This is from the FT this morning. Tax abuse is alive and well and continuing from Ireland:
A Dublin-based company at the heart of Facebook's international tax structure used a complex tax avoidance scheme to limit its Irish corporation tax bill to €1.9m last year, despite generating turnover of €1.79bn.
Facebook Ireland Limited, which employed 382 people in Dublin, generated a gross profit worth €1.75bn in the year to the end of December 2012.
This profit turned into a pre-tax loss of €626,000 when the company paid Facebook Holdings Limited, its Irish-based parent company, €1.75bn in administrative expenses for the use of intellectual property central to its technology platform.
The challenge to the OECD is a simple one: unless its Base Erosion and Profit Sifting project stop s this abuse it has failed.
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Aveez invited me to sign a petition about the Trans Pacific Partnership Agreement
this is what they say (I’ve just copied it)
“The Trans-Pacific Partnership is a huge, ultra-secret deal among twelve major countries that would give corporations unprecedented power — allowing them to use new global tribunals to sue our governments for passing laws that protect us, but reduce their profits! This could apply to everything from labeling GMO foods to protecting internet freedom. Wikileaks has broken the story and opposition is building fast, but the countries are rushing to seal the deal in 48 hours.
– it would set a global standard of companies imposing their will on our governments through an opaque system of tribunals. These courts could limit access to cheap generic medicines in favour of branded medicines, and even allow cigarette companies to sue governments over health regulations that they say threaten profits! It’s almost too crazy to be true.”
I’ve not yet had time to read the Wikileaks 96 page document but it looks like a global stitch up. Of course, it depends on interpretation and some of this would be in a ‘proper trade deal’.
A few years ago I would have said ‘that’s worrying, hope our politicians are looking out for us’ and moved on.
Thanks to your blog (which I first saw cited on CIF) and other sources, I can believe Avaaz’z concerns are well founded. The example you give here seems to me to a blatant abuse of power. But having got away with it, I have no doubt that others are hoping for yet more.
Are you able to shed any light on this TPPA deal?
I’m not an expert – sorry
Best to ask others on that
I have no doubt Google is pulling out all the stops to wipe our its direct tax bills everywhere, no doubt at all. However, reading your post:
“Facebook Ireland Limited, which employed 382 people in Dublin, generated a gross profit worth €1.75bn in the year to the end of December 2012.
This profit turned into a pre-tax loss of €626,000 when the company paid Facebook Holdings Limited, its Irish-based parent company, €1.75bn in administrative expenses…”
So, you tell us that an Irish company reduces its tax bill to Nil by making payments to a fellow Irish group company…which then has chargeble income! As I say, I’m sure the avoidance is there, but this isn’t it, you haven’t found it yet.
The second company is not Irish resident
That is the essence of the double Irish