Avoidance | KitGuru https://www.kitguru.net KitGuru.net - Tech News | Hardware News | Hardware Reviews | IOS | Mobile | Gaming | Graphics Cards Tue, 30 Aug 2016 10:43:14 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.kitguru.net/wp-content/uploads/2021/06/cropped-KITGURU-Light-Background-SQUARE2-32x32.png Avoidance | KitGuru https://www.kitguru.net 32 32 Apple should pay £11 billion in back taxes, rules EU Commission https://www.kitguru.net/channel/jon-martindale/apple-should-pay-11-billion-in-back-taxes-rules-eu-commission/ https://www.kitguru.net/channel/jon-martindale/apple-should-pay-11-billion-in-back-taxes-rules-eu-commission/#comments Tue, 30 Aug 2016 10:43:14 +0000 http://www.kitguru.net/?p=304587 The European Commission has concluded its three year investigation into Apple's use of Irish tax loopholes to avoid paying high corporation tax and has ruled that it should pay as much as 13 billion euros (£11 billion) in back taxes. Both Apple and Ireland's government are expected to appeal the ruling. The investigation into Apple's …

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The European Commission has concluded its three year investigation into Apple's use of Irish tax loopholes to avoid paying high corporation tax and has ruled that it should pay as much as 13 billion euros (£11 billion) in back taxes. Both Apple and Ireland's government are expected to appeal the ruling.

The investigation into Apple's tax avoidance in Ireland has been a long and arduous one. It began way back in 2013, with the European Commission investigating how it was that Apple was paying less than one per cent corporation tax in the EU, despite earning billions upon billions. It turns out that it had help, from Ireland.

The eventual ruling concluded that Ireland gave Apple illegal tax benefits, allowing it to avoid paying billions in taxes. However with this ruling, the Irish government must now reclaim backtaxes, something it will be unlikely to do happily, since it would mean admitting guilt. Hence why it is expected to appeal the decision alongside Apple.

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Although many companies make use of what's known as the Double Irish arrangement (often with a Dutch sandwhich) Apple received special consideration from the Irish government, which is entirely illegal under EU law. Throughout the period of 2003-2014, Apple was able to funnel all European profits through Ireland, claiming all sales as part of its “head office,” there.

Using its special relationship with the Irish government, it then paid next to nothing on its 10s of billions of profits. In 2011 alone, it paid tax on £38 million in profits, but went entirely untaxed on over £13.65 billion. That works out to a corporation tax rate of around 0.05 per cent.

Considering even minimum wage workers must pay 20 per cent on anything they earn over their allowance, that's a figure that's incredibly hard for many people to swallow.

Discuss on our Facebook page, HERE.

KitGuru Says: Although it's good to see Apple being forced to pay its dues and for the Irish government to do its job properly, this just shows yet another instance of mega corporations influencing politicians. Google was previously caught out paying just over a hundred million pounds backtaxhat f on a decade of unpaid taxes, despite owing as much as ten times that.

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Facebook will start paying more tax in the UK https://www.kitguru.net/channel/jon-martindale/facebook-will-start-paying-more-tax-in-the-uk/ https://www.kitguru.net/channel/jon-martindale/facebook-will-start-paying-more-tax-in-the-uk/#comments Fri, 04 Mar 2016 10:53:20 +0000 http://www.kitguru.net/?p=285969 Facebook, like other major tech firms in the UK is often accused of paying far too little corporation tax. In 2014, despite making more than £840 million through UK advertising sales, it paid just £4,300 for the entire year. That's set to change moving forward, as Facebook is changing its practices so that its tax …

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Facebook, like other major tech firms in the UK is often accused of paying far too little corporation tax. In 2014, despite making more than £840 million through UK advertising sales, it paid just £4,300 for the entire year. That's set to change moving forward, as Facebook is changing its practices so that its tax obligations are far greater.

The reason Facebook is traditionally able to avoid paying much tax in the UK is much the same way as Google and other firms do it: it funnels it through Ireland. By having its European headquarters there, Facebook can argue that sales are made in Ireland, thereby taking advantage of its lower corporation tax rate.

Voluntarily it seems though, Facebook is set to change that. Beginning in April, it will begin booking its largest UK advertising deals in Britain, which means it will be liable for tax on those deals. While this doesn't mean Facebook will pay its way entirely, it should begin paying a much fairer tax rate moving forward.

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Source: Esther Vargas/Flickr

This comes just a few weeks after Google received a lot of flak for negotiating its way into paying £130 million for back taxes, despite having earned £20 billion over the past decade in the UK. Perhaps this is Facebook's attempt to not only avoid being forced to pay tax on years gone by, but the bad press that goes along with avoiding tax payments.

Much scrutiny has been poured on Google's talks with politicians, where opponents of its collusion point out that average citizens don't have the chance to meet with MPs on multiple occasions to decide what tax they should pay, they simply have to pay what they owe.

Discuss on our Facebook page, HERE.

KitGuru Says: It always seems so bizarre that the government talks up austerity measures, but then lets multi-national corporations off billions in tax revenue over the years. 

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Google criticised by Obama over EU tax avoidance https://www.kitguru.net/channel/jon-martindale/google-criticised-by-obama-over-eu-tax-avoidance/ https://www.kitguru.net/channel/jon-martindale/google-criticised-by-obama-over-eu-tax-avoidance/#comments Mon, 28 Jul 2014 12:03:54 +0000 http://www.kitguru.net/?p=204972 Tax avoidance is a difficult topic, not least because anyone that's ever filed a tax return through an accountant is likely engaged in it one way or another. However while many morally deplorable newspapers like to point the finger at rich individuals who have dodged tax on their several millions, many corporations that operate within …

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Tax avoidance is a difficult topic, not least because anyone that's ever filed a tax return through an accountant is likely engaged in it one way or another. However while many morally deplorable newspapers like to point the finger at rich individuals who have dodged tax on their several millions, many corporations that operate within the EU avoid far more. Google is the latest to take flak for its dodging schemes, managing to pay just 0.16 per cent tax on its revenue in 2013, despite earning over £13.5 billion.

And that's just Google Ireland Limited. The reason so much money is flowing through Google's Irish HQ, is because local law allows for a funnelling of liquid assets through other countries, ultimately to tax havens overseas like Bermuda. That leads to the firm in question, paying very little tax locally or in its home country. In Google's case, America.

This time however the big guns are throwing out accusations, with President Obama weighing in on Google's activities.

“This is basically taking advantage of tax provisions that are technically legal,” he said (via Wired). “But I think most people would say if you're doing business here, if you're basically still an American company, but you're simply changing your mailing address in order to avoid paying taxes, then you're really not doing right by the country and by the American people.”

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“Don't trust tech firms on tax… but uh, trust them, with your data!”

Google posted revenue of over $60 billion last year in the United States, but despite taxes for individuals being as much as 40 per cent if they earn over as “little,” as $400,000, Google only paid 15.7 per cent tax last year, due to its many avoidance schemes.

Obama admitted that nothing Google was doing was illegal, but that its avoidance was hardly patriotic: “People are paid to maximise profits, but are also paid to be good corporate citizens,” he said. “They're also paid to make sure that they're thinking about [that] in addition to shareholder value. How do you grow a company over the long term? And this kind of strategy, I think, undermines people's confidence in how companies are thinking about their responsibilities to the country as a whole.”

While Obama can hardly talk about confidence in American tech companies, having continued to push for mass data collection on his own citizens by those same companies, he has a point. It certainly seems like closing these sorts of loopholes would lead to masses of extra revenue for the government and theoretically a better society for individuals.

However, the counter argument there is that the reason companies spend so much time avoiding tax, is because it's high in the first place. If governments offered lower tax rates to corporations, they wouldn't spend so much money and time trying to avoid it and would pay a higher rate in the long run.

KitGuru Says: Any clever financiers in the KG readership? What's the best road for governments to go down in your view: high tax and tighter restrictions on avoidance, or lower rate and potentially a lack of the need for enforcement due to companies being more willing to pay?

Image source: Steve Jurvetson

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Google dodged £1 billion in taxes https://www.kitguru.net/channel/jon-martindale/google-dodged-1-billion-in-taxes/ https://www.kitguru.net/channel/jon-martindale/google-dodged-1-billion-in-taxes/#respond Wed, 02 Jan 2013 12:37:21 +0000 http://www.kitguru.net/?p=120935 As part of a call for a global crackdown on tax avoidance, it has been revealed that Google is one of the biggest culprits. In 2011, the search giant pushed 80 per cent of its revenue, some £6 billion, through the island of Bermuda, thereby avoiding over £1 billion in taxes. “I do believe we …

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As part of a call for a global crackdown on tax avoidance, it has been revealed that Google is one of the biggest culprits. In 2011, the search giant pushed 80 per cent of its revenue, some £6 billion, through the island of Bermuda, thereby avoiding over £1 billion in taxes.

“I do believe we all have a common interest in being able to tell our taxpayers who work hard and pay their fair share of taxes that we will make sure others do the same,” PM David Cameron wrote in an open letter to the G8.

Google Dodge
A billion, two, three, who cares right?

The Telegraph points out that Google has never made much of a fuss about its taxes, seeming quite proud in some instances for its ability to pay so little. Eric Schmidt even famously called what the company does, simply, “capitalism.” However, Google's UK head, Matt Brittin, took a more aggressive stance, suggesting that Google merely follows the rules set out by government: “Google plays by the rules set by politicians,” he said. “The only people who really have choices are politicians who set the tax rates.”

Cameron has pledged to spend much of this year's G8 summit – set to take place in Northern Ireland in June – discussing ways to improve the global economy. While he's made it clear that the UK remains his priority, he will encourage worldwide leaders to push for a global boost to finances, not just a local one.

Starbucks has already received a lot of flack in the UK for not paying its “fair share,” of taxes, eventually caving to pressure and announcing it would pay an extra £20 million over the next two years.

KitGuru Says: While I somewhat agree with the crackdown on tax avoidance, it all seems a bit self-righteous considering not that long ago we were looking at a huge number of politicians that were claiming massively undeserved expenses. Taking money from the country seems more of a crime than those that avoid giving money to it.

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