The recent news states that Google, Amazon, Starbucks are openly dancing naked in front of the authorities and not paying any tax either. J1.
A not so recent documentary http://www.youtube.com/watch?feature=player_embedded&v=d4o13isDdfY#!, showed that Apple was able to manufacture their equipment in China for $40-50, and sell it for $500 in the US. Nothing wrong with that arguably. The tax they then go on to pay is about 1.9% on their US sales. According to James. S. Henry (Economist). Something a little more wrong with that? Here in the UK our income tax marginal rate is 20-50% depending on income.
Understandably and with the help of the general media, we have public outrage here in the UK and around the world. http://www.bbc.co.uk/news/uk-politics-22915954
The recent announcement made by our government is to try to set up treaties to openly converse with our British overseas territories to begin with. A scheme whereby the ultimate owners of any company would be brought to the fore using a central register. They would like to expand this to other parts of the world. All understandable.
As usual however the government is dealing with the symptoms and not the cause.
There is no way that countries are going to give up access to this kind of parked capital of the multinationals, by way of revealing too much. It is a catch 22. These countries will be seen as un-competitive and the conglomerates will move out. Countries even under the commonwealth might be reluctant to give over information.
I propose, as do many that slashing the income and corporation tax here will lead to greater revenue for the UK government via increased velocity in the long term. We will become more competitive with the world, attract more investment and see a bigger recovery than ever before. Let us take Hong Kong as an example. Government should be reduced in size, not inflated and then supported by the pole of increased taxation. Unfortunately this requires long term vision and an extremely uncomfortable period for the bureaucrats that make the law.
It is Accountants like me that help corporations. I am one of those accountants that is regularly looking to save my clients tax via tax planning. That is the system and it is how we make a living. The better we do it, the better we can look after our families. I can vouch that a “double Cyprus tax sandwich with dutch and Irish sauce” is the way to go, when you want to save tax for your international company. We will keep doing our work as long as there is an incentive. If the government wants to stop it then do not bash the companies, accountants and lawyers. They need to deal with underlying cause and compete. To my mind anything else is going to end up being a facade at best and will promote underground behavior at worst. These things always remind me of putting make up on much-loved Worzel Gummidge (Jon Pertwee) the scarecrow, to make him look like Aunt Sally. A waste of time too.
VNanda 