Well known multinational corporations Google, Starbucks and Amazon have been accused of “practising tax avoidance on an industrial scale” in the UK.
The UK Daily Telegraph reports:
The fiery exchange, led by Public Accounts Committee chairman Margaret Hodge, saw all three companies accused of siphoning profits away from Britain by using a complex web of accounting strategies that were cynical and “unjust”.
“We are not accusing you of being illegal,” said Mrs Hodge, “we are accusing you of being immoral.”
It was a rare sight watching top finance executives from these influential firms being relentlessly grilled by MPs.
Conservative MP Charlie Elphicke, who has been leading the criticism of US companies avoiding tax, said: “Billions of tax revenues are being lost to the UK. It’s clear from today that international tax avoidance is being conducted on an industrial scale.
“This is not just unfair on hard working honest UK taxpayers. It gives overseas companies an unfair competitive advantage over UK companies. That’s bad for our economic growth.
How do MNCs avoid paying tax? By using a host of accounting tricks to artificially inflate costs and/or reduce profits in the host country through the dubious use of transfer pricing and payments for intellectual property rights, royalty payments and other fees to sister companies located in third countries where tax rates are lower.
In this way, profits can be siphoned out of the host country to tax havens, thus avoiding tax at higher tax rates in the host country.
Has the Malaysian tax department scrutinised the transfer pricing of MNCs in Malaysia and the types of expenses usually found in their books?
How are certain foreign companies given tax free status for 12 years?
What is the effective tax rate these MNCs pay on their profits?
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Off topic. Penang Hill Speedy Gonzales Fridge Train Frozen Again! Star: Stranded on Penang Hill Some 1,000 holidaymakers were stranded atop Penang Hill for up to four hours following a malfunction in its funicular train service. During yesterday evening’s incident, the first batch of affected passengers had reached the bottom of the hill only to find that they could not get out of the train because its doors failed to open. What was supposed to be a five-minute ride then turned into a 25-minute ordeal as the train took them up and down the hill two more times. http://thestar.com.my/news/story.asp?file=/2012/11/16/nation/12328293&sec=nation Was… Read more »
Speaking of Yennie, she hinted recently that RM150 for a dinner for one person is the standard that Malaysians should strive for in becoming a high income nation.
Off topic.
http://thestar.com.my/news/story.asp?file=/2012/11/16/nation/12327853&sec=nation
To answer your question, Anil, it appears that Darthess Hee will be left out to dry like salted fish in the next GE.
So to all thinking about it, it’s not worth frogging to the dark side.
Here are a couple of dedications to Her Darthness:
This is nothing new and the British just found out ???. Laughable !!!!
We in Penang FTZ ( Free Trade Zone, in Bayan Lepas ) did this way back in the 1980’s and our favourites are price fixing, ficticious research and development fees, overseas branches ++
If we can bluff through our Malaysia’s top Audit Firm and take them for a long ride all these years the Malaysian Tax Department is sheer easy meat.
ha ha ha
being at FTZ as well we know what Malaysian R&D is all about to gain tax avoidance etc lah.
If R&D carrird out since 1970s at Bayan Lepas FTZ has so many years in the running, why there is no Penang or Malaysia commercial brand ebven in the local market ?
ya some call Pensonic a successful local brand making simple gadgets even a Bangladesh FTZ can produce !
I am still waiting for a local designed phone like Samsung S3 !
Ya you have some (allegedly) fake proton, myvi and naza which are all local assembled
MIDA does not know the true meaning of R&D.
My experience is many MNCs are getting away with tax incentives because the MIDA officials are not technically trained and easily deceived by strong technical terminology in the proposals for tax break.
Meanwhile Pensonic core competency is making fans and toasters.
Anil: “How are certain foreign companies given tax free status for 12 years?”
GK: Malaysia (except Kelantan and Terenganu) generally attractive to FDI. But there are competition in the FDI $$$. If you don’t up the benefits, that FDI may go elsewhere. And don’t follow LGE style of giving up FDI without a fight. Such stupid action and lazy attitude must be condemned.
We will earn HUGE TAX collection after the 12 years. That MEGA COMPANY will be here for very long time. Look at long term benefits.
GK, Dont be a liar. PR LGE & Khalid are the most hardworking in getting FDI. Selangor and Penang has the highest FDi in Malaysia. It is the lazy and stupid action of UMNO BN and their sycophants that has made Malaysia into having one of the lowest FDi in Asia and SEA. Thailand, Indonesia and the Phillippine once lagged very far behind in FDi compared to Malaysia and now they are well ahead. And its all due to the stupid and racial policy of UMNO BN & Ah Cheap. As always you are … just like your Ah Cheal… Read more »
Yes long term benefits for the cronies and destroy the health and lives of the rakyat
Did anyone see the contradictory? UK create lots of incentive to attract “rich” people to stay there and buy properties. Well… Not unlike Bolehland(TM) . Also, some of the so call “tax avoidance” practice, did pay significant amount of stamp duty, which is not zero sum game.
So, who create those “tax avoidance policies” in the first place? ROFL!!!
Q: So, who create those “tax avoidance policies” in the first place? Ask the accountants, the bean counters, the CFOs, the Rich Dad + Poor Dad financial advisers & money changers. Did I miss anyone? Oh yes, the insurance agents with lots of advices to over-indulge in myriad of insurance policies to avoid paying taxes. And (some unknown) lottery winners who sold their ownership of unclaimed winning tickets to big time tax avoiders. Do you know petrol receipts are another form of tax avoidance? These ‘in demand’ receipts are (alleged) kept (to be ‘traded’) by the cashiers unless you ask… Read more »
Petrol receipt, dining receipt kinda of “tax reduction” methods are just “ikan bilis”. And all 1st world country income tax collection department usually skip these ikan bilis but target the big shark. “Cost efficiency” is always consider whether private or public sector. Tax collector must carefully spend their resources. Bolehland government officer seems did the opposite, wasting tax payer money for “job safety” purpose. Bolehland end up spending 2-5 times more resources to “recover” small fish that can’t even cover the staff cost. OTH, LHDN turn a blind eye on politikus like Selangor tempeh toyor , which in fact, may… Read more »