Quote:
Originally Posted by reefermadness
Im gonna assume that is for GE as a whole and not just the US operations and US corporate income tax. What large multinational corps often do is off load expenses to the countries with high tax rates for deductions and keep the revenues overseas where taxes are often lower.
As far as it not being true....IDK, some pretty reputable sources say otherwise.
http://money.msn.com/top-stocks/post...3-2949588e90f6
http://www.huffingtonpost.com/2013/0...n_2852094.html
http://www.nytimes.com/2011/03/25/bu...pagewanted=all
After researching it seems it hasn't been proven but GE did not release anything proving otherwise which tells me it's either true or they paid very little anyway.
An interesting fact in the first article... "Now, the Times reports, only 6.6% of Uncle Sam's tax revenue comes from corporations (down from 30% in the 1950s)." |
Not saying there's not a problem with the way the US taxes its businesses and citizens but a lot of what you read is a lot of speculation, usually by people not very sophisticated in how these things are accounted for.
Without going into a lot of boring detail, relevant accounting regulations (IFRS and US GAAP) disallow the kind of reporting you're talking about; earning revenue/expense in one nation and reporting it another with better tax rates, it's just not allowed. Public companies are also required to have their financial statements audited as a condition of being listed on their respective exchanges (NYSE, TSX, etc.). This means an independent accounting firm tests the financial statements to ensure that they are following the rules and not misrepresenting themselves to shareholders and other stakeholders. If a firms statements are audited and the audit opinion is unqualified, it's a pretty safe bet the statements are fairly presented; that includes taxes paid and where the revenues came from.
Again, not saying they don't spend a lot of money finding programs and credits that minimize their tax expense, but there's a big difference between illegally misrepresenting financial information and finding legal ways to reduce your tax burden.
As far as ethics, if I called you up and offered you my services as an accountant so I could reduce the amount of tax you'd pay, would you say not a chance, I'd LOVE to pay more? Didn't think so, so if it's ok for an individual to actively engage in tax planning, why is it unethical for a corporation to do so (again assuming all tax planning done is above board and maximising legal programs).