Essays on The Curious Case of Corporate Tax Avoidance Assignment

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The paper 'The Curious Case of Corporate Tax Avoidance 'is a great example of a Business Assignment. In “ Brussels criticizes Apple’ s Irish tax deals” article, the EU had released a letter to the Irish Government and its reasons why it believes Apple Inc was given special tax deal between 1991 and 2007 to reduce its tax liabilities, and this was against the international standard of transfer pricing rules (Barker, 2014). The investigation by the EU was started in June 2014 and was done into two individual tax rulings that were offered by Irish Revenue two Irish subsidiaries- Apple Operations Europe and Apple Sales International.

At that time there were “ serious doubts” about the compatibility of the tax deal with the European Union treaty rules on state aid (Barker, 2014). This investigation looked at the transfer of pricing arrangement that was between the Irish government and Apple Inc. According to Apple’ s CEO, Tim Cook told a Senate Committee that was held last year is that Apple Inc had negotiated a special tax rate preference of less than two percent with the Irish government, while the country’ s tax rate is 12.5 percent. In a 21 page document, the EU details the tax ruling that was issued by the Irish Revenue in 1991 and 2007 did not comply with the arm’ s lengths principle.

The EU was of opinion that through the ruling the Irish government confer an advantage on Apple Inc (Barker, 2014). And that advantage was obtained every year and was ongoing when the annual tax liability was agreed upon by the tax authorities in view of that ruling. Netherlands and Luxembourg were also investigated for tax rulings offered to Starbucks and Fiat. In the second article, “ Curious case of corporate tax avoidance: is it socially irresponsible, ?

The article is all about the silence on the issue of the payment of corporate tax (Dowling, 2014). In contrast to many aspects of the social responsibility of business, scholars have been silent on the issue of the payment of corporate taxes (Dowling, 2014). This is because tax payment is often considered a fundamental and easily measured instance of a corporate’ s citizenship behavior. However, payment of taxes can be legally avoided, this activity has represented boundaries conditions for most corporate social responsibilities.

There has been the widespread practice of avoidance of tax among corporations and this has sat uncomfortably with much of the moral rhetoric in many codes of conduct and pronouncements by advocates of social responsibility (Dowling, 2014). Many corporates have in the past proudly claimed their social responsibility yet they avoid paying their corporate taxes, and these corporations don’ t see the hypocrisy in their behaviors. In contrast, most corporations actively avoid tax and see this activity as part of their financial responsibility of the corporation. Part Two The taxation system differs from one country to another.

Most corporates are able to exploit these differences in-order to limit their obligations with regard to paying taxes (Gurrí a, 2011). The practice is known as cross-border or inter-boarder tax arbitrage- involves using differences between the taxation procedures of two countries to structure a transaction with the aim of securing tax benefits that would not exist had the tax system had occurred domestically (Tanzi, 2006).

Reference

List

Ballr, D and Minor, M. 2012. (13th edition) International Business: The Challenge of Global

Competition. McGraw Hill.

Barker, A. 2014. Brussels criticises Apple’s Irish tax deals. Financial Times. 30th September

2014.

Dowling, G. 2014. The Curious Case of Corporate Tax Avoidance: Is it Socially Irresponsible?

Journal of Business Ethics. 124:173–184.

Hill, C.W. 2014 International Business: Competing in the Global Marketplace. 10E. Global

Edition. McGraw Hill.

Gurría, A.2011. “Challenges in designing competitive tax systems”, Remarks, 30 June, see

www.oecd.org/speeches

Tanzi, V. 2006. Globalization, tax competition and the future of tax systems, IMF Working

Paper WP/96/141.

OECD. 2004. Harmful tax competition: an emerging global issue, Paris.

Owens, J.2011. “Options for financial sector taxation following the crisis”, Remarks, 28

March.

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