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Singapore Sling (tax Avoidance)
A Singapore Sling is a tax avoidance scheme in which a large multinational company sells products to a subsidiary owned by them in a jurisdiction with lower tax rates, which acts as a 'marketing hub'. The subsidiary then sells the product to end users, marking up its value and attributing the mark-up to various marketing activities undertaken by the subsidiary. The parent company retains a higher profit margin due to the lower tax rate. Singapore is a popular location of such subsidiaries, given its low tax rates and its willingness to grant large multinationals 'sweetheart deals' – an extremely low tax rate in exchange for locating the multinational's marketing activities in Singapore. Since at least 2015, it has been under investigation as an abusive practice in Australia. See also * Tax exporting * Tax inversion * Double Irish The Double Irish arrangement was a base erosion and profit shifting (BEPS) corporate tax avoidance tool used mainly by United States multinat ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tax Avoidance
Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable. A tax shelter is one type of tax avoidance, and tax havens are jurisdictions that facilitate reduced taxes. Tax avoidance should not be confused with tax evasion, which is illegal. Forms of tax avoidance that use legal tax laws in ways not necessarily intended by the government are often criticized in the court of public opinion and by journalists. Many businesses pay little or no tax, and some experience a backlash (sociology), backlash when their tax avoidance becomes known to the public. Conversely, benefiting from tax laws in ways that were intended by governments is sometimes referred to as tax planning. The World Bank's World Development Report 2019 on the future of work supports increased government efforts to curb tax avoidance as part of a new social contract focused on human capital investments and expanded social protection. "T ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Multinational Corporation
A multinational corporation (MNC; also called a multinational enterprise (MNE), transnational enterprise (TNE), transnational corporation (TNC), international corporation, or stateless corporation, is a corporate organization that owns and controls the production of goods or services in at least one country other than its home country. Control is considered an important aspect of an MNC to distinguish it from international portfolio investment organizations, such as some international mutual funds that invest in corporations abroad solely to diversify financial risks. Most of the current largest and most influential companies are Public company, publicly traded multinational corporations, including Forbes Global 2000, ''Forbes'' Global 2000 companies. History Colonialism The history of multinational corporations began with the history of colonialism. The first multinational corporations were founded to set up colonial "factories" or port cities. The two main examples were the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Sweetheart Deal
A sweetheart deal or sweetheart contract is a contractual agreement, usually worked out in secret, that greatly benefits some of the parties while inappropriately disadvantaging other parties or the public at large. The term was coined in the 1940s to describe corrupt labor contracts that were favorable to the employer rather than the workers, and usually involved some kind of kickback or special treatment for the labor negotiator. The term is also applied to special arrangements between private corporations and government entities, whereby the corporation and sometimes a government official reap the benefits, rather than the public. No-bid contracts may be awarded to people who have political connections or make donations to influential politicians. Sometimes a sweetheart deal involves tax breaks or other inducements to get a corporation to do business in that city or state. A "sweetheart settlement" may also occur in a legal context. For example, in a class-action lawsuit th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tax Exporting
Tax exporting occurs when a country (or other jurisdiction) shifts its tax burden (partially) abroad. For example, if residents of country A hold shares of a company in country B, the government in B might want to levy an inefficiently high tax on this company's profits since the tax is partially borne by the shareholders in A. Tax exporting does not necessarily involve direct taxation of foreign residents. It can also work through other economic channels, such as price changes. See also * Capital flight * Capital strike * Luxembourg leaks * Tax avoidance * Tax competition * Tax inversion A tax inversion or corporate tax inversion is a form of tax avoidance where a corporation restructures so that the current parent is replaced by a foreign parent, and the original parent company becomes a subsidiary of the foreign parent, thus mov ... * Double Irish arrangement References Further reading * * * * International taxation Tax {{tax-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tax Inversion
A tax inversion or corporate tax inversion is a form of tax avoidance where a corporation restructures so that the current parent is replaced by a foreign parent, and the original parent company becomes a subsidiary of the foreign parent, thus moving its tax residence to the foreign country. Executives and operational headquarters can stay in the original country. The US definition requires that the original shareholders remain a majority control of the post-inverted company. In United States federal legislation, US federal legislation a company which has been restructured in this manner is referred to as an inverted domestic corporation, and the term "corporate expatriate" is also used, for example in the Homeland Security Act of 2002. The majority of the less than 100 material tax inversions recorded since 1993 have been of US corporations (85 inversions), seeking to pay less to the US corporate tax system. The only other jurisdiction to experience a material outflow of tax inv ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Double Irish (tax Avoidance)
The Double Irish arrangement was a base erosion and profit shifting (BEPS) corporate tax avoidance tool used mainly by United States multinationals since the late 1980s to avoid corporate taxation on non-U.S. profits. (The US was one of a small number of countries that did not use a "territorial" tax system, and taxed corporations on all profits, no matter whether the profit was made outside the US or not, in contrast to "territorial" tax systems which tax only profits made within that country.) It was the largest tax avoidance tool in history. By 2010, it was shielding US$100 billion annually in US multinational foreign profits from taxation, and was the main tool by which US multinationals built up untaxed offshore reserves of US$1 trillion from 2004 to 2018. Traditionally, it was also used with the Dutch Sandwich BEPS tool; however, 2010 changes to tax laws in Ireland dispensed with this requirement. Despite US knowledge of the Double Irish for a decade, it was the Euro ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dutch Sandwich (tax Avoidance)
Dutch Sandwich is a base erosion and profit shifting (BEPS) corporate tax tool, used mostly by U.S. multinationals to avoid incurring European Union withholding taxes on untaxed profits as they were being moved to non-EU tax havens (such as the Bermuda black hole). These untaxed profits could have originated from within the EU, or from outside the EU, but in most cases were routed to major EU corporate-focused tax havens, such as Ireland and Luxembourg, by the use of other BEPS tools. The Dutch Sandwich was often used with Irish BEPS tools such as the Double Irish, the Single Malt and the Capital Allowances for Intangible Assets ("CAIA") tools. In 2010, Ireland changed its tax-code to enable Irish BEPS tools to avoid such withholding taxes without needing a Dutch Sandwich. Explanation The structure relies on the tax loophole that most EU countries will allow royalty payments be made to other EU countries without incurring withholding taxes. However, the Dutch tax code a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bermuda Black Hole (tax Avoidance)
Bermuda black hole refers to base erosion and profit shifting (BEPS) tax avoidance schemes in which untaxed global profits end up in Bermuda, which is considered a tax haven. The term was most associated with US technology multinationals such as Apple and Google who used Bermuda as the "terminus" for their Double Irish arrangement tax structure. Definition "Bermuda black hole" was used in relation to US corporate tax strategies that routed un-taxed profits to Bermuda, where they did not emerge again for fear of being subject to US corporation tax. Instead, the untaxed profits were "lent out" to the corporate parent, or its subsidiaries, thus avoiding the risk of incurring US taxation. The Bermuda black hole led to US corporations amassing over US$1 trillion in offshore locations from 2004 to 2017 (before the Tax Cuts and Jobs Act of 2017). A "Bermuda black hole" became the most favoured common final destination for the Double Irish with a Dutch Sandwich base erosion and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
K2 (tax Scheme)
K2 was an offshore wealth management scheme in which salaries of individuals in the United Kingdom were channelled through shell corporations in Jersey, Channel Islands. In June 2012, media reporting of people using K2 for the purposes of tax avoidance was followed by the United Kingdom's Prime Minister David Cameron characterising the scheme as "morally wrong". Later that year the UK government began to introduce legislation to deter people from using such schemes. Operation The K2 scheme was promoted by a Kirkcaldy-based accounting firm, Peak Performance. The scheme involved companies having their main operations in the UK and shell companies offshore. An employee of the UK company would quit their job and then be rehired by the offshore company to the UK. The offshore company would pay a lower salary than the person was originally on but would additionally loan them a large sum of money. Those loans would then be written down as tax liabilities to reduce the amount of tax pa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
