“So the Sunday papers tell us, adding to the stream of stories about how Starbucks ain’t payin’ enough tax, Google ain’t, Apple isn’t and… well, we’re being taken to the cleaners as a nation, aren’t we? We provide this lovely country for them to do business in and we don’t get a modest cut of the profits from the bastards,” Tim Worstall writes for The Register.
“The only problem with this narrative is that it’s entirely false: indeed, we’re being fed this nonsense by those who may have no clue at all about how taxation works – with, if I’m allowed my own little bit of prejudice, a decent assist from a pressure group,” Worstall writes. “I think we’ve all read enough of these newspaper pieces to know what the accusations are.”
“Various tech companies sell into the UK from outside the UK. They book their revenue outside the UK, make their profits outside and thus no money is levied to pay for essentials like diversity advisers and duck houses inside the UK,” Worstall writes. “We are then told that this is tax avoidance and that they’re all very naughty boys. Apple sells the iTunes stuff in from Luxembourg, eBay channels PayPal from there, Facebook and Google both sell in their adverts from Ireland and so on.”
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Worstall writes, “However, this is not tax avoidance (and it’s most certainly not tax evasion, the illegal stuff). It is in fact tax compliance, this is exactly what the EU wants… To allow, indeed tempt, corporations to shift stuff around so as to reduce their corporation tax bills. This, in turn, forces governments to keep their corporation tax rates low: for it’s a very bad tax, d’ye see?”
Read more in the full article here.
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