This is an interesting headline, isn\’t it?
The argument that tax avoidance is legal is now dead and gone, for good. The world of tax abuse changed today, for the better.
So, what has actually changed?
Let us just run through a few cases where Ritchie has been alledging tax avoidance.
1) Lady Green\’s dividends from Taveta, ultimately sourced from Arcadia. Transfers between husband and wife (not that this happened anyway) are tax free. She is non-resident and non-domiciled. Thus the UK tax system has no claim at all over her income. The GAAR will not change this point.
2) Vodafone. EU law is now settled on this point. CFC rules do not apply to subsidiaries in the EU. UK law cannot claim otherwise. So no change here.
3) Boots: interest payments are still business expenses so no change here.
4) Amazon, Apple, Facebook, Google. No, warehouses are still not permanent establishments. Yes, you can still sell from any one EU country into any other or all of them. Paying corporation tax where your one company is, not where the sales are.
So, the GAAR will not stop any of the cases that Ritchie has been whining about. Yet the GAAR makes tax avoidance illegal now.
Which leaves us in something of a quandary really. If the GAAR makes tax avoidance illegal (or, as above, not legal) but all orf these things are still legal then all of these things must not be tax avoidance then.
But we\’ve been told endlessly that all of these things are tax avoidance.
So, where is it that Ritchie is lying to us? In the original definitions of tax avoidance or in the claim that tax avoidance is now illegal?