Doing a Google

[Not So Wise]

Google advoids £100m UK tax

Ok it's not really "doing a Google" as they are not the first (nor only major
company, nearly all do) to do it but it is a particular method of tax avoidance (legal!!) that has interested me for a while and to be honest of the opinion of if they can do it don't see why anyone else should not

From what I know there are two basic methods, one involves various forms of intra company/country debits and credits to reduce reported profits in a particular country, Microsoft are famous for this one both here and in the USA

Now from what I understand this one is so damn complicated to do that unless you are talking 10's of millions it is not really worth the effort

Other one is this Google one, which seems a lot simpler, just get payments made to a low tax EEC country (which these days is always Ireland), now legally I don't see that much difficulty with this one as seems pretty straightforward but I do see one potential problem and that is Agencies not accepting to make payments to accounts outside the originating country (as they did with offshore back in 99/00 after threats of audits from hell from Hector even though that "discrimination" by Hector was pretty illegal), so how are agencies these days for accepting for payment destinations non UK (but still EEC) bank accounts and I presume no UK (but still EEC) companies?

Anyone actually tried something like the above methods of international creative accounting at a contracting company level of income?

[ThomasSoerensen]

So competition is not nice when it is the other guy (country in this example) who wins. Boooohoooooo crybabies in UK.

[BlasterBates]

For companies this works, but how are you personally get hold of this money?

As soon as you transfer the money into a personal bank account it becomes taxable, unless you are actually resident in the other country, and that income is exempt under the DTA.

The other thing you have to be clear on is that it clearly states in all double taxation treaties (both ways) that earnings from professional services must be taxed there.

Big companies have a bonafide presence in both countries so they do actually carry out some work in the cheap tax domain and charge the subsiduary in the expensive tax domain. So they do indeed satisfy the above restriction but they bill themselves. That is if you want this to work, you must travel to the country and do some work there.

So you could travel once a month to the Isle of Man, do some work, and bill from your Isle of Man subsiduary, your UK subsiduary. If you setup with the right form of business, or obtain Isle of Man residency, then it should be possible.

Is it worth it? I think not.

[jmo21]

for what it's worth, Microsoft have been in Ireland for over 20 years for this exact same reason. All european sales go through their Ireland sub. This isn't exactly a new thing, just a story because it's Google

[NickNick]

Logica Used to do it when I worked for them as well. I believe that they are registered in Reading now though.

[Not So Wise]

for what it's worth, Microsoft have been in Ireland for over 20 years for this exact same reason. All european sales go through their Ireland sub. This isn't exactly a new thing, just a story because it's Google

Aye know, hence why i mentioned it

Though it has recently come out that they do this for not only their Euro sales but also large bulk of their US income

[ChimpMaster]

Well you can only blame the government for taxing corporations - and even individuals - out of this country. It's a real shame they can't see what they're doing, i.e. losing taxation income due to their over-zealous and avaricious nature.