In Commodities, Economy, Media on 11/04/2015 at 3:01 pm
Glencore says it will stop funnelling sales from its Australian coal operations through Singapore, a move that comes amid growing concern in Canberra about the impact that alleged tax avoidance by multinational mining companies is having on the country’s tax take …
[It said this to an] Australian parliamentary inquiry scrutinising the use of Singapore marketing hubs by BHP Billiton, Rio Tintoand Glencore to reduce the mining groups’ tax bills.
Glencore told the committee that almost half its Australian exports flow through S’pore …
(FT report on Friday)
In Uncategorized on 24/09/2012 at 5:10 am
The US started kicking the Swiss banks in the head over US citizens evading US taxes via Swiss banks. Will the US “tighten the screws” on the likes of MS, and will S’pore get caught in the row? Watch and wait.
The hearing featured a case study involving Microsoft’s shifting of IP rights for software developed in America, and the earnings that flow from them, to divisions in lower-tax Puerto Rico, Ireland and Singapore. One witness, Professor Stephen Shay of Harvard Law School, pointed out that in 2011 these three units enjoyed an average effective tax rate of just 4% and managed to book $15.4 billion of pre-tax profit—55% of Microsoft’s worldwide total. Their 1,914 employees generated an eyebrow-raising $8m of profit each, compared with $312,000 each for the 88,000 working in the rest of Microsoft. Whether or not this apportionment of profits complies with transfer-pricing rules, it is “not consistent with a commonsense understanding of where the locus of Microsoft’s economic activity…is occurring,” said Mr Shay. The claim that fair transfer prices were paid is “just not credible given the bottom-line outcome,” he added.
In 2011, the Senate investigators asserted, Microsoft’s parent company was paid $4 billion by Ireland and Singapore for rights that the two subsidiaries used to generate three times that amount in royalty payments from other bits of the group … A Microsoft man who was grilled at the hearing said the staffers’ sums ignored hefty, regular “buy-in” payments that the foreign subsidiaries have to make to the parent.