Twitter under scrutiny?

Twitter could become the latest high profile company to come under scrutiny for its tax arrangements after reporting UK profits of less than £100,000.

Such a set up, similar to a controversial arrangement adopted by internet giant Google, would mean that any profits from the sales would not be subject to tax.

accountant palmers green

The point that needs to be made here is that this is not tax evasion: that’s the illegal stuff. It’s also not tax avoidance, tax dodging nor even paying less tax than might reasonably be due. This is simply the way that the international tax system works. Corporation tax is payable where the business is located. In Twitter’s case, in Europe, that’s in Dublin in Ireland and that’s where tax will be assessed.

This is exactly what the European Union set up the tax system to encourage. The idea is that the Single Market should really be a single market. In order to trade in all 28 EU you need only to have a base and a corporation in any one of those 28 countries. You can then sell right across that single market and you corporation tax is assessed in that one country where you have your base. And that’s it. That’s the way it was set up, that’s the way it’s supposed to work.

 

 

And as to the idea that Twitter, by not paying tax in the UK, provides no value to the UK, this is simply ridiculous. The value of Twitter to people in the UK is that people in the UK get to use Twitter. And that’s the only value that’s even worth considering, that consumer surplus.