Tuesday, February 03, 2009

Guardian tax investigation - day two

More stories are emerging from the Guardian investigation. Here are the highlights:

Offshore - and out of reach to the Revenue
How companies have "offshored" legal ownership of valuable trademarks to low-tax locations. Shell has shifted ownership rights of its iconic scallop-shell roadside sign out of London to a third low-tax regime in Switzerland. It was part of a carefully planned merger of its UK and Dutch arms, which enabled the oil giant to keep many operations from the grip of the British tax authorities. For tax purposes, Royal Dutch Shell plc is now resident in the Netherlands. Two drug firms, GlaxoSmithKline, and AstraZeneca, both headquartered in London, have moved title to their drug brands to Puerto Rico in the Caribbean.

Special sections on GlaxoSmithKline, Shell and AstraZeneca

This crisis must spur us to take on the tax avoiders
Comment from opposition Liberal Democrat spokesman Vince Cable. An important starting point in this crisis is to establish a tax base that is robust and fair, in which everyone is seen to be paying their share. There is an all-party consensus that non-domiciles should pay more. The tax avoidance by corporations is, however, much greater and more difficult to identify. With further comment on the threats by corporations to relocate if they don't get their way. " The British government's dogmatic opposition to any EU tax harmonisation has inhibited sensible, practical initiatives"

How you can join in
Introducing the tax gap blog.

What is the point of corporate tax?

Companies are ciphers for their ultimate owners, so why not tax them instead? And are companies that avoid their liabilities doing any harm if it means more can be passed onto their shareholders and employees or re-invested in their business? These economic questions about "tax incidence" underpin much academic debate about how and on whom to levy tax.

The Guardian's tax affairs
Guardian Media Group's arrangements for its acquisition of certain businesses from publisher Emap, in partnership with private equity firm Apax was, by contrast, publicly explained. A fairly full account of the transaction and GMG's view on it was published in May last year. GMG's corporation tax affairs were analysed by Richard Murphy of Tax Research (and TJN) last year. He concluded that there was "nothing abnormal". See Richard's blog here.

Tax loss cost to the developing world
A letter from Christian Aid and ActionAid. "As two of the UK's biggest development NGOs, we are working together to highlight the extent to which the same practices rob poorer countries of desperately needed funds to finance their development and deal with the financial crisis. Christian Aid estimates, on the basis of figures quoted by the World Bank, that corporate evasion through abuses of trade pricing costs developing countries around $160bn each year. Followed by another cogent comment.


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