Swiss bankier arrested in Italy

[Beskar]

I like the one Starbucks did where they buy coffee from one of their owned companies in Switzerland for three times the wholesale cost for England, then say they are not making a profit, therefore, not liable to pay taxes.

Obviously, you would think "Would they go bankrupt?" the fact the debt is continuously forgiven by the Swiss company prevents that from happening, plus they own the Swiss company so the management still gets the profits.

[Conradus]

I like the one Starbucks did where they buy coffee from one of their owned companies in Switzerland for three times the wholesale cost for England, then say they are not making a profit, therefore, not liable to pay taxes.

Obviously, you would think "Would they go bankrupt?" the fact the debt is continuously forgiven by the Swiss company prevents that from happening, plus they own the Swiss company so the management still gets the profits.

Shouldn't work in any decent accounting system since debts that are forgiven count as profit. Besides, as long as it's taxed in Switzerland, you shouldn't care.

[Beskar]

Shouldn't work in any decent accounting system since debts that are forgiven count as profit. Besides, as long as it's taxed in Switzerland, you shouldn't care.

So a company makes over 3 billion in the UK, should not have to pay any tax?

Obviously I should care, they are exploiting the system. Everyone else has to pay tax, why should multi-nationals be excluded?

Article on it here

The 'tax forgiven' was a different loophole used by celebrities such as actors, football players, etc.

The scheme is understood to work by UK earners "quitting" their job and signing new employment contracts with offshore shell companies. Those companies then "rehire" their new employee back out to the UK but take their earnings. The offshore company then pays their employee a much lower salary but also "loans" them thousands a month. However these loans can be written down as tax liabilities, and so reducing the overall bill to the government.

[Andres]

So a company makes over 3 billion in the UK, should not have to pay any tax?

Obviously I should care, they are exploiting the system.

Are those 3 billion profits or not?

If they have 4 billion in costs, then obviously, they don't need to pay taxes, since they are not making profit.

If the Swiss company makes profit, then that company will have to pay taxes.

"The debt is forgiven" is rather vague and I'm sure it's much more complicated than that. There are plenty of constructions a multinational can use to make sure the biggest chunk of the income of your group is taxed in the right country (read, the country that's most beneficial for you) and most of them are perfectly legal.

Of course, from a moral point of view, there's much to say about the unfairness of it all, but that doesn't mean it's illegal.

[Beskar]

Of course, from a moral point of view, there's much to say about the unfairness of it all, but that doesn't mean it's illegal.

Taken from the article:
- Starbucks UK reported losses so did not have to pay corporation tax, but told investors that it was "profitable".
- It said the coffee giant had reported losses in each of the last five years and therefore did not have to pay any corporation tax, yet executives told analysts that the UK business was "successful", "profitable" and they were "very pleased with the performance".
- It identified payments between companies within the group as a factor in reducing its taxable income in the UK.

They are purposefully exploiting the tax system. Whilst 'Tax Avoidance' isn't strictly illegal, by common-sense, not being able to see them fleece the system is naive.

Good way to counter it would be a 10% of all sale transactions. They would start doing their paperwork correctly then to pay their due to avoid a massive loss.

[Seamus Fermanagh]

Taken from the article:
- Starbucks UK reported losses so did not have to pay corporation tax, but told investors that it was "profitable".
- It said the coffee giant had reported losses in each of the last five years and therefore did not have to pay any corporation tax, yet executives told analysts that the UK business was "successful", "profitable" and they were "very pleased with the performance".
- It identified payments between companies within the group as a factor in reducing its taxable income in the UK.

They are purposefully exploiting the tax system. Whilst 'Tax Avoidance' isn't strictly illegal, by common-sense, not being able to see them fleece the system is naive.

Good way to counter it would be a 10% of all sale transactions. They would start doing their paperwork correctly then to pay their due to avoid a massive loss.

Why don't you just stroke a check to the UK exchequer? Save the step of having Starbucks collect the tax on your behalf and pass it to the government.

You do realize who actually pays "corporate" taxes, do you not?

[Beskar]

You do realize who actually pays "corporate" taxes, do you not?

Corporations? The clue is in the name.

Should corporations be able to function as independent institutions completely free from the objections that bind the common-man, exploiting society and institute their own separate system which is frees itself from their obligations under the guise 'not being really there'.

I am not actually being obtuse, I understand you are trying to say it is an indirect tax on the people, but that wearing blinkers to the situation. When you have economic-institutions completely side-stepping society and only acting like a financial drain to no benefit, maybe you will start to realise they are no better than a parasite.

Means-of-Production should serve society opposed to exploiting it.

Whilst there are cases where the 'right thing' does happen, there is a great many which do not and these should be cracked down upon. Because, who is the tax avoidance serving? It isn't the consumer, it goes straight into the pockets of CEOs and Shareholders living it up at our expense.