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Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

theguardian.com

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Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#401

Post by mjfisher »

softveda wrote: post #337
nly wrote: post #89

Earlier quoted context omitted.

It mostly depends if you intend to make significant pension contributions. Let's say your company has £100K to play with and you want it all. - You can pay yourself a £100K salary, of which take home pay will be about ~£67K - You can pay yourself a £8,840 salary tax free in order to qualify for the state pension but minimize national insurance, and pay 19% corporation tax on the remaining £91,160, which leaves £73,83…

I am surprised such loopholes still exist in UK. In Australia if you setup a company and 80% of the company's income is only from your own personal services from a single client then your company has to pay tax on personal income tax rates. These sort of loopholes were closed many moons back.

I don't think that's really such a huge loophole. Pension aside, it's a 2% difference in total tax burden that's probably going to be swallowed up by other company related admin expenses anyway.

I'm self employed and get the bulk of my income through dividends. As with the example above, I often end up paying roughly the same amount of tax as someone with the equivalent salary would.

The big advantage for me is that I can have a very good year and a very bad year and pay an appropriate (smoothed out) level of income tax across both - which seems fair to me.

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#402

Post by disgruntledphd2 »

nivenkos wrote: post #399
disgruntledphd2 wrote: post #338

Earlier quoted context omitted.

The Irish part is there to allow it to funnel EU profits, and ireland allows for countries to be registered there, but not tax-resident. Interestingly enough though, almost all of the zero tax places are British Crown dependencies, so presumably the UK government could exert pressure on them, if it really wanted to.

Why haven't Germany, France, etc. pressured Ireland to stop this?

They've been trying for a while. Ultimately, taxation is a national prerogative, and requires unanimity in Council, so it's unlikely to change any time soon.

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#403

Post by rorykoehler »

throwaway0a5e wrote: post #186
rorykoehler wrote: post #115

Earlier quoted context omitted.

Add a UBI and it would work. There needs to be an economic floor which ensures there is no destitution. The aim isn't to get rid of wealth. The system now isn't working because wealthy people are securing their income and wealth without paying tax at the expense of social and civil programs.

Assuming the UBI works out as intended and doesn't lead to unmanageable inflation the definition of destitution will just change to reflect the new floor. How many 70s government housing project apartments or leaky rural shacks do you think you'd need to combine to get one working set of appliances and utilities that every section 8 apartment and double wide trailer has these days? (I'd put that number at 3-5). That…

Things need to be maintained. Public HDB housing from the 1970s in Singapore is as good if not better than the new builds going up here in Germany. Destitution is not a moving goal post. You need adequate food, water, housing, healthcare, education and security. This is what UBI has to cover. If private housing is soaking it all up through rent seeking then it can be solved via rent controlled public or public/private (like Singapore’s hdb) housing schemes. You want more then you have to work for it.

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#404

Post by frockington1 »

duped wrote: post #288
frockington1 wrote: post #147

Earlier quoted context omitted.

And death tax. And property tax for good measure

We don't have a death tax in the US. We have an estate tax that is exempt up to $11 million and can be spread out 15 years for businesses.

The proposed capital gains changes would ensure that most Americans will be targeted. If the cost basis doesn't recent on death many Americans will immediately get hit with taxes. With the top rate being upped to 43%, its gg for anyone who planned on leaving their loved ones money

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#405

Post by ed_balls »

seanmcdirmid wrote: post #149
lukasm wrote: post #127

Earlier quoted context omitted.

nope this tax scheme would only apply to certain corporations e.g. Revenue 0-20mln EUR, you keep the existing tax scheme Revenue 20-100mln - you can choose the tax scheme Revenue 100mln+ - you have to tax revenue Thresholds are up for debate. Also, companies already pay around 0-5% of their revenue in income tax. Gigantic companies pay close to 0.

> Revenue 100mln+ - you have to tax revenue So banks and oil companies, which are naturally lots of revenue with a tiny amount of profit, would disappear, or become very small?

> If your company cannot pay 1% of the revenue you don't have a viable business. Average corporation spends more on accounting and consulting.

Accounting costs banks and oil companies around 0.8%, so the will be fine.

I don't remember the exact number.

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#406

Post by pas »

G3rn0ti wrote: post #245

There shouldn’t be „corporate taxes“. They tend to be difficult to collect, troublesome to declare and actually can not contribute much to national budgets. Think about it: Employees of multinational companies pay billions of income tax. Customers buying products and services from multinational pay billions in VAT. Shareholders of multinationals receiving dividends pay billions of capital gains tax. So what exactly i…

Corp income tax tries to tax the actual value of the economic activity of the corporation. (And this is a bit different from the VAT, because it's imposed on the consumers: https://economics.stackexchange.com/questions/9678/what-is-t... .)

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#407

Post by tonfa »

breakfastduck wrote: post #280
tonfa wrote: post #223

Earlier quoted context omitted.

I'm not from US. And it works the same for most countries, it just happens that those companies are based on the US and very visible, but if there is a EU corp that's heavily successful and all the development is done in EU why wouldn't the profit be booked in EU? (Other countries mostly have sales, that's what sales/vat are for) If instead of being a digital company it was a physical good company, would it be so con…

Why should it be different? Because you're extract money from a foreign country, utilizing their economy and giving nothing back in return for the infrastructure that's allowing you to make the money - that's why.

That might be fair, but should be applied uniformly (that's a very different internet than the internet of the old days though).

Would end up with every digital company having to register in country before accepting any user from that country (with maybe a facilitated process where they can self declare their per-country revenue).

People already complain about the arbitrary geo-fencing, but that might indeed be inevitable.

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#408

Post by billyruffian »

disgruntledphd2 wrote: post #338
rwmj wrote: post #69

Earlier quoted context omitted.

The company is tax "resident" in Bermuda, a British Overseas Territory. In fact I'm not even sure what the Ireland connection is here except that there is a registered office in Dublin. It seems like all the action is taking place in Bermuda, so this is really a story about UK overseas tax havens.

The Irish part is there to allow it to funnel EU profits, and ireland allows for countries to be registered there, but not tax-resident. Interestingly enough though, almost all of the zero tax places are British Crown dependencies, so presumably the UK government could exert pressure on them, if it really wanted to.

Again, for clarity, the Crown Dependencies are the Isle of Man and the Channel Islands. Bermuda is a BTO.

Bermuda has been self-governing since 1620. Britain has very little in the way of exerting any pressure on them short of imposing direct rule (which it seems to have done only twice: on Anguilla in 1968 after it was invaded and only partially on the Turks and Caicos in 2009-2012 due to systematic corruption).

EDIT: punctuation

Re: Microsoft Irish subsidiary paid zero corporate tax on £220bn profit last year

#409

Post by lukasm »

dkyc wrote: post #139
lukasm wrote: post #127

Earlier quoted context omitted.

nope this tax scheme would only apply to certain corporations e.g. Revenue 0-20mln EUR, you keep the existing tax scheme Revenue 20-100mln - you can choose the tax scheme Revenue 100mln+ - you have to tax revenue Thresholds are up for debate. Also, companies already pay around 0-5% of their revenue in income tax. Gigantic companies pay close to 0.

This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions and therefore directly incentivizes large, vertically integrated companies. You can try to work against it by arbitrary progressive taxation thresholds, but this doesn't change the underlying mathematics. Also, there's a reason why progressive taxation isn't widely implemented for corporations, because it's very ea…

> This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions

You can make the same argument about VAT. There is a cost on every transaction (split payment, money is frozen until you get a return). The incentive would be negligible comparing to other incentives for vertically integrated companies.

> progressive taxation isn't widely implemented for corporations, because it's very easy to circumvent by splitting up and increasing the number of legal entities

It's getting more popular and it's easy to draft a law that splitting companies, does not reduce the taxes (see GDPR) https://taxsummaries.pwc.com/poland/corporate/taxes-on-corpo...

> sensible way around that is taxing the _ultimate beneficiary_ rather than the company itself (i.e. the owners as natural persons), which is what GP suggests with "sales tax and personal income tax on salaries and distributions".

It doesn't work in practice, because of tax heavens. Also, I can have a travel blog and a youtube channel when I review cars and clothes. Would I pay close to 0 in taxes.

---- All taxes are bad, but given current global world, revenue tax seems to be better, hence the digital tax in EU.

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