USA: Apple under scrutiny for tax avoidance; change in tax system & customer attitudes may be needed to curtail practice, says commentary

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3 May 2013

Talk is cheap in the clampdown on tax avoidance

Author: Vanessa Houlder, Financial Times

This week it was the turn...of Apple to be the latest big international company to come under fire for adroit tax planning...[Yet,] [g]overnments are complicit in the problems they are condemning. It is their tax systems that have created incentives for businesses to behave in this way...The global effort to plug leaks in the tax system has been led by the OECD...But..[the OECD] secretary-general...told political leaders..."A meaningful action plan cannot be delivered by June unless you express strong political support.”...Those who benefit from current arrangements oppose any changes...The tax-planning gymnastics displayed by Apple this week may be a powerful reminder of the need for reform. But unless there is a change of heart among policy makers, a meaningful crackdown on avoidance is not going to get far. [Refers to Amazon, Apple, Google]

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2 May 2013

Apple’s Move Keeps Profit Out of Reach of Taxes [USA]

Author: [column] Floyd Norris, New York Times

Some companies actually pay something close to the nominal 35 percent United States corporate income tax rate...But companies with a lot of intellectual property — notably technology and pharmaceutical companies — get away with paying a fraction of that amount, if they pay any taxes at all...Transfer pricing is an issue in all multinational companies and can be used to move profits from one country to another...[T]here are two ways the United States could get out of the current mess. The to end the deferral...Companies would owe taxes on profits when they made them...President Obama...has suggested immediate taxation of foreign profits earned in tax havens...The other way is to move to what is called a territorial system, one in which countries tax only profits earned in those countries...Apple and similar companies might find that their success in avoiding taxes was making them unpopular with other taxpayers — people whom Apple wants to be its customers. [Also refers to Parmalat, Starbucks]

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24 January 2013

Tax avoidance - an introduction

Author: compiled by Business & Human Rights Resource Centre

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