Can someone help me ...
I'm about to put something forward so simple that it is very likely full of holes, because I'm very likely talking out of my arse and just need someone to explain why my thought process is that of a lunatic but ... here we go anyway.
The problem as I understand it from the press, is that company ABC does a sum of business in country A and shifts the profits to another country by various means, such as overpaying for supplies, etc.
Corporate tax is a tax on profits made in that country, but the company must make known the amount of sales in country A. The company also has to report global profits.
So, let's say for example, that a company reports global sales of £100,000 and profits on those sales of £50,000 ... and country A knows that ABC made sales of £10,000 in their country ...
... then to me it is simple maths that their tax bill should be worked out as a percentage of global profit weighed against local sales. Sounds fair to me.
Ergo, profit made in that country assumed to be £5,000, 20% corporation tax of which is £1,000, thank you very much Mr. Won't-play-ball.
So ... what have I missed?
Biting the hand that feeds IT
