Tuesday, November 13, 2012

Starbucks, Google, Amazon in UK tax grilling: none were able to defend their behaviour

We will try not to add too much to the reams of press coverage of the UK Public Accounts Committee grilling of Google, Amazon and Starbucks over their tax affairs. But this has been a savage indictment of the world of international tax, in a system constructed and jealously guarded by the OECD, which is no longer fit for purpose. Perhaps the most important point about what has emerged is this incontrovertible fact:
"Whil(e) it rapidly became clear that tax avoidance is fundamental to the business model of all three companies not one of them had the faintest idea how to defend their behaviour."
The Guardian described these hearings in epochal terms:
"It was one of the great committee disasters, like watching the Titanic, the Bismarck and the R101 all go down in the same afternoon.
. . .
MPs became outright rude: "It beggars belief"; "you cannot be serious!"; and "I don't know what you take us for!". Small smiles were followed by smirks and then outright hilarity. The man from Amazon was told he was a waste of space, had no information to bring, and the committee would summon someone else who might know what they were talking about. The government's chief auditor, Amyas Morse, is normally punctiliously polite but even he snapped. He found the evidence "insulting".
(read the whole piece to get a good picture.) MPs had us wondering aloud if the Starbucks representative could provide us photos of all those coffee plantations in Switzerland, where the company miraculously provides all its profits.

And if you want to know how to tackle this stuff, look no further than this (and this.)

This approach has the strange distinction of being revolutionary - yet proven, at the same time.  If adopted wholesale, it would transform international tax, and it is supported on the left and the right of the political spectrum.

What are we waiting for?

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