SoylentNews is people
SoylentNews
Reuters reports that plans for a major rewriting of international tax rules have been unveiled by the Organisation for Economic Co-operation and Development (OECD) that could eliminate structures that have allowed companies like Google and Amazon to shave billions of dollars off their tax bills. For more than 50 years, the OECD’s work on international taxation has been focused on ensuring companies are not taxed twice on the same profits hampering trade and limit global growth. But companies have been using such treaties to ensure profits are not taxed anywhere. A Reuters investigation last year found that three quarters of the 50 biggest U.S. technology companies channelled revenues from European sales into low tax jurisdictions like Ireland and Switzerland, rather than reporting them nationally. For example, search giant Google takes advantage of tax treaties to channel more than $8 billion in untaxed profits out of Europe and Asia each year and into a subsidiary that is tax resident in Bermuda, which has no income tax. “We are putting an end to double non-taxation,” says OECD head of tax Pascal Saint-Amans.
For the recommendations to actually become binding countries will have to encode them in their domestic laws or amend their bilateral tax treaties. The OECD says that it plans to hold an international conference on amending the network of existing tax treaties. Sol Picciotto, an emeritus professor at Lancaster University in Britain, says the recommendations are at least five to 10 years from becoming law, and that the jury is still out on whether they will accomplish their stated goals. “These are just tweaks,” says Picciotto. “They’re trying to repair an old motorcar, but what they need is a new engine.”
(Score: 3, Interesting) by hoochiecoochieman on Wednesday September 17 2014, @10:39AM
Sales tax is highly evaded, because there's no incentive for neither the buyer not the seller to declare the transaction. If it's not declared, the buyer pays less and the seller gets undeclared revenue, which will allow him to declare less profits, with fiscal advantages.
For a tax to be enforceable, there must be an incentive for at least one of the parts to declare the transaction. If by going clean both parties lose, you're encouraging fraud. It can only work in a highly surveilled environment, where the risk of being caught outweighs the benefits of fraud.
At least here in Portugal, some kinds of companies evade sales tax big time, namely hairdressers, bars, discos, restaurants, car repair shops, household appliance repair shops, etc.
The biggest tax evaders around here, however, are banks. But it's all legal. They take advantage of loopholes in the legislation to route around corporate taxes. Meanwhile, they got huge bailouts from the same State they refuse to pay taxes to. That's why it's so hard to enforce taxes around here, people feel (and rightfully so) that the taxation is hugely unfair. And they want to get their piece of the pie, too.
Being a salaried worker and an honest person, I pay all my taxes to the very last cent. I know, I know, I'm an idiot. But what can I do, I was born this way. If there was a Heaven, I'd be destined to it.