Australian government announces crackdown on tax avoidance by Apple, others
The government of Australia announced on Monday that it plans to investigate alleged tax avoidance in its country by a total of 30 multinational corporations, including the most valuable company on the planet: Apple.
The so-called "crackdown" was announced by the government in a press conference held in Sydney on Monday, as reported by Reuters. Australia's treasurer, Joe Hockey, told the press that major companies are "diverting profits earned in Australia away" from the country to avoid paying local taxes.
And though the government declined to name specific companies in its statement on Monday, it was already revealed in April that inquiries were made into Apple, Google, and Microsoft. Those companies, and apparently some 27 others, are officially "under review" for their tax practices.
In addition, the Australian government is looking to pass new laws that will aim to close tax loopholes used by corporations, and could fine those companies up to 100 percent. If the laws were to pass parliament, they would go into effect on Jan. 1, 2016.
Australia joins the European Union in targeting major corporations for their tax policies, though the efforts have drawn scrutiny for largely targeting American corporations. And though U.S. companies have paid an outsized amount in fines when compared to their European counterparts, the E.U. has denied specifically targeting American corporations.
As for the companies accused of not paying their fair share of taxes, they --?including Apple -- have adamantly maintained that they follow all international tax laws.
Those tax strategies usually involve the use of Ireland, along with Luxembourg and the Netherlands, as those countries have offered sweetheart tax arrangements to large companies in exchange for setting up operations there. The use of tax shelters in Ireland and elsewhere are the main crux of investigations by Australia and the E.U.
One analysis issued last week said that if the E.U. were to impose the worst-possible scenario, it could reduce Apple's annual earnings by 10 percent.
The so-called "crackdown" was announced by the government in a press conference held in Sydney on Monday, as reported by Reuters. Australia's treasurer, Joe Hockey, told the press that major companies are "diverting profits earned in Australia away" from the country to avoid paying local taxes.
And though the government declined to name specific companies in its statement on Monday, it was already revealed in April that inquiries were made into Apple, Google, and Microsoft. Those companies, and apparently some 27 others, are officially "under review" for their tax practices.
In addition, the Australian government is looking to pass new laws that will aim to close tax loopholes used by corporations, and could fine those companies up to 100 percent. If the laws were to pass parliament, they would go into effect on Jan. 1, 2016.
Australia joins the European Union in targeting major corporations for their tax policies, though the efforts have drawn scrutiny for largely targeting American corporations. And though U.S. companies have paid an outsized amount in fines when compared to their European counterparts, the E.U. has denied specifically targeting American corporations.
As for the companies accused of not paying their fair share of taxes, they --?including Apple -- have adamantly maintained that they follow all international tax laws.
Those tax strategies usually involve the use of Ireland, along with Luxembourg and the Netherlands, as those countries have offered sweetheart tax arrangements to large companies in exchange for setting up operations there. The use of tax shelters in Ireland and elsewhere are the main crux of investigations by Australia and the E.U.
One analysis issued last week said that if the E.U. were to impose the worst-possible scenario, it could reduce Apple's annual earnings by 10 percent.
Comments
I find it so pathetic that these countries have to resort to extortion to try to make money. I'm willing to bet that what Apple is doing is 100% legal, but these countries are poopooed that Apple has more cash on hand than their entire economy. If I were Apple I'd leave and shut down any retail there and let the consumer inform their own democracies.
Hey guys, just FYI, this isn't the real Solipsism, it's a clone.
In addition, the Australian government is looking to pass new laws that will aim to close tax loopholes used by corporations, and could fine those companies up to 100 percent.
The Australian government passes tax laws that companies have to abide by. So how is it even remotely legal on any-level that a government can now come back and fine a company for using tax laws / loopholes? They did nothing wrong?
Ah right... election year must be coming. Politicians have to fluff their feathers.
As the so called hardworking types used to say, 'Ain't no Free Lunches', and the biggest pigs at the free lunch counter are corporations.
(And please spare me the "they're just following the letter of the law" BS... talk about a low moral bar.)
You must have a very fulfilling life.
Ironically, Apple products cost less in Australia than in the US, because Apple unofficially capitulated previously when parliament investigated their pricing practices.
As someone who lives in the region, I personally hope that Apple just raises its prices to pay the Aussie government all the taxes it wants, and then passes it back to the consumers. That way, they can enjoy their cheap Chinese knockoffs all the more.
qft
Sad to say, I have to agree with you.
I do not expect that any Govt would try to fine a corp retrospectively though.
The corps are only using the guidelines govts put in place.
If govts move the goal posts through legislation the corps will react accordingly to minimise exposure in any given country.
Vultures just looking for a payday. Leave Australia's market. Or cut jobs and close stores. Australia will have no corporate taxes from Apple, no sales taxes on their products sold, no property taxes on their stores and offices, and no payroll taxes nor income taxes from Apple employees. Teach them some respect.
Hmm... I've been watching your posts for a few weeks now, and I am fairly convinced you're not our formerly prolific poster SolipsismX (nee Solipsism).
I am sure he must be quite flattered -- and it's most certainly not 'illegal' vis-a-vis AI rules -- but may I ask why you chose this particular nom de plume?
Vultures just looking for a payday. Leave Australia's market. Or cut jobs and close stores. Australia will have no corporate taxes from Apple, no sales taxes on their products sold, no property taxes on their stores and offices, and no payroll taxes nor income taxes from Apple employees. Teach them some respect.
Hey jerk, wanna stop spoofing SolipsismY??? Choose a different name...
The national governments could just collect at the register (like state sales tax) but they refuse to make it simple in order to screw tax paying voters with the progressive tax system that is in place today.
Whatever, it all balances in the end with Apple and others simply charging more for products. Don't forget, corporations don't pay any tax that they cannot pass on to the consumer. It is the european or australian consumer that ultimately gets screwed.
You must have a very fulfilling life.
You certainly don't if you feel the need to impersonate a total stranger online, loser.
PUBLIC ANNOUNCEMENT: There is also a SolipsismY.
I am going to assume that the content of my comment was so good as to warrant such scrutiny of my username. Or TheWhiteFalcon is feeling a tad bit threatened today. Regardless, cheers and happy posting.
The low post count gave it away. Soli is either here full speed, or not at all.
The Australian government passes tax laws that companies have to abide by. So how is it even remotely legal on any-level that a government can now come back and fine a company for using tax laws / loopholes? They did nothing wrong?
Ah right... election year must be coming. Politicians have to fluff their feathers.
That's only the half of it. Australia has been living large off the huge influx of wealthy immigrants and companies seeking to live and do business there. Now that China's economy has slowed and is buying less from Australia, they need to cover their loss in revenue.
The resentment towards American companies and wealthy individuals is immense, so this kind of government tax grab is entirely predictable. I hope Tim shows some courage and fights back; Apple is nearly half the size of Australia (1.5 Trillion) when comparing valuation versus GDP, and if current trends continue, may achieve parity in a few years ....
I am not impersonating anyone you blundering idiot. There is more than one, more than two usernames that include the word Solipsism.
PUBLIC ANNOUNCEMENT: There is also a SolipsismY.
I am going to assume that the content of my comment was so good as to warrant such scrutiny of my username. Or TheWhiteFalcon is feeling a tad bit threatened today. Regardless, cheers and happy posting.
And you have just been flagged, every post, for impersonation.