Country by country reporting

Sadly, Snippa and the TJN are still wrong:

The partial picture provided by data from the 15 countries that report at a sufficiently high degree of granularity allows the Tax Justice Network to identify $467 billion worth of profit shifted across the world and $117 billion in corporate tax lost around the world annually. With higher quality US data for 2017 for comparison, the Tax Justice Network estimates that actual profit shifting is approximately 50 per cent higher than reported by the 15 countries, around $840bn, with direct corporate tax losses of $203bn.

The entire thing is based upon the idea that those profits reported in tax havens are entirely untaxed. That in turn relying on the idea that profits made and kept abroad by US corporations do not become subject to US taxation.

Where the HQ company is in a tax haven then yes, getting the profits into the haven means they’re untaxed. But that’s not actually what they’re complaining about. Rather, they’re whingeing about Apple, Facebook and all them US companies getting their foreign profits into the havens and then not paying US tax on them.

This being something that Trump solved by changing the US corporate tax system in November 2017 so that those formerly untaxed foreign profits of US corporations are now taxed in the US. That is, CbyC has achieved nothing. As would be shown if they actually introduced this simple change to US tax law in their calculations.

2 thoughts on “Country by country reporting”

  1. The UK charges companies domiciled in the UK tax on their profits, wherever they arise in the world, with offsets allowed for taxes paid in the country of origin of the profit and, in certain tightly defined circumstances, exclusions for profits not remitted to the UK so that the shareholders are not able to benefit from them by receiving dividends.
    What Murphy wants is extra-teritorial jurisdiction for TJN to force foreign countries to direct locally-incorporated subsidiaries of UK companies to repatriate all their profits to the UK to be taxed here and then borrow money from the UK parent to fund their working capital. I thought the UN Charter forbade that sort of interference in a country’s domestic affairs.

  2. I guess Spud wants UK groups to pay tax on overseas profits both in the relevant jurisdictions and in the UK as well. Is this the day when tax is essential in its own right, rather than the day it sucks inflation out of the economy, or the day it corrects social injustice, or the day it pays for government spending…..

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