UK Government powerless to force multinationals to declare profits

The British Government is powerless to stop large multi-national companies like Starbucks and Google from paying almost no tax on their profits in this country, Britain’s most senior tax official admitted today. Lin Homer, Permanent Secretary of Her Majesty’s Revenue and Customs, told MPs the Government was currently unable to prevent big international corporations from declaring their profits in foreign countries with tiny tax rates - even if they made those profits in this country.

Next week senior executives from the coffee chain Starbucks are due to face MPs on the Public Administration Committee to explain why they have only paid £8.5 million in Corporation Tax despite in the last decade despite racking up £3bn in sales in the UK.

Officials from Apple and Google may also be called to give evidence to the Committee.  Last year Google paid £6m in tax on a turnover of £395m while Apple is thought to be paying £14.4 million in tax on more than £1 billion of sales.  It has been claimed that a more realistic tax bill would be closer to £570m.

More on The Independent and Skelpt Arse

£13tn: hoard hidden from taxman by global elite

A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion (€11tn -$21tn) of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.

James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.

He shows that at least £13tn – perhaps up to £20tn – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy". According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier.

The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.

More on The Observer - The rise of the overclass on The Telegraph

Denmark introduces world's first food fat tax

Denmark has introduced what is believed to be the world's first fat tax - a surcharge on foods that are high in saturated fat. Butter, milk, cheese, pizza, meat, oil and processed food are now subject to the tax if they contain more than 2.3% saturated fat.

Some consumers began hoarding to beat the price rise, while some producers call the tax a bureaucratic nightmare. Others suggest that many Danes will simply start shopping abroad.

Danish officials say they hope the new tax will help limit the population's intake of fatty foods. However, some scientists think saturated fat may be the wrong target. They say salt, sugar and refined carbohydrates are more detrimental to health and should be tackled instead.

BBC News

Capitalism

Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study by a Washington think tank said on Wednesday.

At a time when lawmakers are facing tough choices in a quest to slash the national debt, the Institute for Policy Studies said it also found many of the companies spent more on lobbying than they did on taxes.

Reuters

A Scandal (USA)

Senator Sanders' Top 10 Worst Corporate Income Tax Avoiders: More here