That's a great title. And this is a day when I am relying on blogging by friends.
David Quentin is the real author of the blog of that name, and I recommend reading it, here because what David is doing is working out practical ways to deliver what the UK needs - which is a general anti-avoidance principle and not a General Anti-Abuse Rule.
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Well that is all fine and dandy. The major flaw in the proposed strategy is that Amazon appear not really that interested in making a profit so, in the conventional sense, there will be very little to tax. We are all accustomed to seeing their magical quarters of multi billions of turnover accompanied by millions of losses.
http://www.theverge.com/2014/10/23/7052385/amazon-q3-2014-earnings
This strategy is funded by shareholders’ patience and extraordinary fund raising such as the $3m billion bond offering in 2012. The only business rationale for this policy is to trash as many markets as possible and remove competition so that there will be jam tomorrow.
So even if you tax profit on a country by country reporting basis, there may be no profit to tax and, worse, the taxpaying indigenous businesses of the UK and elsewhere are meanwhile being put to the sword by such non-profitmaking international pirates eroding the tax base still further. The ONLY way to bring them to heel and to protect the home market is to impose a turnover tax on a country by country basis. This would level the playing field.
Now let’s clear out the fact from the nonsense
First, Amazon has only recently lost money
Second, losing money does not mean no taxable profit
Third, country-by-country reporting is a reporting system, not a tax system. If you have not realised that why are you commenting here?
Fourth, turnover taxes guarantee tax injustice
Unitary taxes are the way forward
I am astounded that you dismiss it so lightly. How do you deal with organisations that are engaging in predatory pricing to drive others out of business and thereby reducing the tax take all round? It’s a serious and growing issue and one that deserves more consideration than a glib rebuttal. By the time you have woken up there will be no taxable market to tax. Look at what the LVCR operators did to the independent retail music industry. It no longer exists. That was achieved by a VAT fiddle. This is being achieved by a “no profit” regime. Contrary to your assertion, I am quite certain that a multinational company is smart enough to ensure that no profit means nothing to tax. Of course country by country reporting is a reporting system – that leads to fairer tax. You are quibbling over semantics while taxpaying businesses go to the wall.
I’m not taking it lightly – I was involved in the original exposure of Amazon
But I cannot support taxes that make no sense – including turnover taxes
OK. Discount the idea of turnover tax if you will. But please tuck away in the back of your mind that there badly needs to be urgent consideration given to the no or low profit business model that is being used by such multi-nationals to slaughter whole market sectors and with them the taxes that they pay.
Corporate taxation depends on the need of real businesses to make real profits to earn a living for themselves and their people. If entities come along with enough financial firepower to suspend that principle and sell at cost or very near to it to buy market share, then there are going to be very serious consequences for business and the exchequer.