On Fiat and StarbucksOctober 21, 2015 Tim WorstallTimmy Elsewhere14 CommentsThere Will Be No Fines In The Starbucks And Fiat European Union Tax Cases previousCommenters, eh?nextYou what? 14 thoughts on “On Fiat and Starbucks” Dennis the Peasant October 21, 2015 at 2:47 pm Cue Arnald whine in 3, 2, 1… Tim Worstall October 21, 2015 at 2:50 pm And what fun. This post has just been retweeted by the SVP of corporate communications of…..Starbucks Dennis the Peasant October 21, 2015 at 3:04 pm Oh God, that is glorious, Tim. I’m betting on either Richard or Arnald having a stroke over this. With any luck it will be both of them. john77 October 21, 2015 at 3:29 pm Well, the person who would be fined is currently President of the EU Commission so what would you expect? Geese voting for Christmas, turkeys voting for Thanksgiving? jgh October 21, 2015 at 4:13 pm “asked the controlling governments, Luxembourg and Holland” Holland doesn’t have a government, just as England doesn’t have a government. Max October 21, 2015 at 5:52 pm I see RM has not quite grasped that illegal stae aid is aid by the state which is illegal, not by the companies who have a letter saying it’s legal. Dave October 21, 2015 at 6:06 pm Is it just me reading that headline and… https://youtu.be/2bC07e7PReM?t=40s Tim Newman October 21, 2015 at 7:09 pm I like the quote from Oxfam, wittering on about “times of great suffering” as if the Black Death has reappeared. Rob October 21, 2015 at 8:10 pm What the fuck has this got to do with preventing famine in Africa? Alex October 21, 2015 at 9:31 pm Such is the paucity of Murphy’s tax knowledge that he misses the point. The idea behind the double company structures is to make a lending arrangement that is a bona fide lending arrangement from the point of view of the borrower while making it look like the topco is lending to its foreign branch (and entities that consolidate with it. In order to make this kosher the intermediate group companies have to make a taxable profit, so there is a relatively small tax cost because of the tax on the margin, and one of the negotiating points in getting a tax ruling from Luxembourg was what the amount of that de minimis margin should be. The Luxembourg authorities appear to have accepted one sixty-fourth of a percentage point as being enough whereas the EU says that is too small, but in the whole scheme of things if they paid tax on as much as 0.25%, the groups would still pay no tax on interest at 8.75% (assuming 9% interest on the loans (which many of them do). The rulings are only an agreement with the Lux tax authorities (who will presumably be happy to get paid a little extra tax) but do not affect the rest of the arrangements. Bloke not in Cymru October 22, 2015 at 12:03 am I’m assuming that if we end up with country by country reporting that Murphy wants we are just going to end up with more of the Starbucks type of situation, where they report by country, but legitimately manage their structure and allocations so as to minimise their tax. So Facebook will happily declare a large UK revenue figure which will be mostly wiped out by cost allcations of central resources etc. Maybe I’ll ask Murphy what face books uk revenue should be Ad sales booked by uk residents/businesses Or Revenue from ads served to British IP addresses, which I would assume need adjusting for click through rate if part of the contract covers that MC October 22, 2015 at 5:17 am -Rob Oxfam exists “help create lasting solutions to the injustice of poverty”. Just as well, there is not enough famine to justify all that management. Of course eradicating poverty is a noble goal but as Oxfam points out ‘one person in three lives in poverty’, so they’ll all probably make it through to their pensions… Dan October 22, 2015 at 9:38 am I was having a chat with a vice director of something or other at Starbucks on Monday at an event. They’ve all been briefed internally about this and that briefing was “We’ve done nothing wrong and we don’t care. Don’t rock the boat though guys”. GlenDorran October 23, 2015 at 9:00 am Can one of the resident tax experts confirm if Mary Snell has handed him his arse on this in the comments on his article? I think I follow her argument, but as always Ritchie is giving one line answers which don’t shed any light on things. Also, I think this is priceless: “No idea if this is feasible but couldn’t UK tax law be changed so that we move towards sales taxes, against which corporation tax duties could be offset, set at rates whereby non-cheaters’ existing tax liabilities change very little but cheaters’ tax liabilities grow? Richard Murphy says: October 22 2015 at 9:21 am NO That is a tax in consumption and not capital It would be regressive And we already have a sales tax that is widely evaded” Wasn’t Ritchie’s big idea recently a consumption tax? Stump thinking again. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.