I note that America...
31 nations this week signed a data-sharing agreement that will see multinational companies' financial reports shared widely, the better to understand their global financial contortions. The Multilateral Competent Authority Agreement (MCAA) is an instrument of the Organisation for Economic Cooperation and Development (OECD) …
I'm not surprised by this since most of the multinationals based in the US have been hiding stuff from the US tax man for decades, Taxes in the US are main reason for them being "multinationals" in the first place as far as shuffling money around. Hiding the money from every other country is an art form.
I also note that a couple of biggie tax havens, the Bahamas and the Caymans, aren't signed up either. If they were to sign, things might change a bit. But it is a start.
"Not exactly. They are sending their money through tax havens and may be buying US dollars in those tax havens. I very much doubt they are letting their money actually sit in the US.
Even US billionaires don't do that."
Actually, they do, just not as currency. The richest of the richest know the best place for wealth is in real estate, which by its very nature naturally appreciates due to increasing rarity and cannot be taxed as long as it's simply held. When they need money, they borrow against it and then hold the debt until they die when their heirs can employ a trick called the carryover basis to rebase the assets and dodge capital gains taxes when they sell off some of the assets to pay off the inherited debts. I believe they call that "Tax Planning 101".
Don't go along with the OECD BS story that countries with competitive tax rates (meaning low and territorial) are tax havens. Governments need to get over the love of tax money and should not be sharing data extra-territorially to do it.
The OECD has been pushing a great deal of material that tries to cast countries that respect and protect their companies data and offer low tax rates as needing drastic international pressure to become more like the high taxing countries. And if they will not then screw it, legislatively isolate them or negate advantage via other means.
Should be a wake up call to governments of the world, some get it, Singapore, HK and the like, not so much the welfare states like Australia.
Horse has already bolted. Last week I bought a shed (actually something closer to a log cabin). When Iooked at my card statement the sale was booked across the globe in Signapore despite it being produced less than 100 miles of where I live.
Multinational As A Service and Tax Avoidance As A Service are now a reality. Sharing data will do little to stop them. You need to actually change the rulebook.
But it's not too late. Retrospective taxes are probably lost, and things like the TPP are trying to give even more rights to international mega corporations, but that doesn't mean rolling over and accepting it and worse for the future.
In fact you could pretty much end it tomorrow with a combination of political and public will. Start with the easy targets on the high street and stop buying insipid sugary 'coffee' from Starbucks, go to Gregg's for your sandwich instead of Subway. In the first week of zero trade you'll see some very fast turnarounds and bargaining. This time next month you'd have a solution. Then expand outwards - boycott Amazon, Fuck Apple, whatever. Line targets up one at a time and coordinate the spending public. It's the only thing they'll listen to.
"Horse has already bolted. Last week I bought a shed (actually something closer to a log cabin). When Iooked at my card statement the sale was booked across the globe in Signapore despite it being produced less than 100 miles of where I live."
I'm not 100% sure, but I believe that's illegal, as in actually definitely against tax law illegal. They are pretending that physical sales are really remote sales. Maybe tell HMRC?
Seriously, how does HMRC find out stuff like that? It cannot send mystery shoppers to go buy sheds in every town in the UK. Tax evasion by SMEs might be seen as trying to level the playing field with the big boys, but I don't think we should be encouraging the complete hollowing out of our corporate tax base as fairness.
"You need to actually change the rulebook."
That's assuming they are all following the rule book as written. I suspect the reason for this agreement is to catch out those who are breaking the rules by playing countries off against each other, eg telling country A that most revenue is from country B while telling B that it's actually from C and telling C that it's from A.
Changing the rules is also required of course, but that will take even longer.
Read it, its not about "taxing mega corps", its about individuals:
"The information to be exchanged is, with respect to each Reportable Account of another Jurisdiction: a) the name, address, TIN(s) and date and place of birth (in the case of an individual) of each Reportable Person that is an Account Holder of the account and, in the case of any Entity that is an Account Holder and that, after application of due diligence procedures consistent with the Common Reporting Standard, is identified as having one or more "
I assume the "Putin is a corrupt theif" stories were timed to push this agreement??
Note that this coincides with a change is tax law for Europe, where banks report to the countries tax authorities the balance of accounts. So this extends that to send that data to *EVERY* other one of these countries automatically.
It doesn't appear to limit itself by jurisdiction either, so if US wants information on UK citizens who do ZERO business in the USA, it seems they get it automatically. No wonder this has to be sold under the misleading "taxing multinationals" claim.
All of course illegal, a violation of basic privacy rights, so they've added a 'confidentiality' clause, so they get it, but don't blab about getting it. As if foreign countries getting details of a countries citizens earnings and wealth is not somehow a massive privacy violation.
No mention of crown dependencies Jersey, the Caymans, Bermuda, and gibralta. At least the major US MN bolt holes of Ireland and Luxembourgh have signed up.
We in the UK might be seeing more money from Starbucks, Amazon, google, Apple, Microsoft, Twitter, facebook, ...
Vampires who sell for billions of stuff in Europe, without paying taxes or providing substantial amounts of skilled jobs, should be hunted down and exterminated.
We are better without them, even when access to the cool gadgets they offer would not be possible.
Maybe it is a start, but knowing countries like Ireland, Luxemburg and the Netherlands can veto anything threatening the lucrative tax deals they have with Apple, Google and others by allowing them to cheaply funnel away profits to some "Intellectual property holding" in the Cayman Islands, we are still far away from actual taxing their profits in a fair manner.
Note: This is only an "information sharing" agreement, not even remotely an action plan to tax them the same way the baker on the corner is taxed.
"Vampires who sell for billions of stuff in Europe, without paying taxes or providing substantial amounts of skilled jobs, should be hunted down and exterminated."
It doesn't even cover those, it's not about corporate bank accounts at all. It's individuals. An automatic exchange of information on the bank accounts within each country.
Rich people hold money in trusts, so this doesn't cover them.
Corps don't hold money in accounts of individuals and it doesn't cover those. Google isn't covered by this agreement, Google Netherlands bank accounts are associated with Google Netherlands, not Google Inc, Mountain View.
It sort of covers your jobbing Polish plumber who has a UK account, that massive 0.25% interest that will be reported to Poland now.
When they did 'interest reporting in EU', my dutch bank account immediately stopped paying interest to foreigners to avoid the burden of reporting. I was glad, a few euros interest would require me 200 euros in accountancy fees to report!
"Google and others by allowing them to cheaply funnel away profits to some "Intellectual property holding" in the Cayman Islands"
Netherlands usually, wherever tax is lower they place the holdings in that domain. As long as any other country in the world has a lower corporate tax rate it is a 'tax haven'. It's funny how they're spinning this, but nobody is tackling it.
there is also another big issue - while the Google UK tax story is all over the news, it was bound to come up in a review of the newspapers on the BBC's Andrew Marr show (for overseas readers, a Sunday morning, mostly political, chat show). This story, which makes a mockery of taxpayer confidentiality, was discussed by the guests looking at today's newspapers - one of whom expressed the view that companies should be transparent about their tax arrangements.
A good idea? Yes and no - if one believes in taxpayer confidentiality, then no; if one believes that companies should publish their arrangements, then fair enough - but they should apply to all companies. The guest on Mr Marr's show clearly believes that companies should be transparent.
For some reason, that guest has neglected to publish her own, her company's or her trust's tax arrangements, but felt able to call on others to do the same. My view, for what it's worth, is that if it's OK for Google to be told to publish, then it's certainly OK for the people's elected representatives to do exactly the same, dating back to the day they entered Parliament. I'm not saying Google shouldn't, I'm saying if an MP using questionable tax schemes is sitting calling for others to be transparent, then Margaret Hodge should set an example and start with publishing the detail of her own arrangements.
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