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Facebook, Google, Apple, Amazon, eBay: are all tax dodging scumbags

by | 16th, April 2012

FACEBOOK, Google, Apple, Amazon and eBay are all tax dodging scumbags. At least this is what the Daily Mail would have you believe, that the big five internet firms, Facebook, Google, Amazon, eBay and Apple are all tax dodging bastards:

Figures from the companies’ American filings suggest that the five made revenue of £12.2billion in Britain in 2010 from British consumers and advertisers.

On the basis of their global profit margins for the year, that would mean profits for the five from sales to British customers would have amounted to almost £2.5billion. Corporation tax at 28 per cent would have seen them pay £685million.Instead, subsidiaries established by the five in Britain paid just over £19million in 2010, or 0.8 per cent.

The problem with this is that it’s all entirely bollocks: because we’re in the European Union.

It is indeed true that they don’t pay UK corporation tax on the profits they make from selling to people in the UK. But that’s not what tax dodging is all about. Tax dodging is doing stuff that the government doesn’t want you to be doing. Using the tax law to find a loophole, to avoid what you should justly pay.

What the five companies are doing just isn’t tax dodging. They’re actually doing exactly what the law wants them to do.

It’s all this European Union stuff about the Single Market. And yes, EU law does trump UK law here. The Single Market is deliberately set up so that you only have to have one company to sell to every EU country. That’s the whole point of it. You’ve only got to deal with one bureaucracy, one taxman. So a UK company can sell stuff in Germany and pay corporation tax in the UK: or sell in Greece, Italy, Spain and Finland and still only have to deal with the UK taxman.

So when Amazon sells to everyone across all 27 countries from Luxembourg, or Apple from Ireland, they’re not doing anything dodgy. They’re just not tax dodging at all: they’re doing exactly what the people who wrote the tax laws want them to do. Taking part in the Single European Market. This is the whole point of the damn system.

To get rid of this system you’d have to pull out of the EU: something which I’m all for of course but until we do none of these companies is doing anything even very slightly whiffy. For they’re doing what the system wants them to do.

 



Posted: 16th, April 2012 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink