Reply to post: Re: it is deficiencies in the tax laws

Google UK coughs up £130m back taxes. Is it enough?

Dazed and Confused Silver badge

Re: it is deficiencies in the tax laws

The problem with it being a deficiency in the tax laws is that makes it the government and the MPs fault and they can't admit to this.

The international tax system is simply no longer fit for purpose.

Now if I work in India I have to pay an Indian withholding tax. That is I have to pay Indian tax on the work I do there, they will then give me a certificate that says I've paid this tax and I can then claim this back against any tax the UK authorities might want to charge me on the same piece of work. If Indian tax is higher than UK tax, I lose out.

Now this strikes me a much more sensible way to work in an international environment. If Google (and all the others, it ain't just Google) had to pay UK corporation tax on work done in the UK and were then given a certificate to hand to the Irish authorities that says they've already coughed up this much. Then the UK would get the tax due on the UK bit of business. So instead of paying the lower rate of tax between the 2 countries, they have to pay the higher one.

Of course there are still a million and 1 tricks played by accountants.

So for example Starbucks claim that Starbucks UK makes no profit on any coffee sold in the UK because for every £1 worth of coffee they sell they have to pay £1.01 to Starbucks Logo Inc of some tax haven somewhere. This sort of thing is just pure bollocks and should be outlawed. Money spent of real R&D should be recoverable or there will be no new products, but money spent on other spurious bits of IP shouldn't.

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