Jade Warrior Loc: Sydney, Australia

Should large multinational companies be allowed to minimise or in some cases evade paying tax in the country in which they are doing business?
There is currently an Australian senate inquiry into the practices of large national and international companies and how they have structured themselves internationally to avoid paying tax.
Last Wednesday (8th of April 2015) Google, Apple and Microsoft were invited to attend:
http://www.smh.com.au/business/sandwiches-on-the-menu-as-corporate-chiefs-front-tax-inquiry-20150409-1mgvkh.html
http://www.smh.com.au/federal-politics/political-news/senate-tax-inquiry-google-apple-microsoft-policies-highlight-golden-days-of-tax-laxness-20150410-1mi9k9.html
We have become so addicted to the products of these companies that our lives revolve around them; Sort of like the 19th Century Opium wars between Western nations and China. The difference I guess is that new businesses and work strategies are possible due to the technological innovations that these three companies in particular, have introduced. But there is a price to pay, and that price is national debt. If the top 100 companies operating in Australia were to pay the taxes they really owe, instead of using complex tax avoidance structures, the Australian deficit could be reduced by as much as two thirds.
When large companies, and extremely wealthy individuals with divided loyalties, get to control elected Governments, the Government is doomed to fail. There can be no consensus or middle ground found to allow the nation (be it Australia, or America), to move forward, as the puppet masters in the shadows are yanking the strings of our elected officials.
If the large companies don’t pay their taxes why should the ordinary person pay theirs?

The following is satire but it sails uncomfortably close to the t***h:
http://www.sbs.com.au/comedy/article/2015/04/09/google-threatens-australia-make-us-pay-tax-and-well-make-you-use-bing

Kombiguy Loc: Cedar Rapids, IA

Tax avoidance is legal and smart. Large companies operate within the framework of the tax laws set up by the government. Minimizing (or minimising, if you're not American, :)) those taxes is an obligation of the business, since their goal is to maximize profits.
Large corporations do pay their taxes. If you feel they don't pay enough, talk to your legislators.

Jade Warrior Loc: Sydney, Australia

Our legislators are talking about this right now.
The trouble is that some of these companies are so big that they are able to apply enormous pressure on the Australian Government and Tax Office.
With Australia currently in deficit, it is the ordinary citizens who have to carry more than their fair share of the tax burden because they cannot do what big business does and move their income offshore.

This from the Australian Financial Review
http://www.afr.com/news/politics/national/how-ireland-got-apples-9bn-profit-20140306-j7cxm :

How Ireland got Apple’s $9bn profit


by Neil Chenoweth

Cracking the Apple tax code
Global profit shift needs to change

US tech giant Apple has shifted an estimated $8.9 billion in untaxed profits from its Australian operations to a tax haven structure in Ireland in the last decade, an investigation by The Australian Financial Review has found.

Last year Apple reported pretax earnings in Australia of only $88.5 million after it sent an estimated $2 billion of income from its Australian sales to Ireland via Singapore, where Apple negotiated a secret tax deal in 2009.

The Financial Review has obtained 10 years worth of financial accounts for Apple Sales International, the secretive Irish company at the heart of Apple’s international tax arrangements, which reveal the mark-up Apple charges for intellectual property on its products around the world.
Last year Apple reported pretax earnings in Australia of only $88.5 million after it sent an estimated $2 billion of income from its Australian sales to Ireland via Singapore.

“Newspapers have had lots of stories about tax avoidance by Microsoft and Google and Apple, but there are hardly any numbers," said University of Sydney senior lecturer of taxation law Antony Ting, who has published a review of Apple’s tax arrangements.

“Now, for the first time, there are numbers for the profits that escaped from Australian tax."

The G20 meeting in Sydney last week gave US tech giants Google, Microsoft and Apple a deadline to reform their tax arrangements, ­warning that “by the Brisbane summit [in November], we will start to deliver effective, practical and sustainable measures" against international tax avoidance.

Apple Sales International has reported more than $US100 billion ($112 billion) of profits in the last five years. Its accounts show it has paid less than 50¢ in tax on every $1000 of income.

The company was the focus of a scathing report last May by the US Senate’s Committee on Homeland Security and Government Affairs, Permanent Subcommittee on Investigations.

“What is truly surprising in the Apple case is its brazenness," high-profile US tax commentator Lee ­Sheppard told the Financial Review from Los Angeles.

“We’re not easily shocked by ­t***sfer pricing practices that the US government accepts, for better or worse," she wrote last year in Tax Notes International.

“We’re talking gross worldwide revenues the size of the California state budget, and no tax being paid anywhere on a huge chunk of profits."
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It may be legal, it may be 'smart' but there is something immoral about a company that engages a subcontractor firm to manufacture it's products knowing that the workers are enduring sweatshop conditions on the one hand, and on the otherhand structures itself so that it only pays 50 cents tax in each $1000.
The Chinese factory employees work for Foxconn City, (a unit of Taiwan’s Hon Hai Precision Industry Company - which employs up to 1.1million people in a series of huge factory complexes in China).

This company has installed safety nets around the roofs of their factories to prevent employees from jumping to their deaths because the working conditions are so bad.

http://www.dailymail.co.uk/news/article-2103798/Revealed-Inside-Apples-Chinese-sweatshop-factory-workers-paid-just-1-12-hour.html

World nations need to formulate a way to bring such large international companies companies to account.

Kombiguy Loc: Cedar Rapids, IA

You realize, of course, that to raise taxes on a corporation is to raise taxes on consumers of their product? Businesses never pay taxes, consumers do.

NeilL Loc: British-born Canadian

Yes. And taxes are a disincentive to companies. ALL governments must cut their grossly extravagant spending if they (really) need more money in the coffers.

Jade Warrior Loc: Sydney, Australia

There is always a point at which corporations face increased competition because they have priced themselves too high, and other alternatives either enter the market place or start to increase market share. Where there is an emphasis on increasing profits rather than maintaining them, then you are correct, it is the consumer who is going to get screwed in the short to medium term. Part of this problem is no doubt driven by a company's need to attract investors. The problem with Apple and similar companies is that they have increased their profits by not paying taxes, and if they now pay the taxes that they should have all along, then they may well lose market share.
In the long term they place themselves at risk, e.g. the American vs. Japanese car industries.
In Google's case there is nothing to stop Baidu from expanding into the western world. It has the technology.
http://fortune.com/2013/05/06/baidu-chinas-search-engine/

Kombiguy Loc: Cedar Rapids, IA

Are you saying that Apple illegally failed to pay the taxes they were obligated to?

Jade Warrior Loc: Sydney, Australia

I guess it depends who you ask this question to.
In the strict technical sense it is probably legal, (as are many of the schemes that so called welfare c***ts use).
http://www.uglyhedgehog.com/t-299304-1.html


This link is to a downloadable pdf. My apologies as it is a long read and therefore a big ask for anyone to read properly. However it explains Apple's international business structure better than anything else I have seen to date:

www.sweetandmaxwell.co.uk%2Fcatalogue%2FeDownloadDoc.aspx%3Ffilename%3D331_201471_92131.pdf%26sapmaterialnum%3D6594%26fileserver%3DEPIC%26productid%3D331&ei=IqwrVcKoC8fGmAWF9oHQDA&usg=AFQjCNHOYiJO5YCJGaISj6rFAF71nWOVnQ&sig2=zmWEcvELJ0H2H0XnAfLM5w&bvm=bv.90491159" rel="nofollow" target="_blank">http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CCsQFjAC&url=http%3A%2F%2Fwww.sweetandmaxwell.co.uk%2Fcatalogue%2FeDownloadDoc.aspx%3Ffilename%3D331_201471_92131.pdf%26sapmaterialnum%3D6594%26fileserver%3DEPIC%26productid%3D331&ei=IqwrVcKoC8fGmAWF9oHQDA&usg=AFQjCNHOYiJO5YCJGaISj6rFAF71nWOVnQ&sig2=zmWEcvELJ0H2H0XnAfLM5w&bvm=bv.90491159,d.dGY