Global Financial Integrity

GFI header image
 

Tagged ‘Banking Secrecy’

Transfer Pricing Lands Apple, Starbucks, and Fiat in Hot Water

Apple, Starbucks and Fiat in trouble over transfer pricing practices

Apple, Starbucks, and Fiat should prepare to pay their fair share of corporate taxes.

Last year, a U.S. Senate investigation accused Ireland of giving Apple special tax treatment. EU Antitrust Commissioner Joaquin Almunia has now gone further, initiating a probe of these large firms to determine whether the companies’ tax deals with Ireland, the Netherlands, and Luxembourg involve illegal state aid.

The investigations specifically examine the companies’ method of “transfer pricing”. Transfer pricing is simply the accounting practice by which one part of a multinational company charges another part for goods and services to distribute profits between jurisdictions. For large corporations such as Apple, Starbucks, and Fiat, the problem lies in the use of loopholes and creative interpretations of transfer pricing rules to artificially shift profits to countries where there are lower taxes or better tax breaks.

 

Read More SHARE

Why Swiss Banks Can’t Be as Secretive in 2014 as 1934

UBS is a Swiss bank that was fined for banking secrecy crimes

Swiss banks can’t be as secretive today as they were many years ago. The World Won’t Let Them.

For years, secrecy jurisdictions such as Switzerland helped U.S. depositors use their own secrecy laws to avoid U.S. income taxes. Banking secrecy was firmly established in Switzerland in 1934 when it became a criminal offense to reveal a client’s identity. As a result, Swiss banks have helped hide around $2.1 trillion in offshore accounts. Today this is an increasingly unacceptable amount of money to hide away.

Since the 2008 financial crisis, banks in secrecy jurisdictions have faced increasing international pressures to make banking information more transparent. Such banks have been urged to take on the automatic exchange of information on bank accounts.

Read More SHARE