Why some firms aren’t taxed by data rules

The data protection issues that Simon Davies highlights are a side effect of offshoring for tax avoidance (Online gambling industry ‘ignores’ data protection and privacy laws).

The internet is destroying the meaning of location for tax purposes. When companies are really located in the cloud, their physical location can be just a filing cabinet in a lawyer’s office in a tax haven.

This practice also gives companies an opportunity to dodge compliance with the Data Protection Act – but it’s a side benefit to the tax avoidance.

We will see more of this until it’s regulated. But I suspect when it is regulated, it will be as a way of closing the tax loophole.

Peter Gingham