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Multinationals Hiding more than USD$500 Billion from G20 Tax Collectors

posted by n1 on Thursday November 12 2015, @01:24PM   Printer-friendly
from the luxembourg-shuffle-fulfilled-by-amazon dept.

Phoenix666 writes:

In 2012, something like US$80 billion worth of multinationals' profits worked on their suntans in Bermuda, according to an international report into profit-shuffling and tax avoidance.

Oxfam, the Tax Justice Network, the Global Alliance for Tax Justice, and Public Services International have put their heads and wallets together to fund a report into how multinationals are picking the pockets of G20 nations.

In one way, it's no surprise: the world's top economies are, pretty much by definition, the places where multinationals will make the most money. However, they also have the best resources to try and get companies to pay their taxes, and if the Oxfam et al report is accurate, they're getting gamed hand-over-fist.

The report says just twelve countries (the USA, Germany, Canada, China, Brazil, France, Mexico, India, the UK, Spain and Australia) account for 90 per cent of US multinationals' “missing” profits.

Those profits get processed through various implementations of the “Irish-Dutch sandwich” to be booked in low-tax countries like the Netherlands, Ireland, Luxembourg, Switzerland and Bermuda.

If the numbers are accurate (the report's authors put a number of caveats on the data), then between $500 and $700 billion gets shuffled around in this way, which is how Bermuda found itself home to $80 billion worth of profits in 2012 (its GDP in the same year was a paltry $5.47 billion).

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  • (Score: 1) by J053 on Thursday November 12 2015, @08:36PM

    by J053 (3532) <{dakine} {at} {shangri-la.cx}> on Thursday November 12 2015, @08:36PM (#262341) Homepage
    Exactly. Tax all income at the same rate (can be progressive, or not) and eliminate the capital-gains and business distinctions. Corporations would pay tax on gross income, just like individuals. Eliminate all deductions except one standard deduction per taxpayer equal to the poverty level.

  • (Score: 2) by etherscythe on Friday November 13 2015, @09:27PM

    by etherscythe (937) on Friday November 13 2015, @09:27PM (#262840) Journal

    Gross revenue, or simply profit? Businesses with significant amounts of funds tied up in physical inventory or property, particularly with low operating margins, are going to be buried by gross income tax. And that's where it all gets messy.

    I do like the nod to the idea that if corporations want to be treated like people, they don't get to pick and choose the factors that get applied, however.

    --
    "Fake News: anything reported outside of my own personally chosen echo chamber"

    • (Score: 1) by J053 on Monday November 16 2015, @11:37PM

      by J053 (3532) <{dakine} {at} {shangri-la.cx}> on Monday November 16 2015, @11:37PM (#264141) Homepage
      I would say gross revenue. There are too many accounting tricks a corporation can use to have zero profit on millions of dollars of revenue. As an individual, I have to pay tax on my gross revenue - if a business can't stay in business under those terms, maybe it shouldn't be in the first place. Either that, or let individuals pay taxes only on profits.