Does anybody have any recommendations for decent books or articles on corporate tax evasion?
Facebook paid £4,327 corporation tax in the UK in 2014
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Re: Facebook paid £4,327 corporation tax in the UK in 2014
#362Global companies offshoring profits and not paying enough tax (in the eyes of many countries) was a hot topic at the last G20 summit in Brisbane. This isn't limited to Facebook, as the article explains. The issue and background here is that when large companies operate globally, each country has its own local subsidiary, owned by the global entity. Money is made in each country by selling goods or services. How are t…
Simple 1% revenue tax on companies with revenue of more than $15 million would fix the issue. No other taxes, just revenue one, no tax credits, no refunds. No hiding costs, no going offshore, no creative accounting. One tax on all revenues that will hit your account. This would also help to cut out all the middle man driving prices up and make the logistic chain quite small. Some countries want to experiment with thi…
That would cause an immense consolidation as the 1% would be applied to the revenue of every country in a manufacturing/logistics chain and add up to a sizeable percentage of the final cost. More companies would take the Apple route and do as much as possible so that there would be fewer 'revenues' to tax per good made/service provided. Perhaps that is your goal.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#363Earlier quoted context omitted.
Stories like this make me question if corporate tax even makes sense. However well designed, a tax code with today's complexities is going to have holes. If a savings of even one per mill may mean millions, corporations are going to spend insane amounts of money to hire the best experts to use every last loophole. Why don't we cut down everything to a couple of manageable groups that can be tightened down? I think th…
Someone put it best when they said "corporations may not have a heart, but they don't have a stomach either". Unlike people, corporations do not consume for the sake of consumption, instead they invest in assets. A tax on corporations is directly passed through to employees, customers, investors etc. From what I understand, the actual proposed replacement for the corporate income tax is much simpler: eliminate it and…
>Unlike people, corporations do not consume for the sake of consumption, instead they invest in assets.
Uh, what exactly is the difference between consuming and investing in assets? Most investment in assets is actually just a claim to consume some of the ROE.
Also, it's not clear to me how shifting cash flows into something makes an asset (or how a physical asset could directly benefit from increased cash flow [not sure how this is even possible; I can't pump FRN's into my car's gas tank]).
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#364Earlier quoted context omitted.
Sorry, I might not have made that point clear: they wouldn't be taxed at all. Not at the corporate level, that is. As far as I can tell, money will exit corporations in three ways: 1) salary, 2) shares and 3) payments for goods/services, mostly to other corporations. Income and capital gains taxes will take care of 1 and 2. The company won't owe taxes, but whichever natural person receives the money will. As for 3, m…
This type of tax plan will incentivize wealth aggregation in corporations, while increasing the cost of employees and goods/services. You want companies to spend, to increase economic cash flow and generate jobs, which is why existing corporate taxes are on net income, not revenue or costs.
Why would shareholders want a corporation to aggregate wealth?
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#365Earlier quoted context omitted.
Stories like this make me question if corporate tax even makes sense. However well designed, a tax code with today's complexities is going to have holes. If a savings of even one per mill may mean millions, corporations are going to spend insane amounts of money to hire the best experts to use every last loophole. Why don't we cut down everything to a couple of manageable groups that can be tightened down? I think th…
The big problem with this is that, under a simple tax system, if a government wants to increase it's tax revenue it is extremely easy for voters to understand what is happening. Governments prefer to make complicated tax laws because they are easier to spin.
Ah yes governments always trying to make things too complicated!! Argh! Why cant we replace the govt with the private sector! They never do anything that would obscure or needlessly complicate things.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#366Earlier quoted context omitted.
์So every broker company who makes profit on 0.05% transaction fee is going bankrupt, and no more high-volume low-profit business.
I assume you write this as a bad thing? Its better for economy if brokers would focus on long term trades. Also usually high-volume low-profit businesses are the ones that are arbitrating prices and often are just middle man. No need for that. There is a way around. Obviously there would be FEW businesses that would be affected and need to change the way they work, but this comes always with any tax changes. Anyways,…
I assume you write this as a bad thing?
I don't know about you, but I really like what Amazon provides to me, and am quite glad corporations like it aren't strangled by our tax code.
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#367Earlier quoted context omitted.
So can some tax attorney (we used to have a few on here) or CPA/CA break down how exactly this happened and how other people with corporations can do similar things? If Apple isn't going to be paying their "fair share" (yeah, that's a contentious term I'm throwing around) might as well benefit from the money they spent on lobbying and do the same thing they're doing. I'm in that limbo region where Julius Baer won't a…
You need to have "intellectual property" of some sort (patents, brands for franchising, copyrighted software). You create a number of corporations - one that is tax resident in a tax haven like the Cayman Islands and domiciled in Ireland, one that is tax resident in Ireland, one in the Netherlands, and one in each country where you sell your goods or services. You then go and hire a good tax accountant who has experi…
The part I don't understand is that the brand was developed in the US. Don't you have to transfer the IP at something approaching fair market value to the tax haven corporation? How could you possibly have the resources (in the haven, no less) to do this without loaning money (at interest?) backwards?
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#368Earlier quoted context omitted.
There can still be VAT for things poor people buy. Is there chocolate on your biscuit? Then it's "luxury" and you have to pay VAT.
True, but at least the price label in the supermarket is the final price you pay, no nasty surprises at checkout. VAT is already included in the advertised price, so you know exactly how much you'll have to pay. Apparently, the same is not true of sales tax in (some states of?) the US. It doesn't say the VAT rate on the label, but you can figure that out from your receipt after solving a bin packing problem :) Receip…
> but at least the price label in the supermarket is the final price you pay, no nasty surprises at checkout
Er, that's how nearly everywhere does it. And is irrelevant to whether VAT or income tax should be the main way to raise money
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#369Earlier quoted context omitted.
The issue with VAT is that as usually applied it is an extremely regressive tax. Poorer people spend a far higher proportion on their income on purchases that have VAT applied. If more categories of basic goods were zero-rated or exempt, or if other mechanisms were used to make the VAT burden less regressive, then it might be viable.
The FairTax proposal in the US addressed this with a "prebate" that was mailed out to every person (not sure the criteria) at the beginning of the year. This was a check that covered the taxes on base (poverty?) level spending. This was meant to remove the regressive taxation effect.
Nice in theory. In practice how many really poor people have address, or bank accounts which they can use to lodge it?
Re: Facebook paid £4,327 corporation tax in the UK in 2014
#370Earlier quoted context omitted.
We legislate morality all the time. Would you at least agree with the statement that "Not all legal actions are moral and not all moral actions are legal"?
I prefer to avoid morality since it's too subjective. Morally I believe a business should only pay it's required taxes. Obviously you disagree.
Companie often put in enourmas amount of effort into "only paying it's required taxes" with a vast network of otherwise economically pointelss subsidiary companies that money is shuttled through to take advantage of locally negotiated tax deals to reduce tax liability in third party jurisdictions.
The breadth of complexity and the depth of thought that goes into these corporate structures transcends and notion of "simply doing business"