♠ Posted by Emmanuel in Africa at 7/14/2014 10:45:00 AM
|Coming to a theater near you: Chicken Wings of Global Deception.|
Today's Exhibit A is Nando's, the South African spicy chicken chain that has made it big in other parts of the world, notably the United Kingdom where it features on many high streets along with the similarly ubiquitous Marks & Spencer, Pret A Manger, Starbucks, etc. (It also features "Comrade Bob" Mugabe as an ad pitchman.) The Guardian has a neat video clip tracing the money trail among its different shell companies the world over that ultimately benefit Nando's South African owners. Why the complexity? Simple: to avoid taxes:
Nando's is fast becoming Britain's go-to place for spicy chicken. But behind the simplicity of their menu lies a complex offshore network of money that involves the Isle of Man, Ireland, Guernsey, the Netherlands, Ireland, Luxembourg and the British Virgin Islands. But how does it all end up in Jersey? And what is the connection to a grand 16th century estate in Wiltshire? Guardian special projects editor James Ball explains.The accompanying article is also interesting and adds detail. Isle of Man, Guernsey, BVI...can't fault the locations, mate. It makes me want to play Duran Duran's "Rio" in the background. Anyway, Accountancy Age has more:
[Nando's] is the latest big-name brand accused of operating a complex offshore tax avoidance scheme. A £750m trust held in the Channel Islands sits at the top of the structure, which sees the South African chain's capital flow through Malta, the Isle of Man, Guernsey, the Netherlands, Ireland, Luxembourg, Panama and the British Virgin Islands, the Guardian reported...The company claims that the seemingly complex structure is unavoidable given Nando's multinational operations, and that it pays a lot in UK taxes anyway:
Profits then end up in owner Dick Enthoven's Taro III trust in Jersey. The trust, not liable for UK tax, contains no less than £750m and possibly much more, the newspaper claimed. While entirely legal, the structure is opaque significantly reduces the amount of tax the company and the family pay around the world. Nando's owners also legally reduce their UK corporate tax bill by making various permissible payments offshore, before then paying UK corporation tax on the remainder of its profits.
Nando's said in a statement:"We want to set the record straight. Last year we paid over £12m in corporation tax, 23% of the operating profit we made. The year before we paid £10.4m. "Serving chicken in so many different places does make our parent group's financial structure complex, but we have always been open and honest about the tax we pay in the UK.To be fair, Nando's is hardly the only chain store operating in the UK accused of using complex and obscure structures designed to reduce tax obligations there. Forbes' Tim Worstall adds that the Guardian itself uses similar structures for its non-UK operations. (I am skeptical about classifying the UK as a tax haven of the same magnitude, though.) At any rate, it makes me want to pitch a thriller to John le Carre entitled Chicken Wings of Global Deception. Heck, maybe I should write the novel myself since it sounds like a bestseller. I could certainly use the royalties from the movie...