@RichardJMurphy really doesn\’t understand the European Union, does he?

Here\’s the solution according to the Murphmeister:

That “to” is vital. If the claim that Amazon is in Luxembourg and exports products into the UK when an order is placed on amazon.co.uk is treated as risible, as the PAC did earlier this week, then the UK derived profits of Amazon Luxembourg can be taxed in the UK as it can be deemed to have a branch (or “permanent establishment”) here in the UK. The same could be done to Google Ireland. It’s profits arising in the Uk could be taxed here.

It’s time to make that challenge and change the law on tax residence if need be so that we can clearly state that these companies are trading in the UK – as is so very obviously true.

That does not require international consent.

It does require international consent. Because we\’re in the EU. And EU law specifically and exactly states that we have a Single Market. And any one company in any one country within the EU can sell to any consumer or business anywhere in that EU from that one company in one country. VAT is payable at the rate where the consumer resides and delivery takes place (except, weirdly, on digital goods). Corporation tax is payable in the country where the one company is resident and at the rate of that country.

And that\’s it.

To try and legislate differently within the UK would run smack into the brick wall of EU legislation. As with what happened over Vodafone, recall? There the argument was, quite simply, whether EU law over rides the UK\’s CFC laws or not. The answer being \”Yes, fuckwits, that\’s what EU law means\”.

The UK cannot make, promulgate or impose any laws regarding the tax residence or domicile of a company which violate EU laws on the same subject. \’Coz we\’re in the EU, see?

23 thoughts on “@RichardJMurphy really doesn\’t understand the European Union, does he?”

  1. Er, what, Arnald?

    Murph:

    It’s time to … change the law on tax residence …

    That does not require international consent.

    Okay? I’ve not left out anything that changes the meaning of what His Imperious Ritchiness said?

    Yet, what’s that teeny little problem? Ah, yes. He’s wrong. Because it does require ‘international consent’. Because we’re in the damn EU. Which is an international organisation.

    I do think that one of the funniest things we might ever see is Tim and Ritchie both campaigning for us to leave the EU. Tim because he thinks it is an inefficient, statist monstrosity and Ritchie so he can play Robbing Hood.

  2. Arnald, if what you say is true & he knows EU law prevents what he wants being possible, why does he post a long screed without mentioning it?
    One’s only left with two alternatives. Either he’s stupid/ignorant, as Tim opines. Or he presumes his readership is stupid/ignorant, which is my take.
    What’s yours?

  3. Arnold, since you seem to know something about the EU and international agreements, where does it say that no international agreements are required to change the law regarding taxing foreign companies.

    Or are you saying that the UK branch should not be a branch, but a full blown domiciled in the UK company. And if it is, then Ritchie can tax it as he wishes.

  4. There’s also our many bilateral tax treaties, which specify that the UK can only tax when there is a permanent establishment here, and the Commentary on the OECD Model Tax Treaty that defines in some detail what a permanent establishment is.

  5. You know nothing. try reading the literature, yeah

    Nope. Extraordinary claims require extraordinary proof. You claim the UK can act contrary to EU law. Burden of proof falls on you, chum.

  6. You know nothing.

    You’re not speaking from a tower of strength, here.

    try reading the literature, yeah, not what Worstall deems to edit.

    Tim’s been editing has he? Oh, I’d better check. Let me see – Murph’s post at 10:45am today? Okay, so Tim’s omitted the quote from the Guardian – doesn’t change the meaning of what Murph says. And the first 2 paragraphs – again, no alteration of meaning. Nothing that says “the next three paragraphs are how it should happen in my statist Utopia but I know it doesn’t reflect reality …”

    What about those three paragraphs? This must be where Tim’s evil editing took place? Unless you are just a moronic troll? Hmm?

    Ah, no. Word for word, nay – verily letter by letter – identical. Even copied the grocers’ apostrophe in the last sentence of the first paragraph of the quote. So, no ‘editing’.

    Do you really think we are going to take your word on anything, without actually checking?

    Oh, and he’s snipped the final, blatently inaccurate paragraph too.

  7. I thought Amazon wasn’t making any profits in the UK because of the cost structure, not because they’re not liable to any income tax in the UK.

  8. BlueB,

    He proposes that 25% of a company’s profit is taxable split between where it’s customers are (25% is where it’s workers are, 25% is buildings iircwiqpd and I forget and can’t be arrsed checking on the other 25 …)

  9. Richard: whilst Arnald is a fuckwit, your point here isn’t relevant. Amazon would have a permanent establishment in the UK for tax law purposes in the absence of EU rules. Ebay and Skype may or may not, it’d be an interesting battle.

    On the other hand, another important point is that if EU rules didn’t apply, and Amazon were no longer considered able to run a sizeable logistics operation in the UK and not pay UK tax on it, then (far more than Starbucks, which either sells coffee or disnae) it might as well just actually fuck off and post everything from Ireland. Which is broadly what the EU rules are for: if you have a common market, then a common corporate tax base is the only way to stop really stupid things from happening.

  10. I look forward to Ritchie joining UKIP and campaigning for the UK to leave EU and implement his madcap brilliant tax scheme.

  11. S-R: +1. He’s like John Terry; you wish he wasn’t on your team, you’re ashamed your team will tolerate him, and the sooner he can fuck off to another team the better.

  12. It is the logical conclusion. He’s a socialist, but none of the socialists are arguing to leave the EU, which is the only solution to his tax conundrum.

    Oh dear.

  13. re john b (#14)

    UK – Luxembourg double taxation agreement, Article 5:
    “(3) The term ‘permanent establishment’ shall not be deemed to include:
    (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise”

    Storage & delivery is exactly what Amazon do in the UK. The DTA is incorporated into UK law by Statutory Instrument. So Amazon’s UK activities are not a PE under UK law.

  14. @Stuck Record

    Strangely enough, I’m utterly opposed to the EU as I believe that things like freedom of movement are inherent freedoms anyway, just as they were in the 19th century before they started interfering with their passports, visa’s and all of the other bureaucratic bullshit we have to put up with nowadays…

    However, I am amused the such an offensive and statist organization as the EU is providing such a resilient defence against Ritchies socialist utopia wherein us plebs would work long hours over lathes for whatever pocket money his courageous state deigns us plebs worthy of.

    He’ll be the first up against the wall when the revolution comes.

  15. Like all commies, RM leaves you two alternatives for your judgement upon him.

    Stupid or a liar.

    John Prescott regularly declared he was stupid, but occasionally said he was a liar.

    Sally Bercow now says she is stupid.

    So we all know that Murphy is either a liar or he is stupid.

    You have proven this many time over, Tim.

    All I can say is that whenever I see a blog post with the name Murphy I run away.

    Preserve the planet! Don’t waste electrons on the Murph!

  16. As an aside, if Amazon’s low tax bill is what’s giving them their competitive advantage over other businesses, doesn’t that rather settle the debate about where the tax incidence lies?

  17. if Amazon’s low tax bill is what’s giving them their competitive advantage over other businesses, doesn’t that rather settle the debate about where the tax incidence lies?

    Not exactly, but to follow your argument through, it would strongly suggest that the incidence of corporation tax falls on the customers of the other vendors in that they have to pay higher prices. It is, of course, more complicated than that.

    Especially in the John Lewis case, because, clearly, lower profits at John Lewis fall directly (as it is a partnership) on the workers-as-shareholders – in terms of lower distribution. So, it depends on how much JL raise their prices to maintain profits or keep them competitive with Amazon.

  18. Note how Murphy confuses residence and permanent establishment – an amazing mistake for someone who claims to be a tax expert.

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