Tax Transparency and Corporate Tax Avoidance

This analysis will look into the emerging global trend for increased tax transparency from large businesses and corporations. Tax transparency has been a growing topic globally and there has been some recent progress in several countries. This analysis will begin by looking into the motivation behind increasing the amount of transparency around a business’ tax affairs. After exploring some key driving factors, a few of the new major tax initiatives and the details encompassed in them will be discussed. The specific countries that will be focused on are the United States, Australia, and the United Kingdom. Overall, this analysis is intended to be an unbiased look into the present developments occurring on how large businesses should deal with their tax affairs. It is apparent that the issue of tax transparency is being addressed in various ways in different countries, and barely addressed at all in some. The future of corporate tax transparency is unclear, but changes are being implemented today that must be followed in order to see their full impact in the future. This analysis will also briefly look into the impact that increasing tax transparency has had so far as well as possible speculations for the future

Putting the Genie Back in the Bottle - or Adapting to the New Reality? Response to the CMA's 'Online Platforms and Digital Advertising' Market Study Interim Report

Online platforms grow exponentially. Unexpectedly for most, they have reached the top of the world rankings of the companies with highest market capitalisation. Today they keep demonstrating an unprecedented dynamic of further expansion, increasing vertically and horizontally, entering new geographic and product markets, synchronising, synergising and cross-fertilising their data, algorithms and user experiences. Like King Midas, everything they touch, they turn into gold, instantly creating added value for their customers and shareholders. The fuel that keeps the engine on, is big data: collecting –> categorising –> profiling –> synchronising –> predicting ¬–> targeting –> recommending –> satisfying –> and thereby being able to collect more: this is how the perpetual business cycle of Bentham’s digital panopticon and (again Bentham’s) digital ‘happiness machine’ functions. Being by its very nature rather sluggish and inert, the mainstream perception of online platforms was until recently deeply embedded in an outdated narrative of garage-entrepreneurship, egalitarianism, liberal-democratic altruistic evangelism, helping humankind to bid a final farewell to authoritarianism, obscurantism and propaganda by eliminating borders and multiplying possibilities for everyone. It is only the recent turbulence caused by fake news and the post-truth society, epitomised in the CambridgeAnalytica scandal, that has triggered a reconsideration within mainstream societal opinion as to the multifaceted role of online platforms. UK/EU law and policy try to take a lead in these processes of reconceptualisation. They aim inter alia to regulate the uncontrolled growth of online platforms in order (i) to protect competition and consumers, but also implicitly (ii) to mitigate the ever-expanding gap between the UK/EU on one hand and the US and China on the other, catching up the time and momentum that was lost in the decade of digital naivety. As the Interim report explains, both online search- and online display advertising markets are highly oligopolised with Google for the former and Facebook & Google for the latter not only holding significant shares of the markets (referred to in the Interim Report as ‘platforms with ‘Strategic Market Status’ (SMS)) but also demonstrating a continuous, incontestable dynamic of further increase. Such well-known and widely discussed principles of the business of digital advertising as (i) network effects, (ii) the power of big data, (iii) the winner-takes-most and (iv) competition for the market convincingly show that the trend is stable, and the current incumbents will continue strengthening their dominance. The inevitability of such universally observed systemic features of the digital economy as network effects and winner-takes-most also raise a more fundamental question: is it even possible to expect any meaningful and stable form of effective competition from the markets that demonstrate these characteristics as inherent, or would it not perhaps be a more realistic option to design the regulatory framework in a way that would internalise it from ‘bug to feature’, treating platforms with SMS as natural monopolies / de facto standard setters / public utilities / undertakings providing services of general economic interest or as common carriers? Putting it less controversially: would it not make more sense to perceive both approaches as non-conflicting and mutually supportive? Measures taken to protect the competitive process and consumer interests also help to set expectations for higher accountability from platforms with SMS. And vice versa, imposing stricter regulatory requirements on the platforms with SMS would also provide their competitors (and consumers) with a better chance of competing (and consuming) from a specific platform on the merits. The scope of the market study, and the overall legitimacy mandate of the CMA, requires it to focus on the issues related to the interests of consumers and competition. However, this does not mean that the broader spectrum of remedies, related to shaping the regulatory landscape in ways which would create room for newcomers by making the incumbents more fiscally accountable, should be beyond consideration. Both approaches constitute the subject matter of competition policy sensu lato, particularly given that the most plausible outcome of the market study will take the form of a recommendation to the government

The impact of UKTI trade services on value of goods exported by supported firms

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Five minutes with Patrick Dunleavy: “The Treasury have woefully misapplied our research estimates”

In late May 2014, the UK Treasury released a press release ahead of a major report UK minsters were issuing on the costs of setting up an independent Scottish state. Joel Suss, Managing Editor of British Politics and Policy blog, asks Patrick Dunleavy about the way in which the Treasury used his research findings to arrive at a figure of £2.7 billion, and about his Twitter intervention raising concerns about it, which caused a furore. How did this episode come about, and does it serve to illustrate the problems of mis-communication between civil servants and researchers

Do electric vehicles need subsidies in the UK?

We analyse the total cost of ownership of petrol, diesel, hybrid electric vehicles, plug-in hybrid electric vehicles and battery electric vehicles in the UK over 2017-2029. We do this for large, medium and small cars, under assumptions of 0%, 6%, 30% and 60% discount rates. We find that some electric car models from mass market brands are close to reaching cost parity with their petrol, diesel and hybrid counterparts, but subsidies would accelerate their uptake, especially for impatient consumers with high discount rates. Plug-in hybrid electric vehicles are not worth the effort because although relatively low, their CO2 emissions are non-zero. A subsidy of £4,500 or an exemption from the 20% VAT, perhaps capped at £4,500, would accelerate mass market penetration of battery electric vehicles in the UK. If decarbonising road transport were not as urgent as it is, the market for battery electric vehicles could be left to develop on its own, without government intervention. However, because the cost of batteries is not falling fast enough, subsidies are needed in the short term

Scotland’s international export performance : some recent evidence

This paper outlines the latest data and evidence on Scotland’s export performance and highlights key changes over the past decade. Exporting, for the purposes of this paper, is defined as sales to overseas markets. Scotland’s international exports have changed significantly over the past 10 years. The overall nominal value of international sales has grown since 2005 but the number of exporting businesses has declined, with the result that Scotland’s exports are increasingly reliant on the performance of fewer firms. The sectoral composition of Scottish exports has also changed significantly: in manufacturing, the main change has been from electronics to food & drink and chemicals. Additionally, the overall contribution of Services exports, such as financial and business services, has been important. Developed economies, particularly the EU and US, are Scotland’s largest export markets with emerging economies beginning to comprise a larger proportion of Scottish exports, albeit from a low base. A key factor in raising Scottish exports from current levels will be to increase the number of exporting businesses. Evidence suggests only a very small number of non-exporting businesses (3%) plan to start exporting. However, for example, if Scotland had an export rate similar to that of the UK there would be an additional 2,500 exporting businesses

Investment, Deficits, and the Transition from Feudalism to Capitalism: An Exploratory Heterodox Analysis and Conjecture

Investment in capital, new technology, and agricultural techniques has not been considered endeavors worthwhile in a medieval economy because of a lack of strong property rights and no incentive on the part of lords and barons to lend money to or grant rights peasant farmers. Therefore, the medieval economy and standards of living at that time often have been characterized as non-dynamic and static due to insufficient investment in innovative techniques and technology. The capital investment undertaken typically would have been in livestock, homes, or public investment in canals, bridges, and roads, although investment in the latter would have been hindered by a fragmented political system of fiefdoms and lack of a unified national government. During the mercantilism era, these conditions are claimed to have improved, although much investment and economic activity are deemed to center around trading and small producers. This paper attempts to demonstrate empirically that a productive and sufficient level of public and private investment out of accumulated capital income, taxation, and rents does not have a real impact on economic per capita growth until around the 1600s in Britain perhaps due to the beginning of a strong, central government, increased property rights as well as to the level of capital, tax, and land income achieving an adequate threshold amount. This would also be about the time of capitalism’s ascent as the dominant economic system in England. Even then, dramatic increases in investment and economic growth do not appear until the late 18th Century when investment as a share of the economic surplus reaches a sufficient threshold. According to the heterodox economics and exploratory analysis done in this paper, the types of investment, threshold amounts of investment out of profits and rents seem to matter when it comes to a growth path raising GDP per capita and net national income to higher levels

Taxation of Non-Resident Entertainers and Sportsmen: The United Kingdom\u27s Definition of Performance Income and How it Ought to be Measured

This Note analyzes the U.K. approach to taxation of income earned for U.K. performances by foreign entertainers and athletes and agrees that the country of performance is the dispositive factor in determining which country is entitled to collect income tax on the endorsement income attributable to the performance. In Part II, this Note discusses the background of the relevant U.K. tax law. It reviews the U.K. court decisions in Agassi v. Robinson that led to the taxation of non-resident entertainers and athletes on endorsement contracts with companies that have no tax presence in the United Kingdom. Then, this Note discusses the U.K. acceptance of the substance-over-form tax doctrine after Agassi. In Part III, this Note evaluates the applicability of other sources of relevant international tax law, including the Organization for Economic Cooperation and Development (―OECD‖) and the United Kingdom—United States Bilateral Double Taxation Agreement. In Part IV, this Note recommends a definition for ―performance income‖ within the OECD Model Tax Convention on Capital and Investment. By working through the different possible types of compensation for the same service, this Note arrives at a definition consistent with income tax theory. The resulting definition parallels the same definition upheld by the U.K. courts. This Note also chooses a means for calculating the amount of income tax a country should charge from a performer‘s overall endorsement contract. Finally, the Note concludes in Part V

Working Abroad: An Analysis of the Impact of the Finance Act 2008 on Non-Domiciled Workers in the United Kingdom

The purpose of this article is to outline some of the fundamental principles of U.K. taxation concerning individuals who divide their time in between the U.K. and other countries, and specifically, with reference to the changes in the Finance Act 2008. An individual\u27s status of residence within the U.K. will have an impact on their tax burden, which needs to be taken into consideration when tax planning. It is important to note that the legislation found in the Finance Act 2008 can affect individuals irrespective of nationality. This article will focus on three main areas of taxation: firstly; a discussion of some of the nomenclature concerning domicile, secondly, an outline of the recent changes in tax law found in the Finance Act 2008, and thirdly, a critical analysis of the potential impact of these changes on non-domiciled individuals