<story><title>Tax crackdown on banks and multinationals &apos;to raise £5bn&apos;</title><url>http://www.bbc.co.uk/news/business-30310832</url></story><parent_chain><item><author>sp332</author><text>Or if they just made taxes low enough that it&amp;#x27;s not profitable to do crazy things like the double-Irish. If we had a permanent lowish tax rate on corporations, they wouldn&amp;#x27;t save money doing the weird stuff, the money would move to the USA, it would be more liquid (not being tied up in the Cayman islands etc), and the government would get more tax revenue.</text></item><item><author>crdoconnor</author><text>&amp;gt;So all this money accumulates offshore and can&amp;#x27;t come back to the US unless some taxes are paid, which is why Tim Cook meets with Congress to try and lobby for a tax repatriation holiday.&lt;p&gt;Ironically a lot of this money would probably be repatriated tomorrow (with taxes fully paid) if Congress ruled out a tax holiday and committed itself to gradually raising rates.&lt;p&gt;It&amp;#x27;s just the tantalizing hope of a tax holiday that keeps it abroad.</text></item><item><author>notjackma</author><text>Exactly.  In the case of Apple:&lt;p&gt;The Irish company licenses intellectual property from an Apple registered company in the Cayman Islands, and of course the Royalties are so high that the Irish company makes no profit.&lt;p&gt;So all this money accumulates offshore and can&amp;#x27;t come back to the US unless some taxes are paid, which is why Tim Cook meets with Congress to try and lobby for a tax repatriation holiday.&lt;p&gt;Which is also why Tim Cook is raising money in the debt markets to pay shareholders dividends - it&amp;#x27;s cheaper to pay a tiny bit of interest than pay tax.  Absurd that such a rich company is doing this.&lt;p&gt;Ironically,  the money is already back in US - the Caymans entity invests the money in the US stock market via Braeburn Capital, a hedge fund based in Nevada and owned by Apple Inc!</text></item><item><author>Turing_Machine</author><text>Some of the arrangements can get pretty complex.&lt;p&gt;&lt;a href=&quot;http://en.wikipedia.org/wiki/Double_Irish_arrangement&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Double_Irish_arrangement&lt;/a&gt;&lt;p&gt;Basically, sending the money from Germany (or wherever) -&amp;gt; Ireland -&amp;gt; Netherlands -&amp;gt; Ireland -&amp;gt; Cayman Islands results in no taxes being paid (or legally due).</text></item><item><author>timje1</author><text>As far as I can tell, they shift profits overseas by shifting extra, semi-fictional &amp;#x27;costs&amp;#x27; to the UK subsidiary - for example, if the UK subsidiary of Starbucks makes $100m profit, but has to pay the Canary Isles subsidiary $100m in licensing costs, suddenly the UK subsidiary owes no tax.&lt;p&gt;Given this structure, how does the HMRC plan on distinguishing between legitimate costs and semi-fictional ones? I imagine as soon as the law is changed, the companies will alter their books so that they shift all their &amp;#x27;legitimate costs&amp;#x27; to the UK subsidiary.&lt;p&gt;I suspect that this shift will end up benefitting tax accountants and lawyers.</text></item></parent_chain><comment><author>lmm</author><text>It&amp;#x27;s a race to the bottom. Corporate tax in Ireland is a mere 10% which is what you&amp;#x27;d pay if you did a &amp;quot;single Irish&amp;quot;, but these companies still find it worthwhile to avoid even that much tax through a more complicated scheme. I&amp;#x27;ll wager the only &amp;quot;low enough&amp;quot; would be zero.</text></comment>
<story><title>Tax crackdown on banks and multinationals &apos;to raise £5bn&apos;</title><url>http://www.bbc.co.uk/news/business-30310832</url></story><parent_chain><item><author>sp332</author><text>Or if they just made taxes low enough that it&amp;#x27;s not profitable to do crazy things like the double-Irish. If we had a permanent lowish tax rate on corporations, they wouldn&amp;#x27;t save money doing the weird stuff, the money would move to the USA, it would be more liquid (not being tied up in the Cayman islands etc), and the government would get more tax revenue.</text></item><item><author>crdoconnor</author><text>&amp;gt;So all this money accumulates offshore and can&amp;#x27;t come back to the US unless some taxes are paid, which is why Tim Cook meets with Congress to try and lobby for a tax repatriation holiday.&lt;p&gt;Ironically a lot of this money would probably be repatriated tomorrow (with taxes fully paid) if Congress ruled out a tax holiday and committed itself to gradually raising rates.&lt;p&gt;It&amp;#x27;s just the tantalizing hope of a tax holiday that keeps it abroad.</text></item><item><author>notjackma</author><text>Exactly.  In the case of Apple:&lt;p&gt;The Irish company licenses intellectual property from an Apple registered company in the Cayman Islands, and of course the Royalties are so high that the Irish company makes no profit.&lt;p&gt;So all this money accumulates offshore and can&amp;#x27;t come back to the US unless some taxes are paid, which is why Tim Cook meets with Congress to try and lobby for a tax repatriation holiday.&lt;p&gt;Which is also why Tim Cook is raising money in the debt markets to pay shareholders dividends - it&amp;#x27;s cheaper to pay a tiny bit of interest than pay tax.  Absurd that such a rich company is doing this.&lt;p&gt;Ironically,  the money is already back in US - the Caymans entity invests the money in the US stock market via Braeburn Capital, a hedge fund based in Nevada and owned by Apple Inc!</text></item><item><author>Turing_Machine</author><text>Some of the arrangements can get pretty complex.&lt;p&gt;&lt;a href=&quot;http://en.wikipedia.org/wiki/Double_Irish_arrangement&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;Double_Irish_arrangement&lt;/a&gt;&lt;p&gt;Basically, sending the money from Germany (or wherever) -&amp;gt; Ireland -&amp;gt; Netherlands -&amp;gt; Ireland -&amp;gt; Cayman Islands results in no taxes being paid (or legally due).</text></item><item><author>timje1</author><text>As far as I can tell, they shift profits overseas by shifting extra, semi-fictional &amp;#x27;costs&amp;#x27; to the UK subsidiary - for example, if the UK subsidiary of Starbucks makes $100m profit, but has to pay the Canary Isles subsidiary $100m in licensing costs, suddenly the UK subsidiary owes no tax.&lt;p&gt;Given this structure, how does the HMRC plan on distinguishing between legitimate costs and semi-fictional ones? I imagine as soon as the law is changed, the companies will alter their books so that they shift all their &amp;#x27;legitimate costs&amp;#x27; to the UK subsidiary.&lt;p&gt;I suspect that this shift will end up benefitting tax accountants and lawyers.</text></item></parent_chain><comment><author>tw04</author><text>How exactly do you plan on the US staying solvent charging companies a corporate tax rate of 0%?  Because that&amp;#x27;s what their cost is doing the double-irish.</text></comment>