Welcome to the world of tax avoidance. Multinational companies do it, small companies do it, individuals do it, and possibly birds, bees and educated fleas do it. The issue has hit the headlines in a big way recently though because of sheer scale of aggressive avoidance being employed by such household names as Google, Apple, Amazon and Starbucks. These companies are making enormous profits and are opting, legally, to give as little back as possible in the form of tax. This raises ethical issues, and it is now prompting governments to consider taking preventative action. So how is it done? A tax avoidance technique now commonly employed by large corporations is called “Double Irish with a Dutch Sandwich”.
With a €5.4bn phone call, Nokia has hung up on the mobile phone industry, and over 32,000 employees will be relocating to Microsoft. As part of the deal, Microsoft is purchasing Nokia’s Devices & Services unit (the part that makes your lovely Lumia-running Windows Phone), licensing Nokia’s patents and using its mapping services. Nokia is entrenched in the Finnish psyche, and the recent acquisition of the mobile giant has left the nation mourning the loss of a business that has played such a pivotal role in the country’s global image and economy.
Not long ago, Nokia employed 1% of the Finnish workforce, and in 2000 it formed 21% of exports and paid €1.1bn in corporate tax revenue. It was a leader in the mobile phone market for 14 years until it was topped by Samsung in 2012 as the top-selling brand.
Could there really be an end in sight for the never-ending Greek recession? Prime Minister Antonis Samaras certainly thinks so. By announcing that “2014 will be the year of recovery for the Greek economy”, he has sought to reassure citizens that the country’s ongoing recession will not reach a seventh year. Amid a backdrop of unpopular austerity measures, resulting in widespread social unrest, what is fuelling this remarkable optimism? Firstly, recent figures indicate that the Greek economy shrank by 3.8% in the second quarter, an improvement on the initial estimate of 4.6%, thus boosting forecasts, figures and fervour. Secondly, a record rise in tourism has made a huge dent in the downturn, injecting the necessary euros into a wilting economy.
“The innovative character of our region is supported by the facts. Businesses based in Brainport Eindhoven are awarded four patents per day; this is more than half (55%) of the total number of patents registered throughout the country. Nowhere else in the Netherlands you will see as much private investment in R&D as in this region. The export figures for businesses in the province of Noord-Brabant exceed 57 billion Euros. This is 23% of the total Dutch export figure and way above the figure for the Rotterdam region with its Seaport, and the Amsterdam region with Mainport Schiphol.
It was much simpler in the 1960s – Oil, that is; Black Gold; Texas Tea...
The public chuckled about the plight of the Beverly Hillbillies – those impoverished rustics turned gazillionaires, rich beyond imagination by the mere fact that their humble farm was sat on an oil reserve.
It was funny because it was true – large swathes of USA actually did strike oil; and once they’d got the Great Depression out of their system, Americans drove around in cars as big as boats, with huge grins, and smoking enormous cigars.
Then in 1973, the oil crisis ruined the party. Oil wasn’t a joke anymore. OPEC’s Arab members objected to the US decision to re-supply the Israeli military and promptly declared an oil embargo. The Arab countries had more oil that anyone else and realised they could call the shots. They boosted the price by 70%, and barrel prices quadrupled over the next 12 months.