{"id":17551,"date":"2012-10-01T11:30:10","date_gmt":"2012-10-01T10:30:10","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=17551"},"modified":"2012-10-01T11:30:10","modified_gmt":"2012-10-01T10:30:10","slug":"derivatives-the-new-way-to-shift-profits-without-going-near-a-transfer-pricing-issue","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/10\/01\/derivatives-the-new-way-to-shift-profits-without-going-near-a-transfer-pricing-issue\/","title":{"rendered":"Derivatives: the new way to shift profits without going near a transfer pricing issue"},"content":{"rendered":"<p>The\u00a0importance\u00a0of the story on <a title=\"Glencore\u2019s derivatives: the way to get profit to Switzerland?\" href=\"http:\/\/www.taxresearch.org.uk\/Blog\/2012\/10\/01\/glencores-derivatives-the-way-to-get-profit-to-switzerland\/\" target=\"_blank\">Glencore's tax this morning <\/a>is easily missed. It's not that Glencore is avoiding tax: I'm not sure that is new to anyone. It is instead how they are avoiding tax.<\/p>\n<p>For \u00a0long time we have focussed on transfer pricing as the\u00a0mechanism\u00a0used by multinational corporations\u00a0to achieve the goal of\u00a0shifting\u00a0profits between locations, and no doubt in many cases that's still true.<\/p>\n<p>But a while ago it\u00a0became\u00a0clear to me that this is not the way the extractive\u00a0industries\u00a0are now doing so much of this: they're using hedging\u00a0instead. It's so easy to write a contract to claim the location of risk in a\u00a0contract\u00a0has changed, and pay a premium for doing just that. It just so happens the recipient of the risk is in a tax haven, saving tax on the way.<\/p>\n<p>The sums involved are enormous. The tax losses to countries like the UK can be big too. And so long as we don't have a\u00a0financial\u00a0transactions\u00a0tax\u00a0this\u00a0game can continue unhindered.<\/p>\n<p>Which is another very good reason for an FTT.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The\u00a0importance\u00a0of the story on Glencore&#8217;s tax this morning is easily missed. It&#8217;s not that Glencore is avoiding tax: I&#8217;m not sure that is new to<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/10\/01\/derivatives-the-new-way-to-shift-profits-without-going-near-a-transfer-pricing-issue\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121,51],"tags":[],"class_list":["post-17551","post","type-post","status-publish","format-standard","hentry","category-transaction-taxes","category-transfer-pricing"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/17551","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=17551"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/17551\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=17551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=17551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=17551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}