Ritchie on Google

But for tax games to avoid a permanent establishment here in the UK it would be £5 billion

And whilst those games clearly convince HMRC I think a) the rules need changing b) HMRC needs to become substantially more aggressive and right now it is not – which is a political choice at cost to us all.

Sure, if you think the rules should be changed that’s fine. But do we really want a Curajus State which bullies instead of changing the law?

And across the EU the idea that the tax should be paid where the customer is because that is where a PE might be is being explored

He still doesn’t get what this means, does he? The Curajus State doesn’t get a slice of the profits made from selling elsewhere….

16 comments on “Ritchie on Google

  1. “The tax should be paid where the customer is”

    So presumably all those jet engines and service packages that Rolls Royce sell all around the world will generate zero corporation tax under this principle?

  2. “The tax should be paid where the customer is”

    The hilarious thing is, he doesn’t mean that and had anyone else said it he’d have one of his rants.

    He really is off his head.

  3. “The tax should be paid where the customer is”

    What am I missing? Isn’t that what VAT is, which already exists? The tax that’s paid where the customer is, by the flesh-and-blood customer, via the supplier. at the end of the supply chain.

    Is Ritchie arguing for more VAT, or for VAT to not be reclaimable by businesses, or something?

  4. He’s as moronic as his QC mate. Blinded by their fucked up ideology. Google have a choice as to how they enter / access the UK market. They choose to base their sales activity in Ireland – where they have 5,000 employees. Why the fuck is it so difficult for these idiots to understand very simple tax principles?

  5. In Ritchie’s case, it’s difficult because he’s really, really thick. Jolyon is a wealthy lawyer, so doesn’t have that excuse – he’s just being very selective in the ‘facts’ he quotes.

  6. Murphy claims to hate VAT as it is regressive. He also wrote – very accurately for once – on how Donald Trump’s proposed import/export tax differentials would end up being paid by the American consumer. But ask him to join the dots to this and he seems unable.

    So we go back to the same old question: is he thick or just completely dishines?

  7. An engineer in California writes a piece of software that is deployed on a server farm in Ireland, and provides a service (like search or email) to a user (not the customer!) in England. The company makes money by having a French advertiser (the real customer) pay for an ad for some Riviera vacation displayed along with the English user’s search results, and the money goes into a German bank account owned by that California company.

    Now tell me where the profit happened.

  8. synp – in Ritchieworld(tm) the total profit was earned in California, Ireland, England, and France. Each of those jurisdictions is entitled to a 30% tax on the profit, leaving Google 20% in the hole on the transaction. Don’t worry; they make it up on volume.

  9. Cynic – yes the buyer pays VAT where they are. But may not be paying it to their own state.
    I collect VAT on sales in the EU, payable to HMRC. I don’t collect local VAT and pay it to those other states. I’m not authorised to collect on their behalf.

  10. Over on TRUK a certain “Derek” has been doing a sterling job of getting up Spud’s nose.

  11. even outside EU arbitrarily changing the definition of permanent establishment would involve a lot of treaty negotiation I imagine

  12. Cheers Martin, that’s an interesting wrinkle.

    Does HMRC not then transfer the VAT to the customer’s state?

    I say that because I wondered what happened to VAT on Steam download-only software, checked their website, and found that EU-VAT all got paid to HMRC who then distributed it.

    https://support.steampowered.com/kb_article.php?ref=8360-WEJC-2625#taxes

    “Valve Corporation reports VAT declarations on a quarterly basis to HM Revenue & Customs in the UK, who then distributes to the various EU member countries.”

  13. Cynic – the digital VAT is a bit different. I don’t keep close tabs on that as I don’t do digital.
    When completing HMRC forms there is no indication of what is collected from overseas buyers. There is space for what is not charged to or by overseas buyers and sellers (such as purchasing from say a French company) but its not broken down.
    The total of a dozen plus EU countries buyers are lumped together under ‘sales’.

  14. Aye, I suppose with digital the data on where the customers are get automatically registered in the sales database.

    Probably don’t want to encourage HM’s Robbers and Crooks to come up with even more paperwork for the non-digital folks.

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