Monday, April 22, 2013

Google,Amazon,Starbucks ALL paying virtually no tax thru these loopholes...NOT GOOD CORPORATE CITIZENS -IMMORAL


The 12th of November was a day of unusually entertaining political theatre at Westminster.
Three executives from large multinational corporations were ritually flagellated by Parliament's Public Accounts Committee as penance for the alleged tax sins of their employers.
Starbucks' head of finance, Troy Alstead, was forced to portray his company as a perennial commercial flop, in order to account for its peculiar failure to record a taxable profit in the UK for 14 out of the last 15 years.
He was followed by Amazon's Andrew Cecil, who was reduced to stuttering when he was accused of being "pathetic" for his inability to disclose something as basic as how much of his firm's European sales came from the UK last year.
Last up was Google's Matt Brittin. In contrast to his two peers, Mr Brittin did not seek to evade or apologise.
Yes, of course Google minimises its tax bill, by operating in Bermuda and Ireland, he said. Google had a duty to its shareholders to minimise its costs. And besides, the UK still benefited from Google's many free products, not least its search engine, which were engineered by thousands of employees in California.
But although Mr Brittin acquitted himself best by virtue of sheer bravado, was his confidence justified?
Do companies like his pay their fair share or not? And if not, how do they get around the rules?
Location, location, location
The planet is littered with hundreds of different nations and legal jurisdictions, each with its own peculiar set of tax rules.
For a big internationally-nimble corporation and its financial advisers, this presents an intellectual challenge akin to Sudoku - where to locate its many different subsidiaries and how best to arrange their affairs to minimise the total tax bill?
"What you've got is companies undoubtedly under competitive pressure to reduce cost, and tax is a cost," explains John Whiting, director of HMRC's Office of Tax Simplification.
This was particularly true over the 10 or 20 years leading up to the 2008 financial crisis, a period that saw the unprecedented spread and consolidation of global businesses across the planet.

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