Instead, we are actually getting something done about the rules under which companies should be paying tax. As a lot of people have said all along, fuck the spirit of the law, apply the actual law.
I totally agree with you and you are absolutely wrong.
The "Google tax" law that Osbourne wants to enact appears to be little more than saying "any money stream we would like a piece of, we're gonna take". As far as I've been able to find out there really isn't much more to it than that. That's not a law, that's bringing back the reign of kings. It's been obvious for a long time now that the Tories have no coherent theory of how they want the global tax system to work. They just want more money.
It's not even clear why they need one. They already passed the General Anti Avoidance Rule (GAAR) which basically says "anything a reasonable person would find unreasonable is illegal", i.e. it suspends tax law entirely in the UK and replaces it with the whim of whoever is running the Revenue at the time. Given that they did the GAAR a few years ago already it seems they're implicitly agreeing that the arrangements of these companies is reasonable and legal but they want to undo it all the same.
The big problems this tax is going to run into are both legal and fundamental. The legal issues are that simply grabbing money in violation of the existing systems violates tax treaties. The UK is potentially setting itself up for a world of hurt if other countries decide it's now open season on British companies. Bear in mind the Tories have lowered corporation tax to attract companies from other countries to London. If, say, France, decides that a company is "diverting profits" out of France to the UK and pulls the same shit then the country could find itself ending up with less money than before, not more.
The second problem is that what it means to "divert profits" is left undefined. How do you carve up a company like Google across national borders? When someone clicks an ad in the UK, is that profit made in the UK because that's where the user is? Or California because that's where the ad system was developed? Or Germany because that's where the datacenter is? Or Ireland because that's where the sale was made and where the advertiser sent the money to and had the contract? Or all of them? Currently the system is it's Ireland because that's where the company with which the contract was signed is.
It gets even more convoluted. What if a British user never clicks ads and so is a net loss for the company. Do you then offset all those users against the revenue generating ones? How much does it even cost to serve the search result to a British user? They're using global, shared resources, so do you divide up the global costs by population? By usage? How do you even calculate profit by product when it's all integrated, let alone by country? And how do you stop the red tape required to calculate whatever arbitrary metrics are used from becoming overwhelming?
How will they even collect that tax? What if Google and Facebook shut down their UK offices?
The Tories have answers to none of these questions. They have no thinking behind this deeper than "let's grab some foreigners money and use it to buy off pensioners". The Treasury admitted they are assuming zero businesses will pull out of the UK because of these changes. How this will impact the global tax system, the costs of it, the chances of blowback? Unstudied.
The whole thing is an astonishing abandonment of a system of rules and laws.