At least we know why Soapy Joe is doing this, advertising to pay for that windmill conversion:
Tax barrister, Jolyon Maugham QC, said: “This is the same story as Google and Facebook which is that profits generated from the UK are not taxed in the UK. By using a company in a lower tax country, in this case Ireland, Airbnb looks to have arranged its affairs to avoid tax throughout Europe including the UK.”
The point being that they’ve every right to do this. Note well what the Commission’s complaint about Apple is. It is not that a profits tax is not being paid in the UK, France, or Germany. They’re just absolutely fine with that because it’s a Single Market you idiots!
Airbnb said the UK company processes payments from customers around the world on behalf of its Irish HQ. The “significant costs” of that process – such as any foreign exchanges losses – are reimbursed by Ireland at a profit which is then taxed in the UK, it said.
Airbnb said that its international HQ was based in Ireland to “capitalise on Ireland’s global reputation for technology and utilise the vast tech-savvy and bilingual workforce that Ireland has built.”
But Richard Murphy, a chartered account and director of Tax Research UK, said he thought Airbnb was “dumping its foreign exchange losses in this country to get tax relief on them but the income to which these foreign exchange losses relate never comes near the UK”.
“We get none of the upside on tax from Airbnb’s real income, which is taxed in Ireland, but are giving away tax relief on their costs,” he said. “The net result is to significantly increase the overall level of profits Airbnb can enjoy at low tax rates.”
Murphy said cost reimbursement “is not the basis on which international tax rules are meant to work”.
Actually, costs plus a margin is the way that much of this is indeed done. Because it’s an obvious, legal and simple way to do it.
Wouldn’t it all be so much more fun if those complaining about the tax system actually understood it?