Vodafone Tax Dodge: £325m-a-year Irish office with NO STAFF

Oracle

Employing no staff for five years, the telecoms giant took advantage of Ireland’s generous corporate tax rate to record a £324million annual turnover collecting royalty payments for the use of its brand.

http://www.dailymail.co.uk/news/article-2396979/Vodafones-320m-year-Irish-office-staff-Telecoms-giant-multi-million-pound-tax-deal-HMRC.html

Valetta

It's the daily mail.

Nothing unusual about legitimate companies operating out of any juristiction without staff.

Happens all the time.

Oracle

Valetta wrote: »

It's the daily mail.

What's that got to do with it? You don't like the message so shoot the messenger.

Nothing unusual about legitimate companies operating out of any juristiction without staff. Happens all the time.

Yes unfortunately it's not unusual, Apple, Google, Microsoft, Dell and Starbucks have all operated similar tax avoidance schemes. That doesn't make it right.

By not paying the tax they should, these corporate multi-nationals are dodging their social responsibility, in the countries they operate. They are happy to take the profits but don't want to pay tax.

Valetta

Oracle wrote: »

What's that got to do with it? You don't like the message so shoot the messenger.



Yes unfortunately it's not unusual, Apple, Google, Microsoft, Dell and Starbucks have all operated similar tax avoidance schemes. That doesn't make it right.

By not paying the tax they should, these corporate multi-nationals are dodging their social responsibility, in the countries they operate. They are happy to take the profits but don't want to pay tax.

But they are paying the tax they should.

Advocate to change the tax laws by all means, but don't castigate companies for taking advantage of the laws that are in place.

A financial controller would be grossly negligent if they arranged the companies finances in such a way as they were to pay more tax than necessary.

This is from the Irish Revenue's Customer Service Charter.

Revenue will administer the law fairly, reasonably and consistently and will seek to collect no more than the correct amount of tax or duty

Oracle

We'll agree to disagree Valetta, I am castigating the companies who make billions in profits, yet go to extraordinary lengths to avoid paying their fair share of tax. There's a simple word for it GREED.

Amirani

Oracle wrote: »

We'll agree to disagree Valetta, I am castigating the companies who make billions in profits, yet go to extraordinary lengths to avoid paying their fair share of tax. There's a simple word for it GREED.

The majority of sensible individuals and companies will seek to minimise their tax bills by all legal means available. To think this isn't the case is pretty idealistic.

markpb

Oracle wrote: »

We'll agree to disagree Valetta, I am castigating the companies who make billions in profits, yet go to extraordinary lengths to avoid paying their fair share of tax. There's a simple word for it GREED.

Do you offer to pay more tax than you have to? If you could reduce your tax bill, would you? Countless PAYE employees reduce their tax bill each year through bike to work, taxsaver transport tickets, taking time in lieu instead of overtime, etc so tax avoidance isn't something limited to multinationals.

Oracle

This is the Politics forum, and the point I'm making is political. By choosing not to pay the tax they should, these highly profitable multinationals are also making a political decision, they could instead choose to pay their fair share of tax.

These corporations operate in a society, not just an economy, a society to which they have responsibilities. The taxes collected go towards the education, health and well being of the workers on which they depend, and who help create their profits.

Valetta

But what is their "fair share"?

Surely the only ones to decide this are the people who make the tax laws?

Oracle

Their fair share is the tax they would have to pay without the tax avoidance schemes.

Valetta

Oracle wrote: »

Their fair share is the tax they would have to pay without the tax avoidance schemes.

So are you saying that ordinary PAYE workers should pay 20% or 41% tax on their whole income, without any personal tax credits or allowances?

Should there be no tax relief for medical expenses or refuse charges?

No blind person tax credit or no mortgage interest relief?

Because all the above are tax avoidance schemes.

Amirani

Oracle wrote: »

Their fair share is the tax they would have to pay without the tax avoidance schemes.

Tax avoidance isn't illegal though and there's obviously some tax avoidance practices that are completely fair and normal. Deciding what tax avoidance schemes are ethical is a grey-area that should be cleared up by more thorough legislation.

In this case though, it makes no sense for the Irish Government to legislate as it would result in a lower tax take for Ireland.

partyatmygaff

Oracle wrote: »

We'll agree to disagree Valetta, I am castigating the companies who make billions in profits, yet go to extraordinary lengths to avoid paying their fair share of tax. There's a simple word for it GREED.

I call it good business.

If the government are happy enough to not address the situation, it's their fault, not Vodafone's.

seamus

Oracle wrote: »

By choosing not to pay the tax they should

They are paying the tax they should.

No entity, personal or corporate has any moral/ethical obligation to pay more taxes than those which they are legally obliged to.

They current fad of wanting to claim that legal tax reduction is tantamount to treason is an attempt to divert attention away from the fact that tax laws across the world are in dire need of overhauling to come up to date with the globalised nature of business.

jimmycrackcorm

I don't see how this situation is any different to people here going up north to buy cheaper alcohol to avoid paying higher taxes here.

Weevil

seamus wrote: »

They are paying the tax they should.

No entity, personal or corporate has any moral/ethical obligation to pay more taxes than those which they are legally obliged to.

They current fad of wanting to claim that legal tax reduction is tantamount to treason is an attempt to divert attention away from the fact that tax laws across the world are in dire need of overhauling to come up to date with the globalised nature of business.

As far as I know, it would be considered legally negligent for a PLC to not maximise it's profitabity, using all legitimate tools. Tax laws are part of that tool-kit. Look at who makes the rules.

nesf

Oracle wrote: »

Their fair share is the tax they would have to pay without the tax avoidance schemes.

Man, you'd really hate the French system. The offical rate is 30 odd % but the last survey I saw put the actual tax rate paid by French companies around 25% after all the various reliefs and such were applied.

So, eh, are these companies paying their fair share in your mind or not? I'm curious. Ireland is actually rather odd in that our corporation tax rate is what the vast majority of companies actually pay on profits with limited exceptions for R&D and the like. The Economist (I think) once remarked that the major difference between the Irish and French systems was that the Irish one was honest about what kind of taxes were going to be paid.

mathepac

Oracle wrote: »

This is the Politics forum, and the point I'm making is political. ...

I suspect you are very young or naive, maybe even both.

Oracle wrote: »

... By choosing not to pay the tax they should, these highly profitable multinationals are also making a political decision, they could instead choose to pay their fair share of tax....

The companies you mentioned earlier all discharge their total tax liabilities in all the geographies they operate in AFAIK. The Daily Wail knows that but is doing a Cameron on it and distorting facts. They seem to be able to sucker the likes of UKIP supporters in their Union Jack knickers and other less well informed readers to believe their distortions.

The companies pay the taxes that are due, and as codified in multilateral trade and taxation agreements, that is their legal obligation.

Oracle wrote: »

... These corporations operate in a society, not just an economy, a society to which they have responsibilities. The taxes collected go towards the education, health and well being of the workers on which they depend, and who help create their profits.

These companies generate wealth by paying wages, collecting VAT and other taxes, by paying for services, engaging with local suppliers and ultimately by giving their investors an income by paying dividends on their investments. Without the investors there would be no big companies.

ArseBurger

Oracle wrote: »

This is the Politics forum, and the point I'm making is political. By choosing not to pay the tax they should, these highly profitable multinationals are also making a political decision, they could instead choose to pay their fair share of tax.

These corporations operate in a society, not just an economy, a society to which they have responsibilities. The taxes collected go towards the education, health and well being of the workers on which they depend, and who help create their profits.

Rather than pick on a publically listed international company that has a mandate to maximise profits for shareholders and is not an Irish company, why not refocus that bile on an Irish company or person that does the same yet tries to tell the people how they should live and exist in their home country?

Surely there must be an Irish billionaire somewhere that owns media and Telecoms companies who effectively pays no tax in Ireland?

I'm sure there must be.

djpbarry

jimmycrackcorm wrote: »

I don't see how this situation is any different to people here going up north to buy cheaper alcohol to avoid paying higher taxes here.

No, tax avoidance is only bad when wealthy people/entities practice it.

nuac

ArseBurger wrote: »

Rather than pick on a publically listed international company that has a mandate to maximise profits for shareholders and is not an Irish company, why not refocus that bile on an Irish company or person that does the same yet tries to tell the people how they should live and exist in their home country?

Surely there must be an Irish billionaire somewhere that owns media and Telecoms companies who effectively pays no tax in Ireland?

I'm sure there must be.

Now whoever could that be? ( gone off to rack brains )

Tragedy

jimmycrackcorm wrote: »

I don't see how this situation is any different to people here going up north to buy cheaper alcohol to avoid paying higher taxes here.

Bad analogy. The analogous situation would be people down here setting up a shell company up North and purchasing alcohol at Northern tax rates, billed to NI, but having it shipped to RoI for consumption in RoI.

The attitude of "because they can get away with it, and it's technically not illegal" is disgusting and reprehensible. There are plenty of loopholes in the Irish legal system that lets one get away with doing terrible, immoral acts, and I guess that's fine too.

K-9

mathepac wrote: »

These companies generate wealth by paying wages, collecting VAT and other taxes, by paying for services, engaging with local suppliers and ultimately by giving their investors an income by paying dividends on their investments. Without the investors there would be no big companies.

This particular company doesn't pay any wages, I don't believe VAT is payable on royalties, pays Corporation tax and doesn't do much else bar pay rent! The dividends are paid in Luxembourg because of lower taxes but that seems to have backfired because they'd a huge tax settlement in the UK over it.

Vodafone UK didn't pay any CT for two years there, so I can see why many would have an issue, it may not be illegal but it seems outside the spirit of the law. I never get this argument that they employ loads of people and pay loads of VAT, that's business, you employ people and pay the VAT man! You aren't doing mankind a good deed.

nice_guy80

The UK could tighten up their laws to ensure companies pay proper tax there

but that would hurt their own industries and companies, so that won't happen

antoobrien

Oracle wrote: »

Their fair share is the tax they would have to pay without the tax avoidance schemes.

I've news for you, these "tax avoidance" schemes don't actually allowed them to permanently avoid paying tax.

When the money is to be repatriated, in this case to the UK, they have to pay taxes. That's what this settlement is about, the normal legal paying of taxes defferred using what you describe as a tax avoidance scheme.

djpbarry

Tragedy wrote: »

The attitude of "because they can get away with it, and it's technically not illegal" is disgusting and reprehensible. There are plenty of loopholes in the Irish legal system that lets one get away with doing terrible, immoral acts, and I guess that's fine too.

But this isn't about Irish law - it's about international law. The only way anything is ever going to change is if a multilateral agreement on taxation comes into force, but I don't really see the political will for such a move.

Sir Humphrey Appleby

K-9 wrote: »

This particular company doesn't pay any wages, I don't believe VAT is payable on royalties, pays Corporation tax and doesn't do much else bar pay rent! The dividends are paid in Luxembourg because of lower taxes but that seems to have backfired because they'd a huge tax settlement in the UK over it.

Vodafone UK didn't pay any CT for two years there, so I can see why many would have an issue, it may not be illegal but it seems outside the spirit of the law. I never get this argument that they employ loads of people and pay loads of VAT, that's business, you employ people and pay the VAT man! You aren't doing mankind a good deed.

Just a quick point on the VAT, businesses don't pay vat. essentially they just collect vat from the end user and pass it over to revenue. Any VAT a business is charged is recoverable against the amount it collected for revenue.

esteve

Of course this is outrageous, but also 'legal'. The government and corporations are in this together, and we are all so misinformed, with the media never really dealing with what has to be dealt with.

The Organisation for Economic Cooperation and Development (OECD) has estimated that 60% of all world trade consists of transfers made within multinationals, passing their profits to anonymous subsidiaries in tax-free jurisdictions. At the same time, it has been estimated that a third of the domestic product of the entire planet was being channelled through offshore accounts.

The government knows this, the corporations know this, some people know this, and there is feck all being done about it, so basically the system is inefficient, rotten to the core so to speak, and the future is so uncertain.

djpbarry

esteve wrote: »

The government knows this, the corporations know this, some people know this, and there is feck all being done about it...

It's not like there are not people, governments and probably even certain corporations who would be happy to see something being done, but there's no way tax havens would ever agree to any change - their economies would be destroyed. Hell, even the likes of the UK, heavily dependent on the tax haven that is London, would never agree to anything that could adversely impact on their own interests.

donaghs

Valetta wrote: »

But they are paying the tax they should.

Advocate to change the tax laws by all means, but don't castigate companies for taking advantage of the laws that are in place.

A financial controller would be grossly negligent if they arranged the companies finances in such a way as they were to pay more tax than necessary.

This is from the Irish Revenue's Customer Service Charter.

You hear that a lot, "don't blame the individual/entity, blame the law".

Not necessarily taking sides in this particular debate, but I don't agree with the above logic. The reason people would want to change those laws is precisely because they don't like what the companies are doing. If there was no outrage and castigation of the companies, there would be no need/will to change the law.

An extreme comparison perhaps, but if a murderer can escape conviction due to legal technicalities, that doesn't lesson the evil of what the person has done. Similarly, if there is ever a change to laws relating to massive tax avoidance, it will be moral outrage that will push it through

djpbarry

donaghs wrote: »

An extreme comparison perhaps, but if a murderer can escape conviction due to legal technicalities, that doesn't lesson the evil of what the person has done. Similarly, if there is ever a change to laws relating to massive tax avoidance, it will be moral outrage that will push it through

The difference being that few people would disagree with a change to the law that would address the legal technicalities you refer to.

On the other hand, obtaining agreement on a global tax regime would be a monumental task. I mean, just like at the furore surrounding Ireland's corporate tax rate.

esteve

djpbarry wrote: »

It's not like there are not people, governments and probably even certain corporations who would be happy to see something being done, but there's no way tax havens would ever agree to any change - their economies would be destroyed. Hell, even the likes of the UK, heavily dependent on the tax haven that is London, would never agree to anything that could adversely impact on their own interests.

I see your point, but if money that should be paid as tax to the state, is being undisclosed and sent off to tax havens, this is simply not right. The fact that these places rely on this form of business is unfortunate, especially as it was not really their choice to begin with. I would imagine they would prefer an economy that is based on a real solid foundation, as oppossed to shady transactions involving the worlds elite, especially as these tax havens are hardly shining examples of fully developed and progressive societies. These places existed before they were made tax havens, and i imagine would find a way to exist after.

Nonetheless the point is that, an absolute massive amount of money, an estimated 1/3 of the entire planets domestic product is in offshore accounts, whereas it should be declared and the appropriate tax paid on it.

Corporations are only getting bigger and more powerful, which by that very right makes them less capitalistic, and instead more corporatistic. I agree with Capitalism, in its true sense, but not with this version that is being shoved down our throats.

djpbarry

esteve wrote: »

I see your point, but if money that should be paid as tax to the state, is being undisclosed and sent off to tax havens, this is simply not right.

I'm not suggesting it is. Whether it's being practiced by individuals or corporate entities, tax avoidance is not something I agree with. However, the only way around it is a common tax system on a global scale, where profits are taxed at x% everywhere - there's no way that's going to happen any time soon.

esteve wrote: »

The fact that these places rely on this form of business is unfortunate, especially as it was not really their choice to begin with. I would imagine they would prefer an economy that is based on a real solid foundation, as oppossed to shady transactions involving the worlds elite, especially as these tax havens are hardly shining examples of fully developed and progressive societies.

London? Monaco? Switzerland?

esteve

djpbarry wrote: »

I'm not suggesting it is. Whether it's being practiced by individuals or corporate entities, tax avoidance is not something I agree with. However, the only way around it is a common tax system on a global scale, where profits are taxed at x% everywhere - there's no way that's going to happen any time soon.

Agree, but there has to be a true incentive fo this to happen, of which, i dont believe there is. Why would any corporation want to pay more tax? How could you get to the board of directors and suggest this in a corporation, you would be ridiculed?!

djpbarry wrote: »

London? Monaco? Switzerland?

Im sorry, i did not make myself clear. I am not refering to the above places, as they are more than tax havens. London is one of the financial capitals of the world and capital city of the United Kingdom, Monaco is a wealthy monarchy, Switzerland is, well Switzerland, and always has been a traditionally very wealthy nation for obvious reasons.

I am referring to, for example, some Carribean islands, where an economy does and always has existed alongside as having the service of being a tax haven. But these are small islands, with relativley small populations, where massive amounts of money is being filtered. I dont think a lot of that money gets down to the average Carribean resident.

djpbarry

esteve wrote: »

London is one of the financial capitals of the world and capital city of the United Kingdom...

The City of London is a massive tax haven and has been for a very long time. How do you think it became such an influential financial hub? It's very naive to think that a tax haven cannot exist within the "developed" world.

A Dub in Glasgo

It is quite clear that the London financial district is a city within a city and is a tax haven. What is galling is the measures the British Government will go to protect tax havens whilst ensuring that everyone else picks up the slack from those tax havens. You must remember the motto though - 'We are all in this together' funny how that only works when the rich need a bailout or two.

Good loser

djpbarry wrote: »

The City of London is a massive tax haven and has been for a very long time. How do you think it became such an influential financial hub? It's very naive to think that a tax haven cannot exist within the "developed" world.

The IFSC is a tax haven? Massive?

A Dub in Glasgo

Yes the IFSC is a tax haven. As long as countries have a race to the bottom with respect to tax havens, society will not benefit

djpbarry

Good loser wrote: »

The IFSC is a tax haven? Massive?

The IFSC is not in London?

esteve

djpbarry wrote: »

The City of London is a massive tax haven and has been for a very long time. How do you think it became such an influential financial hub? It's very naive to think that a tax haven cannot exist within the "developed" world.

Please show me where I said this. I acknowledged London is a tax haven, but it is also the capital of Britain, the largest city in Europe blah blah blah. I never once said that a tax haven cannot exist within the developed world, so im at lenghts to see how you can draw such a conclusion. Other examples of tax havens in the developed world would be, Andorra, Luxembourg, Cyprus, Lichenstein. Okay that is enough of me defending something i never said. Reread my posts, it is perfectly clear what my point was.

djpbarry

esteve wrote: »

I acknowledged London is a tax haven, but it is also the capital of Britain...

I don't understand why you keep pointing that out?

I think I need to make the distinction between Greater London and The City of London - it is the latter that is regarded as a haven. London's economy is driven by The City and the UK's economy is heavily dependent on London (worryingly so, in fact). Even though its population is tiny, it's difficult to overstate the influence of 'The Square Mile' in British politics.

Peanut2011

Oracle wrote: »

We'll agree to disagree Valetta, I am castigating the companies who make billions in profits, yet go to extraordinary lengths to avoid paying their fair share of tax. There's a simple word for it GREED.

As lets also throw in the bond holders and all that!!!

Let's face it, these are businesses, they are there to make profit! They are doing all they can to maximise profit and minimise their expense. As long as they are doing it legally there is no problem.

Your grief should be with the government and Revenue for allowing such laws.

Than think again, if these companies did not have any incentive to be here would they ever even set up here in the first place.

What everyone fails to mention is the amount of money these companies hand over in wages and PRSI and all other taxes that their employees have. If they were not here in the first place who would have pick up that employment???

It certainly does not look right and when the country is broke people will see this as extraordinary problem, however this has to be put in prospective!

esteve

djpbarry wrote: »

I don't understand why you keep pointing that out?

I was simply repeating what i had already said, not to rehash the point, but to defend myself from your accusation.

I am perfectly aware of the City of London, and agree, it has a massive if not worrying powerhlod over the rest of Britain.

Anyway, my original point was that it has been established that taxable money, is being slipped away to tax havens, illegally, at the rate of one third of the domestic product of the entire planet. It is essentially being laundered, and nothing is being done about it.

micosoft

Oracle wrote: »

What's that got to do with it? You don't like the message so shoot the messenger.
QUOTE]

Because the Mail tells crude, "moralising", simplistic stories that are full of inaccuracies or straight out lies that are designed to appeal to the lowest common denominator by enraging them and getting them to feel that the "Man" whether that be "insert foreigners/ethnic group/other people here" are to blame for all of the worlds ills and the decline of "our great nation". The fact they have an Irish Edition whose primary difference is to take out the "Anti Irish" articles and replace with Africans or Eastern Europeans says everything about it.

The slightest amount of thought or digging would disprove the story or the logic behind it. You Sir fell for it hook, line and sinker. Hence the derision Daily Mail and it's readers deservedly receive.