Tax-dodger-fingering hypocrisy?
January 24, 2013 8:37 AM   Subscribe

Is UK Prime Minister David Cameron being hypocritical when he talks about cracking down on tax avoiding companies domiciling within the EU? Surely the UK offers low tax incentives too that could be classed as facilitating tax avoidance?

At the Davos WEF, David Cameron is talking about clamping down on tax avoidance (not evasion) by companies selling products and services to the UK but being based in another EU country for tax purposes (like Starbucks is based in the Netherlands and Amazon is based in Luxembourg). This agenda is likely driven by the UK Uncut movement which is seeking to highlight alternatives to the UK government's spending cuts.

I'm interested in how could this be viewed as hypocritical. I think I should look into "non dom status" and perhaps British dependent territories that are used as low tax havens. Are these legitimate avenues to explore, and what other areas should I investigate?
posted by guy72277 to Work & Money (2 answers total) 1 user marked this as a favorite
If he was criticizing the governments of Luxembourg and The Netherlands (not exactly a low tax jurisdiction for anything other than royalties) then that would be hypocritical.

Criticizing the companies that use a whole array of tax dodges spread across a panoply of European and other countries isn't necessarily hypocritical just because Guernsey is also used for shady transactions.

As is, if he's actually serious about it, then expect to see him leading a coordinated international approach about clamping down on unrealistic transfer pricing transactions.

If you can clamp down on these abusive transactions at an international level then it will no-longer be possible to shuffle money around purely for tax reasons.

If you want to know about tax evasion in the British Isles, then certainly look into the role of the channel islands, yeah. Don't bother with domicile status - that's actually something that people used to evade British taxes and anyway it's mostly been clamped down on - manipulating your domicile status is now very difficult and usually involves genuinely moving rather than just manipulating some documents.
posted by atrazine at 8:54 AM on January 24, 2013

Thanks for your comment atrazine, I'll look into transfer pricing.
posted by guy72277 at 11:58 PM on January 24, 2013

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