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Facebook's UK wing paid just £4k in corporation tax last year

xerocred

"If you do business in a country then you should pay that countries tax."

No it won't work.

Well as my personal experience example above. Imagine you are a small SME selling stuff all over the world - do you really want to have to do a full corporate tax return in every country you sell to just because you sold 10 widgets costing $300 there? Then if you have no sales the next year you'd still have to do the tax return to prove you sold/earned nothing. And, say, for others selling to the UK you were late submitting tax return or made a mistake you might get nailed a penalty that could be far in excess of the value of sales.

How would you apportion 'profit' to each country? you'd have to include the cost of compliance with local tax laws and subtract what the local tax account is charging you.

For my company, we would sell a few 100K's worth of stuff (ideally, but maybe only $250 yes, really!) to different countries... I personally dealt with 8 countries our profit margins was not like Apple. Should my salary be attributed to the country I reside and pay tax in or from the region I oversaw or be apportioned equally across the countries or in proportion with the sales volume?... Or do you suggest I have to pay salary tax in 8 different countries too? Think about it for a moment and the current system is simplest and workable - maybe not perfect but there's nothing better. Maybe if the OECD normalizes tax rates there will be less gaming the system and it will work..

So there are loads of reasons it won't work.

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