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>> No. 5738 Anonymous
4th September 2015
Friday 5:51 pm
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Afternoon folks.

Can somebody explain in laymans terms what the big deal about offshore companies owning land / etc in England is? -- how are these "tax havens" such as the Canary islands, Bermuda, etc actually *used* to save money?

I mean, sure, you can register a company in the canary islands or panama or something but when you buy property here aren't you still liable to pay stamp duty, council tax (when applicable) and capital gains if you sell it?
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>> No. 5739 Anonymous
4th September 2015
Friday 6:00 pm
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Problem it' fuck all compared to the tax they should be, in a moral sense, paying in the UK. They want to be able to make the millions of pounds in profit from our consumer marketplace, but not give back fairly to the society that built that marketplace.

The other issue is that it's another unfair advantage for large, multinational capable corporations. Amazon, Starbucks etc can easily offshore their tax and operate with wider margins, but an independent UK based competitor company has no such loophole available. This is, of course, bad for the health of the market and consumer choice.
>> No. 5740 Anonymous
4th September 2015
Friday 6:08 pm
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I think he's on about property/land ownership rather than what multinationals get up to.
>> No. 5741 Anonymous
4th September 2015
Friday 7:45 pm
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Well in that case, the answer is just that there IS no big deal, he must be on crack.
>> No. 5742 Anonymous
4th September 2015
Friday 8:10 pm
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If the property is transferred overseas, potentially the owner won't pay any stamp duty. Your overseas investor then buys the property from the overseas holding company, without having to pay stamp duty. Alternatively there are arrangements whereby if the property is transferred to certain vehicles at the same time as the purchase then there'll be no stamp duty to pay. They avoid council tax and business rates by letting out the property, because in both cases resident occupiers are above non-resident owners in the pecking order for liability. With the property ownership being overseas, if it's held in a jurisdiction where there is no CGT, then none is payable when the property is sold on.
>> No. 5743 Anonymous
11th September 2015
Friday 12:13 pm
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>>5739 >>5740
I'm interested in the multinationals part, too.

How does one offshore tax to another country? Say Starbucks provably sells £1M worth of coffee in the UK in 2015, how would they avoid paying tax on that?

Thanks for this.
>> No. 5744 Anonymous
11th September 2015
Friday 1:07 pm
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Starbucks operates multiple companies in different countries. The UK division is charged by their offshore division for things such as brand imaging rights and such like. If I recall correctly one of the offshores pays for their bulk purchases like coffee and then the individual national divisions buys it from that offshore at a large markup, resulting in the offshore registering massive profits and the UK division operating a loss. No corporation tax is payable if you're (as in the individual company) not making profit.

There are other methods as well. Buy something off Amazon and you buy a product Amazon have bought from a supplier, shipped it to the UK, had it handled in the UK, sent via UK courier to your UK house but when you placed the order you did so on amazon.co.uk through a company registered somewhere else who then pass it on to the relevant warehouse.

Corporation tax is a pretty antiquated tax. It was designed for an age where manufacturing, production and agriculture were the primary source of economic activity, whereas now it's globalised services in much of the world, especially the first world.

Incidentally I do not think tax avoidance is an INHERENTLY bad thing - what is bad is that it presents an uncompetitive market. Having a really lax tax collection agency can be a good thing in terms of attracting business and investment, likewise can having low taxes to perhaps a net economic or fiscal benefit. The real problem is the playing field isn't flat - you can't really discuss the economic or fiscal advantages or disadvantages if the balance is skewed in favour of those willing and able to avoid it.
>> No. 5746 Anonymous
11th September 2015
Friday 5:09 pm
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Incidentally, Starbucks buys all its coffee beans from Switzerland...
>> No. 5747 Anonymous
11th September 2015
Friday 5:32 pm
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They do so under the pretence that a lot of coffee trade passes through Switzerland. What they don't say is that the other traders tend to be dealing in futures and don't actually take delivery.
>> No. 5748 Anonymous
11th September 2015
Friday 11:09 pm
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>It was designed for an age where manufacturing, production and agriculture were the primary source of economic activity
Yeah, god forbid we go back to those dark ages.
>> No. 5749 Anonymous
11th September 2015
Friday 11:27 pm
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Well, seeing as going back to that would involve a mixture of suddenly having a workforce willing to sell their labour for the same pittance kids in East Asia are currently forced by circumstance to do and the sudden reversal of decades of automation, yeah that would be pretty fucking dark.

Personally, I hope that in the long term the robots put the kids out of business and the planet collectively wises up so we can all doss around philosophising and making artisanal pottery and shit like the ancient Greeks, only with morally convenient soulless slaves. Knowing my luck we'll just piss off some aliens and get fucked though.
>> No. 5750 Anonymous
12th September 2015
Saturday 12:53 am
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Yes, frankly. There's not a lot to be gained through simple material advantage. The only real way of 'reshoring' manufacturing now is heavily subsidising energy costs. May I ask why you think it's so inherently beneficial?
>> No. 5751 Anonymous
12th September 2015
Saturday 12:59 am
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Mercantile power.
>> No. 5752 Anonymous
12th September 2015
Saturday 3:09 am
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The decline of British manufacturing is one of the greatest myths in politics.

Our manufacturing output has grown drastically since the 1970s, when Thatcher supposedly 'killed manufacturing'. We make more stuff than ever, we just don't employ as many people to do so. As a highly developed country, it only makes economic sense for us to make specialised and valuable products using the latest technology. What Thatcher killed was the state subsidy of economically unviable jobs in outdated and unprofitable industries.

Shipbuilding is an obvious example. Nobody really makes money building ships, because of the huge oversupply of production. Countries like South Korea and China apply heavy state subsidy to their shipbuilding industries, largely to keep a reservoir of capacity available for military production. Once you factor in that subsidy, nobody has made money in shipbuilding for decades. If you look along the banks of the Tyne today, you'll see companies building components for offshore oil rigs and wind farms - a far more lucrative business thanks to the technical expertise we can bring to the task.

There's a perfectly legitimate political argument that we should be subsidising labour intensive manufacturing as a make-work scheme, but the conventional narrative on the decline of manufacturing is completely bogus.

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