Starbucks - UK tax 'avoiders'

KZNSeagull · Nov 16, 2012

I do think that the likes of these companies are really not doing any good whatsoever to the global economy. Consumers are happy because the likes of amazon sell stuff dirt cheap, but they are hardly making a profit. Thousands of small retail businesses and suppliers have gone under because of them and others and it is the small businesses that need to thrive at the moment. We will be waiting a long time if we expect the large corporations to get the economy back on track.

I think it is no coincidence that this recession or whatever you want to call it has gone on so long because of companies like this. 8bn quid Amazon took out of the UK economy last year - I wonder how much of that was re-circulated in the UK? Not much, I suspect. I would be happy to be proved wrong, however.

**Waits to be banned by the big boss man **

glasfryn · Nov 16, 2012

hans kraay fan club said:
Indeed. No point people blaming the individual companies involved. Tighten up the rules. This kind of thing simply ought not to be so easy to exploit.

exactly so

great flat white

Spiros · Nov 16, 2012

Surely the simple thing would be to change the law such that multinational companies are taxed in the UK according to their worldwide profits in proportion to how much revenue has been generated here. So if a company has made $100M profit globally and 30% of turnover was in UK they get taxed on $30M profit whatever their UK accounts or transfer pricing or inter-company loans say. Just a thought......

Weststander · Aug 14, 2022

Biden, Sunak and many others agreed a global minimum 15% corporation tax rate. This took years to agree. Ending the ‘legal’ tax avoidance of Dell, Starbucks, Amazon, Apple, Google etc who cosied up to nations that enabled their immoral actions eg Lux, Netherlands, Ireland.

Now JRM and others in power are pushing for the UK to renege on this, even the Telegraph are covering this. If Truss does this, it’ll be disgraceful.

Weststander · Sep 10, 2024

To recap, a load of huge multinationals sited their European and beyond HQ’s in Ireland, Luxembourg or The Netherlands on order to pay bugger all corporation tax on profits. In collusion with those governments.

This is not victimless. Dell, Starbucks, Amazon, MS, Apple etc contribute next to no CT in the region. Plus they have in built profits/cash flow advantage on local businesses that pay CT at full rates.

The EU has spent years fighting Ireland on this, it appears they’ve finally won.

https://www.bbc.co.uk/news/articles/ckgwkwxr4eqo

Nobby Cybergoat · Sep 10, 2024

Weststander said:
To recap, a load of huge multinationals sited their European and beyond HQ’s in Ireland, Luxembourg or The Netherlands on order to pay bugger all corporation tax on profits. In collusion with those governments.

This is not victimless. Dell, Starbucks, Amazon, MS, Apple etc contribute next to no CT in the region. Plus they have in built profits/cash flow advantage on local businesses that pay CT at full rates.

The EU has spent years fighting Ireland on this, it appears they’ve finally won.

https://www.bbc.co.uk/news/articles/ckgwkwxr4eqo

This is just fantastic news.

Regular companies need to be able to compete. This situation where there are these companies who pay taxes and these companies who don't is ridiculous, undermines faith in politics and democracy, concentrates power in the hands of a handful of Silicon Valley tech bro's and impoverishes the public realm.

Well done to the EU for sticking to your guns and facing these companies down. Keep going

Anger · Sep 10, 2024

Whilst the objective of the case has been met (i.e. to make it harder for big corporations to reduce their tax responsibilities and remove another country from the list of havens) it looks like a short term win-win for Ireland who have had major players operating in their country with the related benefit of their staff boosting the local economy and now they have an extra unexpected (unwanted) benefit of the tax windfall.

Long term they will probably lose some or most of these corporates as they move on to the next best haven, so the victory for consumers will be as short as the companies and other governments will allow.

schmunk · Sep 10, 2024

Anger said:
Whilst the objective of the case has been met (i.e. to make it harder for big corporations to reduce their tax responsibilities and remove another country from the list of havens) it looks like a short term win-win for Ireland who have had major players operating in their country with the related benefit of their staff boosting the local economy and now they have an extra unexpected (unwanted) benefit of the tax windfall.

Nobby Cybergoat · Sep 10, 2024

Anger said:
Whilst the objective of the case has been met (i.e. to make it harder for big corporations to reduce their tax responsibilities and remove another country from the list of havens) it looks like a short term win-win for Ireland who have had major players operating in their country with the related benefit of their staff boosting the local economy and now they have an extra unexpected (unwanted) benefit of the tax windfall.

Long term they will probably lose some or most of these corporates as they move on to the next best haven, so the victory for consumers will be as short as the companies and other governments will allow.

Again, this is possibly true, but i'm not sure these companies are as mobile as they would have us believe. They will have quite a few skilled workers. remote working will help them, but again there are limits.

To me the long term solution, and I admit there will be problems with this as well, is some sort of tax on the profits made in a particular country. It just cannot be right that a Starbucks, for example, paying no tax on it's profits can open up next door to a business next door and undercut it, take it out of business then jack prices up. The idea I have in mind is some sort of report which the company if it wants to operate here has to submit which isolates what its costs and profits are here in this country. Other countries can do the same. Taxes are then levied. This would have to be underpinned with the threat of being not able to operate in this country. This would include google etc, so would be a ballsy move. But I would argue necessary

WATFORD zero · Sep 10, 2024

Nobby Cybergoat said:
Again, this is possibly true, but i'm not sure these companies are as mobile as they would have us believe. They will have quite a few skilled workers. remote working will help them, but again there are limits.

To me the long term solution, and I admit there will be problems with this as well, is some sort of tax on the profits made in a particular country. It just cannot be right that a Starbucks, for example, paying no tax on it's profits can open up next door to a business next door and undercut it, take it out of business then jack prices up. The idea I have in mind is some sort of report which the company if it wants to operate here has to submit which isolates what its costs and profits are here in this country. Other countries can do the same. Taxes are then levied. This would have to be underpinned with the threat of being not able to operate in this country. This would include google etc, so would be a ballsy move. But I would argue necessary

I agree with all you say and the EU have done well here in getting some large multi-nationals to start paying some tax, but the chances of an individual nation like Britain trying to take on multi-nationals to make them pay ?

Two hopes and I'm afraid Bob is long gone :shrug:

HeaviestTed · Sep 10, 2024

We should put corp tax down to 10% and entice them all back

Nobby Cybergoat · Sep 10, 2024

WATFORD zero said:
Two hopes and I'm afraid Bob is long gone

In practice you're right and what you hope is that the world, or enough of it, realises that it's going to get picked off and starts working together on key issues like this

beorhthelm · Sep 10, 2024

Nobby Cybergoat said:
Again, this is possibly true, but i'm not sure these companies are as mobile as they would have us believe. They will have quite a few skilled workers. remote working will help them, but again there are limits.

To me the long term solution, and I admit there will be problems with this as well, is some sort of tax on the profits made in a particular country. It just cannot be right that a Starbucks, for example, paying no tax on it's profits can open up next door to a business next door and undercut it, take it out of business then jack prices up. The idea I have in mind is some sort of report which the company if it wants to operate here has to submit which isolates what its costs and profits are here in this country. Other countries can do the same. Taxes are then levied. This would have to be underpinned with the threat of being not able to operate in this country. This would include google etc, so would be a ballsy move. But I would argue necessary

country reporting has been suggested. it comes with some side effects. first, a lot of UK listed Plc make an awful lot of money overseas, so the tax revenue here would drop. of course there could be counter examples, say VW would have to pay some of their profits here, which would be nice.

second, to work all this out you'd have to track where costs and revenues are realised. say a German company builds a car in Spain, with parts from other countries, and exports to UK, sold through a franchise. for tax purposes is the cost of the forecourt price, or the imported cost price, or the factory production cost? where does the cost of operating Spainsh factory, parts from Poland, count against revenues, are the profits at the sales, parent or manufacturing companies?

of course thats all possible to work out with a large volume of rules and guides, and army of accountants. which makes everything more expensive, no one really wants to do, and will probably end up with companies finding new ways to hide and mask profits.

WATFORD zero · Sep 10, 2024

Nobby Cybergoat said:
In practice you're right and what you hope is that the world, or enough of it, realises that it's going to get picked off and starts working together on key issues like this

I think that this story is confirmation that large parts of the world have realised and have been working together trying to resolve key issues like this for years. Britain however, has decided to take an alternative approach

chickens · Sep 10, 2024

Needless to say, it’s a comparatively low rate of tax, but getting them paying anything is a massive step forward. Well done EU.

schmunk · Sep 10, 2024

HeaviestTed said:
We should put corp tax down to 10% and entice them all back

We can't, because of the upcoming OECD Pillar Two rules, which mandate a global minimum tax of 15% on multinational companies.

https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/global-minimum-tax/pillar-two-model-rules-in-a-nutshell.pdf

Even tax havens such as the Channel Islands and Bermuda are joining in, albeit there are still hold-outs, such as the Caymans, UAE, etc.

dazzer6666 · Sep 11, 2024

Anger said:
Whilst the objective of the case has been met (i.e. to make it harder for big corporations to reduce their tax responsibilities and remove another country from the list of havens) it looks like a short term win-win for Ireland who have had major players operating in their country with the related benefit of their staff boosting the local economy and now they have an extra unexpected (unwanted) benefit of the tax windfall.

Long term they will probably lose some or most of these corporates as they move on to the next best haven, so the victory for consumers will be as short as the companies and other governments will allow.

It’s not a win/win for Ireland in their eyes - the EU action was against them (not Apple). They were fighting it.

Hamilton · Sep 11, 2024

Weststander said:
To recap, a load of huge multinationals sited their European and beyond HQ’s in Ireland, Luxembourg or The Netherlands on order to pay bugger all corporation tax on profits. In collusion with those governments.

This is not victimless. Dell, Starbucks, Amazon, MS, Apple etc contribute next to no CT in the region. Plus they have in built profits/cash flow advantage on local businesses that pay CT at full rates.

The EU has spent years fighting Ireland on this, it appears they’ve finally won.

https://www.bbc.co.uk/news/articles/ckgwkwxr4eqo

Absolutely brilliant news. The tip of the iceberg, but a start.

If only people woke up to this and got angrier about how much they are being fleeced (he writes while typing on his iPhone.)

Herr Tubthumper · Sep 11, 2024

Anger said:
Long term they will probably lose some or most of these corporates as they move on to the next best haven, so the victory for consumers will be as short as the companies and other governments will allow.

I'm not so sure. Whilst this court case highlights a particular business practice, the Irish economy has boomed due to many other reasons both social and economic. Numerous businesses and economic sectors have moved there and will continue there well after the dust has settled on this case. Life Sciences is one, banking is another...both are now worth billions and there to stay imho. Brexit has also hugely benefitted Ireland, a former client/company I worked for made a 65 million investment in a lab there as part of their Brexit mitigation, JRM's investment firm also did the same. AFAIK, neither of these were due to the tax break afforded to Starbucks etc. Whilst Ireland does not have the monopoly on being an English speaking country in the EU....it is certainly a huge attraction and benefit and will continue to do so.

chickens · Sep 11, 2024

Herr Tubthumper said:
I'm not so sure. Whilst this court case highlights a particular business practice, the Irish economy has boomed due to many other reasons both social and economic. Numerous businesses and economic sectors have moved there and will continue there well after the dust has settled on this case. Life Sciences is one, banking is another...both are now worth billions and there to stay imho. Brexit has also hugely benefitted Ireland, a former client/company I worked for made a 65 million investment in a lab there as part of their Brexit mitigation, JRM's investment firm also did the same. AFAIK, neither of these were due to the tax break afforded to Starbucks etc. Whilst Ireland does not have the monopoly on being an English speaking country in the EU....it is certainly a huge attraction and benefit and will continue to do so.

Precisely. We were America’s voice in the EU, we had huge strategic value to them as an English speaking nation in the EU. Now they still own us, but we’re of little to no geopolitical value to them, and Ireland has taken our place as the geopolitical asset that can fight America’s corner from within the EU.

Those US firms who have their European HQ’s in Ireland will absolutely remain there.

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