Fairness

[centurian]

My view is that a lot of stuff that they do isn't actually legal, but HMRC does not challenge them enough to prove that.

WHS - transfer pricing is illegal, but is incredibly hard to prove. But just because HMRC can't be bothered to take on the case, that doesn't mean that Starbuck's policy is legal.

[centurian]

If that's true, then it's tax evasion, and nobody, not the headline grabbing politicians or the newspapers themselves have said that Amazon, Starbucks etc. are guilty of tax evasion. If you have some evidence I suggest you tell somebody, because even if HMRC can't be arsed, the newspapers probably will.

That's because they've bought the general line that what they are doing really is tax avoidance - and the mandarins at HMRC don't want to burst that bubble, because then they have to admit to their own incompetance for failing to pursue them in the courts.

When one division charges another, you can't just make up a value that just happens to be equivalent to any profits that would have been made - this is transfer pricing - and it is illegal.

INTM412040 - Transfer pricing: legislation: rules: the arm's length principle

The problem is - how on earth do you prove that Starbucks are overcharging themselves.

Because of the closeness of the relationship between the parties there can be genuine difficulties in determining what arm's length terms would have been - especially where it is not possible to find wholly comparable transactions between unconnected

[BrilloPad]

The problem is - how on earth do you prove that Starbucks are overcharging themselves.

Ban charge back for branding.

[DodgyAgent]

I disagree - everybody should pay tax in spirit of the law - creating artificial structures to avoid large part of tax that otherwise would be paid should be classed as criminal tax evasion. Specifically when it comes to companies the law should make company directors personally responsible for what the companies are doing.

Why?

No one should pay tax in the spirit of the law. How would you like it if a judge found against you "in the spirit of the law"? The law is there to remove such vagueness.
Furthermore I would add that the biggest waste of money is in what is done with our tax. When you consider the vast swathes of useless public sector institutions- the welfare industry, the border agency and the appalling education system. It is criminal and immoral that governments should expect people to pay tax "out of spirit" when they then p*** it away with such ease. These hypocrites have no right to claim any sort of moral high ground.
Our moral duty is to make governments earn our tax by spending it properly. In the meantime the world is a better place if Starbucks keep hold of it and use it to employ more people to sell more coffee.

[vetran]

their coffee transfer pricing for coffee should follow global coffee costs, if they are paying more for their coffee than on the open market, tough.

Can't offset unseasonable offshore licensing costs against tax


Alexei, you don't have a partner with a pulse (a slow puncture doesn't count) so you can't share dividends.

[bobspud]

Why?

No one should pay tax in the spirit of the law. How would you like it if a judge found against you "in the spirit of the law"? The law is there to remove such vagueness.
Furthermore I would add that the biggest waste of money is in what is done with our tax. When you consider the vast swathes of useless public sector institutions- the welfare industry, the border agency and the appalling education system. It is criminal and immoral that governments should expect people to pay tax "out of spirit" when they then p*** it away with such ease. These hypocrites have no right to claim any sort of moral high ground.
Our moral duty is to make governments earn our tax by spending it properly. In the meantime the world is a better place if Starbucks keep hold of it and use it to employ more people to sell more coffee.

^ This

I am just about sick and tired of working with civil servants that openly spend the last financial quarter pissing money up the wall so that they can ask for more next year.

These are the same people that you can watch working on a calculator to figure out what they can have for lunch on the canteen menu. Yet an hour later they are sat in meeting saying things like "to hell with the cost thats not our main design constraint..."

No one should be feeding these people until they learn to spend our money the same way that the spend their own...

[BrilloPad]

Accountant joins backlash against tax dodge attacks - Telegraph

Responding to calls for companies to “pay their fair share”, Mark Otty, Ernst & Young’s managing partner for Europe, Middle East and Africa, claimed a moral tax code would not work as companies had a duty to pay the lowest rate permitted.

His intervention follows Starbucks’ threat to suspend millions of pounds of planned investment in the UK if the attacks continue. Goldman Sachs chief executive Lloyd Blankfein has also warned that the row risks stigmatising “every right-thinking person who organises his or her affairs in a sensible way”.

Speaking at the World Economic Forum in Davos, Mr Otty told The Daily Telegraph: “The only way you can resolve this issue is through a legal code. I don’t see how you can have any assessment on payments of tax other than what is in the statute. The simplest solution is to stop banging on about morality and change the law. ”

--------------------
Though why anyone listens to what AtW says on anything on than sofas is beyond me.

[AtW]

So, for example, Porsche make a car in Germany and sell it to somebody in Britain. All the money is made in Britain, but 99% of the costs are incurred in Germany. In your scheme, Porsche UK have to pay CT on virtually the whole purchase price because that's "profit", even though Porsche International might be barely breaking even.

Err, not at all - if Porsche UK is getting cars at market price of such cars in Germany and resells here to make a profit then it's perfectly fine.

What would not be fine (if it was the case) is if Porsche UK paid high "license fee" for usage of Porsche in branding in such a way that it reduced all their UK profits from reselling cars to zero and thus no CT. That's what allegedly Starbucks are doing, nevermind buying their beans through offshore (which I hope Porsche isn't doing).

[AtW]

WHS - transfer pricing is illegal, but is incredibly hard to prove.

Make MI5 and MI6 part of HMRC - next movie about Bond should be about him beating taxes out of multinationals that dodge them.

[AtW]

Speaking at the World Economic Forum in Davos, Mr Otty told The Daily Telegraph: “The only way you can resolve this issue is through a legal code. I don’t see how you can have any assessment on payments of tax other than what is in the statute. The simplest solution is to stop banging on about morality and change the law. ”

He is right you know - the law should change and perhaps it should make it illegal to provide any tax avoidance services.

I find it amusing how people say that Directors' job is to minimise tax, BS - Directors' job is to run legitimate company and make profits whilst obeying the law - taxes is big part of this.