Read Private Eye - they cover this kind of stuff brilliantly!
Agreed in principle.
The problem is... if you're a multinational company, you might have (for example) your offices in Ireland, your sales team in Germany, using servers based in the UK and backed up by a tech support team in India - and these teams help to generate sales all over the World. In that kind of situation it's extremely hard to say with any certainty which of those countries your profits were made in. How on Earth do you determine how much tax should be paid in the UK, how much in Germany, how much in France (where you didn't have anyone operating but customers there still bought your product) and so on? So of course, many multinationals will take advantage of that vagueness to declare virtually all their profits in whatever country the tax they'd have to pay is lowest.
It's not at all fair on small businesses that are only based in one country and can't afford to employ top-notch accountants to arrange their financial affairs so as to knock a few million off their tax bills. But it's not an easy problem to solve when it crosses international boundaries - with every country having a completely different set of tax regulations. I'm pretty sure that is why you get those 'sweetheart' tax deals - for HMRC it's pragmatically the best option to get some tax from those companies without having to pay lawyers potentially millions of pounds to argue about how much money was liable for tax in which country.
^^agreed ^^
The problem is that we have some politicians who either don't understand the complexities or who willingly pretend things are much simpler to appears an electorate who don't understand the complexities.
One of the Labour Shadow Cabinet recently showed a great example of this when she gave the impression she didn't understand the difference between Amazon's revenues and Amazon's profits - suggesting that they should have paid significantly more tax because of how high their revenue was (ignoring the fact that some companies can have a huge revenue and fail to make much profit!).
Taking Amazon as an example (as they are the poster boys for excess here), if I buy a £10 book from them, I'm ordering from a Luxembourg branch of an American company who pay a UK company to deliver it - Amazon's accounts will show something like I've paid the Luxembourg company £10.00 and they've paid the UK firm 50p to deliver it, which is the cost of delivery (i.e. the UK company makes no profits, as the revenue allocated to it is only enough to cover costs), so the "profit" is made by the Luxembourg company - no coincidence that corporation tax is significantly lower there.
Same with Google, who (IIRC) claim that most of the work done selling adverts in the UK is actually carried out in Dublin, where Irish taxes are lower than British ones.
Or Starbucks, who can claim that the majority of profit on your £3 coffee is going towards the licensing wing of the company (in the US) rather than to the bit that you bought the drink off (i.e. if Seattle charge local shops a quid for the licensing mark up on every drink that they sell).
What's the way round this? Can you force them to declare more of their revenue as actually being in the higher tax countries? Doubtful! The only way would be multinational agreement between Governments to at least ensure common standards (say, something like a Europe-wide jurisdiction, that stops companies playing one country off against another?).
The UK can't force other countries to increase their tax rates to UK levels (imagine the tabloid outrage if Germany tried to force the UK to increase our rate of corporation tax to match theirs!), so companies are always going to be able to shift revenue around the world on paper - I think there's an American state that does a lot of this (Delaware?) - figuring that they are better off by getting a tiny amount from lots of big companies than getting nothing.
And Governments are cash strapped and can't afford the smooth lawyers that big business can pay for, so this will continue to go on. Especially as a lot of the Government people looking at laws are those conveniently "loaned"/ "seconded" from the big accountancy firms (who have a clear interest in getting lax laws that their rich clients can drive a coach and horses through).
Finally, whilst this is obviously a problem and a massive reason for lower tax rates, its not the only one - but its easier to whip up populist outrage against Google/ Amazon/ Starbucks than to suggest reform of the overall tax situation. For example, I'd like to see moves to stop people buying firms and then loading them with huge debts (so that the firm never makes a profit on paper as it is paying a crazy rate of interest on the loan to a parent company) - maybe a maximum level of interest that could be mitigated on loans for tax purposes (to stop some of the crazier examples of this), but it's not going to get much attention compared to some outraged Facebook post about nasty American companies not paying much tax on £1bn of revenue
