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They are pointing out that they pay taxes on tangibles such as salaries, VAT and business rates. Corporation tax is based on the fungible concept of profit and

by iand 14y ago

They are pointing out that they pay taxes on tangibles such as salaries, VAT and business rates. Corporation tax is based on the fungible concept of profit and really is unworkable.

pfortuny 14y ago
Yeah, OK, however it is paid by all the other companies working in the UK, Europe etc... and many have not the means to register at Bermuda... I can bet they can manage pay no VAT (because this is a compensated tax, you deduce what you spend...). I may agree: corp. tax may be unworkable but saying "we are honest, we contribute to the economy" is flatly insulting to the other companies which cannot get away with it like Bermuda-based Google.
- alexkus 14y ago
  > Yeah, OK, however it is paid by all the other companies working in the UK, Europe etc... and many have not the means to register at Bermuda... They all have the means to register in Bermuda (or Cyprus or several other countries used to offshore money), it's relatively simple for an accountant to setup, but there's little point as the UK doesn't have any easy way to get the money back into the country from offshore without paying the required amount of corporation tax; so there's no point in sending it overseas in the first place. The US does have periodic amnesties that allow offshore money to be brought back into the US at a reduced tax rate which makes hoarding it overseas for a few years financially worthwhile. Of course, there's nothing stopping a UK company with good cashflow (which is required if you're going to be keeping lots of cash overseas in the hope of a future amnesty) from moving their headquarters to the US and doing exactly what these US companies are doing to pay little/no UK corporation tax.
- icebraining 14y ago
  The small team of NPR's Planet Money has two offshore companies. It's not really hard or expensive to setup: it costs less than $800/company to create one in Belize. http://www.npr.org/blogs/money/2012/07/27/157421340/how-to-set-up-an-offshore-company http://www.npr.org/blogs/money/2012/07/27/157421340/how-to-s...
rayiner 14y ago
Everyone pays VAT, but as a matter of economics it is, like a sales tax, bourne by the consumer, not intermediate producers. Salaries are deductible everywhere I'm aware of, and "payroll taxes," although they are nominally collected from the employer, are, in the concensus of most economists, mostly if not entirely bourne by employees in the form of lower wages.
gregsq 14y ago
Companies don't pay VAT. It's somewhat more complicated than that.

by iand 14y ago

They are pointing out that they pay taxes on tangibles such as salaries, VAT and business rates. Corporation tax is based on the fungible concept of profit and really is unworkable.

pfortuny 14y ago

Yeah, OK, however it is paid by all the other companies working in the UK, Europe etc... and many have not the means to register at Bermuda... I can bet they can manage pay no VAT (because this is a compensated tax, you deduce what you spend...). I may agree: corp. tax may be unworkable but saying "we are honest, we contribute to the economy" is flatly insulting to the other companies which cannot get away with it like Bermuda-based Google.

alexkus 14y ago
> Yeah, OK, however it is paid by all the other companies working in the UK, Europe etc... and many have not the means to register at Bermuda... They all have the means to register in Bermuda (or Cyprus or several other countries used to offshore money), it's relatively simple for an accountant to setup, but there's little point as the UK doesn't have any easy way to get the money back into the country from offshore without paying the required amount of corporation tax; so there's no point in sending it overseas in the first place. The US does have periodic amnesties that allow offshore money to be brought back into the US at a reduced tax rate which makes hoarding it overseas for a few years financially worthwhile. Of course, there's nothing stopping a UK company with good cashflow (which is required if you're going to be keeping lots of cash overseas in the hope of a future amnesty) from moving their headquarters to the US and doing exactly what these US companies are doing to pay little/no UK corporation tax.
icebraining 14y ago
The small team of NPR's Planet Money has two offshore companies. It's not really hard or expensive to setup: it costs less than $800/company to create one in Belize. http://www.npr.org/blogs/money/2012/07/27/157421340/how-to-set-up-an-offshore-company http://www.npr.org/blogs/money/2012/07/27/157421340/how-to-s...

rayiner 14y ago

Everyone pays VAT, but as a matter of economics it is, like a sales tax, bourne by the consumer, not intermediate producers. Salaries are deductible everywhere I'm aware of, and "payroll taxes," although they are nominally collected from the employer, are, in the concensus of most economists, mostly if not entirely bourne by employees in the form of lower wages.

gregsq 14y ago

Companies don't pay VAT. It's somewhat more complicated than that.