Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts

Friday 2 September 2016

EU Commission Irish Tax Ruling in Re Apple: Tim Cook and Abu Arqala Outraged


AA is Paying Attention.  Are You?

This Tuesday the EU leveled some pretty serious allegations against both Ireland and Apple regarding Irish tax treatment of two Apple subsidiaries. 

Tim Cook, Apple's CEO, is outraged.  With just nineteen eloquent words he both defended Apple's reputation and demolished the EU's apparently baseless allegations. More here.

“When you’re accused of doing something that is so foreign to your values, it brings out outrage in you.”

I've boldfaced a few words above to highlight what I think is the central point in Tim's argument. 

Values!  Values, indeed. 

Where would we all be if people and corporations didn't have values? It isn't and shouldn't be "all about the Benjamins."  There are some principles or values that should guide our lives as individuals and corporations. Character informs the values chosen. And actions more than words demonstrate both character and values

That being said, sometimes things are "foreign to one's values".  In AA's experience often when they are foreign (cross-border).

Frankly, since learning about the EU's no doubt intemperate ruling, I've been so outraged that I haven't been able to post. 

But today I'm calm enough to go on record in joining Tim in his outrage, or perhaps, more precisely in outrage.  

In the interest of fairness and to show you how the EU has apparently overstepped the bounds of common sense as well as the sovereignty of Ireland, let's give voice to the EU's allegations.  After reading them, I'm sure you will be as outraged as AA and equally comforted by Tim's eloquence! I've added boldface to some of the text below to highlight the EU's no doubt spurious reasoning and overreach.

"Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."
In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple's decision to record all sales in Ireland rather than in the countries where the products were sold. This structure is however outside the remit of EU state aid control. If other countries were to require Apple to pay more tax on profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland
The two tax rulings issued by Ireland concerned the internal allocation of these profits within Apple Sales International (rather than the wider set-up of Apple's sales operations in Europe). Specifically, they endorsed a split of the profits for tax purposes in Ireland: Under the agreed method, most profits were internally allocated away from Ireland to a "head office" within Apple Sales InternationalThis "head office" was not based in any country and did not have any employees or own premises. Its activities consisted solely of occasional board meetings. Only a fraction of the profits of Apple Sales International were allocated to its Irish branch and subject to tax in Ireland. The remaining vast majority of profits were allocated to the "head office", where they remained untaxed 
Therefore, only a small percentage of Apple Sales International's profits were taxed in Ireland, and the rest was taxed nowhere. In 2011, for example (according to figures released at US Senate public hearings), Apple Sales International recorded profits of US$ 22 billion (c.a. €16 billion[1]) but under the terms of the tax ruling only around €50 million were considered taxable in Ireland, leaving €15.95 billion of profits untaxed. As a result, Apple Sales International b. In subsequent years, Apple Sales International's recorded profits continued to increase but the profits considered taxable in Ireland under the terms of the tax ruling did not. Thus this effective tax rate decreased further to only 0.005% in 2014.
 The EU has prepared an "infographic" which provides a summary overview of the tax structure.

I trust you share my outrage and Tim's too.   

Wednesday 6 October 2010

Threats to Capitalism International Edition: Dateline Qatar Taxes at the QFC

Outside the QFC in the Near Future?

Asa Fitch over at The National reports some distressing news from the Qatar Financial Centre - a corporate tax of 10%.  To add insult to the "grievous" injury caused the tax is retroactive.
 
 

Friday 1 October 2010

The National: Mahmood Karzai Villa Sale and US Federal Tax

The National is in the process of changing its website.  

The draft site site has some articles not in the existing site.  Here's one about potential US tax issues for Mr. Mahmood Karzai with the sale of his Dubai villa.  You'll find other articles and get a sneak peek at the new format by going to www.beta.thenational.ae

You can read the article for details.  

The US is one of a few countries that tax their citizens on worldwide income. 

Thursday 22 July 2010

Kuwait: "The Age of Taxes is Coming"


Kuwaiti Citizens Demonstrate Near Sheraton Hotel Kuwait City

So screams the headline from the 23 July issue of AlWatan.  A most scary development.

According to the article, the Ministry of Finance is preparing a public awareness campaign under the slogan "Tax the Permanent Source of Development" as well as that the Ministry had sent some of its staff to Egypt to learn methods for fighting tax evasion as part of a plan to introduce a comprehensive tax plan including an income tax.

Can it be too much longer before  حزب حفلات الشي   eclipses the salafist bloc in the Majlis al Umma? 

Can the local versions of   سارا بالين  and   جلن باك  be far behind?

Though knowing Kuwait, this may turn out to be like electricity.   At the end of the day citizens will delay paying their taxes until the government bails them out.

Tuesday 9 February 2010

GCC Secretary General Update: GCC Central Bank & EU-GCC Free Trade

Asharq AlAwsat reports on comments by Abdulrahman Hamad AlAttiyah, the Secretary General of the GCC, from a Qatari-Saudi business conference this Saturday.
  1. The first meeting of the GCC Central Bank is scheduled for 30 March in Riyad.  The Governors of the Central Banks of Bahrain, Kuwait, Qatar and Saudi will attend.  Discussions will focus on legislative, institutional, and procedural aspects related to the currency union and the single currency.  More technical meetings will follow to continue the steps necessary to launch the single currency.
  2. He remains optimistic that the UAE will join the single currency project and will be able to quickly catch up.
  3. The EU has presented some new proposals in a bid to reinvigorate the stalled EU-GCC Free Trade negotiations (which began in 2008).  Their proposals have to do with a more flexible less time bound approach to the issue of customs duties, including those on exports.  The GCC is studying and will revert.
There were also some points on the GCC railway:
  1. Project is in the detailed study/technical drawings after having obtained agreement in principle.
  2. HQ for the organization to supervise the railway has not yet been chosen.  
And some news from the Qatar-Saudi businessmen's conference which 300 businessmen attended:
  1. 2008 trade between Qatar and KSA was some SAR6.2 billion (US$1.65 billion).
  2. The number of joint Q-KSA projects in the Kingdom through June 2009 was 16 with capital of SAR6.1 billion.
  3. Various speakers called for increased co-operation.
  4. Ahmad Al San'i (Saudi businessman) called for creation of a joint company in which the two governments should invest to promote business in Qatar and Saudi.
  5. Picking up on that theme, Khalid AlMuqayrin, (another Saudi businessman) called on the SWFs of the two countries to invest at least 5% of the value of their holdings in the two countries so that "there would be a direct return to the two countries and their citizens rather than having all their investments far from the region which don't have a direct impact on citizens".

Tuesday 5 January 2010

Omani New Income Tax - Effective 1 January 2010

Rupert Bumfrey has a post on this topic.

Here are some commentaries by accounting firms.  BDO Jawad Habib (soon to change its name to just BDO).  And Deloitte.

The major change is a reduction in the rates paid by foreign owned companies, though there are some other modifications, outlined in detail in the BDO Jawad Habib piece.

Thursday 19 November 2009

Qatar Income Tax Clarification: Tax Rate Reduction (Foreigners) But New Tax on Local Firms

Qatari authorities have issued another clarification.

What seems to be happening is that there are two tax related initiatives:
  1. Imposition of an income tax on both local and foreign companies at a rate of 10%
  2. Tax relief for foreign corporations who previously were subject to 10-35% tax rate.  In effect a tax equalization so that companies both foreign and domestic pay the same rates.
Unless there's another clarification, this appears to be the final story.

    Wednesday 18 November 2009

    Qatar to Introduce Corporate Tax From 1 January 2010

    See updated post here.

    The local GCC press is abuzz with the news that Qatar has passed a law establishing an income tax  effective from 1 January 2010.

    That would make it the first GCC state to have a general income tax with the exception of the Bahrain income tax which is only on oil companies.

    Some accounts differ on whether the tax will apply only to companies or individuals as well. 

    AlQabas (Kuwait) huna is in the no personal tax column.

    Maktoob takes an opposing view here.

    AlRiyadh (Saudi) huna shares Maktoob's view.

    Qatar Tribune with the apparent definitive answer:  companies only.

    MP's Protest New Real Estate Tax in Bahrain - Haflat AlShayy (Tea Parties) Can't be Far Behind

    Deputies in Bahrain's lower house of parliament are pushing for a repeal of a recent decree by the Prime Minister establishing a real estate tax in Bahrain.

    The tax has a sliding scale:
    1. 1.5% for properties less than BD70,000
    2. 2.0% for properties BD70,001 to BD120,000
    3. 3.0% for properties BD120,001 and up.
    There would be exemptions for those receiving financing from Bank ElEskan (Housing Bank) to buy or build a home.

    Not mentioned in the article, Bahrain also has or at least used to a registration fee for changing the legal titleholder of a property.

    With all the agida in the Kingdom over taxes, can haflat al shayy be too far over the horizon?

    Note to the planners:  AA fancies shayy ahmar.

    Friday 6 November 2009

    Taxes Inevitable in Bahrain?

    Given the uproar that accompanied the imposition of a 1% training levy tax on Bahrainis and 3% tax on expatriates (with a maximum of BD40 per month), I'm guessing that Dr. Essam Fakhro's (Chairman of the Bahrain Chamber of Commerce and Industry) popularity is in for a dip after his speech to the Australian Business Group at the Ritz.

    Other signs of taxes - though it appears only on business/investment - are also on the horizon.  Bahrain currently has a corporate income tax only on oil companies.  More details on Bahrain's tax regime here.


    For more on the rentier state.

    And of course the classic.