Reply to: Turnover tax

[AtW]

Most incorporate in Delaware anyway, which is an on-shore tax haven. But there's no chance of this government cracking down on DE as a tax shelter.

It's not a tax heaven, the reason companies in USA register there is because its cheap to maintain company and corporate law is very well established in that state so things are a lot more predictable and cheaper to deal with law wise.

[Zero Liability]

c) they manage money rather better than politicians have done for the last 100 odd years

Plus there isn't this utter air of disdain and condescension you get when dealing with the likes of HMRC, or a local council. Incompetent and arrogant.

I would much rather see Amazon keep the money than give it to a bunch of profligate, snotty know-nothings.

I think the government should come up with a list of services it deems to be "essential" (whether or not they are, or whether or not only it can provide them is another story), come up with a figure for providing them and limit its annual tax revenues to that. No power to borrow, no power to inflate, no power to raise further taxes. I doubt this would last long, but it's not the populace's problem that they can't bloody manage 'their' money and are so addicted to power that they cannot say no to anyone offering them sufficient graft.

I would say get them out of the provision of healthcare and education entirely, and deal with welfare via a negative income tax/guaranteed income, since the ostensible purpose behind supplying these services via the govt is their universal provision, anyway.

Even if fracking does take off in Britain, I still believe our politicians would manage to pocket the revenues but still end up with a huge debt by the end of it.

Just pointing out how unworkable these "solutions" are. We need to either a) leave the EU and abandon free trade (call that the UKIP option), b) the EU needs to decide one CT rate for everyone, or c) accept that this sort of crap is always going to happen and we're powerless to prevent it.

c).

As for a), abandoning free trade has nothing to do with UKIP. They are not protectionists.

[TheCyclingProgrammer]

My mistake - only for eBooks do they charge UK consumers 20% and pay over 3% to Luxembourg.

Actually Amazon don't charge 20% on ebooks (or any digital content), they charge 3% because place of supply rules mean they have to charge Lux. VAT rates on ebooks (hence the rule change from next Jan, when they will have to charge 20%).

https://www.amazon.co.uk/gp/help/cus...?nodeId=502578

[DirtyDog]

Google sell everything in Ireland and pay tax at 20%, but avoid 99% of that due to licencing their IP from their company in Bermuda. The real question is how was it that Google, who are undoubtedly an American company, were able to move their IP to Bermuda? All these companies are American, so really it's the US that's losing out most of all as they should all be paying tax on their international profits at home.

Most incorporate in Delaware anyway, which is an on-shore tax haven. But there's no chance of this government cracking down on DE as a tax shelter.

[vetran]

Google sell everything in Ireland and pay tax at 20%, but avoid 99% of that due to licencing their IP from their company in Bermuda. The real question is how was it that Google, who are undoubtedly an American company, were able to move their IP to Bermuda? All these companies are American, so really it's the US that's losing out most of all as they should all be paying tax on their international profits at home.

because they can hire the best lawyers. have you ever seen 'runaway jury'? it illustrates the point quite well.

[VectraMan]

Don't some companies pay a "licence fee" to the overseas company which allows them to use their name? And that fee just happens to almost match their sales profits, wiping out any UK-based profit.

Google sell everything in Ireland and pay tax at 20%, but avoid 99% of that due to licencing their IP from their company in Bermuda. The real question is how was it that Google, who are undoubtedly an American company, were able to move their IP to Bermuda? All these companies are American, so really it's the US that's losing out most of all as they should all be paying tax on their international profits at home.

[VectraMan]

Ok, lets say it's myco. Lets say i import stuff from.luxembourg and sell it here. Where should i pay tax on my profits?

If you buy stuff from Luxembourg, and sell it here at a profit, as in you find the customers, you handle the money, then you pay tax in the UK. If you're in Luxembourg, and you sell stuff on a website, the payment goes to Luxembourg, the admin is done in Luxembourg, then you pay tax in Luxembourg. The fact that you might use another company to distribute the goods on your behalf in the UK is irrelevant. It'd be ridiculous if that other company was somehow liable for the tax of the "profit" that you made in the UK.

[doodab]

Don't some companies pay a "licence fee" to the overseas company which allows them to use their name? And that fee just happens to almost match their sales profits, wiping out any UK-based profit.

Yes, that's part of the transfer pricing we were talking about. Or they import very expensive coffee beans or similar. Bear in mind this trick is also used to transfer profits out of poor countries as well as rich western ones.

[DirtyDog]

Don't some companies pay a "licence fee" to the overseas company which allows them to use their name? And that fee just happens to almost match their sales profits, wiping out any UK-based profit.

[doodab]

The problem lies in the current definition of permanent establishment in the relevant tax treaty. It needs to be updated for the internet age.

[DirtyDog]

Wait, surely Amazon have to remit the 20% UK VAT to HMRC?

I know that Amazon (and Apple) currently have a big advantage over smaller retailers when it comes to ebook sales as they can charge Luxembourg VAT rates on ebooks (due to place of supply rules being different), however that will all change from January next year when electronically supplied services have to have VAT charged *where the customer belongs*. Its easy to see why the change is being brought in but its going to be a nightmare for any small business that sells any digital content to consumers.

My mistake - only for eBooks do they charge UK consumers 20% and pay over 3% to Luxembourg.

[Ticktock]

I haven't really looked into this all that much, but isn't the catch here simply where the sale is deemed to have taken place?

Amazon / Apple and so on would like the sale to take place based on where the salesperson is.
I would say it makes more sense to say the sale takes place based on where the customer is. If I go to France to buy some frogs legs, I pay French sales taxes, and Kermits Kneecaps pays French corporate taxes. If Kermie sees how much I like his legs and decides to open a market stall near me and I start buying from there, I pay UK sales tax and KK (UK) Ltd pay UK corporate taxes, and are then free to repatriate any profits back home to the parent company in France.

The waters are muddied by Amazon not using door to door salespeople. Those bastards.

[Mich the Tester]

speed bumps? Cheaper than treating rta victims probably. War fair enough. Measuring things is required to improve them otherwise you're flying blind, so thats not waste imo.

Right, so there's the business case for speed bumps; they save money. Yep. If our governments are so good at writing sound business cases, why do we have so much debt?

[doodab]

You are right, but 'some overhead'? SOME? Wars in Iraq, speed bumps every fooking 100 metres, quangos, endless planning procedures, bureaucrats dreaming up tulipe like IR35, quality systems wonks putting hospitals, schools and so on into league tables, come on; how much is really spent on unproductive cack? Everywhere you look you can see money being wasted and then along comes Mr Government demanding more. Somewhere this waste has to end. The whole of Europe (except Germany and Norway) has just come through, or is arguably still going through, a huge government debt crisis. You vote conservative and the debts keep building up. UKIP can't be expected to make a difference because they don't even turn up to work. Labour still think they didn't spend enough. Libs are much the same. The only way governments will ever be forced to control their spending is when they are starved of the cash they spend.

speed bumps? Cheaper than treating rta victims probably. War fair enough. Measuring things is required to improve them otherwise you're flying blind, so thats not waste imo.

[Mich the Tester]

Ok, lets say it's myco. Lets say i import stuff from.luxembourg and sell it here. Where should i pay tax on my profits?

Monaco.