Oh, no; but they can repeal whatever allowed Apple to do this and then go after Apple if they continue to use those methods.
Or maybe they can retroactively change the law. The UK did it.
Australia has done it too.
(From my previous link)
Taxation (Unpaid Company Tax) Assessment Act 1982
The Taxation (Unpaid Company Tax) Assessment Act 1982 went further, allowing for the recovery of tax avoided under bottom of the harbour tax schemes between 1 January 1972 and 4 December 1980. The retrospectivity in this act was even more controversial than making the avoidance a crime.
You can certainly take advantage of some loophes but I doubt that you earn enough to hire such a creative account as Starbuck's accountant. How much tax did you pay last year? Was it more or less than 2%? The less tax Starbucks pays, the more tax you pay.
According to Starbucks, they don't make a penny of profit on their UK sales.
Their generosity is astounding. 800 not-for-profit retail outlets.
We in America are so effing greedy. The rich complain about Obama and taxes; yet collectively the plutocrats have a whopping 40 trillion plus stash overseas. OMFG!
Enough to pay off our national debt, credit card debt and stunt loan debt. That of course is wishful thinking.
OMFG!!!!! They should just write a check to every family in the country!
Are you sure it's only $40 trillion? I heard it was $400 trillion.....
If they purposely set themselves up so as to legally avoid taxes, how can these governments suddenly find a way to tax them?
I don't know about the Europeans but in Australia the ATO has provisions in the legislation that allow for it to determine if a particular scheme of arrangement has been entered into primarily to avoid paying tax, even years after the fact. If they decide yes it was setup and used primarily to avoid tax they can go back and bill the company (or individual(s)) for the tax thus avoided. Apple Australia being "owned" by a shelf company in Ireland might be considered such a tax avoidance scheme under certain circumstances I suppose.
I don't think it's fair to back tax these large corporations on legal loopholes that they legally took advantage of. What is fair is that these governments close those loopholes and start taxing these corporations properly going forward.
A fair amount of tax to pay is as little as possible. In the words of Australia's richest man in the eighties and nineties (he has passed on, now) at a government inquiry
Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra!"
The only people that rail on about a 'fair' amount of tax are the ones that have plans to use Other People's Money (OPM) for stuff that they give a higher priority for than the majority of the population. It is most certainly not money they earned themselves.
In this particular case, Australian governments generally try to not spend more money than they have. You know, actually ensure expenditure is related to tax revenue, something quite unfashionable amongst most western countries these days. It's called living within your means. The current mob in power lost track of spending a ways back and now are trying to claw out new sources of revenue from under every rock they can find in order to live up to the promise of a balanced budget. Hence poking around and making adjustments to tax law to increase revenue from other sources like foreign corporations.
But in the larger picture, you yanks have a problem. You are wanting to impose high rates of taxes on money your corporations have earned overseas, where they have already paid tax in the country the money was earned. Sure, it is netted out, but it is definitely a disincentive to bring that money back where it would do your country some good. That money will instead get invested in my country, so your stupid tax laws are to my benefit.
But you can't retroactively change the law, surely?
You can say they violated existing laws if the tax structure and business structure/operations are not in alignment. Much of the tax "law" is more about policy than legislation, which is why there are so many grey areas.
We in America are so effing greedy. The rich complain about Obama and taxes; yet collectively the plutocrats have a whopping 40 trillion plus stash overseas. OMFG!
Enough to pay off our national debt, credit card debt and stunt loan debt. That of course is wishful thinking.
Hyperbole and hypothetical numbers don't really move discussions in a good direction. My opinion is simply that by setting up shop in that country, they are bound by the tax laws of that country. I have very little sympathy for these companies. Tax laws aren't supposed to be accommodate corporations routing funds through multiple companies. Most of the laws used for such things are in place for legitimate purchases. You can write off costs incurred setting up foreign subsidiaries, but this relies on profits being taxed later upon return. It's not like these laws don't exist for a reason. They just don't always operate in the way they were sold to the general public. This makes it difficult to close theoretical "loopholes" at times, as you risk hindering legitimate uses and can squeeze smaller companies that cannot afford or benefit from an army of accountants to navigate these complexities.
Australian tax law has general anti-avoidance provisions. If the tax office can look at a company structure and say that in essence it has been set up that way to avoid paying tax, it can reject that company return and substitute its own tax assessment.
Obviously it's more complicated than that (the structure may provide other benefits such as simplified administration which may make the tax benefits incidental, for instance) but in a nutshell that's how it is.
Yes one of the reasons Australia has virtually no foreign debt is efficient tax collection, and a level of tax that pays its way. 21 years since the last recession, they must be doing something right.
"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"
by Lord Clyde in: Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764
In UK, we have just had a very amusing Parliamentary committee investigating tax paid by multinationals.
What Starbucks said to the Parliamentary committee:
Troy Alstead said Starbucks paid almost no tax in the UK because it made no money here. With one exception, they had made a loss for 15 years. "We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically."
What Starbucks said to their investors:
For 2008 (a 'loss-making' year), Starbucks CEO Schultz told an analysts' call that the UK business had been so successful he planned to take the lessons he had learnt there and apply them to the company's largest market - the United States. He also promoted Cliff Burrows, former head of the UK and Europe, to head the U.S. business. Schultz said he looked forward to Burrows "now applying that same drive and business acumen to leading our U.S. business."
if a company wasn't making money prior to 2008 there would have been a real problem....Good ol' Cliffy was just ridin' the wave, and fooling his CEO. Four years later reality has bitten.
Same in Australia, Starbucks has closed almost all its stores. And so it should, it makes crap coffee anyway.
Not 70%, but, doesnt' less than two percent seems a bit low to you? I pay about 30% in income tax.. and then, I pay 15% sales and service tax on everything I purchase. I wish I had made 4 billion dollars only to pay 2%
I dont believe in strangling companies. They need initiative to develop, grow, create employment. But I believe there is a civic duty for corporations.
"They need initiative to develop, grow, create employment". They already have a perfect incentive- namely profit. The corporate line- "we need lower taxes so that we can create jobs" is BS. There are many firms who employ people and pay taxes: Starbucks pay bugger all, Costa pay real taxes, both manage to employ lots of people,
MNEs want to take advantage of the ammenities in countries without contributing to the system that put them there in the first place. Why should I as a tax payer have to subsidise the "unfair" profits earnt by shareholders?
Distance selling muddies the water even further. UK iTunes customers pay an extra 3% more in VAT so that Apple can enjoy lower corp taxes in Ireland. In short, not only do taxpayers subsidise these forms of tax avoidance, customers also lose out.
In UK, we have just had a very amusing Parliamentary committee investigating tax paid by multinationals.
What Starbucks said to the Parliamentary committee:
Troy Alstead said Starbucks paid almost no tax in the UK because it made no money here. With one exception, they had made a loss for 15 years. "We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically."
What Starbucks said to their investors:
For 2008 (a 'loss-making' year), Starbucks CEO Schultz told an analysts' call that the UK business had been so successful he planned to take the lessons he had learnt there and apply them to the company's largest market - the United States. He also promoted Cliff Burrows, former head of the UK and Europe, to head the U.S. business. Schultz said he looked forward to Burrows "now applying that same drive and business acumen to leading our U.S. business."
But Starbucks are only able to make a "loss" because they buy coffee very cheaply and sell it to their stores at an inflated price that enables the store to make a loss.
Comments
Quote:
Originally Posted by ascii
But you can't retroactively change the law, surely?
Yes you can.
Quote:
Originally Posted by Tallest Skil
Oh, no; but they can repeal whatever allowed Apple to do this and then go after Apple if they continue to use those methods.
Or maybe they can retroactively change the law. The UK did it.
Australia has done it too.
(From my previous link)
Taxation (Unpaid Company Tax) Assessment Act 1982
The Taxation (Unpaid Company Tax) Assessment Act 1982 went further, allowing for the recovery of tax avoided under bottom of the harbour tax schemes between 1 January 1972 and 4 December 1980. The retrospectivity in this act was even more controversial than making the avoidance a crime.
Quote:
Originally Posted by RichL
You can certainly take advantage of some loophes but I doubt that you earn enough to hire such a creative account as Starbuck's accountant. How much tax did you pay last year? Was it more or less than 2%? The less tax Starbucks pays, the more tax you pay.
According to Starbucks, they don't make a penny of profit on their UK sales.
Their generosity is astounding. 800 not-for-profit retail outlets.
Bless 'em.
Quote:
Originally Posted by maccherry
We in America are so effing greedy. The rich complain about Obama and taxes; yet collectively the plutocrats have a whopping 40 trillion plus stash overseas. OMFG!
Enough to pay off our national debt, credit card debt and stunt loan debt. That of course is wishful thinking.
OMFG!!!!! They should just write a check to every family in the country!
Are you sure it's only $40 trillion? I heard it was $400 trillion.....
I don't know about the Europeans but in Australia the ATO has provisions in the legislation that allow for it to determine if a particular scheme of arrangement has been entered into primarily to avoid paying tax, even years after the fact. If they decide yes it was setup and used primarily to avoid tax they can go back and bill the company (or individual(s)) for the tax thus avoided. Apple Australia being "owned" by a shelf company in Ireland might be considered such a tax avoidance scheme under certain circumstances I suppose.
I don't think it's fair to back tax these large corporations on legal loopholes that they legally took advantage of. What is fair is that these governments close those loopholes and start taxing these corporations properly going forward.
From what I've read, Apple only pays 2% in corporate taxes outside the US.
And they want tax AMNESTY on all those billions made overseas.
Most of their billions are overseas because they would have to pay taxes.
The only people that rail on about a 'fair' amount of tax are the ones that have plans to use Other People's Money (OPM) for stuff that they give a higher priority for than the majority of the population. It is most certainly not money they earned themselves.
In this particular case, Australian governments generally try to not spend more money than they have. You know, actually ensure expenditure is related to tax revenue, something quite unfashionable amongst most western countries these days. It's called living within your means. The current mob in power lost track of spending a ways back and now are trying to claw out new sources of revenue from under every rock they can find in order to live up to the promise of a balanced budget. Hence poking around and making adjustments to tax law to increase revenue from other sources like foreign corporations.
But in the larger picture, you yanks have a problem. You are wanting to impose high rates of taxes on money your corporations have earned overseas, where they have already paid tax in the country the money was earned. Sure, it is netted out, but it is definitely a disincentive to bring that money back where it would do your country some good. That money will instead get invested in my country, so your stupid tax laws are to my benefit.
You can say they violated existing laws if the tax structure and business structure/operations are not in alignment. Much of the tax "law" is more about policy than legislation, which is why there are so many grey areas.
Quote:
Originally Posted by maccherry
We in America are so effing greedy. The rich complain about Obama and taxes; yet collectively the plutocrats have a whopping 40 trillion plus stash overseas. OMFG!
Enough to pay off our national debt, credit card debt and stunt loan debt. That of course is wishful thinking.
Hyperbole and hypothetical numbers don't really move discussions in a good direction. My opinion is simply that by setting up shop in that country, they are bound by the tax laws of that country. I have very little sympathy for these companies. Tax laws aren't supposed to be accommodate corporations routing funds through multiple companies. Most of the laws used for such things are in place for legitimate purchases. You can write off costs incurred setting up foreign subsidiaries, but this relies on profits being taxed later upon return. It's not like these laws don't exist for a reason. They just don't always operate in the way they were sold to the general public. This makes it difficult to close theoretical "loopholes" at times, as you risk hindering legitimate uses and can squeeze smaller companies that cannot afford or benefit from an army of accountants to navigate these complexities.
Australian tax law has general anti-avoidance provisions. If the tax office can look at a company structure and say that in essence it has been set up that way to avoid paying tax, it can reject that company return and substitute its own tax assessment.
Obviously it's more complicated than that (the structure may provide other benefits such as simplified administration which may make the tax benefits incidental, for instance) but in a nutshell that's how it is.
Quote:
Originally Posted by ascii
But you can't retroactively change the law, surely?
"Sovereign nation" is a very expansive term.
Cheers
Quote:
"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"
by Lord Clyde in: Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764
Cheers
In UK, we have just had a very amusing Parliamentary committee investigating tax paid by multinationals.
What Starbucks said to the Parliamentary committee:
Troy Alstead said Starbucks paid almost no tax in the UK because it made no money here. With one exception, they had made a loss for 15 years. "We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically."
What Starbucks said to their investors:
For 2008 (a 'loss-making' year), Starbucks CEO Schultz told an analysts' call that the UK business had been so successful he planned to take the lessons he had learnt there and apply them to the company's largest market - the United States. He also promoted Cliff Burrows, former head of the UK and Europe, to head the U.S. business. Schultz said he looked forward to Burrows "now applying that same drive and business acumen to leading our U.S. business."
Four years later reality has bitten.
Same in Australia, Starbucks has closed almost all its stores. And so it should, it makes crap coffee anyway.
Quote:
Originally Posted by See Flat
Not 70%, but, doesnt' less than two percent seems a bit low to you? I pay about 30% in income tax.. and then, I pay 15% sales and service tax on everything I purchase. I wish I had made 4 billion dollars only to pay 2%
I dont believe in strangling companies. They need initiative to develop, grow, create employment. But I believe there is a civic duty for corporations.
"They need initiative to develop, grow, create employment". They already have a perfect incentive- namely profit. The corporate line- "we need lower taxes so that we can create jobs" is BS. There are many firms who employ people and pay taxes: Starbucks pay bugger all, Costa pay real taxes, both manage to employ lots of people,
MNEs want to take advantage of the ammenities in countries without contributing to the system that put them there in the first place. Why should I as a tax payer have to subsidise the "unfair" profits earnt by shareholders?
Distance selling muddies the water even further. UK iTunes customers pay an extra 3% more in VAT so that Apple can enjoy lower corp taxes in Ireland. In short, not only do taxpayers subsidise these forms of tax avoidance, customers also lose out.
Quote:
Originally Posted by dave2012
In UK, we have just had a very amusing Parliamentary committee investigating tax paid by multinationals.
What Starbucks said to the Parliamentary committee:
Troy Alstead said Starbucks paid almost no tax in the UK because it made no money here. With one exception, they had made a loss for 15 years. "We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically."
What Starbucks said to their investors:
For 2008 (a 'loss-making' year), Starbucks CEO Schultz told an analysts' call that the UK business had been so successful he planned to take the lessons he had learnt there and apply them to the company's largest market - the United States. He also promoted Cliff Burrows, former head of the UK and Europe, to head the U.S. business. Schultz said he looked forward to Burrows "now applying that same drive and business acumen to leading our U.S. business."
But Starbucks are only able to make a "loss" because they buy coffee very cheaply and sell it to their stores at an inflated price that enables the store to make a loss.
It might be legal but it ain't moral...