Thread by @PJChapman74

Very boring thread!

By now, the “Brexit was about tax avoidance” conspiracy theorists mostly know they are peddling nonsense. However, what I perhaps haven’t articulated is that the Anti Tax Avoidance Directive contains the biggest impact on our tax avoidance…

…rules the EU has ever had, and tax avoiding companies love it!  It’s already cost UK taxpayers £millions and if we stay in the EU it will probably continue to cost us £millions. You want to know what damage the Single Market has done to ordinary people? Read on.

First of all, open the directive itself EU 2016/1164. Go way down, past where it says Chapter II – find Article 7, or just search for “Controlled foreign company rule” – 2 clicks and you’re done. Para 2.

eur-lex.europa.eu/legal-content/…

The godsend for tax avoiding companies everywhere is this statement, “This point shall not apply where the controlled foreign company carries on a substantive economic activity supported by staff, equipment, assets and premises, as evidenced by relevant facts and circumstances.”

What does that mean? Well, as long as you have staff, sat indoors at computers in your Luxembourg subsidiary it does not matter that the purpose of that subsidiary is to avoid UK tax. So, I want to book some very lucrative, profitable, taxable, contracts then that…

…business can be directed to my Luxembourg/Irish subsidiary. Surely the EU are the good guys, sent to save us from tax avoidance not enable it? Well, let’s here from the EU – Cadbury Schweppes vs HMRC:

europa.eu/rapid/press-re…

“…the establishment by a parent company of a subsidiary in another Member State for the purpose of enjoying the more favourable tax regime in that other State does not constitute, in itself, an abuse of freedom of establishment.”

Perhaps read that sentence a couple of times – this is the principle that is now in the Directive. You are absolutely free to have a subsidiary in Luxembourg/Ireland or any EU member state PURPOSELY to avoid domestic tax in the parent company’s jurisdiction. This is the…

…reality of the impact of the EU on corporate tax avoidance. To those who wonder what the purpose of the 30,000 corporate lobbyists that reside in Brussels is, this will come as no surprise. The only way, within the EU, to truly resolve this friction is to remove tax policy...

...from the member states. Which is of course what the CCCTB is ultimately supposed to achieve, and only goes to reinforce my own reason for voting leave.

https://twitter.com/PJChapman74/status/1080510227554975744?s=19