[governance] FW: [Dewayne-Net] Facebook paid £2.9m tax on £840m profits

[Roland Perry]

In message <020101cde44c$2900ad10$7b020730$@gmail.com>, at 08:06:40 on 
Thu, 27 Dec 2012, michael gurstein <gurstein at gmail.com> writes
>3. the issue under discussion here is less whether past behaviours were
>legal or not (leaving aside the ethics of not paying ones' "fair share") but
>whether certain actions/interventions are either deliberately or by
>happenstance directed towards a "political" intervention so as to preclude
>the type of globalized "Hands On" actions that might be warranted given the
>changing legal, taxation and other circumstances that the Internet is
>precipitating.

Suppose someone had a business selling an online newsletter about 
Internet Governance issues. Written in the UK at a cost of $50k a year. 
1,000 subscriptions sold at $250 each, but invoiced from Luxembourg 
where the sales tax is perhaps 3% on such items rather than the 20% that 
would be payable in the UK.

In this fictional story, it seems that they pay a $180k fee to a 
shell-company[1] in a Caribbean tax haven to proof-read and spell-check 
the newsletter before it's published, which means the net profit for UK 
corporation tax is just $20k.

As far as I can tell, failing to disclose the $20k would be tax 
*evasion*, but the rest of the scenario is simply tax avoidance.

[1] This shell-company, by co-incidence, is building a retirement home
     for publishers of Internet newsletters.
-- 
Roland Perry

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