I might have missed some nuance here in the Australian context but the anti-avoidance provisions are baked into the law. It's right there now and has always been there. Basically, if it looks like a duck....
Is this ex-post-facto? Genuinely curious as one who has completed legal study but never pursued it as a career.
Maybe not "ex post-facto" in the common sense of the phrase. But for sure it would not be ethical for a government to overlook any tax avoidance loopholes, that was being used by a multitude of big corporations, over the course of many years and not once warning any them that the practice might fall under the anti-avoidance provision. And then, 5 or 10 years down the line, they decided that using that loophole falls under the anti-avoidance provision and back taxes for 5 or 10 years are now due. (Along with fines and interest).
If they now decide that using that loophole falls under the anti-avoidance provision, then the practice must stop now and no back taxes are due for the years that the government didn't enforce the anti-provision on that loophole. There is no way in hell that any government would not know, in any given year, what big corporations like Apple, Microsoft and Google were doing to avoid paying more taxes than they legally have to. If using some loophole to avoid taxes was illegal 10 years ago, then it should have been enforced 10 years ago, when they knew corporations were using that loophole. Not now, after the government sees how much more taxes they can collect by enforcing some anti-avoidance provision cause ……. retro-actively.
Maybe not "ex post-facto" in the common sense of the phrase. But for sure it would not be ethical for a government to overlook any tax avoidance loopholes, that was being used by a multitude of big corporations, over the course of many years and not once warning any them that the practice might fall under the anti-avoidance provision. And then, 5 or 10 years down the line, they decided that using that loophole falls under the anti-avoidance provision and back taxes for 5 or 10 years are now due. (Along with fines and interest).
If they now decide that using that loophole falls under the anti-avoidance provision, then the practice must stop now and no back taxes are due for the years that the government didn't enforce the anti-provision on that loophole. There is no way in hell that any government would not know, in any given year, what big corporations like Apple, Microsoft and Google were doing to avoid paying more taxes than they legally have to. If using some loophole to avoid taxes was illegal 10 years ago, then it should have been enforced 10 years ago, when they knew corporations were using that loophole. Not now, after the government sees how much more taxes they can collect by enforcing some anti-avoidance provision cause ……. retro-actively.
The specific context in Australian is that corporate tax avoidance has been red flagged for years, both by a formal tax review and by an upswell of public interest as people become aware of what is happening.
The expected revenue from this measure in the recent budget is marked as a blank figure with an asterisk. They basically have no idea about the extent of the problem and probably no real intention of actually repatriating any money. This is a toothless tiger, a gesture from an unpopular conservative government that in the past has been all too willing to give the big end of town a free pass on on everything, including carbon emissions. It's the same party that completely squandered the potential social benefits of the mining boom years ago and allowed the likes of Gina Rhinehart to line fleece the Australian public for billions.
Maybe not "ex post-facto" in the common sense of the phrase. But for sure it would not be ethical for a government to overlook any tax avoidance loopholes, that was being used by a multitude of big corporations, over the course of many years and not once warning any them that the practice might fall under the anti-avoidance provision. And then, 5 or 10 years down the line, they decided that using that loophole falls under the anti-avoidance provision and back taxes for 5 or 10 years are now due. (Along with fines and interest).
If they now decide that using that loophole falls under the anti-avoidance provision, then the practice must stop now and no back taxes are due for the years that the government didn't enforce the anti-provision on that loophole. There is no way in hell that any government would not know, in any given year, what big corporations like Apple, Microsoft and Google were doing to avoid paying more taxes than they legally have to. If using some loophole to avoid taxes was illegal 10 years ago, then it should have been enforced 10 years ago, when they knew corporations were using that loophole. Not now, after the government sees how much more taxes they can collect by enforcing some anti-avoidance provision cause ……. retro-actively.
Thanks for getting back to me. I would tend to agree with the ex-post-facto argument generally.
However it is well known and well appreciated that returns submitted to the Tax Office by individuals and companies are considered by the Tax Office to be prima facie correct. There is provision to audit the previous n years of an entities returns to establish their accuracy and compliance. If there are irregularities the legislation permits the Tax Office to go back even further.
The anti avoidance provisions are no secret and provide a backdrop to the returns process. As best I can recall, the acceptance of a return by the Tax Office does not make the return any more 'legal' or 'final' than at any other time. If that be the case, then there is really no reference point behind which one could say anything is ex post-facto.
It's an interesting discussion. Certainly a law which increases the price of already issued permits, for instance, would be ethically dubious. It is possible under our system, as you say, but it would be politically disastrous to go there.
In reality, individuals cannot avoid paying corporate taxes. The taxes that corporations pays are included in the price of the product or service they sell. Every time an individual buys something from a corporation, that person is paying a little bit of the taxes that the corporation has to pay on the profits from that sale.
And then we have the argument that individuals that are shareholders of a corporation do indeed pay corporate taxes. It's factored into the price of their stock shares. When these countries passes laws to close all these loopholes that corporations are using to reduce their corporate taxes by hundreds of billions of dollars, just watch how the stock prices of these corporations respond to the news.
It's not just Apple. There are 30 companies being targeted in this measure. The double-irish-with-a-dutch-sandwich might be legal but it is not ethical. Company profit is a BENEFIT of being able to conduct business in countries with a stable economy and infrastructure. Companies which profit ought to reinforce the stability of those same economies through appropriate taxation. It goes both ways: there is no point in governments supporting business activity that doesn't generate positive fiscal impacts on the society. We are not corporate quarries to be pillaged of profit and beg for scraps of employment.
In the last 30 years international corporations just pulled up stumps and decided to set up elaborate business structures to avoid giving back. They merely offloaded this tax burden onto mums and dads, people who don't have the capacity or flexibility to rearrange their personal finances in tax-optimal ways at the stroke of a pen. The chair of the IMF declined to put an exact on the amount of international taxation being forgone through these loopholes but went on the record stating that it was a massive problem and that all estimates of the numbers are "very big". If we can't appeal on ethical grounds (we can't) our only recourse is to restructure tax law to close the loopholes. I don't actually think companies enjoy playing "hide the revenue". It's only something they have to engage with because their competitors do it and if they didn't they'd be at a competitive disadvantage.
There were other relevant changes in the budget speech that were not mentioned in this article: for instance some digital services being sold within Australia will be forced to attract a compulsory sales tax. Apple is unaffected by this change because they have always done the right thing and collected this sales tax on digital services like iTunes.
If you believe that corporations are doing nothing unethical then you have absolutely nothing to worry about by governments investigating corporate tax structures. Expect a lot more of this.
There are a whole lot of false arguments in that rather lengthy post.
First and foremost are the assertions that governments are inherently ethical, secondly the assumption that the people exist because of their rulers and not the other way 'round.
First and foremost are the assertions that governments are inherently ethical
Exactly!
This is the main reason behind the U.S. Constitution. It was written to limit the federal government because Jefferson knew that government was a bunch of power hungry fools and would take whatever they could.
Comments
I might have missed some nuance here in the Australian context but the anti-avoidance provisions are baked into the law. It's right there now and has always been there. Basically, if it looks like a duck....
Is this ex-post-facto? Genuinely curious as one who has completed legal study but never pursued it as a career.
Maybe not "ex post-facto" in the common sense of the phrase. But for sure it would not be ethical for a government to overlook any tax avoidance loopholes, that was being used by a multitude of big corporations, over the course of many years and not once warning any them that the practice might fall under the anti-avoidance provision. And then, 5 or 10 years down the line, they decided that using that loophole falls under the anti-avoidance provision and back taxes for 5 or 10 years are now due. (Along with fines and interest).
If they now decide that using that loophole falls under the anti-avoidance provision, then the practice must stop now and no back taxes are due for the years that the government didn't enforce the anti-provision on that loophole. There is no way in hell that any government would not know, in any given year, what big corporations like Apple, Microsoft and Google were doing to avoid paying more taxes than they legally have to. If using some loophole to avoid taxes was illegal 10 years ago, then it should have been enforced 10 years ago, when they knew corporations were using that loophole. Not now, after the government sees how much more taxes they can collect by enforcing some anti-avoidance provision cause ……. retro-actively.
Maybe not "ex post-facto" in the common sense of the phrase. But for sure it would not be ethical for a government to overlook any tax avoidance loopholes, that was being used by a multitude of big corporations, over the course of many years and not once warning any them that the practice might fall under the anti-avoidance provision. And then, 5 or 10 years down the line, they decided that using that loophole falls under the anti-avoidance provision and back taxes for 5 or 10 years are now due. (Along with fines and interest).
If they now decide that using that loophole falls under the anti-avoidance provision, then the practice must stop now and no back taxes are due for the years that the government didn't enforce the anti-provision on that loophole. There is no way in hell that any government would not know, in any given year, what big corporations like Apple, Microsoft and Google were doing to avoid paying more taxes than they legally have to. If using some loophole to avoid taxes was illegal 10 years ago, then it should have been enforced 10 years ago, when they knew corporations were using that loophole. Not now, after the government sees how much more taxes they can collect by enforcing some anti-avoidance provision cause ……. retro-actively.
The specific context in Australian is that corporate tax avoidance has been red flagged for years, both by a formal tax review and by an upswell of public interest as people become aware of what is happening.
The expected revenue from this measure in the recent budget is marked as a blank figure with an asterisk. They basically have no idea about the extent of the problem and probably no real intention of actually repatriating any money. This is a toothless tiger, a gesture from an unpopular conservative government that in the past has been all too willing to give the big end of town a free pass on on everything, including carbon emissions. It's the same party that completely squandered the potential social benefits of the mining boom years ago and allowed the likes of Gina Rhinehart to line fleece the Australian public for billions.
Maybe not "ex post-facto" in the common sense of the phrase. But for sure it would not be ethical for a government to overlook any tax avoidance loopholes, that was being used by a multitude of big corporations, over the course of many years and not once warning any them that the practice might fall under the anti-avoidance provision. And then, 5 or 10 years down the line, they decided that using that loophole falls under the anti-avoidance provision and back taxes for 5 or 10 years are now due. (Along with fines and interest).
If they now decide that using that loophole falls under the anti-avoidance provision, then the practice must stop now and no back taxes are due for the years that the government didn't enforce the anti-provision on that loophole. There is no way in hell that any government would not know, in any given year, what big corporations like Apple, Microsoft and Google were doing to avoid paying more taxes than they legally have to. If using some loophole to avoid taxes was illegal 10 years ago, then it should have been enforced 10 years ago, when they knew corporations were using that loophole. Not now, after the government sees how much more taxes they can collect by enforcing some anti-avoidance provision cause ……. retro-actively.
Thanks for getting back to me. I would tend to agree with the ex-post-facto argument generally.
However it is well known and well appreciated that returns submitted to the Tax Office by individuals and companies are considered by the Tax Office to be prima facie correct. There is provision to audit the previous n years of an entities returns to establish their accuracy and compliance. If there are irregularities the legislation permits the Tax Office to go back even further.
The anti avoidance provisions are no secret and provide a backdrop to the returns process. As best I can recall, the acceptance of a return by the Tax Office does not make the return any more 'legal' or 'final' than at any other time. If that be the case, then there is really no reference point behind which one could say anything is ex post-facto.
It's an interesting discussion. Certainly a law which increases the price of already issued permits, for instance, would be ethically dubious. It is possible under our system, as you say, but it would be politically disastrous to go there.
You asked me whether Apple broke a law. That I cannot possibly decide, nor did I ever write that.
and you post here because?
and you post here because?
My last post was to answer your question...? As is this post. Why do you ask?
My last post was to answer your question...? As is this post. Why do you ask?
So what?
to get back to your original question (which you felt you could decide on).
For the exact same reason you avoid paying corporate taxes. They don’t have to.
Why would they pay tax when then don’t have to (pay more than they are paying)?
Why do you think they should pay more than the amount set by law?
In reality, individuals cannot avoid paying corporate taxes. The taxes that corporations pays are included in the price of the product or service they sell. Every time an individual buys something from a corporation, that person is paying a little bit of the taxes that the corporation has to pay on the profits from that sale.
And then we have the argument that individuals that are shareholders of a corporation do indeed pay corporate taxes. It's factored into the price of their stock shares. When these countries passes laws to close all these loopholes that corporations are using to reduce their corporate taxes by hundreds of billions of dollars, just watch how the stock prices of these corporations respond to the news.
There are a whole lot of false arguments in that rather lengthy post.
First and foremost are the assertions that governments are inherently ethical, secondly the assumption that the people exist because of their rulers and not the other way 'round.
Thanks a lot for share.
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This is the main reason behind the U.S. Constitution. It was written to limit the federal government because Jefferson knew that government was a bunch of power hungry fools and would take whatever they could.