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NewsPoster Jul 19, 2013 12:22 PM
OECD plan shown at G20 may close loopholes exploited by Apple, others
Presenting at the ongoing G20 summit in Moscow, the Organization for Economic Cooperation and Development has revealed a 40-page plan meant to undo <a href=" es/">tax avoidance schemes used by companies like Apple and Google</a>. Multinational corporations will use strategies such as dumping patent rights into shell companies, or claiming interest deductions in one country without reporting taxable profits in another. The proposal would develop rules over the next two years to counter the schemes, and force companies to detail where they report their income.<br /><br />The director of the OECD's Centre for Tax Policy, Pascal Saint-Amans, <a href="" rel='nofollow'>refers</a> to one of the tax avoidance strategies as "double non-taxation." Apple in particular is known for using a method called the "Double Irish," which involves setting up two companies in Ireland -- one to hold intellectual property rights, and another to license the rights without turning a high profit. The second company is taxed at a rate of just 12.5 percent, a shadow of the 35 percent international tax rate some businesses might otherwise owe the US. <br />
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In the long run, the goal of the OECD proposal is make it harder for companies to hide profits offshore. Apple has an estimated $100 billion or more in offshore cash reserves; it has said it wants to repatriate that cash, but only on the condition that it and other corporations can secure a tax "holiday."
gmsquires Jul 19, 2013 12:45 PM
Of course all of these countries and the US among them is trying to now get at money that companies legally avoided paying taxes on. The faux outrage has everything to do with what the US Congress and the governing bodies of the other countries put into place as far as tax law is concerned. They , the governing bodies, have only themselves to blame.
SierraDragon Jul 19, 2013 01:26 PM
If the money exists the govts will go after it. "Bring business here, get a deal" incentives live only as long as it takes until pols figure out a way to beat the deal a company made.
The Vicar Jul 20, 2013 03:56 PM
Nothing will come of this, for the same reasons that there are no effective nuclear missile bans even though there are multiple countries who have enough weapons to destroy all of humanity all by themselves. Building nukes is very profitable for very powerful people, and even if politicians grew spines and acted in the interests of their countries, you can't explain to the average idiot that "we agreed to have fewer weapons because they're dangerous to us" because the average idiot will simply say "but... but... the Bad Guys won't obey this ban, so they'll have nukes and we won't! I'm scared and I'm going to vote against you!" (Come to think of it, that's the reason why the U.S. doesn't have gun control, in a nutshell, too, once you realize that the NRA is basically funded and controlled by the gun manufacturers rather than something which actually represents gun owners.)

In this case, the politicians at the G20 are all very rich because of corruption (campaign contributions, cushy jobs for family members, "consulting" jobs on retirement from politics, etc.) from large corporations. They don't want to hurt those corporations and risk losing out on all that money. So they're not going to want to take action. And the corporations can certainly afford to hire some yahoo conservative to yell about how closing tax loopholes damages the economy and vote out anyone who tries.

This is just kabuki theater to convince everyone that the powerful actually act in our best interests, without actually having them do so.
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