UK government to initiate tax crackdown on tech firms holding earnings offshore

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Comments

  • Reply 21 of 32
    avon b7avon b7 Posts: 5,933member
    xbit said:
    JanNL said:

    - Are there border controls? Structural border controls are forbidden by EU law within the EU zone. Crossing the border with Belgium a few times a week for the past 15 years, never had a control... I even moved to Belgium years ago and it was only a formality.
    The UK has never been part of the Schengen zone. The UK has border controls with other EU nations and has the powers to deny EU citizens entry (e.g. criminals or those without realistic prospects for finding a job).
    - But there are also a lot of real HQ's, think about the City/financial centre in London.
    Unfortunately a lot of these large multinational finance organisations have signalled plans to leave London. Even Lloyds of London (est. 1686) is looking at moving away. :(
    Border controls for EU members is largely 'symbolic'. In many ways they are actually stricter for UK nationals who now have to pass through a computerized, automated system. Last time I visited, I had to be scanned biometrically but the Spanish people with me just flashed an ID card and were let through.

    Everyone has (or had in the case of Brexit) the right to free movement and could visit for three months, no questions asked. After that, very few of those without sufficient means to support themselves were denied EU rights although technically it is possible to ask someone to return to their country of origin. The same applies to those going from the UK to other EU countries without sufficient means. 
  • Reply 22 of 32
    d_2 said:
    larrya said:
    Good for them. Taxes not paid by corporations are taxes paid by the rest of us, yet they benefit disproportionately from roads, airports, labor force, government research, and the rest of the national infrastructure. 
    Taxes paid by corporations are, in aggregate, paid by the populous, because the burden of taxes is typically passed along in the form of higher prices for the goods and services provided.  For example, import duties and sales taxes are factors in the cost of an iPhone in countries like the U.K., where it’s not uncommon to hear its citizens, right here on AI, complain about the relative cost of an iPhone there versus in the states.  The price is not merely the U.S. dollar price converted to pounds, after all. 
    The population doesn't pay! Just consumers of Apple products and they don't really pay because taxes are on profits they are not costs. So while the comment "sounds good" to is actually 100% rubbish!
    Yes (consumers pay) and No (rubbish)... if an iDevice sold at $100 made Apple $10 in profit and with new taxes makes them just $5 in profit, then Apple simply raises the price to $110
    Hmm, thats only the other side of the coin. Value and price versus demand. i bet Apple isnt going to make a good profit in Europe if the iphone X price of 1200Euros would be raised to 1400Euros. They wouldnt sell anywhere near the quantities they are now....

    So It might mean that the corporations only have two options. Not sell or take a small hit in the profitability....
    I dont think it would be a problem for Apple nor any other bigcorp... Its just life and either you are in or you are out and participate in the game with the rules of the game.

    Now Apple is going to maximize the profit whatever the taxes are. This doesnt change anything. Sometimes they can make the price higher sometimes not. It depends on what they want, but they are playing the same game as all the other players...
    edited November 2017
  • Reply 23 of 32
    larryjw said:
    I love when politicians claim businesses are illegally avoiding paying their fair share of taxes to these jurisdictions, when, in fact, their tax laws were written expressly to allow themselves, their rich buddies, and corporations to legally avoid paying taxes. 

    Tax havens exist because the laws of the jurisdictions allowed them. What can I say but governments seem to exist for only the purpose of enriching their leaders and their friends.

    What’s happening now is the shell game is changing, but the illusion will remain, with perhaps less favored entities required to defend their legal actions to make it seem those in power have the public interest as their chief concern.

    Nothing will come of this. Sound and fury constituting nothing. In most jurisdictions, ex post facto laws are illegal. These jurisdictions can pass new laws which collects taxes on new income, but they can’t reach back to collect taxes when the avoidance was legal when made. 
    Law is one thing and applying it a totally different thing. 5 people can come to different conclusions on how to read law. It will be settled in the court of law if nothing else helps... There the opinions of the participants will be measured for accuracy in understanding the law.

    Now it is difficult to make law so that it doesnt have any "loopholes" (meaning == how to understand it wrong) but basically a lot of states have laws that prohibit pumping out the profit locally to the mothership. So we are really talking about where to draw the line here (yes, where to draw the line on greed). Big corps try to avoid everything in this sence and local firms arent always able to do that kind of stuff. So it is bad for everybody except the bigcorps. The more freeloaders there are the less there are left to pay the whole total amount and the burden for this is higher taxes to local firms, when it could be less taxes for everyone if everybody paid their taxes. And remember, if you save on a product because the producer avoids taxes, you will just pay more for your education, infra, healthcared, environmental issues (eg. mining, polution etc..) and whatnot..

    Anyways, i think its best to do better than most and not try to be the worst. It draws regulatory attention to how you do your operations, so it might not always good to streamline taxes to the extreme even if you "can".

    edited November 2017
  • Reply 24 of 32
    Rayz2016 said:
    The entire continent of Europe is going down the drain.High taxes & importing terrorists are not a good thing.

    The US growing and nurturing its own domestic terrorists is way better?


    Not on the same scale. Have you seen what is happening in Europe recently? It's a lost cause.
    williamlondon
  • Reply 25 of 32
    Rayz2016Rayz2016 Posts: 6,957member
    JanNL said:
    Rayz2016 said:

    JanNL said:
    To put things in perspective, UK is taking all these measures because of exiting the EU. A lot of new (tax) law is aimed at strong lower taxes, to keep and attract companies. So in most cases the opposite direction of the EU.
    Actually, these measures are being taken because of the massive £40billion it’s going to cost to leave the EU, along with the extra cost of having to pay to have access to the market the country has decided to leave. 

    We will also need to spend millions on border controls – the same border controls that other EU countries have (try moving to Belgium), but the U.K. didn’t implement because EU migrants paying into the taxation system was something they were happy about, until they weren’t. 

    And I doubt that getting foreign companies to pay their fair share of tax is going to attract them to the U.K.  

    Hell, most of the biggest companies in this country have their “headquarters” next door to each other, on the same shopping street on the Isle of Mann. 
    I don't know Rayz, it's a bit how you look at it...

    - Is it going to cost £40 billion? That's what the EU asks...
    - Paying to have access to the EU? UK is for many EU countries their biggest market, so they are eager to get treaties in place to continue to sell in the UK.

    - Are there border controls? Structural border controls are forbidden by EU law within the EU zone. Crossing the border with Belgium a few times a week for the past 15 years, never had a control... I even moved to Belgium years ago and it was only a formality.

    - Aren't there a lot of proposals to lower the taxes for businesses in the UK? Genuine question.

    - But there are also a lot of real HQ's, think about the City/financial centre in London.
    Is it going to cost £40billion. Yes, I reckon so.

    http://www.independent.co.uk/news/uk/politics/brexit-latest-divorce-bill-cost-theresa-may-trade-talks-news-a8066356.html

    The UK is a large market for German cars, which is why the German car manufacturers are clamouring for a deal, but no one else in Europe really seems that bothered. Since current party in charge has spent the last 40 years dismantling the country's manufacturing base, we are now in a poor position to by without a European export deal, and the Prime Minister knows it, which is why they have basically caved on every demand they made of the EU since Christmas. Once the Prime Minister hands over the cash, then the EU is ready to talk trade deals, and how much that will cost.

    The European Medical Agency and the European Banking Authority are relocating with a loss of a thousand jobs and a lot of prestige; this is a stark contrast from earlier in the year when our chief Brexit bods said that European Agencies would stay in Britain even if we left the EU (which in theory could have been true).

    No there are no structural border controls, but EU members are free to prevent anyone they want from entering the country. You can be turned away if they believe you have criminal intent, if they believe you have no job when you arrive, if they believe you have no accommodation, and contrary to popular belief, the EU does not grant you unfettered access to other member countries' social welfare system. 

    To answer your question on the taxation proposals: well, there are always proposals; that's how this government works. There is a will to lower corporation tax, but with a £40billion bill in the offing, the worse slowdown in real earnings in sixty years, and our economic growth sliding down the place (I think it's just been announced we've fallen to sixth place, behind France), then I don't see rates falling any time soon. In fact, what we have is some clever sleight of hand designed to extract more money from the large corporations which will make it less likely they'll want to settle here.

    http://www.cityam.com/276274/autumn-budget-2017-hammond-changes-corporate-capital-gains

    Oh yes, banks do have their offices in London, but they have their 'head office' on the Isle of Man. This is not a real office, as it's probably only two floors, but registering there gives them massive tax breaks. 

    It'll be interesting to see if London remains the finance hub of Europe. There's no reason why it shouldn't; we're leaving the EU, not Europe; but with the European Banking Authority leaving the city, that's not a good sign.





  • Reply 26 of 32
    fracfrac Posts: 480member
    The entire continent of Europe is going down the drain.High taxes & importing terrorists are not a good thing.
    Well I came to this thread expecting some mindless irony-free xenophobic nonsense...and you didn't disappoint.
    Well done. 
    propodwilliamlondonasdasdsingularity
  • Reply 27 of 32
    xbitxbit Posts: 312member
    Not on the same scale. Have you seen what is happening in Europe recently? It's a lost cause.
    Not on the same scale? How many people died in Vegas? How many mass shooting have there been in the US this year?
    propodsingularity
  • Reply 28 of 32
    xbit said:
    Not on the same scale. Have you seen what is happening in Europe recently? It's a lost cause.
    Not on the same scale? How many people died in Vegas? How many mass shooting have there been in the US this year?
    Last I heard, this was a thread about the UK.
  • Reply 29 of 32
    fracfrac Posts: 480member
    Rayz2016 said:
    JanNL said:
    Rayz2016 said:

    JanNL said:
    To put things in perspective, UK is taking all these measures because of exiting the EU. A lot of new (tax) law is aimed at strong lower taxes, to keep and attract companies. So in most cases the opposite direction of the EU.
    Actually, these measures are being taken because of the massive £40billion it’s going to cost to leave the EU, along with the extra cost of having to pay to have access to the market the country has decided to leave. 

    We will also need to spend millions on border controls – the same border controls that other EU countries have (try moving to Belgium), but the U.K. didn’t implement because EU migrants paying into the taxation system was something they were happy about, until they weren’t. 

    And I doubt that getting foreign companies to pay their fair share of tax is going to attract them to the U.K.  

    Hell, most of the biggest companies in this country have their “headquarters” next door to each other, on the same shopping street on the Isle of Mann. 
    I don't know Rayz, it's a bit how you look at it...

    - Is it going to cost £40 billion? That's what the EU asks...
    - Paying to have access to the EU? UK is for many EU countries their biggest market, so they are eager to get treaties in place to continue to sell in the UK.

    - Are there border controls? Structural border controls are forbidden by EU law within the EU zone. Crossing the border with Belgium a few times a week for the past 15 years, never had a control... I even moved to Belgium years ago and it was only a formality.

    - Aren't there a lot of proposals to lower the taxes for businesses in the UK? Genuine question.

    - But there are also a lot of real HQ's, think about the City/financial centre in London.
    Is it going to cost £40billion. Yes, I reckon so.

    http://www.independent.co.uk/news/uk/politics/brexit-latest-divorce-bill-cost-theresa-may-trade-talks-news-a8066356.html

    The UK is a large market for German cars, which is why the German car manufacturers are clamouring for a deal, but no one else in Europe really seems that bothered. Since current party in charge has spent the last 40 years dismantling the country's manufacturing base, we are now in a poor position to by without a European export deal, and the Prime Minister knows it, which is why they have basically caved on every demand they made of the EU since Christmas. Once the Prime Minister hands over the cash, then the EU is ready to talk trade deals, and how much that will cost.

    The European Medical Agency and the European Banking Authority are relocating with a loss of a thousand jobs and a lot of prestige; this is a stark contrast from earlier in the year when our chief Brexit bods said that European Agencies would stay in Britain even if we left the EU (which in theory could have been true).

    No there are no structural border controls, but EU members are free to prevent anyone they want from entering the country. You can be turned away if they believe you have criminal intent, if they believe you have no job when you arrive, if they believe you have no accommodation, and contrary to popular belief, the EU does not grant you unfettered access to other member countries' social welfare system. 

    To answer your question on the taxation proposals: well, there are always proposals; that's how this government works. There is a will to lower corporation tax, but with a £40billion bill in the offing, the worse slowdown in real earnings in sixty years, and our economic growth sliding down the place (I think it's just been announced we've fallen to sixth place, behind France), then I don't see rates falling any time soon. In fact, what we have is some clever sleight of hand designed to extract more money from the large corporations which will make it less likely they'll want to settle here.

    http://www.cityam.com/276274/autumn-budget-2017-hammond-changes-corporate-capital-gains

    Oh yes, banks do have their offices in London, but they have their 'head office' on the Isle of Man. This is not a real office, as it's probably only two floors, but registering there gives them massive tax breaks. 

    It'll be interesting to see if London remains the finance hub of Europe. There's no reason why it shouldn't; we're leaving the EU, not Europe; but with the European Banking Authority leaving the city, that's not a good sign.





    How the government intends to coax/coerce these companies to pay more taxes remains to be seen. I suspect it will go nowhere since the existing tax rules specifically allow all these offshore entities to be faceless and were written by ministers and financial power brokers to intentionally bypass personal and corporate taxation rules. In effect, 'business' has been empowered to hold nations to ransom. "We will leave your country unless you provide us a backdoor to move our cash where we can make bigger profits, which will ensure our business continues to benefit your country. Oh yes...we promise not to abuse the system. Honest!" The flow of ministers and Exchequer 'high-uns' with their fingers in the decision-making pie, is quite indecent. 
    Unfortunately, almost every aspect of the world's financial dealing now has an offshore component that embraces every aspect of our daily lives. Banks, insurance, retirement plans, health provision, house building, local government finance....the lot...is tied to some offshore dealing, somewhere, which brings the usual response of "If you hobble us, it will cost 'you'".
    Financial terrorism by any other name. 
    I'm guilty directly. I bought Apple shares through an IOM entity ensuring that any capital gains are offset forever so long as I spend 1 week on the IOM every year which is really a bonus since I get to go to the TT and use tax free Apple dividends to pay for it. At the time - 2001, it was the easiest way to buy into Apple for U.K. investors. 
    I find the argument that Apple should be able to repatriate $250B of foreign profits cheaply to the US and thus avoid paying taxes in the country they were generated, to be the least attractive element of Apple's current success. We are talking profits not costs, and they ought to be taxed appropriately at source, to benefit the people who enabled their creation. 
    williamlondon
  • Reply 30 of 32
    asdasdasdasd Posts: 5,671member
    bshank said:
    larrya said:
    Good for them. Taxes not paid by corporations are taxes paid by the rest of us, yet they benefit disproportionately from roads, airports, labor force, government research, and the rest of the national infrastructure. 
    Taxes not paid by corporations are lower prices on the products we buy. I hope you live in Europe or the UK and you see prices on Apple products skyrocket 
    I doubt that. Apple isnt paying taxes but claims it has an "effective rate" of tax of 25%. Therefore its already calculating its supposed liabilities. And anyway thats not the way it works, companies rarely pass on savings in tax to consumers, they price at what they think they can sell. 
  • Reply 31 of 32
    asdasdasdasd Posts: 5,671member
    Rayz2016 said:
    The entire continent of Europe is going down the drain.High taxes & importing terrorists are not a good thing.

    The US growing and nurturing its own domestic terrorists is way better?


    Not on the same scale. Have you seen what is happening in Europe recently? It's a lost cause.
    From the point of view of living in Europe I see American as having mass shootings every other week. You see Europe as beset with terrorists. Both are probably exagerations. 
    williamlondon
  • Reply 32 of 32
    avon b7avon b7 Posts: 5,933member
    asdasd said:
    Rayz2016 said:
    The entire continent of Europe is going down the drain.High taxes & importing terrorists are not a good thing.

    The US growing and nurturing its own domestic terrorists is way better?


    Not on the same scale. Have you seen what is happening in Europe recently? It's a lost cause.
    From the point of view of living in Europe I see American as having mass shootings every other week. You see Europe as beset with terrorists. Both are probably exagerations. 
    Possibly true, but of all the people I've known who have had the opportunity to live and work on the 'other side', all of them prefer Europe over the US as somewhere to live and work. 

    The only reasons those people returned to the US were family ties and the red tape involved in securing residence rights after contracts had expired.

    Getting a visa to work in the US is very difficult, even if you have a contract, place of abode and medical coverage.

    Basically you have to be able to prove no one else in the US can do the same work you are going to do. 

    It is possible to get your US Embassy or consulate interviews fast tracked for 1,000 dollars but that doesn't mean the paperwork will necessarily be more agile.

    As far as taxes are concerned, we are slowly moving in the right direction. Ever since it became harder for banks to use client confidentiality as an excuse to withhold information and better traceability regulations were introduced for transfers, more governments have begun to question certain practices and have modified legislation to make companies more accountable. Although the EU has many investigations underway, there are also workgroups drafting up recommendations that could form the basis of legislation to hit the problem head on.
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