G20 finance ministers agree plan to make multinationals pay their 'fair share' of tax Global plans to ensure that big international companies such as Amazon and Google pay their "fair share of tax" have passed another hurdle following a meeting in Venice of the world's leading finance ministers. In June, the G7 group of nations threw its weight behind proposals to change international tax rules. At the weekend …
Oh please...
UK overseas territories top list of world’s tax havens
The top 10 biggest enablers of global corporate tax abuse
1 British Virgin Islands (British overseas territory)
2 The Cayman Islands (British overseas territory)
3 Bermuda (British overseas territory)
4 Netherlands
5 Switzerland
6 Luxembourg
7 Hong Kong
8 Jersey (British crown dependency)
9 Singapore
10 United Arab Emirates
This is completely wrong.
They try to shift the blame to territories with better tax rates and call them "enablers". The truth is that every single country that allows multinational companies to pay IP fees (and use other schemes) to their parent companies and deduct these from tax are the enablers of this.
The tax problem could go overnight if HMRC called IP fees within the connected group of companies as non-deductible. You don't need any G20 meetings, champagne, fluff to get the result.
Some tax havens already reject companies that hold IP. Simply make transactions that are designed to avoid tax subject to tax.
So if a movie or music or software company sells in the UK they pay 100% tax because they can't count the costs of the movie/music/software production because it was all IP ?
I think you are missing the point. The very basic idea of such schemes is that your subsidiary pays fake charge to the parent company that they account as tax deductible cost. You can have a chain of companies, but ultimately the company at the end of the chain has no tax obligations on revenue generated outside of the country. Those fake transactions are for example payments for ability to use branding or paying licenses for use of internal software. There are many more schemes like that with different ways of hiding those profits.
This is all really simple to find out. Some companies may disguise this in millions of transactions and use many dependent corporations, but we have technology to find anomalies and if a company has billions of revenue and only pays a tiny fraction in corporation tax if at all, that should be a first red flag.
@Yet Another Anonymous coward
"How screwed is Ireland when Scotland gets independance and joins the Eu?"
If Scotland decides to do that to themselves I expect there will be a lot of disbelief and sympathy as reality hits them. Independence is tough but joining the EU (or thinking they will even be accepted) is just economic suicide. Ireland will probably be sympathetically watching as will the rest of the world.
"(or thinking they will even be accepted) " Who told you that? Farage? The ERG? The truth, as usual is readily available to all but Brexiteers
https://www.bbc.com/news/uk-scotland-scotland-politics-51342714
The rest of the world.is presently sympathetically watching Westminster and its Brexit shambles and the inevitable dissolution of the Union.
@gandalfcn
"The truth, as usual is readily available to all but Brexiteers"
That being the truth that Scotland doesnt meet the required criteria to join the EU? Especially under the proposed independence voted on last time. That Scotland wants to join with the opt outs the UK had, which is a pipe dream.
@gandalfcn
You appear to have posted the same link twice but as it says-
"When asked if this would be looked upon favourably, Mr Tusk said there would be enthusiasm but he warned the country would not be automatically accepted."
In fact apart from saying there is some enthusiasm (brexiters shocked I tell you) it basically says Scotland would have to agree to no opt outs, would be just another country waiting to get ascension and would have to meet the criteria for joining. So the situation hasnt improved for Scotland joining it seems.
@Yet Another Anonymous coward
The English Brexit headbangers will NEVER allow Scottish independence. It disturbs their ideas of a continuing English-centric UK and pipe dreams of an Empire 2.0. Just watch the slow drip-drip of poison in the ear of the public via the rightwing media. And the lies. Remember, "Vote to stay in the UK if you want to remain part of the EU." Even the Unionists in NI have been sold down the river by the Brexit fundamentalists.
@gandalfcn
So other countries dont consider Ireland as stealing their tax revenue?
https://www.independent.ie/business/budget/ireland-stealing-eu-tax-revenues-nobel-economist-says-40371482.html
or the longer version-
https://www.thejournal.ie/ireland-corporate-tax-rate-davos-stealing-3817678-Jan2018/
https://www.irishexaminer.com/news/arid-20466283.html
Ireland is considered a tax haven. So you may have problems with his use of caps but still he isnt wrong.
Not at all odd, totally expected. The really odd thing is that the main reason the Tories, their backers and the UK media wanted out of the EU had nothing whatsoever to do with patriotism, taking back control etc, it was the fact that the EU is clamping down on tax havens, tax exiles, non-doms etc.
People with the ability ti think for themselves were fully aware of that (including BoJo and the ERG) which speaks volumes about your Brexiteers.
If adopted, it would go some way to ensure that large multinationals pay their fair share of tax in the countries they do business and introduce a global minimum rate that ensures companies pay at least 15 per cent tax on profit in each country they operate.
If it was fair, they wouldn't have to say fair.
This means all the tax avoidance schemes will continue to operate, business as usual, but the public will be lied to that the problem has been fixed.
Only difference it will make is that if a company doesn't manage to hide profit, they'll pay minimum 15% on that. Not sure where you learn your maths, but 15% of 0 (in most cases) is still 0.
Companies and individuals have used a variety of schemes to reduce their tax burden for decades and while they were just cutting it by a small amount it was generally easier to ignore it.
Now these big tech companies have started to take the piss and reduce their tax burden by a significant amount with the inevitable result that the counties they operate in are getting seriously pissed off.
If they hadn't been greedy idiots, they could have continued with tax reduction for ever, now they've screwed the pitch for everybody (And not before time in my opinion).
I guess there are plenty of accountants working on new creative things to avoid paying taxes. Add to this a lot of lobbyists pushing to have the aforementioned rules applied next century if not later.
Anyway, it goes into the good direction. Multinationals have an unfair advantage over SME when talking about taxes.
@Cynic_999
"Not unless we also have some sort of international exchequer."
You are probably right. Its a cartel attempt to extort more money and only needs one to 'fiddle' or break from the pack to gain the benefits. I do wonder how long it would take for countries not in the cartel to take advantage.
With pressure mounting on Ireland to agree to this new tax "regime" they will cave-in sooner or later as, I suspect, some of their grants and subsidies could be withheld or stopped altogether.
Now, if/when they do, what will all those US companies with offices of convenience do next? My guess is just move to somewhere that did not sign up to countries such as the Caymans and others. Ireland knows how much the real loss would be which is why they are trying to hold out.
Maybe Ireland should consider leaving the EU (IEXIT) which would also solve the current customs problem with EU, UK and NI.....
Those companies need a presence in the EU - or any business of them won't happen inside the free trade area. Now say Apple can sell in Germany and record the sales profits in Ireland - because of free trade inside EU. That can't happen without a EU subsidiary, if they operate from Caymans it will undergo any rule for foreign trading with Caymans. Nor they could gather and store the "gold" of the early XXI century, user data, easily.
Because all EU country will be bound by the agreement, if it happens, they can't simply move to Luxembourg, Hungary, Bulgaria, Cyprus or Malta on pure tax benefits reasons. Unless they decide that without a big advantage is better to move to France or Germany directly to be closer to where decisions are made and lobby better.
But IMHO Ireland won't lose much business, it's being chosen because it's an English speaking country, it is close to UK and France, and flying to and from US is a little shorter.
But I guess there will be **someone** in Ireland that has a lot to lose personally if they can't help strike some "good deals" with US companies...
>>>Again nonsense. Companies around the world sell software online and they don't need to be in the EU to do that
Why are all the US tech/soft companies (EU) HQ'd in Ireland then? Are you saying they have no need to have a legal presence and are just stupid and wasting their money?
Sure, I would like to see Amazon selling you stuff from US and deliver it with Prime with warehouses outside EU... with everything needing to go through customs for each parcel... and people needing to pay the fees for transaction in a foreign currency, without being protected by EU laws.
EirExit would solve nothing in Eire/NI and would probably make things worse. Unlike the UK, Eire committed fully to the EU and has benefitted mightily from it, so they are very unlikely to leave. You also seem to have forgotten what Britain did to the Irish not that long ago. Trust me, they haven't forgotten.
As for these new tax rules, lets wait and see what happens. It can't get much worse than it currently is, and stands a small chance of actually working. Then all we need to do is find a way get fair taxes from the other serial tax avoiders. If they all paid their fair share, we would all pay less taxes.
@Big_Boomer
"Then all we need to do is find a way get fair taxes from the other serial tax avoiders. If they all paid their fair share, we would all pay less taxes."
I dont know of tax falling due to the government collecting more. I know the government has collected more by reducing some tax's. Amazingly without collecting this theoretical 'fair' amount of theft the govs still manage to spend more.
The only way we pay less tax is when the government is scared it will take less by charging more.
> You also seem to have forgotten what Britain did to the Irish not that long ago. Trust me, they haven't forgotten.
Are you talking about when a Scottish king invaded the north of the Island of Ireland and invited Scottish people to move there?
Or are you talking about potato blight? When the Peel government bought £100k of food from America to distribute in Ireland?
This post has been deleted by its author
Ever heard of the Dunning-Kruger Effect. What you describe occurred when Dublin was a Viking outpost and the things you describe were carried out by Vikings.
Yes there was slavery in Dublin/Ireland before that, just like in Britain. No different.
"From before Roman times, slavery was prevalent in Britain, with indigenous Britons being routinely exported.[10][11] Following the Roman Conquest of Britain slavery was expanded and industrialised.[12]
After the fall of Roman Britain, both the Angles and Saxons propagated the slave system.[13] Some of the earliest accounts of slaves from early medieval Britain comes from the account of fair-haired boys from York seen in Rome by Pope Gregory the Great."
You gammons with your lies and bs give the UK a bad name you know, you are why the term Perfidious Albion ( "das perfide Albion" ) was coined long ago and you are still the same.
> Ever heard of the Dunning-Kruger Effect.
I think the Donning Kruger effect is the intellectual argument equivalent to the wedding speech opening "Oxford English dictionary defines...".
> What you describe occurred when Dublin was a Viking outpost and the things you describe were carried out by Vikings.
So?
The people alive in 1800's Britain were different people to those alive today. People like you are keen to bizarrely hold us accountable for their sins, yet this is somehow different? Pull the other one.
> You gammons
And you're a racist too. Who would have thunk it.
Your Brexiteer Little Englanders don't give a gnat's fart about history, the Troubles or anything else, other than their misplaced sense of superiority and supremacy.
Remember they totally believed all the lies they were fed about the EU, and still do, including that the EU would break up as soon as England, sorry, the UK, voted to leave. Still waiting. The only thing looking like its breaking up is the UK Union.
"the EU and has benefitted mightily from it". Quite, once Eire got out of the crippling claws of the UK.
Taxes are for the little people... not for the likes of them.
There is also the higher tax rate for little people with "broad shoulders" like Labour like to call those workers who put effort into getting education and skills and sacrificed a lot to get better paying jobs, only to have taxman take half of it away to help with living costs of people whose employers get away with paying minimum wage and no tax.
AC>Taxes are for the little people
The best bit about the anti-tax brigade is that they think if they apologise/excuse the tax-avoiders enough then they too will ascend and be allowed into the club of elites. [Spoiler Alert: They won't.]
It's telling that the main parties have detailed proposals how to tax workers and tackle the "tax avoidance" among them (those poor souls doing cash in hand gigs or the moguls paying themselves low salary and life changing dividends), but are extremely vague about tax avoidance and evasion by big multi national corporations.
Their main idea is that the more you tax the workers, the more those corporations will pay by proxy. Completely missing the point that even if you taxed workers at 100%, that would be nothing in comparison to how much those companies are getting away with.
@AC
"The best bit about the anti-tax brigade is"
They probably dont want their earnings to be stolen. These tax's having a bad habit of working their way down to the little people.
Remember that income tax is only on the rich land barons as a temporary measure to pay for the war against France.
Tax fraud and evasion is not "efficiency"; it is evading your responsibilities, gaming the system, and I hope they put an end to it in spades.
The trillions the megacorps rake in without paying taxes just offloads the burden to the people. It is LONG past time people like Zuckerberg and Bezos opened their wallets - WIDE. And preferably while bending over for the IRS/CRA/??? in the nation in question like any other common citizen being audited.... :)
This new 15% corporate tax rate will only apply to those companies with a profit margin of at least 10%. Easily fixed with a bit of clever accounting, and the big tech companies can afford clever accountants.
We'll see them all on margins of 9.99% and all this much-lauded new tax will quietly go away.
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