping any economic activity.

The rosy view of Capitalism is like the rosy view of Communism. Human nature gets in the way...

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Re: taxation vs economic activity

"Corporations" don't pay tax. It's the people who OWN the corporation [through stock, equity, etc.] that pay the tax.

Bugger me, I'm almost agreeing with Bombastic Bob. Hell must have frozen over.

However, to correct a point, the incidence of corporation tax is primarily on the shareholders in the US. In the rest of the world the incidence of corporation tax is primarily on the employees. This means increasing taxes on the FANG companies in the UK would make their UK workers worse off. Not a good idea.

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Megaphone

Re: taxation vs economic activity

@ bombastic bob

I think you should have added to your comment that the state/country need tax money to provide affordable education and health care, for roads and bridges and more. Have a listen* to this by John Oliver, as the saying goes socialism is for big business and the rich while capitalism is for the rest of the population.

https://www.youtube.com/watch?v=xcwJt4bcnXs

* slightly reluctantly as I don't much care for his voice, but the team behind him doing the research is good.

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Pirate

Re: taxation vs economic activity

@MrBombastic:

Yes taxation depresses economic growth. However if $BigCorp doesn't pay their share, then the slack must be picked up by others. Roads, Police, Military, Water, Power infrastructure there are many things that taxes pay for that we all use. You end up in a tragedy of the commons type of situation if some players don't pay their share.

Now the question becomes how do you encourage (force) entities to play fairly? I don't know the answer, don't think anyone does; If they did there would be a well established protocol for that. The fact that everyone is banging around trying everything and anything in hopes of stumbling across the right answer is proof of that.

The argument "are the taxes here or there too high or too low" is moot until we can find a way to make sure that in a globally interconnected world that at least the majority of players either can't cheat or won't cheat for $reasons.

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Re: taxation vs economic activity

I think you should have added to your comment that the state/country need tax money to provide affordable education and health care, for roads and bridges and more.

Unfortunately they waste it instead on wages for so very many jobs that simply don't need doing. Too much administration, too many middle managers, etc etc etc. The last thing they spend it on is the roads.....

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Ok. So this proposal is for a 3% tax on revenues as all of the profit has been classed as revenue and passed out to tax havens such as Ireland and Luxembourg, who predictably are trying to oppose the existing arrangements changing as it benefits them to the detriment of everybody else.

I have two major objections. First is the timescale. 12 to 24 months seems a bit slow. I was thinking 12 to 24 days. It shouldn't take much longer than that to draft something and push it through both houses of parliament when both parties are likely to vote for it. Every country in the EU could have slightly differing legislation in place within a month or so if there was will to tackle the problem and legislation can always be amended in tidying up exercises later down the line if required.

My second objection is simply the numbers mentioned here. Services companies tend to expect a 20% profit, and retailers can make much, much more than this.

Assuming that 20% of revenue is profit:-

10% revenue tax would be equivalent to 50% tax on profit

5% revenue tax would be equivalent to 25% tax on profit

2.5% revenue tax would be equivalent to 12% tax on profit

At the moment UK corporation tax is 20% tax on profit. If there is a 3% revenue tax applied as suggested off in the article then companies are still going to be getting a tax discount compared to if they hadn't of gone evading tax to start with, or maybe be in a revenue neutral position. I think that this approach is seriously wrong.

My take on it is that after ~250 years of taxing companies on their profits if we are now having to come up with new laws to deal with a new generation of amoral pointy haired bosses who are scamming their tax bills down then the response should be sufficiently punitive to make it painfully clear for the next 250 years that it's not worth creatively exploring the limits of what is possible to scam the taxpayer out of.

I'd apply revenue taxes individually to companies that have taken the piss. In my view, the absolute minimum level of revenue tax that should be considered is 5%, equating to a rough rate of about 25% of profits going by my assumptions above.

Personally, my conscience wouldn't be troubled by taxing the companies involved at up to 15% of revenue (or higher) until Her Majesties Revenue & Customs have collected around 120%-200% of what they think might have been evaded by that company with creative tax arrangements, at which point I might be inclined to consider talking about considering returning to a percentage tax on profits for these companies if they are willing to stop taking the piss. It'd leave a lasting message that it's not worth pissing about and quietly dismantle the "don't pay tax!" industry.

What's the worst that could happen? The affected companies might struggle, but public services are struggling because taxes aren't being paid so my sympathy is rather limited. If we have a few billion extra in tax receipts then we can slip the NHS an extra few billion or start paying down the debt pile, repayments on which are comparatively larger than either the defense or education budget.

I doubt that anybody on either the political left or right is going to seriously complain about taxing companies that have not been paying their fair share of tax. Even if this level of tax is too high, and puts those companies out of business then what's the worst that happens? The companies smaller UK competitors who have been disadvantaged by paying tax end up picking up their former competitors market share which UK PLC then gets the tax money from there instead? Hardly sounds like a disaster.

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Anonymous Coward

@Peter2

As I understand it 20% is wildly optimistic for the profitability of retail firms - it's an order of magnitude less. Services companies may be more profitable, but I doubt they hit 20% either.

Thing is, we already have a direct tax on the amount of sales a company makes (note - not revenue, which is slightly different). It's called VAT. Why not increase the percentage of VAT instead, rather than creating a new type of tax with new collection costs?

I've heard the arguments that VAT is a cost on the consumer rather than the businesses before btw - and it won't wash. Consumers foot the bill for everything every company does everywhere - always have, always will. Just because you want the "rich foreigners" to take the hit for your new tax plans doesn't mean it has the remotest chance of happening.

Whilst we're at it, why don't we lower business rates and corporation tax on all companies, and shift our expectations to society collecting their tithe from businesses via VAT instead? That'd be much more effective at levelling the playing field between large multinationals and small local businesses.

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The problem is that a minority of businesses are making profits, and then not paying a not unreasonable 20% tax on their profit before transferring the remaining 80% abroad.

Your suggestion to obtain more money from these businesses who are not paying that 20% is to lower the tax on having an office or other physical business space which they can't avoid, and then switch to taxing via VAT, which is currently being evaded by these companies in the EU by "paying" the VAT in ireland at a rate of 0% on exports. Your suggestion actually appears to be "don't tax multinational companies".

I can't see who benefits from this other than the heads of the multinationals.

Why do you need to post that as an Anonymous Coward, by the way?

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Anonymous Coward

VAT in the EU is charged at the location of the purchaser not the HQ of the vendor. Multinationals pay 0% VAT in Ireland because although they're headquartered there the value add bit is realised elsewhere - i.e. where the sale is made. VAT is about the only thing the multinationals don't easily avoid by moving activity or profits to other jurisdictions.

The usual argument against using VAT is that it's regressive, as it hits everyone at the same rate regardless of their income. That ignores the fact that poorer people spend a higher proportion of their income on zero-rated items like food and basic essentials and less on luxuries, but it is at least a valid argument.

Amending the existing VAT rates is also a relatively simple change to existing tax law, as opposed to applying the clear and legally unambiguous "have they been taking the piss" test, as you've proposed. One of these is a practical solution to a problem, the other is an idea taken from a pub conversation about 3 pints down.

I post anon because none of your business.

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Not the owners

The customers, which always includes you even if you have no direct commerce. All businesses that stay in business pass ALL costs through. Even if you're not a customer yourself, the outfits you are a customer of pay, and then pass that cost to you.

It's a damn lie that gets propagated by those who'd pick your pocket to buy your vote that you can tax "those other guys" to get some goodies for you. It all, always, comes around...

And the suckers keep buying it. Don't let wishes make you stupid. It doesn't work like that.

I'm not saying don't tax these guys at all. I'm just saying there's no free, it takes some work to figure out who pays and whether that benefits the rich or poor more, and so forth. All I see here is "he's got some and I want it" level of analysis and understanding...

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GST vs VAT

GST voids profit shifting. VAT encourages it.

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Tax the Turnover

Don't tax the profits - the accountants are too sharp!

Make it a legal requirement that if you do business in the UK you must state your UK annual turnover.

Tax on the basis of the turnover. Profits may go anywhere, but the turnover in the UK you can't get out of.

Low turnover is bad for the share price.

Could do it a sliding scale, but the biggest companies will have the highest turnover.

Doesn't matter if they don't make a profit, you tax them on the turnover.

Means companies will pay their fair share

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Alert

Re: Tax the Turnover

This will make high-margin businesses very happy (banks, the luxury industry, and incidentally Apple and Google), and will bankrupt low-margins industries, like retail.

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Devil

Re: Tax the Turnover

"Don't tax the profits - the accountants are too sharp!"

Actually the I.T. department helps out a lot, in that regard. It was one of my tasks, back in the early 90's, working for a large non-U.S. company [as a contractor]. Their U.S. division (where I worked) _was_ a U.S. corporation, and they had this rebate thing and some rather interesting 'middleman' pricing. Part of what I did was to determine what the rebate amount should ideally be, so that the U.S. corporation makes "a little money" but not too much, to keep the taxation down. It's not illegal to do this, but it would make a lot of people unhappy to have it confirmed. I said something like "oh you want to..." to the executive, who then basically said "but we can't say it like that."

But yeah, tax minimization is a huge thing with corporations. can you BLAME them? I mean, would YOU deliberately NOT deduct things on your income taxes so you can go ahead and pay MORE taxes? In any case, I still call into question the whole idea of raising taxes anyway, because there's another factor that I haven't mentioned yet: if taxation reduces profits, even if its paid by foreign investors, it still affects hiring and wages in EU and UK. And 3% doesn't sound like much, until it's raised every year by a tiny amount until it becomes confiscatory, because "they can".

And you know if "they" taxed you at 100%, they'd beg for more, and want to go to 110%.

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TVU
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Re: Tax the Turnover

"This will make high-margin businesses very happy (banks, the luxury industry, and incidentally Apple and Google), and will bankrupt low-margins industries, like retail"

The proposals have been explicitly designed to only hit a wealthy subset of large tech firms that are in the habit of using various forms of tax avoidance. At least this way they get forced to pay something just like other businesses have to.

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Hmmm

So the commission plans to drop a tax plan to tax users data. I like this. The EU eventually take a hit 'em in the pocket attitude to American frontier technology companies taking the piss. Sometimes its all they understand.

Can't help but think the lobbyists on this one are missing a trick though. Surely if it is taxed then any GDPR regulation becomes subject to the needs of the exchequer. Short term upheaval, long term influence for the Company. Look at banking in Britain, particuarly the city of London. I thought they would have learned that by now.

Maybe IT IS all just a show for the cameras. (it's 2am)

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