In my last post about what I learnt at a CCLA seminar I said that, in suggesting that better returns were to be obtained from overseas growth funds, the point was made that it depends on where the money is made, not where the company is quoted on the stock exchange or where its headquarters are. The bigger returns, and faster economic growth, are in fast developing countries, not the developed world of the UK, Europe and the US.
I found this article on the BBC website, which begins with looking at the controversy about Amazon not paying any corporation tax in the UK despite their substantial sales because their European headquarters are in Luxemburg, but it goes on to describe how multi-national/trans-national companies operate around the globe and use transfer pricing to minimise liabilities and move profits to the lowest tax jurisdictions. Some of that may make analysing companies' activities for investment (let alone tax) purposes more difficult, but the article gives a useful insight into the activities of some of our household and other names that operate around the world and is a reminder that sometimes we in our locality are a very small part of a much bigger picture.
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