Ritchie’s all excited

Osborne’s going to try a withholding tax on royalty payments.

And then note this will ‘look through’ intermediaries. Could ‘Double Irish’ and ‘Dutch sandwiches’ be in line for UK attention? That’s going to be popular in Dublin and Amsterdam.

And in that case is this an admission that the Google or Diverted Profits Tax was an over complicated tool for something that could be done a lot more simply? Especially when, I note, the phrase ‘apply this to to all payments connected with the activities of a business liable for tax in the UK’. Could this just be a statement of intent to apply the withholding to payments made by sales agents even if they do not settler a royalty? If so, this will be fun.

And, as a final note, why has it taken so long for the tax justice movement to be listened to on withholding when we have suggested it for so long?

Well, the real reason no one’s been listening is because the proposal itself is simply illegal. Certainly with respect to the tech companies, those is it aimed at, doesn’t have a hope in hell of standing.

10 thoughts on “Ritchie’s all excited”

  1. Slightly OT but does anyone on here have the legal knowledge to say if Ospuke has created this sugar tax in a legally valid form.? To me it seems possible that EU law might have something to say about that as it does about min alcohol pricing.

    That would be sweet. Pun intended.

  2. Ritchie’s all excited

    Well we know he claims to be unmoved by porn (at least of the conventional kind). There must be something that gives him, ahem, an outlet.

  3. Tim: You might want to take a look at Article 5 of that Directive.

    “Member States may, in the case of transactions for which
    the principal motive or one of the principal motives is tax
    evasion, tax avoidance or abuse, withdraw the benefits of this
    Directive or refuse to apply this Directive.”

    Which doesn’t stop Richie being wrong, of course (very little does seem to be capable of that). The reason this doesn’t stop (say) Google’s structure is that Google UK doesn’t pay a royalty to Google Ireland – rather Google Ireland pays Google UK a (low) amount for sales and marketing support. The UK can’t book sales, so it doesn’t have to pay a royalty.

    Also, it’s not just domestic law that’s in point. Treaties are also relevant, including the UK-Ireland treaty.

  4. Today’s FT section on the Budget says that the royalty withholding tax will only apply where itv is not illegal. Gideon is not as stupid as Murphy.

  5. Tim…I guess all the tax experts are busy trying to work out the effects of all this bullshit. This really looks to me like a bullshit budget. adding lots of complications and achieving nothing very much. It is perhaps the worst budget I have seen since Brown first got into power.

  6. The shit about debt interest and loss relief…. It is all about getting outsiders into the game of calculating tax, nothing about raising tax

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