It was almost inevitable that at some time big business, with its ability to command almost untold sums in lobbying budgets, would fight back against the moves to implement international tax reform. The Guardian notes that this trend is underway this morning, in two separate articles.<\/p>\n
The first is by Larry Elliott, who has a pre-Davos price in which he notes<\/a>:<\/p>\n Davos debates income inequality but still invites tax avoiders<\/p>\n<\/blockquote>\n He sets this in a context, that Davos attendees think inequality is the biggest issue for the next decade. Tax avoidance has, of course, been a major factor in increasing inequality and yet as Larry notes:<\/p>\n [Davos] could make life more uncomfortable for [its] guests by naming and shaming the aggressive tax avoiders, declining to invite them to[its] annual talkfest. This, though, would leave many empty rooms in Davos.<\/p>\n Instead, companies such as Google (UK 2012 turnover: \u00a33bn; UK profits: \u00a3900m; corporation tax: \u00a311.6m) can pretend they are good global citizens.<\/p><\/blockquote>\n As Larry concludes:<\/p>\n Memo to self: things to pack for Davos this year \u2014 boots, woolly hat, gloves, sick bag.<\/p><\/blockquote>\n I think he has a point, but not as strong as the one another friend and colleague, Prof Sol Picciotto, has to make in the same pape<\/a>r when discussing the response of many of the world's digital companies to the OECD's enquiry<\/a> into ways in which the taxation of the digital economy can be transformed. As the Guardian notes:<\/p>\n The Digital Economy Group, a\u00a0lobbying<\/a>\u00a0group dominated by the leading US digital firms, has written to the OECD, the Paris-based thinktank tasked by G20 leaders with drawing up reforms, saying it is not true that communications advances have allowed multinational groups to game national tax systems.<\/p>\n Suggesting that any leakage of tax revenues flowing from the complex corporate structures of digital groups is merely coincidental, the Digital Economy Group says: \"Enterprises that employ digital communications models do not organise their business operations differently as a legal or tax matter.\"<\/p>\n Sol Picciotto, a Lancaster University law professor, said the DEG's stance was hard to sustain. \"I don't think you could fairly say that they don't organise their business differently [to secure tax advantages] ... I don't think it's true ... It's rubbish.\"<\/p><\/blockquote>\n I suspect Sol was being very polite. My off the record comments would have been much more robust. I'll settle for similar on the record language.\u00a0It should be noted that the Digital Economy Group is widely believed to include Google. In that context it's easy to understand why Sol has been robust.<\/p>\n In fact many of the submissions to the OECD are pretty much a combined exercise in denial of reality. Sol wrote the submission for the BEPS Monitoring Group of which\u00a0Tax Research UK is a member<\/a>. It was, unfortunately, the only civil society submission: we simply don't have the resources of big business.<\/p>\n\n