How anyone, who is not a subject matter expert, can make a decision in this is just beyond me

You can't easily do so, but you can easily recognise the spin for what it is. As you say, the Guardian wants us to believe that the chemical industry is some cigar-smoking shades-wearing embodiment of corporate evil here, which is unlikely. It seems to be more like a dispute over the costs and benefits of enacting a ban before harm is conclusively established. So ..... just ignore it! My opinions on TTIP have been entirely unmoved by this story as it seems to be a dispute that would have happened anyway, regardless of whether TTIP existed.

Yes indeed. Whenever I read a story in the press that asks me to believe that a large group of people are utterly, totally evil and get their rocks off by being malicious psychopaths, I go looking for a reality check.

Digging through apparently endless links arrives us at this quote:

Peter Smith, executive director for product stewardship at CEFIC, which represents the European chemical industry, said the Nordic report attribution of health problems to EDCs was “arbitrary”. He said: “The link between exposure to a chemical and an illness has not been shown in many cases. The authors themselves say they have some trouble with causality.”

Smith said the delays to EDC regulation in the EU did not suit the industry. “Nobody is happy with the delays. But we would prefer it to be permanent and right rather than temporary and wrong.” He said case-by-case rigorous assessment was needed and that any precautionary action had to be proportional to the evidence of harm.

However, Professor Andreas Kortenkamp, a human toxicologist at Brunel University London in the UK, said the epidemiological work needed to prove causation is very difficult. For example, he said, analysing links to birth defects would mean having taken tissue samples from mothers before they gave birth. “But there is very good, strong evidence from animal and cell line test systems. The chemical industry only likes to emphasis the first part of that.” He said precaution was the only safe approach and said the Nordic report was good work.

In other words, the EU doesn't actually know these chemicals are dangerous to humans. They have some initial findings from animal studies that should be followed up on, and the chemical industry agrees with that, but heck if every mouse study translated directly to humans we'd all live a thousand years and be totally disease free by now.

So this entire dispute boils down to non-expert bureaucrats wanting to ban some chemicals early without clear evidence that they harm people, based on an abundance of caution, and the chemical industry saying "you should really prove your case first". Not entirely unexpected - EU regulators won't be the people who actually have to find alternatives and then do all the work to transition to them. They'll just issue a regulation, then go home and tell the wife/husband the story of how they fought the Big Chem to save helpless babies. The cost will get passed on the consumer. Skilled manpower and resources will be diverted from other things.

If they're right and the effects reproduce in humans - great, we got a few fewer years in which the chemicals were interfering with fertility. If they're wrong, well, the cost of that would be huge.

I don't see any clearly right or wrong side on this, which probably means the government should stay out of it. Mandate labelling at most, so consumers themselves can decide, at least until the scientific evidence of harm is stronger.

I don't recall anyone promising tax cuts during the last UK general election

e.g.

http://www.theguardian.com/pol...

Yes, the Tories won despite promising more austerity and that's the big difference between the UK and Greece. Regardless, if they thought it was affordable they would definitely not hesitate to use windfalls from taxing foreigners to buy off pensioner votes, for example. That's a very clear pattern in how governments do things.

And we spend 8% of government spending on interest not 25%.

You're right. I looked it up and it's 8%. I'm not sure why I thought it was 25%, perhaps I'm getting confused with some other country.

But the main point is, if a company wants to do business in the UK it should pay UK taxes on it's profits.

We're talking about a company that delivers things through the mail, here. What does "doing business in the UK" even mean? If Amazon were to have no offices or presence in the UK at all and just deliver everything via third party companies, would they be "doing business" there or not?

The problem with this sort of thinking is it ignores the consequences. Imagine a small company in the USA gets an order for its new widget from the UK. The company wants to sell, but ...... wait! The UK has screwed up laws. A single sale to a British person means the UK Gov will classify the company as "doing business" in the UK and suddenly all the companies profits are taxed twice. No can do, therefore, no sale.

So in practice that's not how the system works.

What about first employee in the country? Well, same problem. Google looks at the UK and says, hey, we'd like to hire people in Britain to do engineering and sales. But ..... it makes no sense, because hiring the receptionist for the new office will cost us a billion dollars in new tax, as suddenly our profits all get taxed twice.

So the scheme you outlined is not workable. It'd just mean nobody does business with the UK.

The usual variant people demand is "tax only the profits made in the UK" but this is also so vague and poorly thought out as to be unworkable. Where are profits made, exactly? This is easier to see with a company like Google or Facebook. The physical location where profits are made is unknowable because many countries contribute to the whole. For Amazon people tend to say, it's the sales to people in the UK, but then you're asking for a sales tax not a profits tax, and the EU VAT changes have now put this in place (at massive bureaucratic cost).

The way it works is that Amazon UK pays enormous licensing fees to Amazon USA for use of the brand. That way the money ends up back in America where it can be spent on things Amazon wants to spend it on.

The moment such a company paid money to the owner so they could buy a new TV or whatever, it'd count as personal income. So in a well designed tax system it'd not be quite that easy.

"and therefore corporate taxes are evil, and should be abolished, not raised." - if you do that then the people will have to pay more to make up the shortfall.

swillden's point is that it would be neutral. There is no shortfall, exactly. Tax reallocates resources that would have been used for other things, it's not like a mine that you actually dig gold out of.

Whilst governments might feel the need to raise personal tax rates if they no longer received corporation tax, as corporations are no longer being taxed that money will end up doing something else instead. It might lower prices, in which case paying more personal tax to government wouldn't change your standard of living. Or it might get paid out to shareholders, i.e. you or your pension fund. Or it might get re-invested into developing new products, which again would improve your standard of living to offset the fact that you have less money than before. Remember money is just a proxy, what ultimately matters is wealth not money. (or happyness)

At the moment personal taxes are high because not everyone pays their fair share of tax, that includes businesses and personal, if everyone did the right thing and paid what was owed, we'd all be taxed less.

A common misconception spread by propaganda in the press. Tax evasion rates in western societies are very low. Almost everyone already pays what they owe. The UK is not Greece - there's no blood to squeeze from that stone. The entire tax avoidance argument is that some people should owe more than the rules say they do.

Personal taxes in Anglo countries are high for a bunch of reasons, including but not limited to: extremely expensive and pointless foreign wars, increasing life expectancies that cause spiralling healthcare and pension costs as governements are loathe to adjust the retirement age, hangover from the banking bailouts, the general decline in labour force participation over time meaning more people on benefits, unaffordable tax cuts (USA), the massive interest payments on debt incurred by previous governments (UK), etc etc.

They are not high because immoral people are somehow dodging the tax man.

Free trade is only desirable to the stronger economy/ies in the bloc

Maybe you didn't notice all the little countries with tiny economies that bent over backwards to join the EU in recent years. Obviously a whole lot of countries came to the same conclusion independently - they wanted in, because they wanted access to the single market. If you're a specialist company in Bulgaria making a particular type of ball bearing and joining the EU means you can suddenly easily sell to a market of several hundred million people, that's a win. Yes, your lone local Bulgarian customer might decide to jump ship to a Spanish supplier once it gets easier to do so, but that's offset by the sudden ease of replacing them.

I don't think you can argue with this reality - if the EU only benefited large economies, then all the smaller Balkan and eastern European countries would have simply formed their own trading blocs. But they didn't. Your position assumes they are all stupid.

Amazon doesn't make profit in any country. But hey, would you prefer they sent the money from the UK immediately to Seattle? If the USA and EU were in a single trade bloc then they could certainly do that and cut Luxembourg out of the equation, but it wouldn't make any difference to the UK's tax take.

Uh, Amazon aren't taking billions out of economies. That's not how economics works. Amazon CREATE billions by the act of doing useful things, like selling people products at prices they want and managing complicated global supply chains. That's not exploiting helpless countries, and it's insanely dangerous to start thinking that it is. We do like Amazon selling us things, right?

I'm not an economist so correct me if I'm wrong here

You don't have to be an economist to understand this stuff. Governments will always be perpetually broke because they expand to fill whatever funding is available. Very few governments actually hold savings accounts (petrostates being a rare exception) - if they get new tax revenues, they immediately spend it or waste it and then go back to being broke again.

So it doesn't matter how much money the UK or Australia raise from taxing companies. It will never make any difference. Look at the recent UK election - despite that the country is drowning in interest payments (25% of the budget!!), politicians simply could not resist promising to lower taxes and spend more money. The SNP is flat out attempting to sabotage the Tories spending cuts as their main political strategy and even the Tories kept throwing in tax drops they can't afford as part of trying to get elected.

The UK could drain Amazon, Apple and Google dry and the UK would still be utterly, utterly skint. The UK will always be skint. In the unlikely event that it stops being skint for a moment, politicians will award pensioners more free bus passes or something and then it'll be skint again.

Meanwhile, those evil corporations everyone loves to think of as their personal ATM don't roll their dollar bills into cigars and smoke them, you know. Amazon is notorious for reinvesting ALL their revenue into the business, such that they never make a profit. It's because of that sort of behaviour that we have the Kindle, we have Amazon Web Services, we have (soon) flying drones that drop parcels at our door, etc. This stuff is to some extent zero sum - the money can either be spent by Amazon on improving Amazon stuff (which mostly benefits the global population), or it can be taken by governments and spent on giveaways to Brits or Ozzies or the French or whoever. But the money can't do both things at once.

Why should companies like Amazon get all the benefits of our country - working roads, efficient transport systems, a stable legal system, health facilities and crime prevention while paying nothing towards it

This is a really messed up way of looking at things. Amazon doesn't get the benefits of the UK - the people living there do! Amazon is just a convenient legal handle for a large group of people around the world working towards a common goal, with collectively owned assets. So let me turn that question around - why should that group of people, many of them not living in the UK, collectively pay for British roads that they may never drive on? Surely it's up to British people to pay for that?

And incidentally, the entire point of my post was that the UK no longer has a stable legal system as far as large corporations are concerned. A stable legal system would be one in which you can read the law and then know what you can or cannot do. The UK GAAR breaks that: you really have no idea whether your companies financial arrangements might be OK today and retroactively "unreasonable" tomorrow. It depends mostly on political winds, some arbitrary judgement by an HMRC bureaucrat, how in debt the country is etc.

I and lots of people in the UK are frankly sick of your attitude. If they are making billions from selling to UK consumers, they should damn well pay their fair share of tax on it. We're not asking for taxation of other countries to be paid to us, just our fair share from these heartless global behemoths. They're not working on your behalf buddy.

Frankly, I and many other people are sick of the UK attitude too. Yes you are asking for the taxation of other countries to be paid to you. Every time a company is whacked because they chose to pay Irish taxes or Luxembourg taxes instead of British taxes, you are demand that money be spent on YOUR needs instead of the needs of the people of Ireland or Luxembourg. Hey, guess what? That's a double edged sword.

Maybe tomorrow, France will decide that companies headquartered in London are all engaged in dirty tax evasion because the British corporation taxes are by no means the highest in Europe. They will argue that there's no real reason to be in London other than to avoid French taxes. Then maybe it'll decide to just slap a nice fat 75% tax rate on those companies, I heard Hollande likes that sort of tax level. And if that leads to job losses in Britain, well, they were heartless tax avoiders who just wanted to wriggle out of paying French pensions so fuck them, right?

Or what ...... do you think companies are bottomless money pits that every country can just pump without end?

By the way, I'm British myself. And the debate over tax avoidance there makes me embarrassed for my country. The UK is marching towards authoritarianism so fast it makes my head spin. Tearing up the rulebook in frustration and beating up on whoever is unpopular is certainly not the first step down that road, but it's an important one.

But somehow marketing in all these different languages isn't overwhelming enough to stop them from selling their goods in these countries.

Eh, yes, it is actually. Many online services aren't universally available throughout the EU because they aren't translated into the local languages, and it wasn't so long ago that we were reading here on Slashdot about how the EU Commission is annoyed by geo-blocking of services. These rules aren't just about Amazon and Google you know. They also apply to a huge long tail of smaller companies who given a choice between "having to respond to letters from the Bulgarian government, written in Bulgarian" and "spending the time on other things" will choose the latter.

And if you're worried about efficiency, let's remember that it would be FAR more efficient to only tax corporations, than to tax EVERY SINGLE CITIZEN.

No, it really wouldn't. This whole fiasco is demonstrating that very clearly.

Taxing people makes sense. People cannot be in multiple countries at once: figuring out if someone should be a taxpayer can be as simple as adding up how many days they spent in the country. People are what use government services. Companies don't use them anywhere near as much - companies don't get sick and go to hospital, they don't drive down roads, they don't draw pensions etc. Companies get the services of the legal system, although sometimes those "services" may involve being sued by a competitor and other times they have to pay fees to use the courts anyway.

What's more, the moral justification for taxation fails when applied to companies - they suffer taxation without representation. Companies cannot vote. Heck, they get demonised even for talking to governments, so voting is entirely out of the question.

The biggest problem with taxing companies though, is figuring out how to slice the pie between different governments. Unlike people, companies can be in many places at once. So suddenly every cash-starved government feels like they're entitled to a bigger piece of pie. It turns into a crazy tug of war with the company being torn apart in the middle.

In the old days this problem didn't matter much because large scale free trade is a relatively recent thing, so previous generations of companies were mostly based in one or two places. But sometimes, especially with modern companies, there's no really good way to divide the spoils up. Where does Google make its profit? Is it in California where the search engine is developed? Is it in Ireland where the advertising contracts were signed? Is it in Germany where the datacenter handled the request, or Oregon where the data the datacenter served was generated? Is it where the customer who clicked the ad is located, or the customer who paid for it? If it's the latter, what if the customer is itself a transnational company?

These questions are enough to feed an army of lawyers and accountants for all eternity, and the end result will still seem unfair to big groups of people. Accusations of "avoidance" (whatever that means) will still fly. There is just NO WAY to do this well.

The logical conclusion to all these problems is to simply zero out corporation taxes entirely, and raise revenue from the individuals who live there. Of course this is deeply unpopular because corporation taxes feel "free" .... it's harder to understand the impact they have, whereas it's easy to understand the impact that less money in your wallet has. So I think we will continue to see a never-ending stream of asshattery and countries finger-pointing at each other over tax, especially tax of perceived foreign companies, because taxing them looks to politicians suspiciously like free money.

I am not contradicting myself. The point of a single market is that the distinction between national and multinational companies disappears. Inside the EU, as conceived, there is no such thing as a national company. There are only European companies, selling to Europeans. The concept is supposed to be as meaningless as talking about "state companies" would be in America. There's no such thing - people only talk about companies being American, regardless of which part of America they may have physically originated in.

The politicians and bureaucrats who set up the EU/EEA may have been thinking of short term benefits to pre-existing companies. But the system created was very straightforward in its goals - to tear down national boundaries across the trading bloc, starting with tariffs and later, standardising bureaucracies to eliminate red tape. And the way corporation and sales taxes worked were chosen to meet those goals.

And if it was the latter, why is the Commission investigating whether the arrangements negotiated between various companies and the Luxembourgeois tax authorities constitute illegal state aid?

Because the commission is a creature of EU politicians who represent countries that are, by and large, broke (except for the Germans). The notion that setting taxes lower than your competitors is illegal state aid didn't crop up until the European debt crisis, which isn't surprising because "taking less of your money than others would" is only "aid" under some very strange definition of the word. Aid normally would mean giving money, not taking it. But many of these laws are vague enough to be stretched to meet more or less political goal, and scapegoating foreigners for domestic problems is always popular.

I would not have any problem if their actual warehouses were all in Luxembourg and all shipments departed from there; however, they most certainly do not

So what? Why is the last hop on a long supply chain special to you, exactly? Many of those goods were made in China and shipped through several warehouses before they ended up at whichever facility dispatched the product to you - so picking that one specifically as where tax is owed is no less arbitrary than any other place.

The EU rules are quite clear about this and always have been. Attempting to carve up a company between countries is a losing proposition that explodes complexity and discourages trade, so companies are free to choose where their headquarters are and where they book sales. It requires nothing more than a nameplate, technically. This may seem "unfair" but any other scheme you can think of is ultimately no fairer.

The single market was intended to be used for simplification, not for tax avoidance.

See, this is why I hate the term "tax avoidance". It's meaningless. It literally doesn't exist and this statement is a great example of why not - simplification is tax avoidance. Every time a British company ships something to someone in Poland overland via Germany, and doesn't have to fill out dozens of company registration and tax forms in Poland or Germany, that is in some sense "avoiding" tax. But it's avoiding it because of the simplification. You can't have it both ways - paying taxes in foreign countries adds complexity to trade and results in less of it ..... and that's why trading blocs evolve.

Basically every argument I've ever come across about tax avoidance founders immediately, due to this problem. Attempting to define tax avoidance is like trying to define terrorism. People think it's simple and they know it when they see it, and then the moment they try and nail down exactly what it means they realise it's nothing more sophisticated than "behaviour I don't personally like".

Yes that's what this is all about. It's not to do with profits per se (Amazon makes none), it's to do with sales taxes. So absolutely prices will go up.

Actually, I think this move has got nothing do with the UK specifically. It's to do with the EU VAT changes that make Luxembourg no longer advantageous to sell from. Those changes came at grievous cost to small businesses but the EU doesn't seem to care.

Anyway. This whole thing is bad news. The UK is currently trying to throw the idea of tax law in the bin by passing stuff like the "General Anti Avoidance Rule", which literally says anything the government doesn't like is illegal (retroactively), i.e. it's not a law at all, but rather a return to the time of kings. The "diverted profits tax" amounts to the same thing - if the government sees something it wants, it'll take it, and there's nothing resembling normal legal processes to stop them e.g. no requirement to specify exactly what they will take and when.

In effect the UK is enacting an equivalent of America's civil asset forfeiture schemes, but for business rather than individuals, and with the justification of balancing budgets rather than the war on drugs. But they amount to the same thing - the law says they can seize money whenever they like, without needing any meaningful justification. And if you don't like it you can appeal to the same people who took the money in the first place.

It took decades of civil asset forfeiture abuse before it became bad enough to trigger real investigations/reforms in America, and the damage inflicted on civil society has been huge. When the laws were passed in the 1980's it's safe to say that the authors didn't really think through what would happen over the long term, even though the outcome was rather predictable.

I think what the Tories are doing will be the same - if these new taxes aren't struck down by the courts then in the long run they will inflict lasting and serious damage. It'll be hard to see at first because the new powers will only be used against very high profile and controversial cases, and then as governments constantly find they're out of cash, they'll go on tax raids ever more frequently with ever more dubious justifications as to why it's OK. And the impact will be that some businesses leave, others simply don't establish bases in the UK at all, and some businesses that would have been good are just never created in the first place.