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The UK Autumn Budget gets tough on tech companies and tax
During yesterday's Autumn statement, Chancellor Philip Hammond outlined positive measures to push the adoption of autonomous and electric cars, develop new 5G networks, treble the number of computer science teachers and further research into AI and robotics. But tucked away in the 88-page document were small changes that show the UK government plans to get a lot tougher on technology companies that aren't willing to give back as much as they should.
Amazon and eBay accused of turning blind eye to VAT fraud
It's not uncommon to see a headline vilifying a well-known tech company for their incredibly low tax contributions despite turnovers in the billions. The EU is famously taking Apple to task, but more often than not, these clockwork bouts of outrage are frustrating to endure. If these "loopholes" are built into the system, it would seem energy could be better spent lobbying for tax reform instead of telling the same story ad infinitum. But this isn't one of those stories. In a new report, the UK government's Public Accounts Committee has made some pretty strong allegations against Amazon, eBay and other unnamed online marketplaces, accusing them of facilitating VAT fraud.
Europe takes Ireland to court over Apple's $14.5 billion tax bill
The European Commission has announced that it will refer Ireland to the European Court of Justice for not collecting back taxes that it is owed by Apple. More than a year after a sweetheart deal between Ireland and the iPhone maker was ruled illegal, the country has dragged its feet in asking Tim Cook for the cash. Tired of waiting around, Commissioner Margrethe Vestager (pictured) has referred the nation to the continent's highest court, which can then impose fines for non-compliance.
IRS hands fraud prevention contract to Equifax despite massive hack
You'd think that government agencies would be reticent to work with Equifax given that it just exposed the private info of more than 145 million people through a preventable hack, but a massive data breach apparently isn't enough of a deterrent. The Internal Revenue Service recently awarded Equifax a fraud prevention contract that will have it verifying taxpayer identities. And crucially, it was a no-bid, "sole source" contract -- Equifax was deemed the only company capable of fulfilling demand.
EU countries aim to raise tech firms' taxes by targeting revenue
It's no secret that European countries want major tech firms to pay more taxes, but how will they go about that beyond collecting back taxes? By taxing the companies where they'll feel it the most, that's how. The finance ministers of France, Germany, Italy and Spain have written a joint letter to the European Union's presidency and Commission calling for taxes on tech giants' revenues, not just their profits. The four nations want the Commission to produce an "equalization tax" that would make companies pay the equivalent of the corporate tax in the countries where they earn revenue.
Google won't have to pay $1.3 billion in back taxes to France
Back in February, France took Google to court demanding back taxes of $1.7 billion. But it wasn't clear whether the search titan, whose European headquarters is based in Ireland, would be subject to continental taxes. A French court just decided in Google's favor, sparing it from the $1.3 billion award for tax years 2005 to 2010 that France was seeking.
Steve Ballmer builds an open database of government spending
Our leaders may be determined to make their daily dealings less transparent, but they probably didn't reckon on bored Steve Ballmer. The former Microsoft CEO has spent more than $10 million on a new project to open up the US government budget. USA Facts, as profiled in the New York Times, is an open, searchable database that tracks where almost all of your federal, state and local tax dollars are spent.
Alabama tests filing taxes via selfie
As tax day looms, Alabama citizens will get to live the dream and file using an app on their mobile device. The state's department of revenue is partnering with MorphoTrust to let taxpayers use the company's electronic ID (eID) system to digitally send in their taxes. In return for using the face-scanning app to prove their identity online, folks willing to to test the new setup will get priority processing and an expedited return.
IRS says thousands of taxpayers affected by financial aid breach
Tax day is rapidly approaching in the US, but according to the IRS, there could be additional headaches for up to 100,000 people this year. Hackers posing as students applying for financial aid possibly swiped taxpayer details through the FAFSA (Free Application for Federal Student Aid) online tool. According to The New York Times, the breach has the potential of being the most extensive since the 2015 tax return incident when info on over 300,000 taxpayers was used to file false claims. The IRS later increased that estimate to potentially affect 700,000 people.
Amazon will collect state sales taxes nationwide April 1st
While Amazon has resisted collecting state sales taxes, over the last few years it has bent, state by state. Now CNBC reports that as of April 1st, it will collect sales taxes in every state that imposes one, as Hawaii, Idaho, Maine and New Mexico join the list. Even if Amazon (or another online retailer) doesn't collect sales tax, consumers may be on the hook to pay via a "use tax." For companies like Amazon, however, bringing warehouses, services and data centers closer to where customers live has closed the loophole, and they've begun collecting the tax on their end. Between the taxes and universal pricing policies, the gap between Amazon and local retailers (big box or small) is getting closer. Of course, the convenience of Amazon Prime and the addition of other services (Fresh, Local, etc.) may keep things tipped in its favor.
The Engadget Podcast Ep 29: Re-Offender
Managing editor Dana Wollman and senior editor Nathan Ingraham join host Terrence O'Brien to talk about the biggest tech stories of the week. Of course, that means Uber and the growing controversy around its corporate culture -- including allegations of rampant sexism. They'll also address Samsung's plans to sell refurbished Note 7s, Bill Gate's endorsement of a robot tax and PewDiePie's most recent controversy. Then it's time to unwind a bit, and the group has some reading and listening suggestions. Plus, Dana wants your recipes.
Bill Gates wants a robot tax to compensate for job losses
How would you deal with the likelihood that robots and automation will likely lead to many people losing their jobs? For Microsoft co-founder Bill Gates, the answer is straightforward: tax the robots. In an interview with Quartz, Gates argues that taxing worker robots would offset job losses by funding training for positions where humans are still needed, such as child and senior care. It could even slow automation to a more manageable rate, if necessary.
California bill doesn't want Netflix to be taxed like a utility
Proposed legislation in California aims to prohibit video-streaming services, such as Netflix, Hulu and YouTube, from being taxed as utilities by local municipalities. The AB 252 bill, called the Streaming Tax Relief of Entertainment And Movies (STREAM) Act of 2017, was introduced by assembly member Sebastian Ridley-Thomas to "safeguard high tech innovation" in his state. This comes after the city of Pasadena had previously worked to introduce a nine percent Utility User Tax for streaming services, although those plans from 2008 didn't pan out.
Apple moving international iTunes arm to Ireland next month
In a note sent out to developers, Apple has confirmed it's moving its international iTunes business from Luxembourg to its European hub in Ireland effective February 5th. The company pre-empted the move last September, when it transferred all developer contracts and an estimated $9 billion in assets between the countries in preparation. And from next month, responsibility for Apple's iTunes arm serving over 100 countries (not including the US) -- and covering the iTunes, iBook and App Stores as well as Apple Music -- will formally transfer to its offices in Cork, Ireland.
Ireland says EU overstepped authority over Apple tax bill
Ireland says the European Union overstepped its authority and misinterpreted the country's laws when it ordered the country to claim 13 billion euros ($13.59 billion) in allegedly unpaid taxes from Apple. The company will also reportedly dispute this figure later this week. It's by far the highest tax bill chased by the EU, and is one of multiple cases it's pursuing against corporate tax deals granted by EU countries. The commission says that lower tax bills create illegal "state aid", giving firms advantages over rivals.
Apple formally challenges the EU's tax demands
Apple is about to fight the European Commission's claims that it must pay the €13 billion in back taxes ($13.6 billion) it allegedly owes from its deal with Ireland. The American firm tells Reuters that it's planning to appeal the ruling this week on the grounds that it not only can't abide by the decision, but that the figures don't make sense. To start, Apple argues that the EC falsely determined that two of its business units existed solely on paper, and thus didn't justify their untaxed profits. They were real, actively managed companies, the company claims. Also, Apple reportedly can't comply with the decision without making Ireland violate past tax laws that had different rules for residents and non-residents.
Facebook says it shouldn't pay back taxes from Irish loophole
Apple and Google aren't the only big tech companies fighting against requests to pay back taxes they allegedly racked up through loopholes. Filings obtained by Ars Technica show that Facebook is resisting the IRS' request for taxes owed after the social network reportedly undervalued property transferred to its Irish holding company. If you ask the US agency, Facebook owes $1.7 million plus interest for at least 2010. That doesn't sound like much for such a profitable company, but Facebook claims that it could wind up paying $3 billion to $5 billion (before interest and penalties) if the IRS really does want money from the past several years.
Japanese tax investigation ends with Apple paying $118 million
After an in-depth investigation, one of Apple's Japanese subsidiaries paid ¥12 billion ($118 million) in back taxes, according to a report from the Yomiuri Shimbun. Japanese tax authorities ordered the payment after determining the company hadn't correctly paid taxes on funds it had quietly funneled out of the country. This whole thing might sound a little dry, but hey -- what better way to spend a Friday than to dig into some corporate cloak-and-dagger dealings? Let's take a closer look.
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.
EU Commission: Apple must repay its $14.5b Irish tax break
The European Commission has ruled that Apple was given up to €13 billion ($14.5/£11.1 billion) in an illegal sweetheart tax deal with the Irish government. The amount of money involved here dwarfs the EU antitrust penalties handed out to Google, Microsoft and others, but this is effectively a backdated tax bill, rather than a fine. Officials opened the investigation into Apple's tax affairs back in 2013 and soon found that the agreement that it had signed with Ireland was illegal.
