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Facebook paid £4,327 corporation tax in the UK in 2014

bbc.co.uk

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Re: Facebook paid £4,327 corporation tax in the UK in 2014

#411

Post by funkyy »

1123581321 wrote: post #362
funkyy wrote: post #272

Earlier quoted context omitted.

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.

Goal would be to remove middle man and shell companies. When you look at the product offered by lets say Samsung, how many companies such a product would go after removing middle man, 5? Mine -> Parts Manufacturing -> Producer -> Distributor/Licensor -> Sales Point (Mine -> Some small manufacturer making simple parts -> Foxconn -> Samsung -> Shop in Vancouver). Thats 5% tax on whole product that will not have added sales tax anymore. Thats low, probably would lower the price of product by huge. And there is no tax credits etc so no place to exploit. As simple as that, so companies can focus on what is important, especially growing ones.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#412

Post by msandford »

gburt wrote: post #367
MagnumOpus wrote: post #360

Earlier quoted context omitted.

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?

> Don't you have to transfer the IP at something approaching fair market value to the tax haven corporation?

So here's the deal. "Transfer pricing" is a thing, and it's what you're supposedly allowed to sell stuff at. https://en.wikipedia.org/wiki/Transfer_pricing

So if you sell something on the open market anywhere, you can't sell it to your foreign subsidiary or owner for too much more or less than the open market price. But things get dicey when you're talking IP: patents and trademarks don't trade on the open market but are absolutely vital for a subsidiary to be alive, right? Amazon isn't Amazon if it can't call itself "Amazon".

The other trick is to offer some kind of service that's difficult to precisely quantify like having an accounting or service center in one country that every foreign subsidiary is required to pay for. It might not be a reasonable price but the cost of auditing all the call center records to find out it's costing $3/minute (on average) for a particular US based company to outsource its support calls to somewhere instead of $0.10/minute is going to be very steep. Do this across a few different lines of corporate support and your profit hiding is accomplished.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#413

Post by WildUtah »

protomyth wrote: post #244
pjc50 wrote: post #158

Earlier quoted context omitted.

It's worse than that. The "HQ" is in Ireland, but pays "royalties" to an IP holding company in the Cayman Islands, which is where all the profits go, on which no tax is paid. This is the "double Irish" referred to in other comments. Edit: note that you can just go and read the accounts for Facebook UK here: https://beta.companieshouse.gov.uk/company/06331310/filing-h... A very important piece of information is left o…

Wasn't Monster Cable pulling some weird licensing arrangement like that? I know Toyota USA pays licensing to Toyota to avoid taxes in the US.

As for Toyota, Japan has the second highest corporate tax rate in the first world, after the USA. And until two years ago, Japan had the highest rates.

So I don't think Toyota was running the same schemes we see in tax havens.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#414

Post by asuffield »

bluecalm wrote: post #353
Frondo wrote: post #330

Earlier quoted context omitted.

The best possible tax scheme for poor people would be a wealth tax. Make it a flat wealth tax, and I'm with you: 10% (or whatever) of what you possess, into the community coffers every year. Don't muck around with income, it's too easy to game.

Wealth tax is obviously (I think!) the best kind of tax but the problem with it is it's hard to collect (you would need to assess wealth of everyone and that is a problem).

Please consider what kind of behaviour you would encourage. If wealth erodes every year then this strongly disincentives long term thinking and rewards business ventures which give quick cash and then burn out, like strip mining, and punishes planning for the future like pensions.

You want your tax system to reward long term thinking, not punish it.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#415

Post by dragonwriter »

WildUtah wrote: post #413
protomyth wrote: post #244

Earlier quoted context omitted.

Wasn't Monster Cable pulling some weird licensing arrangement like that? I know Toyota USA pays licensing to Toyota to avoid taxes in the US.

As for Toyota, Japan has the second highest corporate tax rate in the first world, after the USA. And until two years ago, Japan had the highest rates. So I don't think Toyota was running the same schemes we see in tax havens.

If (and I have no idea of this is true) Japan doesn't tax transfers from foreign subsidiaries to domestic parents, and the US allows transfers from domestic subsidiaries to foreign parents to be expensed, such an arrangement would avoid taxes entirely, making Japan's tax rates irrelevant.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#416

Post by afsina »

collyw wrote: post #274
pjc50 wrote: post #227

Earlier quoted context omitted.

Standard Oil? If you're going to call that "crony capitalism", we're well into the same delusional territory as "true communism has never been tried".

when was it tried?

Well, the ones tried were close enough. Soviets and the all eastern block, Cuba, Cambodia, China, North Korea. They all contained communist ideas such as common ownership, abolishing private property, central planning, and somewhat classless society. Apparently event the theory does not hold much weight as almost all collapsed or converted to some form of nationalist totalitarian regime. Perhaps once robots do all our jobs harvesting food and cleaning streets using power from endless battery fields, Marx's prophecy of inescapable history will be fulfilled.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#417

Post by United857 »

As others have pointed out, this is far from unique to FB. I'd be surprised if any large multinational corporation didn't do such creative "optimizations" globally.

E.g. British companies doing the same thing in the US:

http://www.washingtonpost.com/wp-dyn/content/article/2006/09...

Don't hate the player, hate the game.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#419

Post by desas »

newjersey wrote: post #142
coldtea wrote: post #130

Earlier quoted context omitted.

> Why not let Apple have what's left? Because other businesses also create products that collect VAT and still pay their taxes. Why should Apple be any different? To promote those that are big enough to avoid taxation to make them even bigger?

Apple pays VAT and all the taxes it is legally obliged to pay. Don't blame Apple. They will pay the least amount they have to pay. Fix the loopholes.

VAT is a tax paid by end consumers, its just collected by retailers.

Re: Facebook paid £4,327 corporation tax in the UK in 2014

#420

Post by lomnakkus »

fredoliveira wrote: post #240
coldtea wrote: post #201

Earlier quoted context omitted.

No, they use every trick in the book not to, ending up paying less than your local frozen yogurt place (exaggerating a little, but still).

See but they do pay their taxes. They just use loopholes to pay less taxes.

That's basically a distinction without meaning.

The whole reason for taxes is that it helps the collective -- sometimes at the expense of the individual.

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