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EBay 'pays £1.2m in UK tax' on sales of £800m

bbc.co.uk

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Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#41

Post by tonyedgecombe »

Silhouette wrote: post #34
petercooper wrote: post #29

Earlier quoted context omitted.

Because the UK can't arbitrarily change laws easily in the majority of cases any more due to being a member of the European Union. What would they be taxing anyway? If they're like many of the other companies similar stories have risen up about, they're paying a subsidiary in another EU country for rights to the brand. So we'd either need to outlaw free trade between EU states (which the EU won't allow) or somehow ta…

No, there is a third option that is looking increasingly credible: the UK could leave the EU altogether. Whatever the arguments for being in or out more generally, in financial terms that is almost certainly a win as things stand today, and it looks like any realistic outcome of the Euro problems will only strengthen the case.

I'm not sure about that, if the UK wants to continue trading with the EU from outside then they will be forced to pay for that privilege some way or another.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#42

Post by jasonlingx »

Silhouette wrote: post #33
jasonlingx wrote: post #20

Corporations, small businesses and even people will rationally pay only the minimum tax that they can get away with under the law. The law favours big international corporations so this is what you get. If you find this inequitable then laws need to be changed. On the other hand big corporations as well as wealthy people usually have more leverage in terms of being able to move and operate or reside in more tax-frien…

On the other hand big corporations as well as wealthy people usually have more leverage in terms of being able to move and operate or reside in more tax-friendly or hospitable regimes. That's often claimed, but I'm not convinced. Some people/businesses might move away because of being forced to pay tax at the same rate as everyone else. Most people/businesses won't, because most people don't choose where to live only…

Businesses might not be able to choose so much where their market is, but they surely have a choice in where they set up manufacturing, R&D, corporate HQ etc etc. Countries constantly compete for business investment.

Wealthy individuals are similar. They probably won't move their chosen country of residence for tax reasons, but I am pretty sure they will move their assets and investments to protect their value.

Most tax systems are inherently unfair with the middle-class and small business taking more than their fair share of the burden. The increasingly globalised and virtual nature of the economy only exacerbates this.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#43

Post by tangue »

rhplus wrote: post #36
tangue wrote: post #32

Ebay is based in Luxemburg, if it were in an offshore fiscal paradise I would have understood, but hey this is Europe. If something is broken in Europe don't blame companies, they're not the ones sitting in parliament.

If you've ever purchased Apple apps through the app store in Europe, you'll notice the developer is listed as "iTunes S.a.r.l". It's similar for web-services purchased through "Amazon Services Europe S.a r.l" and transactions through PayPal and Skype. All are registered as companies in Luxembourg[0], to take advantage of more attractive tax structures and legal codes while still being within the EU trading zone. Skyp…

That's what I meant with "something is broken in Europe". The concept of tax competition has been encouraged by the european commission. They've created this situation where each country competes against others. I won't blame the companies for playing by their rules.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#44

Post by chii »

nikcub wrote: post #40

This is why consumption taxes are good - you can't get away from them. On the £3B of sales from Starbucks, they would have contributed at least £600M in consumption taxes (known as the VAT in the UK and at a rate of 20%). Getting rid of corporate taxes and increasing consumption taxes proportionately would be a good way around this, although as much as it makes sense, and it is a popular position amongst economist -…

consumption tax (like VAT, or GST in australia), unfairly taxes the poor as a percentage of their income.

The gov't tries to fix this by having some categories of goods that are _not_ taxed (at least this is true in australia), to alleviate this problem, but its not quite perfect.

I don't like consumption tax at all. However, i can't think of a way to levy that won't have loopeholes for the mega rich.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#45

Post by chii »

ChuckMcM wrote: post #39
beedogs wrote: post #38

Earlier quoted context omitted.

I'm pretty sure "corporations writing their own tax laws" is society's problem, and is indicative of a much bigger problem with capitalism in general.

That would be a problem, and it may be the case in the UK, I'm not familiar with their legal institutions, in the US the only people empowered to 'write' laws are elected legislators. Now some will say "Corporations elect legislators" except that isn't true at all, at least not in California. The only thing corporations and so called 'super pacs' can do is throw money at getting someone elected, and Meg Whitman prove…

Theres another side to the voter apathy story though, which you haven't fairly covered.

The choice a voter makes can't just be arbituary (i.e., flip a coin to vote). If they are to make an informed decision, it will require investment in effort and time. The voters that are most apathetic are more likely to be poor, and won't have time to invest in such endeavours. Obviously, this perpetuates the problem, but the cause is that, in the mind of the apathetic voter, their time is better spent making money, or making the most of their spare time to have fun, instead of the chore of working out who to vote for.

There is no answer to this problem, as it is a problem with the mindset - they do consider their other activities more important, but they do so because they just don't have the resources to invest in civic activities.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#46

Post by chii »

jasonlingx wrote: post #42
Silhouette wrote: post #33

Earlier quoted context omitted.

On the other hand big corporations as well as wealthy people usually have more leverage in terms of being able to move and operate or reside in more tax-friendly or hospitable regimes. That's often claimed, but I'm not convinced. Some people/businesses might move away because of being forced to pay tax at the same rate as everyone else. Most people/businesses won't, because most people don't choose where to live only…

Businesses might not be able to choose so much where their market is, but they surely have a choice in where they set up manufacturing, R&D, corporate HQ etc etc. Countries constantly compete for business investment. Wealthy individuals are similar. They probably won't move their chosen country of residence for tax reasons, but I am pretty sure they will move their assets and investments to protect their value. Most…

I suspect that the equilibrium would be that there is no taxation, but also there is no social net and welfare.

The divide between the haves and the have nots will grow and grow.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#47

Post by chii »

petercooper wrote: post #29
TomGullen wrote: post #10

Why can't they change the tax law to tax these companies? I know it would be difficult, but it can't be impossible. These companies will always want to operate here.

Because the UK can't arbitrarily change laws easily in the majority of cases any more due to being a member of the European Union. What would they be taxing anyway? If they're like many of the other companies similar stories have risen up about, they're paying a subsidiary in another EU country for rights to the brand. So we'd either need to outlaw free trade between EU states (which the EU won't allow) or somehow ta…

Do you think its possible to have each company disclose its structure and relationships with all other companies, and have those books and transactions audited for tax purposes?

This way, if you pay for a "brand" with $100m, it seems very sus when the subsituary is also owned by a related set of people.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#48

Post by chii »

pan69 wrote: post #15
TomGullen wrote: post #10

Why can't they change the tax law to tax these companies? I know it would be difficult, but it can't be impossible. These companies will always want to operate here.

Because that will probably impact certain politicians and other "important" stake holders who benefit from these tax laws as well. In my opinion, every democratic country should make the following change to their laws: Politicians cannot own, or have a stake in, any commercial enterprise. Needs to be a bit refined but you get the idea.

or put it more broadly - you should be able to acquire the financials of public servants. All of it, and if they have significant others like spouse or children, their financials are also considered public. And any stakes in any company will cause that company's financials to become public (whether its a privately held company or not).

This way, there is a web of transparency so that any dodgy transactions will be definintely caught (probably by the opposing party).

It sucks that these days, its possible to "hide" the true owners of companies and stocks. Its not in the public interest to have this feature.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#49

Post by nikcub »

Silhouette wrote: post #33
jasonlingx wrote: post #20

Corporations, small businesses and even people will rationally pay only the minimum tax that they can get away with under the law. The law favours big international corporations so this is what you get. If you find this inequitable then laws need to be changed. On the other hand big corporations as well as wealthy people usually have more leverage in terms of being able to move and operate or reside in more tax-frien…

On the other hand big corporations as well as wealthy people usually have more leverage in terms of being able to move and operate or reside in more tax-friendly or hospitable regimes. That's often claimed, but I'm not convinced. Some people/businesses might move away because of being forced to pay tax at the same rate as everyone else. Most people/businesses won't, because most people don't choose where to live only…

NPR Planet Money did an episode on the claim that rich people move states based on increasing tax rates:

http://www.npr.org/blogs/money/2011/04/22/135635574/the-frid...

They found, based on research, that the effect was negligible, and that other impacts of increasing taxes are much more noteworthy.

Re: EBay 'pays £1.2m in UK tax' on sales of £800m

#50

Post by andreasvc »

ChuckMcM wrote: post #22
beedogs wrote: post #19

Earlier quoted context omitted.

Oh. Right. I guess we're "punishing success" (or some other horseshit terms) by expecting companies to pay their fair share in taxes. And even though corporate tax laws are written in large part by these very same companies, I'm sure we should regard them as completely legitimate, as well. What an absurd argument.

I hear you, but to make your argument you have to define the term 'fair share'. If you take the working definition that 'fair share' is 'all legally owed taxes' then guess what, all these people are paying their 'fair share.' So do you see the problem? You have an internal definition of 'fair share' which is inconsistent with what the folks who govern the UK have codified as 'fair share.' Is that Ebay's problem? Or i…

To say that a 'fair share' is the taxes prescribed by the current laws is ridiculously circular. Of course it's the _intention_ of laws to be fair, but no one can claim with a straight face that the current loopholes are actually fair. It's quite obviously unfair because larger companies with more money get away with paying less.

The problem with these loopholes is an international one; countries screw each other over with it, and it's difficult to pressure them into closing them.

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