from the biting-the-hand-that-hit-us dept.
The International Consortium for Investigative Journalists (ICIJ) reports
The landlocked European duchy has been called a “magical fairyland” for brand-name corporations seeking to drastically reduce tax bills.
Pepsi, IKEA, FedEx and 340 other international companies have secured secret deals from Luxembourg, allowing many of them to slash their global tax bills while maintaining little presence in the tiny European duchy, leaked documents show.These companies appear to have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes, according to a review of nearly 28,000 pages of confidential documents conducted by the International Consortium of Investigative Journalists and a team of more than 80 journalists from 26 countries.
The leaked documents can be found here.(requires flash)
Direct Link to Apple/iTunes 2011 tax return. (flash)
Related Stories
NPR reports EU Investigating Tax Deal Between Luxembourg, McDonald's:
European regulators have launched an investigation into Luxembourg's tax treatment of McDonald's, saying the fast-food giant's franchise office has paid virtually no taxes on franchise profits it earned in Europe and Russia since 2009.
It's the latest in a series of investigations into corporate tax avoidance schemes by the European Commission, which has also targeted Starbucks and Apple.
"A tax ruling that agrees to McDonald's paying no tax on their European royalties either in Luxembourg or in the U.S. has to be looked at very carefully under EU state aid rules," said Commissioner Margrethe Vestager, who heads the European Commission's competition bureau.
Regulators say authorities in Luxembourg, where McDonald's Europe Franchising office is located, determined in March 2009 that the company should be exempt from corporate taxes because its profits were also taxed in the United States.
The company was required to submit proof every year that it actually paid US taxes on its profits, according to the statement. It stated:
"However, contrary to the assumption of the Luxembourg tax authorities when they granted the first ruling, the profits were not to be subjected to tax in the US. While under the proposed reading of Luxembourg law, McDonald's Europe Franchising had a taxable presence in the US, it did not have any taxable presence in the US under US law."
A subsequent ruling by Luxembourg in September 2009 said McDonald's no longer even had to submit proof it was paying U.S. taxes.
Since then, the company has paid no taxes on virtually all of its European income, despite hefty profits of 250 million euros in 2013 alone, the E.C. said. Investigators will determine whether this gave McDonald's an unfair advantage over its competitors, violating European law.
In a statement e-mailed to NPR, McDonald's said the allegations it paid no taxes are untrue:
"McDonald's complies with all tax laws and rules in Europe and pays a significant amount of corporate income tax. In fact, from 2010-2014, the McDonald's Companies paid more than $2.1 billion just in corporate taxes in the European Union, with an average tax rate of almost 27%.
Previously: Leaked Documents Expose Companies' Secret Tax Deals in Luxembourg
Multinationals Hiding more than USD$500 Billion from G20 Tax Collectors
(Score: 3, Interesting) by Anonymous Coward on Thursday November 06 2014, @10:53PM
Do you really think billions of dollars can move around that much without many people knowing about it? They all got their cuts, I'm sure. Many of them would have to be in government. This is a problem as old as money, it's never going to go away, but you can measure the virtue of a society, or an age, by how well it manages to resist the impulse to hoard and steal. This is not a virtuous nation. We are not living in a virtuous age.
(Score: 0) by Anonymous Coward on Friday November 07 2014, @02:50PM
Actually we can do better. The only reason we have thieves is because there is incentive to steal. Remove that, and there will be no thieves.
(Score: 2) by wonkey_monkey on Thursday November 06 2014, @11:06PM
(requires flash)
...what?
I've got Flashblock installed and it seems to work okay for me.
systemd is Roko's Basilisk
(Score: 2) by bob_super on Friday November 07 2014, @12:57AM
Forget the loopholes, I'm for a simple system mirroring the sales tax:
You sell X amount in the country, which is y% of your global income? You owe the Treasury t% of y% of your worldwide gross margin (with t being lower than the current imaginary rate that only the small guys pay)
No "provisions", no deductions, no "net margin" which removes multimillion-dollar bonuses... You only get to deduct a token amount per employee paid above the local average wage.
Yeah, i know, never gonna pass... especially after the end of January.
(Score: 2) by Snotnose on Friday November 07 2014, @04:14AM
Exactly. I see this as nothing more than me taking the home office deduction, gas mileage, and the myriad other deductions my tax guy comes up with. For me it's a few dollars, for corps it's a few billion.
Simplify the tax code, don't make it worse by trying to modify it to outlaw these tricks. All it takes is 1 smart accountant to find new loopholes and publish it somewhere, and the corps will still avoid taxes.
When the dust settled America realized it was saved by a porn star.
(Score: 2) by jcross on Friday November 07 2014, @03:17PM
Or we could adopt the Fair Tax, which is basically a substantial VAT on all new goods plus a fixed annual prebate available to every citizen that makes it so anyone at the poverty line spending all their income will pay no taxes, and those below the poverty line will get subsidized. It too is unlikely to pass, I think because on one side it cuts against the tax dodgers that have most of the Republicans in their pocket and on the other side Democrats can't seem to understand the concept of the prebate and make the knee-jerk assumption that it's a regressive tax. Well, that or protecting the poor is just an excuse and they're actually owned by Wall Street, as seems increasingly likely. Also the transition to the Fair Tax would be somewhat tricky because it's hard to predict how the VAT would itself influence sales and then set it appropriately to balance the budget. But still, considering the insane number of person-hours spent each year either circumventing or complying with the current US tax code, it seems like it might be worth it.
(Score: 2, Interesting) by nishi.b on Friday November 07 2014, @12:59AM
Jean-Claude Juncker is president of the European Commission (of the EU) since last july. In the articles I read about this (including from the summary), it is said that as the former Prime Minister and Finance Minister of Luxembourg, he is most likely responsible for a lot of this.
See for example :
http://www.ibtimes.co.uk/lux-leaks-jean-claude-juncker-facing-credibility-crisis-after-latest-luxembourg-tax-avoidance-1473543 [ibtimes.co.uk]
EU is supposed to try to tackle tax avoidance and tax havens. How believable...
(Score: 1, Insightful) by Anonymous Coward on Friday November 07 2014, @03:23AM
Now, if someone was operating something like the old-school Napster under the guise of foreign-flag to bypass royalty payments, all hell would break loose.
Like Leona Helmsley said once, only the little people pay tax. However our Government will go after those copying a song without permission.
Try to remember that at the polls. Although I refused this time to vote for either tweedle-dee or tweedle-dum and went for the little guy... the poll results were out today and none of my little guys made it. We need to give these little guys a chance because the big ones sure aren't doing much in our interest these days.
I think what I am observing is stealing isn't about who is right or wrong, rather its who has the gun and can get people to listen to them and pull the trigger on their say-so.
(Score: 0) by Anonymous Coward on Friday November 07 2014, @03:13PM
"We"? If you mean the ignorant and narrow-minded masses, then there is no fixing them. They'll keep buying the pretty words of morally bankrupt psychopaths over and over again, no matter how many times they see the outcome. If you mean any other group, then you won't be able to oppose the former and their masters while retaining a shred of morality.
This game has no good endings. The only sane move is not to play.
(Score: 0) by Anonymous Coward on Friday November 07 2014, @04:57PM
Absolutely, the best way to change things is to do absolutely nothing. Very Zen. You are obviously a very deep thinker.
(Score: 0) by Anonymous Coward on Saturday November 08 2014, @11:03AM
do absolutely nothing
Not playing this game != not playing any games.