|
Spandex Sidney
1:59 Sun Jan 31
Re: Google's tax bill
|
If you receive a dividend, because it has already been subjected to corporation tax, it is deemed to have already been taxed at 20%
Therefore there is no further tax to pay unless the dividend flips the individual into the higher income tax rate.
|
Spandex Sidney
1:57 Sun Jan 31
Re: Google's tax bill
|
Corporation tax is paid at a flat rate of 20% of net profit so after salaries but not dividends have been accounted for.
|
BRANDED
1:56 Sun Jan 31
Re: Google's tax bill
|
Its not double taxed.
You get gross earnings minus gross costs including wages and taxes associated with them.
If there's a profit, the profit would be taxed.
So if that's 1000 you get a 200 tax bill.
This leaves you 800 to reinvest or to pay as a dividend.
The dividend is paid to an individual who will have is taxed or not depending on their own financial circumstance which will vary enormously. It is fair to say that dividends are about to be taxed quite differently in the uk.
|
peroni
1:55 Sun Jan 31
Re: Google's tax bill
|
Mike
I think Corporation Tax is only applied to profit so wages and salary are only taxed once.
|
Mike Oxsaw
1:48 Sun Jan 31
Re: Google's tax bill
|
If I've got it right, if a company makes a million pounds in a year, then the government takes 200,000 (and uses that yo fund MPs expenses).
The company then uses what is left of that (same) money to pay dividends to it's shareholders - which are taxed - and staff salaries & wages - which are also taxed.
So the original earned million pounds is effectively double-taxed.
Break out the champagne, all you socialists! Those rich bastard company owners are really get it stuck to them.
|
Hermit Road
10:43 Sun Jan 31
Re: Google's tax bill
|
Hobson's choice, Apple or Android. Choose a tax avoider or choose a tax avoider.
|
Coffee
10:16 Sun Jan 31
Re: Google's tax bill
|
Search me.
|
After8
9:38 Sun Jan 31
Re: Google's tax bill
|
Are all the people complaining about Google boycotting them?
|
Hermit Road
5:11 Sat Jan 30
Re: Google's tax bill
|
Infidel 3:33 Sat Jan 30
Classic Infidel.
Pretend someone said something he didn't, then commence to rubbish what you've just invented.
|
Brucies_Star_Prize
4:29 Sat Jan 30
Re: Google's tax bill
|
Billy Blagg 4:26 Sat Jan 30
Re: Google's tax bill
Nail on head.
If there's a good argument for changing the law then let's change the law. As opposed to moaning when companies organise their tax affairs in accordance with it.
|
Billy Blagg
4:26 Sat Jan 30
Re: Google's tax bill
|
As someone with his own company I only get pissed at this inasmuch as a company like Google is working perfectly reasonably and within the law. It's the tax law that's the ass here. Frankly, if I was them I'd tell the UK Govt 'tough and you're not getting a penny'. As it stands it matters not a jot what their UK sales are, under current legislation they owe the UK nothing. Anyone here who says they would give the Govt more tax because it's morally right, is a liar.
|
BRANDED
3:40 Sat Jan 30
Re: Google's tax bill
|
A sales tax may be better unless you could acquire that product or service in another jurisdiction. That currently happens with some internet business, although many loopholes have been closed.
Fact is tax is something that most people will avoid if they can. Its much easier for multinationals to do that.
|
BRANDED
3:37 Sat Jan 30
Re: Google's tax bill
|
Tax the individuals instead?
What if all the individuals are taxed in another tax authority? All the profits made in the UK will be taxed somewhere else.
|
Infidel
3:33 Sat Jan 30
Re: Google's tax bill
|
Chigwell
I don't think you understand what a company is. You talk about it as if it is a sentient being.
Imagine a company owned 100% by one individual. I think you would agree that the company and the individual are essentially the same thing. If the company makes a profit it all goes to the single shareholder.
Imagine he then sells 20% of the company to a friend. What has changed? Nothing. It's still an entity the two of them operate and control in the interest of making profits they can return to themselves in the form of dividends.
Now suppose that colleague sets up a holding company and places his 20% shareholding in the holding company. What has changed? Nothing. He still wants to maximise profits so that he can eventually take them out as dividends, in this case through his holding company.
A very large company is just an extension of the same principle. It is owned ultimately by people. It's run by people. It exists to create a dividend flow back to the human beings who own it (either directly or indirectly, it doesn't matter).
So scrap corporation tax and tax the individuals instead. It makes perfect sense and by the way is top of the list of almost every academic study on how to reform the tax system.
|
Chigwell
10:54 Sat Jan 30
Re: Google's tax bill
|
A company is not a "pass through entity": it is a legal person separate from its owner or shareholders, who carry no risk beyond their own stake in it. It can go bust and write off its debts. It does not have to pass on profits to its shareholders or employees. Not to tax it on profits would be to give it all the advantages of being in that privileged position, with no responsibility to the nation from which it makes its money.
|
Infidel
9:43 Sat Jan 30
Re: Google's tax bill
|
I can't understand why a man as brilliant as Nigel Lawson would propose a revenue tax to replace corporation tax.
It would ruin the economy, and pretty quickly too.
First, the attractiveness of the UK as a new market would be severely damaged. Businesses often take several years to build up before they start making profits. If revenues are taxed rather than profits they will be hit for heavy taxes when they can least afford it.
That would also apply to every home grown start up business too. If you make losses for the first few years while you are building up your painting and decorating business or bakery or antiques shop the last thing you need is a revenue tax. It seems almost designed to drive new businesses into bankruptcy before they even get off the ground.
Lawson just hasn't thought this through. He's 83 and his mind is no doubt not what it once was.
The right thing to do is scrap corporation tax altogether and tax individuals instead. As LA says below, companies are just pass through entities. They have real people behind them (the shareholders) who can be taxed, but companies themselves should not be used as proxy tax collection entities.
|
Mike Oxsaw
9:41 Sat Jan 30
Re: Google's tax bill
|
"Corporations are pass through entities"
Agree 100%: they're simply conduits used to simply channel money from the paying customer to the stakeholders.
Those stakeholders can be owners & shareholders, who receive the money via dividends, or employees, who receive wages or salaries.
They are bound by duty first and foremost to serving the requirements of the stakeholders and that means minimising costs (legally) at EVERY opportunity.
If there exists a system by which costs can be reduced and they deliberately choose not to use that system, they may find themselves open to charges of (criminal) negligence from the stakeholders.
The government needs to change the system, to level the playing field - not advertise the fact that it doesn't have a pot to piss in by handing out "sweetener deals" for multi-nationals to bring in a little extra cash (for their expenses trough).
|
Hermit Road
8:08 Sat Jan 30
Re: Google's tax bill
|
Nigel Lawson speaking sense.
http://www.telegraph.co.uk/technology/google/12130414/Lord-Lawson-Google-tax-row-shows-that-corporation-tax-has-had-its-day.html
Lord Lawson: Google tax row shows that corporation tax has 'had its day'
The row is set to rumble on through the weekend with Peter Barron, a senior Google executive, set to be interviewed on Sunday morning’s agenda-setting Andrew Marr Show on BBC1
Lord Lawson, the former Chancellor, is chairman of the accounting sub-committee of the Commission on Banking Standards
The Google tax row shows that corporation tax has “had its day” and should be replaced with a tax on sales, Lord Lawson, the former Conservative Chancellor of the Exchequer, has said.
The peer, who has acted as an informal adviser to the current Chancellor George Osborne, said the fact that multinational companies can move profits around the globe meant that corporation tax was out of date.
Lord Lawson’s comments came as the row over Google’s “sweet heart” deal to pay a £130million bill to cover tax owed for 2006 to 2011 in the UK continued unabated.
Peter Barron, a senior Google executive, will give the first public defence since the row broke out on the agenda-setting Andrew Marr Show on BBC1 on Sunday morning.
former Chancellor of the Exchequer Lord Nigel Lawson
Photo: Andrew Crowley
Lord Lawson, who as Nigel Lawson was Chancellor under Margaret Thatcher from 1983 to 1989, said: “It is profoundly unsatisfactory that corporation tax has to be collected from large multinational corporations by a series of ad hoc compromise deals, as we have once again seen with the Google affair.
“It is also grossly unfair on smaller businesses, who are unable to shift profits between tax jurisdictions and have to pay the full amount due under UK law.
“I have long argued that in the modern world corporation tax has had its day as a major source of tax revenue. It needs to be a much lesser tax, bolstered by a tax on corporate sales.
“While multinationals can artificially shift profits to whatever tax jurisdictions they choose, sales are where they are, and can't be shifted.
“Instead of endless discussion at international conferences of one kind or another, the UK should take the lead in implementing this much-needed reform.”
The news came sa Downing Street confirmed that Google had not had to make payments under the new diverted profits tax, introduced by Chancellor George Osborne last year to target companies which artificially shift revenues overseas to avoid paying tax in the UK.
The measure was nicknamed the "Google tax" after Mr Osborne said it was designed to put a stop to technology companies going to "extraordinary lengths to pay little or no tax here".
Critics have accused the internet search giant of shifting billions of pounds worth of profit generated in the UK to low-tax Ireland.
But a Number 10 spokesman said that diverted profits tax was being applied only to those companies which fail to pay corporation tax at the appropriate level.
Privacy campaigners claim corporates around the world have finally realised they can make a small fortune by selling details about their customers.
Google has been ordered by a court ruling to removed links to information deemed "inadequate, irrelevant or no longer relevant" Photo: JESS J MITCHELL/GETTY IMAGES
HM Revenue and Customs has said that Google has paid the taxes due, he said.
Asked whether Google had paid the "Google tax", the Downing Street spokesman said: "Companies which divert profits from the UK will either have to change their behaviour and declare the correct amount of profits and pay corporation tax on all those profits, or, if they don't do that, they risk paying a higher amount of diverted profits tax.
"Diverted profits tax is only there to capture tax from those organisations that don't pay corporation tax on their profits in the UK. HMRC have made clear that Google have paid the taxes that they are due to pay."
The new tax came into effect in April 2015 at a rate of 25 per cent, with the intention of creating a deterrent to companies seeking to avoid corporation tax at the lower rate of 20 per cent.
A Google spokesman said: "After a six-year audit by the tax authority we are paying the amount of tax that HMRC agrees we should pay. Governments make tax law, the tax authorities enforce the law and Google complies with the law.”
|
LA Hammer
11:33 Wed Jan 27
Re: Google's tax bill
|
Infidel is right in his race to the bottom comment.
Corporations are pass through entities. They aren’t sentient beings. The tax they pay is borne by shareholders, employees and customers. If we think those groups should pay more tax we should be honest and say so, not try and hide it by taxing corporations.
But we won’t . Corporation tax is great for politicians because its impact is hidden and the great unwashed think there is such a thing as a free lunch. Hence the comments about “greedy corporations “ as opposed to greedy pensioners wanting a return on their investments or employees wanting a raise or me paying too much for a coffee/i phone etc.
|
Hermit Road
9:36 Wed Jan 27
Re: Google's tax bill
|
Infidel, not for the first time is being a bit misleading. There's a company called Google UK, it pays its corporation tax in the UK. There is another company called Google Ireland, they pay their corporation tax in Ireland, there's a further company called Google inc. they pay their tax in the US.
Google UK has a turnover of £3 billion.
Google Ireland has a turnover of €18 billion.
Google UK has to pay tax on all the sales made in the UK, and here's the rub. Google makes much more UK sales through Dublin, than it does London, so the tax on UK revenue is paid in Ireland.
No problem from me, that's the law, they abide by it.
What I think should be done though is that our govt should do the same as the US govt. We should force Google to pay tax on the revenue they gain from the UK, whether the salesman on the end of the phone was in London or Dublin. It can be done.
|
Westside
11:34 Wed Jan 27
Re: Google's tax bill
|
"I'm going to change hats here, Infidel, and declare that such an arrangement need not create mountains of bureaucracy - mobile phone companies have, for years, been using a similar approach to settle roaming charges around the globe."
Unfortunately Mike, mobile phone companies are far more advanced in their IT and charging processes, than any Government's tax infrastructure.
I spend some of my working time, ensuring my companies witholding tax affairs are up to date. This means we receive income streams from intellectual property assets around the world, without tax being deducted at source and tax is paid on them in the UK. For every country I deal with I have to complete the appropriate forms, manually. These can be annually, or every so many years. I have to then send them to HMRC for certification, then to the tax authorities of the paying company. Then the paying company itself. The whole process is cumbersome and time consuming.
If something this simple can't be automated, I very much doubt any government has the will or ability to do as you suggest.
|
|
|
|
