Yet another one

[The Spartan]

Anger grows over large companies' tax bills as attention turns to eBay and Ikea | Business | guardian.co.uk

Seems these articles have been appearing for about week now and mentioning all the major players, thing is it's not as anything can be done as it's all legal as we've established in other threads. Question is as a consumer would you now think twice about buying from these companies? knowing that your money ends up elsewhere.

[Mich the Tester]

At what point does 'tax avoidance' become 'aggressive tax avoidance'?

[Platypus]

Question is as a consumer would you now think twice about buying from these companies? knowing that your money ends up elsewhere.

No.

Question is, does the government have the balls to legislate aggressively to stop this. If not, then there's no point getting into a frazzle about it, IMO.

[SimonMac]

At what point does 'tax avoidance' become 'aggressive tax avoidance'?

When aggressive tax avoidance becomes a crime, until then Hector can go ****

[b0redom]

Serious question for a sec - I know a shocker for General - but how do you legislate to stop this?

It seems that they effectively operate a shell company in a tax haven and charge for using the license. If you closed this down I guess it would break the existing franchise model for 'real' franchises?

Alternatively they do similar deals by loaning from the parent company at a highly punitive interest rate (also based in a tax haven). If you closed down inter-company/international loaning, that would break the startup model where a US forms a satellite UK company (start up software company establishing a UK presence for example).

The final way I've seen described was with Starbucks buying very expensive coffee beans from Switzerland (that great coffee bean growing nation), causing the UK profits to plummet and the Swiss company to make massive profits. Who is to say what is a 'fair' price for a commodity?

I don't really see an elegant way of closing all these loopholes.

[The Spartan]

No.

Question is, does the government have the balls to legislate aggressively to stop this. If not, then there's no point getting into a frazzle about it, IMO.

I'll admit it's pretty hard to get away from buying on Amazon I spend quite a lot on there, as for eBay meh I tend not to use it, I just found it funny as the article referred to the anti-cuts march and people shouting pay your taxes as they passed Starbucks, it seemed somewhat ironic to me.

[vetran]

Serious question for a sec - I know a shocker for General - but how do you legislate to stop this?

It seems that they effectively operate a shell company in a tax haven and charge for using the license. If you closed this down I guess it would break the existing franchise model for 'real' franchises?

Alternatively they do similar deals by loaning from the parent company at a highly punitive interest rate (also based in a tax haven). If you closed down inter-company/international loaning, that would break the startup model where a US forms a satellite UK company (start up software company establishing a UK presence for example).

The final way I've seen described was with Starbucks buying very expensive coffee beans from Switzerland (that great coffee bean growing nation), causing the UK profits to plummet and the Swiss company to make massive profits. Who is to say what is a 'fair' price for a commodity?

I don't really see an elegant way of closing all these loopholes.

"Ramsay principle"

Tax avoidance: HMRC could gain billions as court rules against 'artificial' scheme - Telegraph

It requires the balls to pursue it.

[b0redom]

"Ramsay principle"

Tax avoidance: HMRC could gain billions as court rules against 'artificial' scheme - Telegraph

It requires the balls to pursue it.

So they just look into the profits and costs and say, "Right company A, you're clearly taking the piss. Pay up now?"

How does HMRC then calculate the correct amount of tax? Let's assume Adama Coffee is avoiding paying tax by being charged £1 per bean buying coffee from Switzerland, taking £1bn in sales to £1 in profit. That would pass the 'you're clearly taking the piss' test, but then how do you define how much they should pay? On a fair market price for coffee?

Who decides what's a fair market price? Adama coffee might say, "Ah yes, a normal bean would only be 1p, but ours have been hand roasted by Swiss virgins on top of the alps to ensure a fuller flavour, so are clearly worth £1 each."

The problem is that unless you have a fairly black and white set of rules all you'll do is make a lot of tax lawyers very rich.

[vetran]

So they just look into the profits and costs and say, "Right company A, you're clearly taking the piss. Pay up now?"

How does HMRC then calculate the correct amount of tax? Let's assume Adama Coffee is avoiding paying tax by being charged £1 per bean buying coffee from Switzerland, taking £1bn in sales to £1 in profit. That would pass the 'you're clearly taking the piss' test, but then how do you define how much they should pay? On a fair market price for coffee?

Who decides what's a fair market price? Adama coffee might say, "Ah yes, a normal bean would only be 1p, but ours have been hand roasted by Swiss virgins on top of the alps to ensure a fuller flavour, so are clearly worth £1 each."

The problem is that unless you have a fairly black and white set of rules all you'll do is make a lot of tax lawyers very rich.

true which is why you have to set expectations and negotiate, they can get away with it so they do.

[Platypus]

I just found it funny as the article referred to the anti-cuts march and people shouting pay your taxes as they passed Starbucks, it seemed somewhat ironic to me.

Indeed!

But the prols will never understand that. They look at a banker or someone with more than they have and shout about fair taxes by which they mean, rich bastards should pay more. Rich being anyone with more than them. It's depressing.