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Author Topic: Is tax-avoidance evil - or simply......  (Read 2044 times)

Offline antonymous

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Is tax-avoidance evil - or simply......
« on: 20 May, 2013, 11:32:45 AM »
...... not cricket?
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Offline Hiheels

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Re: Is tax-avoidance evil - or simply......
« Reply #1 on: 20 May, 2013, 11:47:18 AM »
Avoidance is fine - evasion is criminal.

Offline siasl

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Re: Is tax-avoidance evil - or simply......
« Reply #2 on: 20 May, 2013, 01:10:55 PM »
I'm not entirely clear on what the difference between avoiding and evading is, personally. Assuming all financial techniques are legal, surely there is no difference.

Take the case of a well known global coffee house, GlobalCoffee. GlobalCoffee(UK) Ltd, a division of GlobalCoffee, sell lots of coffee in the UK, employing staff in the UK to sell it in their UK establishments. The UK coffee houses are bound by contract to purchase their coffee from GlobalCoffee(Switzerland), as well as licensing the branding for GlobalCoffee from the same office. Co-incidentally, the price of that coffee bean is more expensive than other beans of similar quality on the open market. Also, the brand licensing fees are co-incidentally similar to the overall operating margin of GlobalCoffee(UK). The net result is that the UK arm of the business has artificially high operating costs, and the profit it does make is funnelled into the Swiss arm of the global company, where the corporate tax rate is 8.5%, in comparison to the 20% in the UK.

All of these techniques are legal, but is GlobalCoffee avoiding or evading?

Offline antonymous

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Re: Is tax-avoidance evil - or simply......
« Reply #3 on: 20 May, 2013, 01:12:49 PM »
Avoidance is fine - evasion is criminal.

So Margaret Hodge was out of order in her remark to the Google exec. last week?

The fact that the larger part of UK sales through Google are handled by their Irish office  where
the Corp. Tax is 12.5%  is good news for the Irish economy - bad news for Mr Osborne/Mrs Hodge
« Last Edit: 20 May, 2013, 01:30:33 PM by antonymous »
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Offline P-Kasso2

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Re: Is tax-avoidance evil - or simply......
« Reply #4 on: 20 May, 2013, 02:36:17 PM »
I'm not entirely clear on what the difference between avoiding and evading is, personally. Assuming all financial techniques are legal, surely there is no difference.

The difference is simple...Tax evasion is what the average Joe Blow does when he doesn't want to pay taxes.

Tax avoidance is what his neighbour does by calling in a very expensive tax consultant when he doesn't want to pay taxes.

They are both comparable to a guy who enjoys all the benefits of living in a nice house but welches on paying the rent.

Simple...both are criminal, both are anti-social and both are so self centred it should have absolutely no place in a well run society. There are plenty of establishments for housing tax avoiders/tax evaders and they all begin with HMP.

« Last Edit: 20 May, 2013, 02:40:44 PM by P-Kasso2 »
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Offline siasl

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Re: Is tax-avoidance evil - or simply......
« Reply #5 on: 20 May, 2013, 03:05:56 PM »
So, tax evasion is...
Mis-representing income & expenses to reduce your tax bill - i.e. lying on your tax return(s). I agree, it's a no-no

Tax avoidance is...
using tax laws to your financial advantage while reporting the correct numbers. Corporations are under a duty to do this given that they are created to maximise shareholder value - so if it's a lower tax burden to open an office in Switzerland, assign IPR rights and a supply monopoly to global franchises, then it's a no-brainer to do.

Maximising shareholder value is the only ethics a company has (barring superfluous terms in their memorandum of incorporation and articles of association), therefore it cannot be "unethical" for a company for "efficiently plan for tax". But companies can muck it up and put incorrect structures in place - the ex-Google whistleblower of the last day or two may be demonstrating that (although as an ex-employee he's opening himself up to all sorts of civil suits by having all this confidential information to hand, plus I'm not sure anyone would be that keen on hiring him, now).

So, if companies can "ethically" do it, and people can own shares in aforementioned companies, why is it unethical for people to do the same thing? Those that can afford it will do it.

Overall, the while tax system needs an overhaul, but there will still be armies of accountants & lawyers poring over the new system to find the cracks.

Offline Hiheels

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Re: Is tax-avoidance evil - or simply......
« Reply #6 on: 20 May, 2013, 03:11:23 PM »
Tax avoidance is buying biscuits with no chocolate as chocolate covering makes them taxable, tax evasion is not paying it when you should.
One's opportunistic and the other criminal.

Offline antonymous

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Re: Is tax-avoidance evil - or simply......
« Reply #7 on: 20 May, 2013, 03:21:37 PM »
Tax avoidance is buying biscuits with no chocolate as chocolate covering makes them taxable, tax evasion is not paying it when you should.
One's opportunistic and the other criminal.

How did I guess that chocolate was going to creep in here somehow? ;)
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Offline P-Kasso2

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Re: Is tax-avoidance evil - or simply......
« Reply #8 on: 20 May, 2013, 04:38:25 PM »
I remember growing up in a land where there was not just the letter of the law...but the spirit of the law was respected and valued.

Was that such a duff idea?

Should such an egalitarian and civilised view be jettisoned for weasel words such as 'maximising shareholder value'?

When someone is actively enaging in 'tax avoidance' they know fully well that they are not following the spirit of the law.

They also know that it is the sprit of the law that is the oil which makes our Society run smoothly.

They also know that they are jettisonising important social values and that they are grabbing for themselves potential tax amounts that can make this particular society even better.

Does being a 'tax avoider' come with a clause that guarantees no bad consciences? That equally guarantees unbroken nights of good, refreshing sleep?

Any 'tax avoider' can persuade himself with the flimsy excuse that his witholding of tax 'is not particularly illegal'.

Someone has to be earning vast amounts of money before they even have to face paying significant amounts of tax.

It is not as though they can't afford to make a proportional contribution to the society that so amply feeds their income flow...it is just that don't want to.

So where's their beef apart from the fact that they are totally self-centred and uncaring people sniggering up their sleeves while the society from which they earn such vast sums is being short-changed?

I cannot see any other equation, excuse or justification.

Everything with 'tax avoiders' is just hair splitting and self gratitfication at the cost of social duty.

One is called being human and the other is not.

End of.

« Last Edit: 20 May, 2013, 04:46:55 PM by P-Kasso2 »
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Offline antonymous

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Re: Is tax-avoidance evil - or simply......
« Reply #9 on: 20 May, 2013, 05:23:02 PM »
I remember growing up in a land where there was not just the letter of the law...but the spirit of the law was respected and valued.
????

Dont you recall the 'black market' and 'spivs' PK.
Today the spivs have gone global - which is facilitating the ability to shuffle ill-gotten gains into inaccessible spots on the globe, and claim "not us guv!"
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Offline Hiheels

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Re: Is tax-avoidance evil - or simply......
« Reply #10 on: 20 May, 2013, 05:54:39 PM »
Tax avoidance is buying biscuits with no chocolate as chocolate covering makes them taxable, tax evasion is not paying it when you should.
One's opportunistic and the other criminal.

How did I guess that chocolate was going to creep in here somehow? ;)

Chocolate is everywhere I tell you, everywhere!  Joy

Offline P-Kasso2

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Re: Is tax-avoidance evil - or simply......
« Reply #11 on: 20 May, 2013, 07:06:53 PM »
Dont you recall the 'black market' and 'spivs' PK.
Today the spivs have gone global - which is facilitating the ability to shuffle ill-gotten gains into inaccessible spots on the globe, and claim "not us guv!"

Yes I do Ant...but they were tax evaders...duckers and divers it is true...but probably honest enough to admit that what they were up to was not 'legal' or done for purely for 'maximising shareholder return'.

Also, from what little I remember about spivs, Sid on the corner was far less noxious to the economy than global spivs of the scale of Microsoft, Amazon, Google, various coffee outfits etc shovelling money away.

"I live in hope"