Tax Avoidance
Latest
Apple and Ireland win European appeal over multi-billion tax deal
Europe's second-highest court has ruled in favor of Apple and Ireland.
Ireland aims to close tax loophole Apple has exploited
If the Irish government's plans come together, the tax loophole that Apple, Microsoft, Google and other companies have been using for years will be closed up. Reuters and other news services are reporting that the Irish Government intends to close the loophole, although another will remain. Last May, a US Senate investigation revealed that Apple had sheltered billions in assets by declaring companies registered in the Irish City of Cork as not tax resident in any country. Michael Noonan, the Irish Finance Minister declared Tuesday that he was going to make it against Irish law for an Irish-registered company to have no tax domicile anywhere. Apple and the other companies could still avoid big tax bills by nominating Bermuda, for example, as its tax residence, or any other country that does not charge corporate income tax. During the Senate hearings Senator Carl Levin said Apple had achieved "...the 'Holy Grail' of tax avoidance." Apple's tax avoidance policies were also defended by some current and past members of the Senate, saying there was nothing illegal in the practice, but Ireland was welcome to change its laws. Now, it appears, that will happen. [via Reuters]
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.
