taxavoidance
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Tim Cook says EU tax ruling is 'total political crap'
Apple and other giant tech companies have long stashed cash overseas where they've paid less taxes on it, but the days of that happening could be numbered. Earlier this week, the EU said that Apple must pay back a whopping $14.5 billion plus interest because of an illegal tax deal between the company and Ireland. Unsurprisingly, Apple is appealing the ruling, and CEO Tim Cook is angry at the way the company's actions have been characterized.
Facebook changes how it pays tax in the UK
Facebook has announced that starting this April, it'll radically simplify its business arrangements in the UK. Boor-ing, right? Except this means that the social network's tax dealings will now be much more transparent. It's a big deal because, until now, the company has been accused of avoiding paying its fair share. After all, in 2014 it paid less than $7,000 despite the UK being its biggest overseas market. It somehow managed to pay a rate of just four percent on its operations, despite the going rate for businesses being 20 percent, so you can see why people were angry.
Australia to have Apple, Google disclose tax arrangements
According to a Reuters story today, Australian officials are planning to have large corporations like Apple and Google disclose their tax arrangements in an attempt to crack down on alleged tax avoidance by multinationals. Australian Assistant Treasurer David Bradbury said that the "increasingly borderless global economy means big firms often have no tax liability in a country." How do corporations manage to avoid paying taxes even in countries where they have a major local presence? Some multinationals have been accused of moving income to countries like Ireland (with a corporate tax rate of 12.5 percent) where tax rates aren't as high as those in Australia (30 percent). The new Australian measures will require about 2,000 companies with annual revenues greater than A$100 million (about US$105 million) to report their tax details to the government for publishing. Similar measures have been discussed by the Group of 20 wealthy nations to shut down loopholes that are estimated to cause a loss of more than A$1 billion annually in tax revenue in Australia alone.
How Apple, GE brands weather bad press
According to YouGov BrandIndex, Apple's public reputation in the U.S. is "Teflon" compared to another large brand -- GE. YouGov BrandIndex compared the two companies, both of which have recently gone through tax avoidance "scandals," and found that Apple's reputation was untarnished and almost unchanged after the recent NY Times revelation (disproved by Forbes and trashed by Apple) that the company avoids paying taxes in 21 different states. The chart above was published by YouGov BrandIndex and shows the relative reputation score of both GE and Apple within five days of news of alleged tax avoidance by each company. Apple's reputation actually rose after the event -- probably after the company's heated response to the Times -- and then settled back to almost the previous level after a few days. By comparison, GE -- which had suffered its own tax avoidance scandal in 2011 when it was discovered that the company paid no U.S. taxes on US$14.2 billion in worldwide profits and actually pulled in a tax benefit of $3.2 billion -- had a massive 19-point reputation score drop over five days. It took GE's reputation almost two months to recover from the bad news. What YouGov BrandIndex seems to be missing out of this entire story is that the alleged Apple tax avoidance was quickly called out by Forbes as total ignorance and misstatement by the NY Times, not as malfeasance on the part of Apple. In GE's case, the answer was not so simple.
