Boycott Amazon

[aeolium]

I'm not at all knowledgeable about corporation tax but if it is indeed so complex and difficult to quantify and collect, how about abolishing it across the EU and replacing it with a sales tax applicable to all EU goods and services levied at the point of transaction and standard across all EU countries (so effectively increase VAT)?

[ahinton]

....I'll put my mind to it if I've got time (after I've taken my library books back and got some milk)....cannot be that hard surely ..... international finite resources and logistics versus total international profit....blow up Bahamas and Cayman Islands....Surely most companies derive their products and raw materials from all over the world??...

Yes, many of them do, but I'm not just talking about that; one of the big issues that's been raised over this centres upon royalties and, as one who receives royalties in respect of intellectual property rights, I do know that copyrights and the rest are the kinds of absolute specialist minefields that any tax avoiding company will make the most of in order to hide what might otherwise be its liabilities to tax. Yes, I really do think that it would - and indeed will, if it proceeds - be very hard to ascertain exactly how much tax on what profits should be paid where. That's not to say that such matters should not be investigated but, if the job's to be done properly and if that's what people who are aggrieved about these companies' advantage-taking activities actually want, there'll be little use in complaining years down the line if the very costs of these exercises turn out to make them less productive than might at first have been hoped. Furthermore, such exercises (a) won't just involve a handful of the very largest alleged transgressors but all multinational companies great and small and (b) will presume the need for a great deal more thoroughgoing international co-operation than they're ever likely to achieve.

[ahinton]

I'm not at all knowledgeable about corporation tax but if it is indeed so complex and difficult to quantify and collect, how about abolishing it across the EU and replacing it with a sales tax applicable to all EU goods and services levied at the point of transaction and standard across all EU countries (so effectively increase VAT)?

It's a thought, but apart from the sheer cost of doing this, there would need first to be harmonisation of VAT rates and rules across not just the Eurozone but the EU as a whole (i.e. not only what rates of VAT are to be applied but on what goods and services and with what specific exemptions) and I see no reason why it would be any easier to achieve that than it would to achieve EU-wide agreement on rates and rules of corporation tax.

[eighthobstruction]

Yes, many of them do, but I'm not just talking about that; one of the big issues that's been raised over this centres upon royalties and, as one who receives royalties in respect of intellectual property rights, I do know that copyrights and the rest are the kinds of absolute specialist minefields that any tax avoiding company will make the most of in order to hide what might otherwise be its liabilities to tax. Yes, I really do think that it would - and indeed will, if it proceeds - be very hard to ascertain exactly how much tax on what profits should be paid where. That's not to say that such matters should not be investigated but, if the job's to be done properly and if that's what people who are aggrieved about these companies' advantage-taking activities actually want, there'll be little use in complaining years down the line if the very costs of these exercises turn out to make them less productive than might at first have been hoped. Furthermore, such exercises (a) won't just involve a handful of the very largest alleged transgressors but all multinational companies great and small and (b) will presume the need for a great deal more thoroughgoing international co-operation than they're ever likely to achieve.

...Yes you are right....that is how I see it....but the subject must be approached....it might be simpler than we think in the definition of 'royalities', and how much of that can be offset....

[Flosshilde]

assessing what profits are "made in Britain" is not so easy as it might seem. The coffee beans that it turns into mostly overlarge cups of coffee are not exactly grown in Britain.

Well, obviously they have to pay for the raw materials, labour, premises etc. But they take that into account when setting the cost of the cup (or bucket) of coffee which, in most businesses, would include a profit. Apparently they manage to make no profit by having seperate companies, one of which owns the Starbucks brand for which Starbucks shops have to pay a licence. I would have thought, though, that that would be one of the elements in setting a price. Any company which doesn't take all these things into account, & therefore makes no profit would surely go out of business?

[aeolium]

It's a thought, but apart from the sheer cost of doing this, there would need first to be harmonisation of VAT rates and rules across not just the Eurozone but the EU as a whole (i.e. not only what rates of VAT are to be applied but on what goods and services and with what specific exemptions) and I see no reason why it would be any easier to achieve that than it would to achieve EU-wide agreement on rates and rules of corporation tax.

Well, the loss of a lot of potential income to nations which are in many cases in desperate financial situations might concentrate minds towards some agreement. Whatever solution is found, there needs to be some change as the present position is unsustainable. It allows multinationals to exploit countries and enjoy an unfair advantage compared to nationally located companies which are unable to avoid paying corporation tax. Perhaps a widespread consumer boycott is the only way of driving home to these companies that they have some responsibility to the countries in which they operate and from which they profit (even if they don't pay any tax on that profit). People may be shareholders but they are also, for the most part, taxpayers and citizens and it is simply no good saying the thing is too complex. Even government ministers and select committees believe something needs to be done.

[ahinton]

Well, the loss of a lot of potential income to nations which are in many cases in desperate financial situations might concentrate minds towards some agreement. Whatever solution is found, there needs to be some change as the present position is unsustainable. It allows multinationals to exploit countries and enjoy an unfair advantage compared to nationally located companies which are unable to avoid paying corporation tax. Perhaps a widespread consumer boycott is the only way of driving home to these companies that they have some responsibility to the countries in which they operate and from which they profit (even if they don't pay any tax on that profit). People may be shareholders but they are also, for the most part, taxpayers and citizens and it is simply no good saying the thing is too complex. Even government ministers and select committees believe something needs to be done.

I do not disagree in principle with the argument that something needs to be done; one of my concerns, however, is what that is and how first to establish full co-operation agreements, including full disclosure, between Britain and all other countries involved, as would likewise have to apply to all other concerned countries that might consider the British example and seek to follow suit in order to recover unpaid corporation taxes.

A consumer boycott - even if such could be generally agreed and implemented - would either be unfairly and ineffectively selective in seeking to make scapegoats of just one or two of the largest transgressors or so far-reaching as to bring the economies of most countries to their knees since, as I have stated, it's not just the biggest boys involved but many multinational companies; were all of their products and services to be boycotted, the firms that deal with them would risk going under and then the entire pack of cards would collapse, affecting all of us everywhere.

[ahinton]

Well, obviously they have to pay for the raw materials, labour, premises etc. But they take that into account when setting the cost of the cup (or bucket) of coffee which, in most businesses, would include a profit. Apparently they manage to make no profit by having seperate companies, one of which owns the Starbucks brand for which Starbucks shops have to pay a licence. I would have thought, though, that that would be one of the elements in setting a price. Any company which doesn't take all these things into account, & therefore makes no profit would surely go out of business?

That's more or less correct, yes; as I observed earlier, much of this particular kind of tax avoidance is predicated upon successful manipulation of the intellectual property legislation of large numbers of countries and, since that is so specialist an area and since such legislation varies widely from nation to nation, the prerequisite of fully co-operative participatory agreement between all of the countries involved (which would hardly be easy) would form the basis for agreement to hammer out the total harmonisation of such laws in all of those countries in order to try to create the kind of level playing field that would be essential to the demise of such intellectual property rights-dependent tax avoidance schemes and I fear that this would be improbably cumbersome, elaborate, complex and, ultimately expensive and, in addition, would likely take decades rather than months to complete, if indeed it ever could be.

[aeolium]

A consumer boycott - even if such could be generally agreed and implemented - would either be unfairly and ineffectively selective in seeking to make scapegoats of just one or two of the largest transgressors or so far-reaching as to bring the economies of most countries to their knees since, as I have stated, it's not just the biggest boys involved but many multinational companies; were all of their products and services to be boycotted, the firms that deal with them would risk going under and then the entire pack of cards would collapse, affecting all of us everywhere.

That is possible, although a much more likely situation is that widespread adverse publicity and withdrawal of consumer support for some large corporations (some have already been highlighted by UK Uncut campaigns) as well as pressure on the government would make the companies themselves realise that they need to improve their public image, as Starbucks seems to have done, and change their behaviour. I think Barclays also abandoned some aggressive tax avoidance schemes under public and government pressure, though they continued to assert that the schemes were legal.

I really don't have any qualms about "unfairness" in selecting out certain multinational companies, given the unfairness of their behaviour towards nationally-based rivals and wider society. Perhaps if they experienced some unfair treatment themselves it might give their directors some idea of how a lot of people feel about their actions.

[ahinton]

That is possible, although a much more likely situation is that widespread adverse publicity and withdrawal of consumer support for some large corporations (some have already been highlighted by UK Uncut campaigns) as well as pressure on the government would make the companies themselves realise that they need to improve their public image, as Starbucks seems to have done, and change their behaviour. I think Barclays also abandoned some aggressive tax avoidance schemes under public and government pressure, though they continued to assert that the schemes were legal.

Indeed - but to what extent do you trust Starbucks to implement a complete volte-face over this, especially if other large multinationals don't follow suit? What will those shareholders think if they do, when the effect on them is that the value of the pensions for which they are saving begin to deplete because the value of the companies in whose shares the pension trustees invest has done likewise? What gives you the confidence (if indeed you have it) to assume that other less conspicuous corporate tax avoidance schemes will not take the place of the ones currently under scrutiny?

To return to the intellectual property rights issue that is at the heart of some of this multinational corporate scheming, consider this. I have registered intellectual property rights in UK because that's where I live and am taxed. Were I to relocate to another country (e.g. France, to which I plan to relocate anyway in due course), I would have the choice either to re-register them there or leave them where they are now. If it would pay me to do the latter (which in the case of France it would, given the punitive social charges in that country), would that constitute "tax avoidance"? Yes, of course it would, because it's legal and I am entitled by both jurisdictions to make that choice. Would it be "immoral"? No more so than any other legitimate means of ensuring that I don't render myself liable to greater tax liability than is necessary. The scale would, of course, be minuscule but the principle, it seems to me, is not necessarily so different other than in that (as I mentioned earlier) it would not require fancy expensive tax lawyers to devise and implement a scheme in order to achieve this result; the only way around it, however, would be to ensure that the tax arrangements for such intellectual property between the two countries were identical, which would require the mutual agreement of those countries as well as that of EU. Likely? Hardly!

[teamsaint]

I agree with Aeolium. tax at a high level will always be a dirty business.

http://www.bbc.co.uk/programmes/p010jx3m

(in case you missed it).
The public CAN affect what goes on , though. big companies don't like even small drops in turnover or falls in share price, since this is often how the high level execs are rewarded.

This stuff is going on all over the place, and fairness is impossible. It would be interesting if pressure was brought to bear by a rolling programme of boycotts, with perhaps a little notice so that the company in question could have the chance to get its wallet out, or face a month long "total" boycott.
The ideal group to organise this might be the Lib dems....oh no, silly me. Oh well, somebody else then.

[aeolium]

ts, I wonder whether even ahinton would manage to defend the behaviour of some of the individuals and organisations in that programme. I'm sure he would have a damned good try, though

UK Uncut is one organisation that is trying to highlight and take action on corporate tax avoidance. I think 38 Degrees and avaaz are also interesting themselves in it. Those in the major political parties are (as that programme indicated) the last people to take action as political parties are funded by the very wealthy individuals and corporations that practise tax avoidance. Still, even they have had to sit up and take notice of public concern.

Edit: This seems a good summary about the state of taxation in the UK at present.

[teamsaint]

ts, I wonder whether even ahinton would manage to defend the behaviour of some of the individuals and organisations in that programme. I'm sure he would have a damned good try, though

UK Uncut is one organisation that is trying to highlight and take action on corporate tax avoidance. I think 38 Degrees and avaaz are also interesting themselves in it. Those in the major political parties are (as that programme indicated) the last people to take action as political parties are funded by the very wealthy individuals and corporations that practise tax avoidance. Still, even they have had to sit up and take notice of public concern.

Edit: This seems a good summary about the state of taxation in the UK at present.

eye watering numbers on what the wealthy and corporations are getting away with , Aeolium. Thanks for that.Get some of that lot in and we could have 2 nuclear deterrents.
never mind, there is the prospect of a royal baby to cheer us through the long winter...and as SKY news told us yesterday (on the telly at the vets, not in my home) "The world celebrates news of the royal pregnancy".
No really.
And the cats are fine, thanks, just the annual booster.

Edit, I'll check those links to 38 degrees and avaaz.

[ahinton]

I agree with Aeolium. tax at a high level will always be a dirty business.

http://www.bbc.co.uk/programmes/p010jx3m

(in case you missed it).
The public CAN affect what goes on , though. big companies don't like even small drops in turnover or falls in share price, since this is often how the high level execs are rewarded.

Quite - but there has to be a judicious balance between a public seeking to "affect what goes on" by baying for blood in the form of boycott implementations and the same public biting off its own nose to spite its face by so doing because, as the companies concerned are so large and, as you rightly point out, they "don't like even small drops in turnover or falls in share price", that public would be affected to some degree by such falls in company value and share price; it's a variation on the old "too big to fail" argument in one sense, in that, if a company's value deteriorates either because it suddenly suffers from a mass boycott or it agrees to pay squillions in tax (and, if it does that here, just watch scores of other countries trying to make them do the same!) or even both in succession, it won't just be the company that suffers.

Again, though, to the extent that the issue arises from what might be argued to be an immoral manipulation of the intellectual property rights laws of many countries, might not such boycotts also run the risk of becoming premature sledgehammers wielded at the wrong angles and thus failing to crack the nuts?

[ahinton]

ts, I wonder whether even ahinton would manage to defend the behaviour of some of the individuals and organisations in that programme. I'm sure he would have a damned good try, though

I'm not here to defend or even to accuse; I have neither the right nor the evidence nor the legal expertise to do either. I am certainly not suggesting that all is OK; what I am doing is trying to address why it is that some of these schemes, particularly the ones involving the manipulations of intellectual property rights law in order to register brands, patents et al in the least punitive taxation régimes and to focus attention on what if anything can be done about it by whom and where, at what cost and with what anticipated net revenue benefit.

UK Uncut is one organisation that is trying to highlight and take action on corporate tax avoidance. I think 38 Degrees and avaaz are also interesting themselves in it. Those in the major political parties are (as that programme indicated) the last people to take action as political parties are funded by the very wealthy individuals and corporations that practise tax avoidance. Still, even they have had to sit up and take notice of public concern.

Most people either practise tax avoidance of have others do it for them (by which I do not just mean fancy expensive tax lawyers but the kind of example that I provided earlier, to which could be the added pension tax relief and ISAs
that are sponsored by government itself - and, incidentally, I note that, in his winter speech, the Chancellot [what a fortuitous and even serendipitous typo that was, upthread!) has cut the level of tax avoidance offered by the former while expanding that offered by the latter). Show me a corporation of any size that does not practise tax avoidance of any kind! They always have and always will, which is no reason not to try to go after them for it when it's deemed to be immoral or to change the laws allowing it accordingly, but intent is no guarantee of success because people are dreaming up new schemes all the time and will always do so.

In addition, it is always worth bearing in mind that, as "the correct amount of tax" for which an individual or corporation is liable is only ever what the government of the day determines that it shall be, there is really no such thing - at least in "moral" terms" - as "the correct amount of tax"; there is only such a thing in legal terms, defined by the rates, thresholds and the rest imposed by any government at any given time and which will all change soon anyway, just as will the governments themselves.