The problem of tech company tax is too well known to spend much time talking about. It’s more than a decade now since I first helped research this story, then in partnership with the Sunday Times. And now, despite all the due notice given to countries around the world since then there is no solution in obvious sight.

He’s not noted that Trump changed US tax law.

Then came the GOP’s corporate tax reform. Under the new law, even if American companies leave those profits outside the U.S., they still get taxed. So the whole game isn’t worth it anymore. It’s all going to get taxed in the U.S., so companies can forget about those chains of offshore companies and all the complications with Ireland, the Netherlands, and so on. Which is exactly what is happening.

As Reuters reports, Google is simply not going to bother with the elaborate “double Irish with a Dutch sandwich” scheme anymore. The cash will flow into the U.S. and be taxed, justly, here as well. It doesn’t matter how you try to finagle matters, U.S. tax will still be due and will still be paid.

This is, by a long, long way, the single biggest closing of tax-avoidance opportunities that anyone has ever managed. And it’s all been done by Trump and Republicans, whose tax reform is decried by those very same liberals who claim to be against tax avoidance. It’s funny how liberals aren’t satisfied with getting what they demanded if it comes from a Republican.

The problem – assuming we agree it was a problem – is already solved, dealt with.

8 thoughts on “How sad”

  1. My opinion is, tax law should be applied to all companies in its jurisdiction in a similar manner. Some businesses will be smarter and more nimble, they should not be punished for having a superior business model.

  2. Jussi – that is indeed what happens.
    That’s also what Ritchie, the media and governments see as the problem. They want a share of the pot that someone else is getting in full.

  3. But they are not using CbCR and paying their fair share in the U.K., as defined by murphy
    As far as he’s concerned this is Trump literally stealing money from UK taxpayers

  4. “It’s more than a decade now since I first helped research this story”

    No one knew about international tax planning until spud alerted us to it.

  5. Re: Boris, Javid, Hammond, Osborne and their insane 2% Digital Tax

    Loss making Uber, Deliveroo etc make a loss; where does UK Gov’t expect the 2% turnover tax to come from?

    London-based Deliveroo sales $584 million in 2018 with losses of $284 million
    – Digital Tax $11.68 million

    JustEat results 31 July 2019
    Revenue £464.5 million
    Profit £0.8 million
    – Digital Tax £9.29 million

    Somebody needs to punch sense into UK Gov’t

  6. Social media, online marketplaces and search engines were the businesses I thought this 2% revenue tax applied to.
    I didn’t realise that it applied to Deliveroo Uber and Just Eat. Very bad, if true.

  7. @Bongo

    Read FT article I posted a few days ago, last Wed iirc

    “Firms selling online with turnover/revenue over £25m”

    Worryingly, you seem to approve with concept of a turnover tax

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