Interesting Links for 15-11-2012

[andrewducker]

• Terry Pratchett: My daughter Rhianna will take over the Discworld when I'm gone
  (tags: terrypratchett terry )
• The Oatmeal muses about creativity and the web.
  (tags: internet creativity comics )
• Windows 95 Tips, Tricks, and Tweaks (Direct from the world of HP Lovecraft)
  (tags: funny windows )
• UK and Germany agree crackdown on tax loopholes for

Comments

UK and Germany agree crackdown on tax loopholes for multinationals

[cartesiandaemon]

Some sort of international agreement on what was taxable seems to be the only sensible solution to the current situation, and all steps in that direction seem good. I imagine it won't mean much unless it's standard enough that all the little EU countries are on board, or everyone decides to go ahead and tax profits on international companies regardless of where they were declared, where the countries have a deal who gets it, or the company gets to shuffle it around where-ever they like, but the UK says "you can pay all your tax to Luxembourg if you want, but if you pay less than £X, we want the rest". I don't know if any of that will be plausible.

Re: UK and Germany agree crackdown on tax loopholes for multinationals

[andrewducker]

The international one is tricky. You can't force people to open up a local company to sell to you - that's against the whole basis of the European Union. So if a company based in Luxembourg wants to sell things to people in the UK then they can do so.

Re: UK and Germany agree crackdown on tax loopholes for multinationals

[a_pawson]

This is the problem when you establish a single market, but don't have fiscal union. The obvious solution is fiscal union, harmonising the corporation tax across all EU states, but there's no way in hell most of the EU member countries will ever agree to that.

If online trading grows, the situation is going to arise whereby nations will compete with each other to lower their corporation tax rates to attract businesses to locate their HQ there. Although it should be noted that the problem is not limited to online businesses. Glaxo Smithkline and a number of other large corporations have done something similar. Luxembourg seems to be the EU state of choice to pay your tax in, not least because they are willing to make deals with large corporations, granting them special tax rates in return for paying their taxes there.

Re: UK and Germany agree crackdown on tax loopholes for multinationals

[andrewducker]

Even a fiscal union doesn't mean harmonised taxes - the USA has different levels of corporation tax in different states.

Re: UK and Germany agree crackdown on tax loopholes for multinationals

[cartesiandaemon]

But it seems like companies often _do_ open up a local subsidiary, but then do Shenanigans(TM) to make sure only the parent company reports a profit. OTOH, if you taxed people only if they did, then maybe amazon would switch back to posting everything long distance from luxembourg, which may be bad in the long run.