Basic HTML Version
603
IL BaroMetro
GLOSSARY
SEC:
Securities and Exchange
Commission - the U.S.
government agency responsible
for supervising the stock
exchange. It is similar to Italy’s
Consob.
Talk
Large hi-tech
multinationals generate
incredible profits
conquering global
markets.
Understand
Using complicated
financial mechanisms
companies are able to
slip through the nets
of the tax world while
staying within the law.
Read
Tax havens – what
are they and how
are they used by
large multinational
companies?
L
et’s be clear: it is all perfectly legitimate. Hi-tech
multinational companies are grinding out profits around
the clock. Nailing down their activities to specific territorial
boundaries, however, is a very bold undertaking. Nonetheless
it is the scheme in which they have invested to minimize their taxes.
They use complicated triangulation mechanisms or avail themselves
of legislation that varies from country to country to identify the
sanctuaries which offer the lowest taxes.
The SEC has required companies listed on U.S. markets to clarify the
tax benefits they enjoy in the United States and other countries. And
the feeling is that Google, Apple and Microsoft save millions of tax
dollars through financial engineering. This is especially evident in the
case of Google.
The model it uses is the same scheme already used by Microsoft:
invoicing overseas from countries with low taxes. But Google has
exploited the concept, acknowledging that all its tax benefits have
been achieved through its Irish subsidiary. Irish law allows tax benefits
obtained by foreign companies to be transferred, thereby allowing
them to dodge even the taxes required by the legislature for Irish
companies. So this is how the proceeds of companies based in tax
havens are made without any burden on the profits.
There are many ways to slip through the nets of the tax world. For
example: Google and other hi-tech companies sell their licenses,
technology, intellectual property rights in countries which are “lax”
on taxation. The result is a masterpiece of financial artistry. But in the
U.S. all of this is beginning to stir up controversy.
big hi-tech companies
flee from taxes
Source: Corriere della sera