EC cooking up rules change for aggressive tax avoiders The European Commission is reported to be updating its planned rules for tackling aggressive tax planning. Brussels’ legislators are understood to be updating existing tax plans that would force companies to say where their money is held. Under the proposed rules, firms operating in EU member states with a turnover of more …
You put a minimum threshold of X on what triggers Official Notice, & they'll just make sure it never gets above X-1. It doesn't matter what amount X might be, if they never hit it then you'll never twig to the fact that they're fucking with the system.
Just stuff them aboard a "B Ark" and launch them into space. It won't matter where, the ship will be programmed to crash land & negate any chance of return.
Of course that may mean the REST of us are wiped out by a telephone-based plague, but at least we won't have to deal with tax cheats, telemarketers, insurance premium adjusters, used car salesmen, or anyone from Human Resources ever again...
I'll get my coat, it's the one with a copy of the HHGTTG in the pocket.
(Edited to restore the Title. For some reason it lost half of it.)
It is the extremely aggressive tax avoidance (not to say outright evasion) by the few who megaprofit from these companies which is the issue. Especially when it is to the detriment of the divisions of the company which are registered in normal tax jurisdictions and the detriment of the corresponding job and wealth creation.
These new rule(s) do absolutely nothing to address this.
Now, FULL tax returns of every single person running for an elected position as well as returns of the members of their household would be a different story. Starting with Farage, continuing with Boris, Blair (and his wife + her foundation) and all the way to the local county councilors. So it is clear who pays the bill and what for.
Brief returns of anyone (and household members) on a board of a listed company and/or company registered with the FSA and/or Insurance regulatros as well as full disclosure of domicile status and _ALL_ of their offshore holdings should be next.
We can probably stop at that (yeah, I know, it will take another episode of a bare-breasted lady leading the people to the barricades for this to happen).
Publishing tax returns is all well and good (it's about time certain politicians did so after various promises they would) but that just tells us how much tax they paid on assets+incomes they're prepared to disclose to HMRC. The whole point here is people and companies avoiding tax they should be paying by hiding the assets/incomes that would attract it. Since they've hidden it - it won't show on the tax return! Who's going to pop "Income from secret offshore investment trust, with board meetings held in Switzerland" in the "Other information" part of the HMRC SA form?
As long as their tax return shows something reasonable for their KNOWN income streams people aren't going to look for the hidden stuff, and it's that hidden stuff which is the problem. For example the Chancellor's tax return shows he was taxed correctly on his earnings as Chancellor (plus Corbyn paid the right tax on his salary as HM LotO, Boris was taxed on his salary as MOL etc.)
how much tax they paid on assets+incomes they're prepared to disclose to HMRC
You are mistaking avoidance (paying lower rate tax, but declaring all assets and tax paid elsewhere to ensure that you are not double billed) and evasion which is hiding your assets.
The latter is a crime, it is prosecuted for fraud, money laundry and tax evasion on a daily basis. The former is not. The former also involves declaring all of your assets and the fact that they _ARE_ in a lower tax jurisdiction on a tax return. They will be listed there. The former is also many, many, many orders of magnitude larger than the latter. More than 3. If tax evasion worldwide is in the billions, tax avoidance is in the hundreds if not thousands of TRILLIONs.
Actually, even that is not the issue, the issue is that in order to AVOID tax (not evade), the income of whole companies is brought to tax heavens where it is effectively taken out of the cycle of economic activity and wealth creation. For each lush 200K trust fund for dear little spoggy, the 0.1 percentile brings several millions of company profits into a jurisdiction where they will not be reused in any economic activity (besides offshore finance pocket tennis) for decades.
I'm not sure where the threshold needs to be set; but it makes sense to have one rule for small companies who cannot afford to declare their income in each EU country separately, and the Apple et al. who already have a presence in each country anyway, and for whom separate income declarations are a rounding error in the budget.
There might be people who will complain that the rules should be the same for everybody on grounds of fairness. My opinion is that the goal of society is not in fact to achieve a perfect karmic balance of fairness, but to improve the common good. It is useful that small companies can sell all over Europe without worrying about tax issues. It is hardly useful that megacorporations can shop and bargain for the lowest tax treatment in the world.
@ ratfox
"There might be people who will complain that the rules should be the same for everybody on grounds of fairness. My opinion is that the goal of society is not in fact to achieve a perfect karmic balance of fairness, but to improve the common good. It is useful that small companies can sell all over Europe without worrying about tax issues. It is hardly useful that megacorporations can shop and bargain for the lowest tax treatment in the world."
Fairness is a fuzzy word with little meaning (fair for who) but so is society as your opinion will be different to others. Just as common good is also a fuzzy word to justify anything. Almost everyone believes their version of a perfect world is good, but ones heaven is anothers hell.
For example the usefulness of the lowest tax treatment in the world is debatable when we also claim to want jobs, products and services provided by these businesses. There seems to be funny ideas recently concerning right and wrong all justified by morals to intrude and nosy into other peoples business. The result is not good, it is mistrust and more intrusions.
"It is hardly useful that megacorporations can shop and bargain ..."
But shirley, if the intellectual property that goes into that Venti something or other containing 25 spoons or so of sugar resides somewhere in the Caribbean then that's OK?
Didn't they originally find the recipe for the sugar there anywho?
Just wait till this starts getting round in the US mainstream media. We will be subjected to weeks of "analysis" from far right-wing nutjobs frothing at the mouth and raging on about how this is just a commie land-grab to pay for all those euro-fags socialized medicine because socialism is a failure and they're all a bunch of godless dystopian failed totalitarian states... BTW there are plenty of those who actually *believe* that.
How about setting up many smaller companies, each below the threshold of 750M, each performing the paying royalties for "intellectual properties" scam involving a shell company in Panama.
For sure the tax service of Luxembourg/Belgium or the Netherlands will be happy to aid in siphoning off the profits made in the larger EU countries for a little fee ... better than nothing right... ?
However forcing all money to pass through the tax office and having a single income tax percentage makes it so much easier to regulate.
As to politicians I would say that if they cannot prove they have paid tax like everyone else they cannot stand at all.
The idea of giving control to people unwilling to pay their way in society is offensive, who will they ever represent but others of their own ilk.
I've always thought tax workarounds are similar to hacking. A system is put in place, with quite complex rules, and clever law-hackers find exploits. We don't have a problem defining in law what hacking computers is and prosecuting people for it. Why can't tax law be written the same way? With criminal consequences for hacking it.
@ Pat 11
"We don't have a problem defining in law what hacking computers is and prosecuting people for it. Why can't tax law be written the same way?"
Taking something from someone else is called stealing. Define it by a set of rules by government and it is tax. The rules define what the gov is allowed to take from you because a government will always want more and will never be happy or find a limit. So the limit is they set the rules and we vote for who we want making the rules. The gov is not entitled to private property including money and abuses against that are usually punished by peoples money leaving.
Nothing the companies are doing is illegal, it is perfectly legal with the intention of being legal. It is the same rule for all. But look at it from the other side. You want the gov to steal for you and attack companies who follow the rules but have money (the defining criteria of all this seems to be any company with some money), but you also want these very same companies to provide you jobs and services. They already pay a lot of tax and are not stupid enough to let themselves be robbed for more.
The criminal act is the current mob mentality to attack the law abiding for being successful. mob mentality has caused a lot of problems throughout history and necessitated the rule of law.
Tax havens have three characteristics, the fundamental two (outside of their tax structures) being banking secrecy and lack of international co-operation with tax authorities. The simple fix is to insist on transparency of all beneficial ownership of companies, trusts and foundations of *any* size to other sovereign tax authorities (HMRC for us) for all territories. Nothing less. Then job done without any sham self reporting, "look everyone we're doing something" but being totally ineffective.
The fact that Cameron personally intervened to remove trusts and foundations from any such proposal is the real story. You have to ask why. I don't buy the "we'd never get an agreement if we'd left them in" statement in parliament; who are the mythical objectors? Surely not his own puppet masters?
Corbyn stopped short by not asking who would stop proposals should trusts and foundations be included. He should keep pushing, and not just join in on the farcical "put up our tax returns" magnesium flare. Put trusts and foundations back in, no more, no less. And grow some balls in dealing with our own Overseas Territories and Crown Dependencies.
It seems easy enough to resolve the problem. The proportion of turnover (money received, not profit) in a country compared to the overall turnover of the company should be used to determine the proportion of profits that are taxed in that country irrespective of whether the company claims to make no profit in that country.
To save the small business major problems, a clearing system should be set up to determine tax due and re-distribute to governments appropriately. It doesn't matter where they declare their results, insist that turnover is split by country in the annual accounts. There are already reciprocal agreements against dual taxation.
This would involve some worldwide agreements - tricky at best and I feel sure that some tax havens will object...
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