I haven't done a straight talk to camera for some time on this blog. However the issue of territorial taxation appears to be becoming one of some significance in UK taxation, and also in the taxation of the Crown Dependencies. I am suddenly not sure that this is a coincidence. The opportunities for abuse of this parallel change might give rise to significant. We need to be aware of it. I explain a lot more here.
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And yet you were the one who promoted CBC reporting. Territorial taxation is a logical extension of that.
Be careful what you wish for.
@Rod Cowan
This is so far from being true it is ridiculous
Country-by-country reporting favours unitary tax if it favours anything
But since it is about consolidated reporting it does in a sense favour no tax system
Get your facts right and try learning a little about tax and accounting
Over a million companies alone are registered in the British overseas territory known as the British Virgin Islands – BVI (which is in the same HMRC category as the Isle of Sham, see blogs passim). Can the long suffering U.K. tax payer now look forward to few million more companies registering on the Isle of Sham?
These P.O. Box companies are routinely housed in an 8” x 10” tin box through which billions of dollars wash daily. Meanwhile back in the land of reality ordinary U.K. citizens are increasingly burdened by the tax deficit created by this contrivance.
Toby who?
The problem with the concept of territorial tax is that to the uninitiated it seems perfectly reasonable and common-sense. It’s only when you understand how slippery this concept is that you realise how large companies can drive and coach and horses through it, and an awful lot of people won’t see through the spin.
Good luck in educating them, though!
There is no reason why territorial taxation of business income should be a non-starter, after all a number of jurisdictions are looking at it as more and more investors seek to avoid home country taxation by investing through non-home country vehicles.
Territorial based taxation can work provided proper and adequate source rules are in place, a point you omitted.
@JayPee
But source is being undermined at the same time
So that’s a ridiculous argument
Lee Sheppard of Tax Analysts has a long article discussing this
http://blogs.forbes.com/leesheppard/2011/02/10/the-great-british-corporate-tax-giveaway/
Will territorial taxation not further encourage the use of the LVCR loophole? (profit made in Guernsey or Jersey = no tax, as well as no VAT. Trebles all round!!)
And didn’t one or both of the ConDem partners make manifesto commitments to clamp down on LVCR?
@Richard Murphy
Well not in the UK as the UK doesn’t have a source based tax system for its residents – are you suggesting that non residents are abusing the UK source rules, if so I would be interested in finding out more.
The current argument in the US is to consider a predominantly territorial system (as there is nowhere in the world where a pure territorial system exists!!!) – are you suggesting that Obama is encouraging pillage by large corporations of the public purse. Anyway, countries like France, Canada (in fact about 50% of the OECD countries) which have a territorial basis of taxation seem more inclined to remain with it than change to a worldwide system. Japan has recently transitioned to territorial, I’m note sure who has gone the other way.
Anyway, I thought you would jump with excitement at the move to territorial: more unitary based than the worldwide system, no confusion on domicile, taxation of the economic substance and less opportunity for tax planning across borders.
[…] pleased to see that he supports my concern about the introduction of territorial taxation, expressed here yesterday. As he says (and I have edited a lot): The protests have hit multinationals where they […]
[…] pleased to see that she supports my concern about the introduction of territorial taxation, expressed here yesterday. As she says (and I have edited a lot): The protests have hit multinationals where they […]
[…] pleased to see that she supports my concern about the introduction of territorial taxation, expressed here yesterday. As she says (and I have edited a lot): The protests have hit multinationals where they […]
Richard, your photo on the video is rather disturbing. You look a bit distraught and the scroll bar seems always to end up displaying what appears to be a string of pearls round your neck. It never fails to bring a wave of sympathy for you:o)
@Carol Wilcox
Weird
I’ve tried it on PC and Mac and more than one browser and all look fine (given the subject material)