As the FT has noted this morning:
Fiat Industrial aims to move its tax residency to the UK from Italy after a merger with US business CNH to take advantage of a lighter fiscal regime, according to a regulatory filing.
Now there's no chance that this means Fiat will be making cars here. No, this is just a sign of tax haven UK, which is itself undermining the tax laws of other EU states. Fiat's moving here, I have no doubt, to exploit our new controlled foreign company legislation that basically lets UK based companies now use tax havens at will and with impunity; to exploit our new low tax rate and to exploit the fact that, come what may, income from foreign subsidiaries is never now taxed in the UK even if they took part in massive tax avoidance.
This is tax haven UK at work.
We should be ashamed of it, not least because the tax we'll raise as a result of tis direct attack on the Italian tax system will be very small indeed. Our corporation tax system us now designed to make sure that is the case. And the number of people who will relocate to the UK as a result of this move will, I suspect, be counted on the fingers of a hand or two.
Welcome to brass plaque Britain.
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Richard, just a point of information as there may be those who wish to negate the message by emphasising the error in the above. FIAT Industrial is the umbrella of subsidiaries which produce and sell everything from tractors to lorries. The old Ford New Holland is Fiats tractors and Iveco Trucks for instance. They also make engines, but not in the UK.
Leechtenstein
When they move to the UK they’ll presumably be paying UK taxes that they don’t at present.
Is this tax avoidance, in your book?
I don’t know enough about the situation yet to decide whether I think there’s tax avoidance involved (I’d expect that there will be, though), but I know our definitions differ.
I doubt they will pay here
And yes, it is avoidance – in Italy
This is, of course, one of the first of what the government presumably planned would be many similar “relocations”, Richard. My view would be that this piece of legislation is something of a masterstoke in terms of the legitimation of tax avoidance and the tax haven status of the UK. Whoever concocted it (no doubt a team from one of the big four) will no doubt be enjoying their well earned (sic) rewards.
It would be interesting to be a fly on the wall at the forthcoming G8/G20 meeting and see whether/if Cameron sets out to explain what the UK has done, and whether it’s sold as a positive step towards solving (i.e. hiding) the tax avoidance issue. I also wonder whether the big four now have their marketing teams out trying to sell similar policy approaches to other states. I dare say they do.
Or, perhaps, some governments – some courageous politicians – will see the UK’s actions for what they are: following the Irish example and taking yet another step – and a significant one at that – in the race to the bottom in terms of the tax treatment of big business and the 1%.
This feels like a key moment in the UK tax debate.
Are we as a nation happy inflicting injustice on another nation through our actions?
Are we happy pursuing tax competition which by definition means if we win, someone else will lose? What do we hope for the nation that loses out?
And, of course, we are showing our tax haven attributes: a shell company, not employing anyone and not making anything here. The Government will deny we are a tax haven but, as you say elsewhere, that will just confirm it.
Which Tax Haven are they using? London (the biggest) or Jersey?
Happy inflicting injustice ?
What has “happy” got to do with business ?
Where does “happy” come into the deliberate policy of selling insurances that are not worth anything to people ?
And that is only a single aspect of the financial financial-crime hub of the world that UK banking and finance have become.
How can Cameron defend the deliberate policy of attracting tax avoiders ?
Why should he care ?
The race to the bottom has started.
I had a conversation the other week with a guy in “health and safety”.
He gained considerable comfort that the UK industrial accidents and deaths had gone down considerably.
I just told him that along with now importing our goods, goes the problem of exporting our deaths and injuries to other countries.
Face it: We have three party leaders whose interest in the economy and finance only goes to those who have the most.