Apple chief calls on US government to slash US corporate tax

Tim Cook warns Congress that he would refuse to repatriate $100bn stashed offshore unless US severely reduced its 35% tax rate

Apple has called for US corporate tax rates to be slashed after it admitted sheltering at least $30bn (£20bn) of international profits in Irish subsidiaries that pay no tax at all.

In a dramatic display of how threats from multinational corporations are driving down taxes across the world, chief executive Tim Cook warned Congress that he would refuse to repatriate a total of $100bn stashed offshore unless it acted to slash the 35% US rate.

Cook said the tax rate for repatriated money should be set "in single digits" to persuade companies to bring it back. Standard tax for US profits should be, he said, in the "mid 20s".

He also revealed that Apple had struck a secret deal with the Irish government in 1980 to limit its domestic taxes there to 2%.

Three subsidiaries based in Ireland are also used to shelter profits made in the rest of Europe and Asia but are not classed as resident in any country for tax purposes – a tactic dubbed the "iCompany" by critics.

Cook's testimony to a Senate sub-committee investigating multinational tax practices largely confirmed its findings that Apple had taken tax avoidance to a new extreme by structuring these companies so they did not incur tax liabilities anywhere.

Phillip Bullock, the California company's head of tax, estimated that just one of these subsidiaries – Apple Operations International – had channelled $30bn in global profits over the last five years without filing a single income tax return.

Lower, lower: Apple CEO Tim Cook testifies before senators about his company's tax affairs.

The only taxes paid were on the interest earned by the cash pile and small sums in local markets. Senate investigators allege a total of $70bn has been sheltered this way in four years.

Despite heated exchanges with committee chairman Carl Levin, Apple largely shrugged off criticism of the practice, insisting it was acting "in the letter and the spirit of the law".

An independent tax professor, Richard Harvey, testified that its tax avoidance was "probably legal" and could have been much more aggressive.

The Apple chief used his appearance to renew lobbying for Congress to cut a deal with multinationals to encourage them to bring back, or repatriate, the billions of dollars kept offshore to avoid tax.

Cook said he had no plan to bring back the $102bn built up by Apple at current tax rates, and recently opted to return money to shareholders by borrowing money instead. "I have no current plan to do so at the current tax rates.

"Unlike some technology companies, I am not proposing a zero rate," he said. "My proposal is that we have a reasonable tax for bringing back money from overseas.

"A permanent change is materially better than a short term tax holiday."

Cook said he "personally doesn't understand the difference between a tax presence and a tax residence".

He was even defended by some members of the committee who accused Levin and Republican John McCain of "bullying" Apple. "I am offended by the tone and tenor of this hearing," said fellow Republican and presidential hopeful Rand Paul.

The hearing was seen as a watershed in the increasing tense clashes between governments and multinationals, particularly technology groups such as Apple, Amazon and Google.

Edward Kleinbard, professor of law at USC Gould School of Law, said: "Apple is not an outlier in its efforts to produce 'stateless income' – income that is taxed neither in the United States nor in the countries where its foreign customers are located – but it is an outlier in the baldness of its strategies. Apple shifted tens of billions of dollars of income without even breaking into a sweat.

"The hearing will forcefully remind policymakers that international tax reform will require the implementation of really thoughtful anti-abuse rules, ideally developed in conjunction with other OECD member states.

Every country is the worse off when they facilitate multinationals aggressively pursuing stateless income strategies, just as every country is worse off when they all engage in trade wars."

Corporate tax expert Jennifer Blouin at University of Pennsylvania's Wharton business school said the Apple revelations were "extraordinary but not surprising".

"We have seen versions of this with Microsoft and with Google," she said. "I hope it gooses the notion that we need to fix the worldwide system."

She said Apple was working within the law but that the law was written before huge profits could be made by companies that trade not in goods and manufacturing but in ideas.

"I have worked in this area for years and it's been largely an obscurity. But it's at the forefront now, and it needs to get fixed."

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Article source : http://www.guardian.co.uk

Bank accounts will be 'open to all' in EU

European residents will have the right to open a basic bank account in any country of the EU and compare the fees charged by providers, under new plans.
The European Commission is outlining proposals to make it easier for customers to compare charges and switch to another bank.

At present, many consumers find it difficult to open an account in another EU country where they are not resident .The Commission also hopes to reduce the numbers who do not have accounts.

It estimates that about 58 million consumers across the EU, aged over 15, do not have a payment account. The levels vary hugely across different states of the EU.

The plans are designed to make bank charges clearer to customers

Swift switching
Only France, Belgium and Italy have laws in place that ensure people have access to a basic bank account in line with the proposals.

The plans would mean anyone could open an account, even if they have been made bankrupt or unemployed, with at least one provider. This would allow them to perform basic operations such as to receive their salary, pensions and benefits, or to pay utility bills.

The Commission also wants banks to send information to customers that lists the fees for common services, and the charges that have been levied in the previous 12 months.

It also plans to set down rules that ensure an account is switched for free within 15 days between providers in the same country. The UK is already going further, with a speedier seven working-day switching plan.

The Commission wants to see free switching between providers in different EU countries to take place within 30 days.

"By making it easier to compare fees and change bank accounts, we also hope to see better offers from banks and lower costs," said EU Internal Market Commissioner Michel Barnier.

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Article source : http://www.bbc.co.uk

Spanish retail sales slump 10.7% as austerity hurts consumers

Retail figures in Spain have fallen for 30 successive months, the decline accelerating since latest austerity measures applied

It was one of the most miserable Christmases on record for stores vacation as product sales plunged recently in the middle of one of many worst consumer problems the particular recession-hit country provides seen.

A man walks past a closed down shop in in central Madrid

With florida sales tax outdoor hikes biting on, unemployment expanding and several staff and pensioners viewing the real values of their earnings tumble, Spaniards kept their purses firmly closed, assisting to make a Ten.7% drop within sales in Dec compared with exactly the same month next year.
The actual retail slump actually quicker, rising from the tumble of seven.8% with regard to Nov as well as an yearly price with regard to This year associated with Six.8%. Store revenue in Spain have now dropped with regard to 30 successive weeks, as well as the decline offers quickened because the pm, Mariano Rajoy, implemented additional austerity measures to create the budget into series.
Major stores including the food store string Carrefour and Ikea possess documented drops in their The spanish language shops. Trading information is unavailable regarding Inditex - the Spanish store giant in which is the owner of Zara, Massimo Dutti and Stradivarius clothing retailers : even though it experienced previously reported the slump of 1.3% in revenue on the very first six months regarding 2012.

Rajoy's austerity-bound government elevated VAT within June in an attempt to fill up its coffers. The particular Christmas product sales tumble would be a more signal that households have fewer euros to invest. Cost savings will also be straight down, meaning the recession isn't just caused by frightened families trying to build-up their cost savings.

Spain's municipal services marriage, CSI-F, said the Xmas revenue decline could possibly be held accountable directly on selections to be able to curb an additional payment per month normally handed in order to public employees in December.
Car as well as home product sales tend to be dropping, indicating these tough economic times which prompted the economic system to shrink through One.4% a year ago continue. Most professionals predict the particular economic system will contract by way of a comparable rate this season since the government looks for to chop the cost debt more just like borrowing costs skyrocket. Lack of employment rose previously mentioned 26% a few weeks ago and is also forecasted to be able to climb greater but the federal government insists these tough economic times will certainly base out this season and also growth may go back by 2014.
About Monday evening, Olli Rehn, the particular EU's monetary as well as financial matters commissioner, suggested how the austerity program might have to become relaxed: "If there is a significant damage throughout the market, we are able to suggest an extension cord of the state's realignment course … That is what we do a year ago when it comes to The country.Inch
Spain is known to have skipped the mark regarding cutting it's shortage to six.3% regarding GDP in 2012, making it more difficult going to the particular 2013 goal of Four.5%.

Clive African american, list expert with Shore Funds, said customers vacation, such as those somewhere else within Europe, have been minimizing non-food and also discretionary spending to pay attention to essentials.

"Large retailers have got endured more than little types since they're in out-of-town locations that require a vehicle. Not really likely to all of them reduces enticement and also the use of fuel. Small retailers, nearby stores and local food markets have got gained market share because they are much more obtainable."
Handful of Uk merchants are exposed to the The spanish language industry. Represents & Spencer offers eight retailers centered on expat enclaves including Grandma Canaria and Tenerife. But one brand using a significant reputation in the country will be the value merchant Primark, section of the UK-listed Connected Uk Foods.

Primark provides defied the particular worries from the Spanish language economic system and also continuing to expand it's reputation. It now functions Thirty five shops on holiday, together with half a dozen starting because October.

"It delivers quite strong benefit credentials in order to consumers," stated Dark. "Which in any marketplace is a virtue, but specially when the marketplace is dealing with a fiscal economic downturn with the magnitude of the economic downturn within the southern part of Europe."
Spanish language mass media companies, meanwhile, assume advertising spending to be able to tumble almost two times as quickly since thought within 2013. A opinion poll released on Tuesday outlook advertising spending might tumble 7% this coming year. Based on estimations from marketing and advertising owners with Spanish language mass media organizations, the survey through working as a consultant Peak predicted Spain's struggling marketing field wouldn't normally grab till Apr 2014.

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European car sales plunge ends woeful year for automotive industry

EU car sales fell 16.3% in December – with non-eurozone members Britain and Sweden the exceptions

Europe's market for brand new cars shrank in 12 with the most effective monthly rate given that October The year of 2010, shutting per year troubled through heavy diminishes in most key eurozone establishments.
2 less business days normally made it easier for send out brand-new vehicle sign ups in the European in freefall 07.3% last month for you to Seven hundred ninety-nine,407 autos, as outlined by data posted about Wed from the Western european auto market relationship Acea.

VW sales fell 22% in December, with GM and Ford both down around 27%

Your figures emphasize the actual problems regarding carmakers in The european countries, wherever over-indebted financial institutions won't lend cash-strapped consumers the particular cash to get brand new automobiles while austerity forces being out of work into a report a lot of practically 12%.
Exclusions a few weeks ago had been non-eurozone European users including The united kingdom and Sweden, in which demand increased. But declares even if it's just within the Western european, for example Exercise as well as Norway, experienced contractions.
Twelve-monthly car sales volumes in the EU droped 8.2% in order to 14.05m autos next year, Acea explained. Within the eurozone, they will slipped Eleven.3% to merely underneath 9m, based on Reuters' data.
With regard to 2013, marketplace forecaster LMC Auto not too long ago projected any Several.1% drop in eu income in order to 12.4m automobiles, in comparison with levels of about 14.8m as well as 13m in 2011 along with This year, respectively.
One of the most detrimental reach recently have been People carmakers General Motors and Kia, in which class revenue every single chop down around 27%, using the Chevrolet brand major them all lower and also publishing a good sluggish calendar month as compared to their sickly cousin Opel.
Actually Volkswagen's sales of its core VW brand name droped 22%. The actual 12 jump at their high end model Audi virtually harmonized in which.
Malay manufacturers Hyundai along with Kia remained a rare vivid location, increasing 12.5% and also Six.8% respectively. The couple make an identity on their own together with well created, inexpensive autos that get pleasure from prolonged warranties.
The most severe regular monthly fall in recent years was your 27% stop by The month of january '09, whilst the worst type of annual contraction had been 1993's slide involving Sixteen.9%.

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