Families of the victims of the Orlando Pulse nightclub shooting are suing Facebook, Google and Twitter. CBS News justice reporter Paula Reid joins CBSN with more on the civil suit.
(qlmbusinessnews.com via bloomberg.com – – Mon, 19 Dec, 2016) London, Uk – –
The iPhone came out in 2007. So why was Apple still paying taxes like it was 1990?
“The Maxforce” is the European Union team that ordered Ireland to collect billions of euros in back taxes from Apple Inc., rattled the Irish government, and spurred changes to international tax law. You’d think it might have earned the name by applying maximum force while investigating alleged financial shenanigans. It didn’t. It’s just led by a guy named Max.
A European Commission official gave the nickname to the Task Force on Tax Planning Practices in honor of its chief, Max Lienemeyer, a lanky, laid-back German attorney who rose to prominence vetting plans to shore up struggling banks during Europe’s debt crisis. Since its launch in 2013, the Maxforce has looked at the tax status of hundreds of companies across Europe, including a deal Starbucks Corp. had in the Netherlands, Fiat Chrysler Automobiles NV's agreement with Luxembourg, and — its largest case — Apple in Ireland.
Lienemeyer’s team of 15 international civil servants pursued a three-year investigation stretching from the corridors of the European Commission, the EU’s executive arm, to Ireland's Finance Ministry and on to Apple's leafy headquarters in Cupertino, California. Much of it outlined for the first time here, this story chronicles a growing clash between Europe and the U.S. and a shift in the EU’s approach to the tax affairs of multinationals.
The Maxforce concluded that Ireland allowed Apple to create stateless entities that effectively let it decide how much — or how little — tax it pays. The investigators say the company channeled profits from dozens of countries through two Ireland-based units. In a system at least tacitly endorsed by Irish authorities, earnings were split, with the vast majority attributed to a “head office” with no employees and no specific home base — and therefore liable to no tax on any profits from sales outside Ireland. The U.S., meanwhile, didn't tax the units because they’re incorporated in Ireland.
“I can’t see why the tax liability is in Ireland.” —Irish Finance Minister, Michael Noonan
In August the EU said Ireland had broken European law by giving Apple a sweetheart deal. It ordered the country to bill the iPhone maker a record 13 billion euros ($13.9 billion) in back taxes, plus interest, from 2003 to 2014. One example the Commission cites: In 2011, a unit called Apple Sales International recorded profits of about 16 billion euros from sales outside the U.S. But only 50 million euros were considered taxable in Ireland, leaving 15.95 billion euros of profit untaxed, the Commission says.
Though the EU says its goal is “to ensure equal treatment of companies” across Europe, Apple maintains that the Commission selectively targeted the company. With the ruling, the EU is “retroactively changing the rules and choosing to disregard decades of Irish law,” and its investigators don’t understand the differences between European and U.S. tax systems, Apple said in a Dec. 8 statement.
Apple, which has some 6,000 workers in Ireland, says its Irish units paid the parent company a licensing fee to use the intellectual property in its products. The Irish companies didn't own the IP, so they don’t owe tax on it in Ireland, Apple says, but the units will face a U.S. tax bill when they repatriate the profits. Apple expects to pay about 26 percent of its earnings in tax for the most recent fiscal year and has set aside some $32 billion to cover taxes it says it will face should overseas income be returned to the U.S. “This case has never been about how much tax Apple pays, it’s about where our tax is paid,” the company said. “We pay tax on everything we earn.”
Ireland on Nov. 9 appealed the Commission’s ruling at the EU General Court in Luxembourg, arguing it has given Apple no special treatment. Irish Finance Minister Michael Noonan has said he “profoundly disagrees” with the ruling and that Ireland strictly adheres to tax regulations. The government says Ireland has no right to tax non-resident companies for profits that come from activities outside the country.
“Look at the small print” on an iPhone, Noonan said after the EU released its ruling in August. “It says designed in California, manufactured in China. That means any profits that accrued didn’t accrue in Ireland, so I can’t see why the tax liability is in Ireland.”
In the coming weeks, the EU is expected to publish details of the Maxforce investigation. At about the same time, Apple will likely lodge its own appeal in the EU court. Though Apple will have to pay its tax bill within weeks, the money will be held in escrow, and the issue will probably take years to be resolved.
This story is based on interviews with dozens of officials from the EU, Ireland, and Apple, though most didn't want to speak on the record discussing sensitive tax matters. A Maxforce representative declined to make Lienemeyer available for an interview. Ireland's Office of Revenue Commissioners (the equivalent of the American Internal Revenue Service) says it can’t comment on specific companies.
Lienemeyer began assembling the Maxforce in late spring of 2013 with a mandate of scrutinizing tax policies across Europe in search of any favoritism. Direct subsidies or tax breaks to court a specific company are illegal in the EU to prevent governments aiding national champions. His first hire — the person who would oversee the Apple probe — was Helena Malikova, a Slovak who had worked at Credit Suisse Group AG in Zurich. He quickly added Kamila Kaukiel, a Polish financial analyst who had been at KPMG, and Saskia Hendriks, a former tax policy adviser to the Dutch government.
As the four initial members began their investigations, they got a head start from a U.S. Senate probe of the tax strategies of American multinationals. The Senate’s Permanent Subcommittee on Investigations said Apple shifted tens of billions of dollars in profit into stateless affiliates based in Ireland, where it paid an effective tax rate of less than 2 percent.
At 9:30 a.m. on May 21, 2013, senators gathered in Room 106 of the Dirksen Office Building. Included in the evidence presented that day was a 2004 letter from Tom Connor, an official at Ireland’s tax authority, to Ernst & Young, Apple’s tax adviser. Connor’s question: A unit of the tech company hadn’t filed a tax return; Was it still in business? E&Y responded two days later that the division was a non-resident holding company with no real sales. “There is nothing to return from the corporation tax standpoint,” E&Y wrote. The Senate exhibits didn’t include Connor’s response if there ever was one.
At the hearing, Arizona Republican John McCain castigated Apple as “one of the biggest tax avoiders in America.” Democrat Carl Levin of Michigan peered over the glasses perched on the tip of his nose and said Apple uses “offshore tax strategies whose purpose is tax avoidance, pure and simple.” Crucially, though, Levin told the crowded room that under U.S. law, there was little the panel could do to force Apple to pay more tax. Apple Chief Executive Officer Tim Cook passionately defended the company’s actions, telling the senators “We don’t depend on tax gimmicks.”
The Senate revelations raised eyebrows at the Maxforce’s office in Madou Tower, a 1960s high-rise in the rundown Saint-Josse neighborhood of Brussels. Three weeks after the Senate hearing, Lienemeyer's team asked Ireland for details of Apple's tax situation. The Irish tax authorities soon dispatched a representative carrying a briefcase filled with a bundle of bound pages. The Irish could have simply sent the material via e-mail, but they were cautious about sharing taxpayer’s information with the EU and have a ground rule to avoid leaks: never send such documents electronically.
While the Irish government remained bullish in its public statements, saying Apple hadn’t received any favors, behind the scenes tensions were rising. Through the summer of 2013, the Finance Ministry assured government ministers that the EU investigation would amount to nothing, according to people familiar with the discussions. But those assertions seemed less confident than earlier communications. There was a sense that Apple had worked out its Irish tax position in a vastly different era, and no one remembered many details of the negotiations decades earlier.
In 1980, the four-year-old company — the Apple III desktop had just been released — created several Irish affiliates, each with a different function such as manufacturing or sales, according to the Senate report. Under Irish laws dating to the 1950s designed to shore up the moribund post-war economy, as a so-called export company Apple paid no taxes on overseas sales of products made in Ireland.
To comply with European rules, Ireland finally ended its zero-tax policy in 1990. After that, Apple and Ireland agreed that the profit attributed to a key Ireland-based unit, the division discussed in Tom Connor’s letter, be capped using a complex formula that in 1990 would have resulted in a taxable profit of $30 million to $40 million.
An Apple tax adviser “confessed there was no scientific basis” for those figures, but that the amounts would be “of such magnitude that he hoped it would be seen as a bona-fide proposal,” according to notes from a 1990 meeting with the Irish tax authority cited by the EU. The equation didn’t change even as Apple began assembling the bulk of its products in Asia.
Ireland and Apple started to make changes a few months after the Maxforce began looking into their tax relationship. In October 2013, Finance Minister Noonan announced he would close the loophole that let stateless holding companies operate out of Ireland. The EU said Apple changed the structure of its Irish units in 2015, which the company says it did to comply with the shift in Irish law.
As the Maxforce stepped up its probe in June 2014, Irish Prime Minister Enda Kenny was wooing potential investors in California. At a San Francisco event to promote Irish entrepreneurs, Governor Jerry Brown quipped that he had thought Apple “was a California company,” but according to tax returns, “they’re really an Irish company.” News clips show Irish officials looking on stony-faced as the governor makes his jest.
With Lienemeyer’s team digging further into the issue, Apple’s concern deepened. In January 2016, CEO Cook met with Margrethe Vestager, the EU competition chief — and Lienemeyer's ultimate boss — on the 10th-floor of the Berlaymont building, the institutional headquarters of the European Commission in Brussels.
Vestager, a daughter of two Lutheran pastors, has a reputation for being even-handed but tough, cutting unemployment benefits while advocating strict new rules for banks when she served as Denmark's finance minister. While she has acknowledged that her team had little experience with tax rulings — in a November interview with France's Society magazine, she said, “We learned on the job” — Vestager says enforcement of EU rules on taxation is a matter of “fairness.”
In the meeting with Cook she quizzed him on the tax Apple paid in various jurisdictions worldwide. She told the Apple executives that “someone has to tax you,” according to a person present at the meeting. In a Jan. 25 follow-up letter obtained by Bloomberg, Cook thanked Vestager for a “candid and constructive exchange of views,” and reasserted that Apple’s earnings are “subject to deferred taxation in the U.S. until those profits are repatriated.”
Subsequent correspondence became more heated. On March 14, Cook wrote to Vestager that he had “concerns about the fairness of these proceedings.” The Commission had failed to explain fully the basis on which Apple was being investigated, and the body's approach was characterized by “inconsistency and ambiguity,” Cook said.
Apple contended that the EU had backtracked on a 2014 decision recognizing that its two Irish subsidiaries were not technically resident in Ireland, and therefore only liable for taxes on profits derived from Irish sources. Now, Cook said, it seemed the Commission was intent on “imposing a massive, retroactive tax on Apple by attributing to the Irish branches all of Apple’s global profits outside the Americas.”
“There is no inconsistency,” an EU spokesman said in a Dec. 15 statement. Only a fraction of the profits of the subsidiaries were taxed in Ireland, the statement said. “As a result, the tax rulings enabled Apple to pay substantially less tax than other companies, which is illegal under EU state aid rules.”
Cook's entreaties did little to sway Vestager, and in August she phoned Noonan to tell him the results of the Maxforce investigation: The Commission was going to rule against Ireland. Late in the afternoon of Aug. 29, Irish officials began hinting to reporters that Apple’s tax bill amounted to billions and “could be anything.” At noon the following day, Vestager told a packed press conference in Brussels that the Commission had decided Apple owed Ireland 13 billion euros.
Though that would be equivalent to 26 percent of the 2015 national budget, Ireland didn't want the windfall, saying the ruling was flawed because the country hadn’t given Apple any special treatment. The decision sparked a political crisis as left-leaning members of Enda Kenny’s fragile minority administration saw a potential bonanza for taxpayers that the world’s richest company could well afford. Even as Noonan toured television studios vowing to appeal the decision, independent lawmakers demanded that Ireland take the money.
Facing a potential revolt that could bring down the government, Kenny and Noonan eventually bowed to demands for a review of the country’s corporate tax system. But they said they would fight the case, and on Sept. 7, Irish lawmakers overwhelmingly backed the motion for an appeal.
Officials from Lienemeyer’s team and other EU offices say they have gathered tax information on about 300 companies, looking for what they deem to be favorable treatment by governments across Europe. While they don't expect all of those to yield payoffs as hefty as that from their investigation of Ireland and Apple, they say a worrying number require the kind of maximum force that the Maxforce can apply.
“We focus on outliers where you're looking at something that is off the radar screen,” Lienemeyer's boss, 50-year-old Dutchman Gert-Jan Koopman, who is in charge of state-aid enforcement at the EU, said at a Brussels conference in November. “If you're paying a fair amount of tax then there is absolutely nothing to worry about.”
—With assistance from Stephanie Bodoni and Aoife White
(Updates with tax figures in seventh paragraph, clarifies effective tax rate in 13th, adds line about compliance in 21st. A previous version corrected fifth paragraph to show 16 billion euro profit was on sales outside the U.S., not just Europe)
By Gaspard Sebag, Dara Doyle and Alex Webb
(qlmbusinessnews.com via uk.reuters.com – – Mon, 19 Dec, 2016) London, UK – –
Workers at British cereal company Weetabix, majority owned by China's Bright Food Group Co Ltd [SHMNGA.UL], have voted to strike in the new year over a dispute over proposed changes to working conditions, according to a statement from their union.
The Union of Shop, Distributive and Allied Workers (USDAW) said on Monday that its members voted 91.7 percent in favour of industrial action, on a turnout of 69.5 percent.
The union said the strike would affect Weetabix workplaces in Corby and Kettering. Each strike day would run for 24 hours with no more than one strike to take place in a single week, it said.
Weetabix was not immediately available to comment.
By Martinne Geller
Rupert Murdoch's Twenty-First Century Fox is buying European pay-TV firm Sky, which has nearly 22 million viewers in Britain, Ireland, Italy, Germany and Austria.
The deal unites a media empire across two continents.
Murdoch – who has dominated Britain's media and political landscape for decades – is paying 11.7 billion pounds (13.96 billion euros) for the 61 percent of Sky that Fox does not already own.
It is his second go at taking control.
Sunny Dhillon, principal at Signia Venture Partners, discusses Nintendo’s release of its first game for smartphones, Super Mario Run. He speaks with Vonnie Quinn on “Bloomberg Markets.”
Sinead de Vries and Kristian Harloff with Collider News break down and discuss ‘Rogue One's' opening night box office results.
Online seller of literally everything Amazon.com made history last week when the company made its first drone delivery to a customer. The order came from near Cambridge in the United Kingdom, and the customer received their order of a Fire TV streaming device and popcorn 13 minutes after placing the order online.
Amazon CEO Jeff Bezos tweeted a photo of the drone in flight and wrote “First ever #AmazonPrimeAir [the name of the company's drone delivery program] customer delivery is in the books,” citing how quickly the delivery made it to the customer.
(qlmbusinessnews.com via uk.reuters.com – – Fri, 16 Dec, 2016) London, UK – –
London rents, which are amongst the highest in the world, have fallen this year for the first time since 2010 as landlords rushed into the rental market before a tax increase in April, a report published on Friday showed.
Landbay, a property market lender, said private rents in London edged down by 0.3 percent between January and November 2016. That compared with a 1.9 percent rise in rents across the rest of Britain over the same period.
Landbay chief executive John Goodall said he expected London rents to rise in 2017 when tighter controls on bank lending to landlords was likely to slow the number of rental homes coming on to the market. But he expected growth in London rents to remain below the average for Britain as a whole.
Average rents in London peaked at 1,894 pounds ($2,374) per month in April before beginning to edge down in May, a month after the introduction of a higher a tax on landlords buying property to rent, Landbay said.
Rents rose in many suburbs but fell in central areas such as the borough of Kensington and Chelsea where they dropped by 2.3 percent.
London residential property has attracted many foreign investors and has shown little sign of falling in value since the country voted to leave the European Union in June.
In 2014, real estate firm Savills estimated that 32 percent of high-end residential property in London was overseas owned.
London had the sixth most expensive average rent, and the most expensive in Europe, when compared with 14 other global in a report by not-for-profit organization Global Cities Business Alliance and the Centre for Economic and Business Research.
By Camilla Hodgson
AOL Co-Founder Steve Case on why he believes Verizon still wants the Yahoo deal.
Facebook has said it is going to do more to prevent fake news stories from spreading on the social media website.
Chief Executive Mark Zuckerberg admitted recently that it needs to improve monitoring and policing of content but said it was a “crazy idea” that fake or misleading news on Facebook had helped swing the US presidential election in favour of Donald Trump.
In September, the internet giant revealed 500 million user accounts had been hacked. Now, Yahoo has doubled its unenviable record.
Strike action by Southern rail staff over the role of guards and driver-only trains – which they argue are a safety risk – has meant that the rail operator's 2,242 services have come to a grinding halt.
One of the bosses of GTR, who run under-fire rail company Southern, has apologised for the travel chaos commuters will face throughout December. The RMT and Aslef unions have called for a number of strikes across the month over a long-running dispute about the changing role of conductors on trains. Alex Foulds, the deputy chief operating officer for GTR, also called the Southern service “very poor” and said it was “not good enough”.
(qlmbusinessnews.com via news.sky.com- – Tue, 13 Dec, 2016) London, Uk – –
The walk-out adds to a wave of industrial action with strikes also hitting the Southern rail network and the Post Office.
Drivers who deliver goods for Argos are set to go on strike just days before Christmas in a dispute over pay.
The Unite union said the three-day walkout from next Tuesday threatened “mayhem” for Christmas deliveries.
Argos said it had contingency plans in place and was working to prevent deliveries from being disrupted.
Members of Unite employed by Wincanton – a separate company – at a national distribution centre in Staffordshire are engaged in a dispute over holiday back pay.
Unite regional officer Rick Coyle said: “This strike by our members will cause havoc and mayhem to deliveries to Argos shoppers in the run-up to Christmas.
“There will be a lot of very unhappy Argos customers, if they don't receive the iPhones, TVs and white goods that they have ordered as presents for relatives this Christmas.”
He said strike dates were only being announced as a last resort and that “Unite's door is open 24/7 to try and settle this long-standing dispute”.
Argos said: “We would encourage both sides to keep talking with the aim of coming to a swift resolution.
“We also have contingency plans in place and can reassure customers we're working hard to ensure this will not impact our deliveries this Christmas.”
The strike adds to the industrial chaos in the run-up to 25 December with hundreds of thousands of passengers being hit by action on the Southern rail network and Post Office workers planning a walkout next week.
Unite said the dispute centred on how holiday pay is calculated after legal cases established that overtime and extra shift payments should be taken into account.
It said managers at Wincanton had offered to backdate additional pay to April, while it maintains this should go back at least two years, and that each driver is owed an average £700.
Wincanton said: “We are disappointed with Unite's announcement given that at Unite's request we already have a meeting scheduled tomorrow morning with ACAS to resolve the issue.”
It said it had already agreed to change holiday pay calculations in a way that exceeds its obligations in line with recent rulings and guidance.
The company added that it was committed to ongoing dialogue with the union.
The David Rubenstein Show: Peer-to-Peer Conversations” explores successful leadership through the personal and professional choices of the most influential people in business. Renowned financier and philanthropist David Rubenstein travels the country talking to leaders to uncover their stories and their path to success. The first episode features Microsoft co-founder Bill Gates.
At the International Manufacturing Technology Show in Chicago, Local Motors 3D printed a plastic car called the Strati.
Local Motors printed the car's chassis and body all in one piece, and also printed the fenders separately. The first phase of the process took just 44 hours.
Then the non-printed components (engine, seats, steering wheel, etc.) were attached in the last stage of the assembly.
“A 3D printed car like ours will only have dozens of components,” Local Motors engineer James Earle told Business Insider. In the near future, he says, it could cost only about $7,000 to manufacture, perhaps the start of what will become a niche market for customized cars.
On Friday, Coca-Cola announced that its CEO Muhtar Kent will step down from that role in 2017 and be succeeded by the beverage company's No. 2 executive, COO James Quincey. Quincey, who's worked with Coca-Cola for nearly two decades, has led the company's recent drive to cut down sugar in its drinks. In an announcement Friday, Quincey claimed that he'll continue to follow that same as CEO. Wall Street analysts said they had expected Quincey to be promoted to the top job, but originally predicted that it would be announced early next year. Quincey is expected to begin his tenure as CEO on May 1, 2017.
Google Pixel vs iPhone 7 – I put these two flagship Android and iOS smartphones head-to-head to find out which is best and which you should buy.
A new report says Samsung's Galaxy S8 will ditch a physical home button and have a design that's all-screen in front, without a typical frame around the edge.
A grocery store with no lines. Dreams do come true. Amazon is creating a brick and mortar grocery store.