Discussion
sidicks said:
speedyman said:
You mean coffee bought for 100 euro a bag by Starbucks Nl. and cross charged at 10000 euro a bag to Starbucks uk who claim that as a legitmate expence.
You don't know what you are talking about. Maybe understand the rules before you complain about them!!See 'transfer pricing rules' for more detail!
Now that is totally legal - doesn't make it morally right......
B'stard Child said:
It doesn't matter what the rules are for the purposes of discussion - it an example where a company is using the rules to it's own advantage
Now that is totally legal - doesn't make it morally right......
I'll ask you the same question?Now that is totally legal - doesn't make it morally right......
Why is it morally wrong for a company to offset genuine expenses against it's liability to tax, just as every other business in the world does?
You appear to be suggesting that taxation should be charged on revenue rather than profit, do you not see a bit of a problem with that?
Edited by sidicks on Tuesday 6th December 21:14
sidicks said:
B'stard Child said:
It doesn't matter what the rules are for the purposes of discussion - it an example where a company is using the rules to it's own advantage
Now that is totally legal - doesn't make it morally right......
I'll ask you the same question?Now that is totally legal - doesn't make it morally right......
Why is it morally wrong for a company to offset genuine expenses against it's liability to tax, just as every other business in the world does?
sidicks said:
B'stard Child said:
It's not when in "Bold" however I'll ask you the same back - is it morally wrong for a company to offset non genuine expenses against it's liability for tax
I believe it is illegal too. Which of those Starbucks expenses i listed are not genuine?So buying beans at one price in one location - doing nothing with them and then charging 20% more plus delivery to the "franchise"
This is assuming they are doing nothing with them
B'stard Child said:
That's good
So buying beans at one price in one location - doing nothing with them and then charging 20% more plus delivery to the "franchise"
This is assuming they are doing nothing with them
The price charged for coffee has to be an arms length price.So buying beans at one price in one location - doing nothing with them and then charging 20% more plus delivery to the "franchise"
This is assuming they are doing nothing with them
Why is that unreasonable?
sidicks said:
B'stard Child said:
That's good
So buying beans at one price in one location - doing nothing with them and then charging 20% more plus delivery to the "franchise"
This is assuming they are doing nothing with them
The price charged for coffee has to be an arms length price.So buying beans at one price in one location - doing nothing with them and then charging 20% more plus delivery to the "franchise"
This is assuming they are doing nothing with them
Why is that unreasonable?
If they sold to the franchise at cost price they would be accused of transferring profits from, and evading tax in, the buying location.
Dr Jekyll said:
+1
If they sold to the franchise at cost price they would be accused of transferring profits from, and evading tax in, the buying location.
There are plenty of positives and negatives of 'globalisation' worthy of discussion. Likewise there are plenty of issues with 'tax avoidance' If they sold to the franchise at cost price they would be accused of transferring profits from, and evading tax in, the buying location.
However, let's address the real issues not pretend that perfectly reasonable activities by some companies are unreasonable 'tax avoidance'!!
sidicks said:
B'stard Child said:
That's good
So buying beans at one price in one location - doing nothing with them and then charging 20% more plus delivery to the "franchise"
This is assuming they are doing nothing with them
The price charged for coffee has to be an arms length price.So buying beans at one price in one location - doing nothing with them and then charging 20% more plus delivery to the "franchise"
This is assuming they are doing nothing with them
Why is that unreasonable?
Lets say they've paid the Market price for the beans in one location
The beans are also on the market for the same price in the other location
Stretching arms length principle if the franchise has to buy from the source that charges 20% more - same price as independents??
B'stard Child said:
I'm familiar with that - companies I've worked for normally use 10% - I'm not sure there is an industry norm but ignoring that
Lets say they've paid the Market price for the beans in one location
The beans are also on the market for the same price in the other location
Stretching arms length principle if the franchise has to buy from the source that charges 20% more - same price as independents??
Where does 20% come from?Lets say they've paid the Market price for the beans in one location
The beans are also on the market for the same price in the other location
Stretching arms length principle if the franchise has to buy from the source that charges 20% more - same price as independents??
The requirements are for an arm's length price.
sidicks said:
B'stard Child said:
I'm familiar with that - companies I've worked for normally use 10% - I'm not sure there is an industry norm but ignoring that
Lets say they've paid the Market price for the beans in one location
The beans are also on the market for the same price in the other location
Stretching arms length principle if the franchise has to buy from the source that charges 20% more - same price as independents??
Where does 20% come from?Lets say they've paid the Market price for the beans in one location
The beans are also on the market for the same price in the other location
Stretching arms length principle if the franchise has to buy from the source that charges 20% more - same price as independents??
The requirements are for an arm's length price.
sidicks said:
B'stard Child said:
Well I'm always keen to learn so if you have time would you explain?
Basically a fair market price, so not a large premium or a large discount.Yet the coffee example is 20% and it wasn't fair market price because the same goods were available on the open market at 20% less than the price that was being charged
Oh the 20% (god I actually clicked on a Guardian Link)
https://www.theguardian.com/business/shortcuts/201...
Edited by B'stard Child on Tuesday 6th December 22:58
sidicks said:
B'stard Child said:
I'm familiar with that - companies I've worked for normally use 10% - I'm not sure there is an industry norm but ignoring that
Lets say they've paid the Market price for the beans in one location
The beans are also on the market for the same price in the other location
Stretching arms length principle if the franchise has to buy from the source that charges 20% more - same price as independents??
Where does 20% come from?Lets say they've paid the Market price for the beans in one location
The beans are also on the market for the same price in the other location
Stretching arms length principle if the franchise has to buy from the source that charges 20% more - same price as independents??
The requirements are for an arm's length price.
B'stard Child said:
Well I'm always keen to learn so if you have time would you explain?
It's just a price or deal that could be argued to be a normal value in a commercial sense, "argued" being the operative word - you'd need a team of contract lawyers, about a £squizzilion and 43 years to actually get anyone to make a decision though if I know owt about contract laywers. https://en.wikipedia.org/wiki/Arm's_length_princip...
FredClogs said:
B'stard Child said:
Well I'm always keen to learn so if you have time would you explain?
It's just a price or deal that could be argued to be a normal value in a commercial sense, "argued" being the operative word - you'd need a team of contract lawyers, about a £squizzilion and 43 years to actually get anyone to make a decision though if I know owt about contract laywers. https://en.wikipedia.org/wiki/Arm's_length_princip...
B'stard Child said:
So all the companies I've worked at it's 10%
Yet the coffee example is 20% and it wasn't fair market price because the same goods were available on the open market at 20% less than the price that was being charged
Why would an 'arm's length' deal be done at cost price?Yet the coffee example is 20% and it wasn't fair market price because the same goods were available on the open market at 20% less than the price that was being charged
B'stard Child said:
Oh the 20% (god I actually clicked on a Guardian Link)
https://www.theguardian.com/business/shortcuts/201...
'the company says it pays higher prices because it only buys premium coffee beans."https://www.theguardian.com/business/shortcuts/201...
So the 20% isn't 'like-for-like'?!
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