Using Tax Loopholes And Avoiding Paying Tax Essay

Tax avoidance has become a massive topic of discussion over the past few years, given the current global economic conditions and the cuts to the public sector by the government as a result. This led to increased anger from the public who perceive avoidance by many of the country’s wealthiest people in a time of austerity as greed. Perhaps the most notable demonstration of this anger can be seen in the actions of the group UK Uncut, who for the past year have been organising protests at shops owned by retail tycoon Philip Green who, as the poster boy for tax avoidance, paid a £1.2 billion dividend to his Monaco-resident wife.

interest in the company. On the one hand, they can enjoy tax efficiency by paying tax of

This scenario demonstrates the motive to purchase personal expenses and hide small revenues and this ultimately results in a higher expense value, gaining a favourable tax return. Examples within the scenario were buying a sports car, or paying for a trip to Hawaii which are clear violations of the Business Entity Concept. This principles states that a business must be considered a separate entity from the person, and all of its financial matters should be recorded separately from one’s own. This act is seen as an unacceptable behaviour since the business is cheating the government, and keeping the money that could have been used to better the community in addition to violating common accounting standards.

The main objective of many companies is to minimize their tax obligations. Jeffers (2014) discussed the reason of why companies adopt tax inversion strategies. The researcher indicated that the income maximization is a major reason of companies attempting to reduce their tax liability (pp. 100-101). Tax inversion strategies provide companies an advantage to lower income tax rate. Today, U.S. corporations renounce its U.S. citizenship and move to low-tax countries. Companies that reincorporate oversees are not obligated to pay U.S. taxes on earning income (p. 99). Many countries implement tax competition strategies to attract and retain businesses. Well-known companies, such as Exxon Mobil, Hewlett Packard, Tyco, General Electric, PepsiCo, etc. take benefits of tax shelter opportunities overseas (p. 102). Other benefits of the jurisdiction abroad are flexible banking laws and simplified litigation processes.

A sustainable budget with crackdowns on tax avoidance and loopholes, address the issue of tax avoidance that are cause by legal

In order for the reader to fully comprehend what the tax evasion argument is and how alternative possibility are not required for responsibility, it is

9. The Internet company Google managed to avoid $2 billion in international income taxes in 2011 by moving a hefty sum of its revenues to subsidiaries in Bermuda, according to CNBC, which cited a report by Bloomberg.[1] The search giant reportedly stashed $9.8 billion in revenues to its shell company in Bermuda — which doesn't have a corporate income tax — last year allowing the company to shave its overall tax rate by almost 50 percent. Google's Bermuda move was disclosed in a Nov. 21 filing by a subsidiary in the Netherlands. While the company's move to shift funds to the country was legal, it could spur the growing global criticism of corporate tax

However, the introduction of such a law becomes increasingly difficult when the companies being questioned are some of the largest and wealthiest in the world. In order to truly understand the stature of these companies, one would need to look into some of the statistics regarding them. Remarkably, according to Al Jazeera America “the largest 500 U.S. companies would owe an estimated $620 billion in U.S. taxes” if they had to declare all their overseas stockpiles, of around $2.1 trillion (“Al Jazeera America”). In addition, it found that “three-quarters of the 500 biggest companies utilize tax havens”. The top three offenders included Apple, General Electric and Microsoft. In many cases according to the report, the money is not being utilized to improve foreign economies. By this they mean to say that, U.S. businesses were not using their overseas profit to build factories and employ individuals. Instead, the overseas profit was a result of accounting tricks purposely implemented to benefit the business alone. To put all of this in perspective, the United States is losing billions of dollars to foreign economies. These taxes are being introduced into countries such as Ireland and Luxembourg. In other words the money that should be invested in the United States of America on public services, is being

A Tax Inversion is a business transaction in which a company, typically residing in the U.S., merges with a foreign company and moves its corporate headquarters overseas while maintaining its main operations in the U.S. for strategic purposes; specifically to take advantage of the lower tax rules in the foreign country. Even though, this practice has progressively increased in the last two decades, Congress is not so enthusiastic with the idea of corporations trying to avoid a

Cheating on taxes is unethical. Three Views on the Ethics states the one cheating on tax is always, or almost always unethical. There are basically three ethnic views for this belief. The first views are the belief that individuals have a duty to the state to pay whatever taxes the state demands. This view comes from the belief that individuals should conform to majority rule. The second views for cheating on tax become unethical duty is because the individual has a duty to other members of the community. This view holds that individuals should not take advantage of the services the state provides while they don’t contribute to the payment of those services. This view come from the belief that if the one who cheating on tax do not pay their tax, then the others who obey the law must pay more than They should on the their tax. It is unfair and otherwise unfair means unethical. The third view is that we owe a duty to God to pay taxes because God has

Even with all these reasons on why corporate tax evasions are bad, there are still some arguments saying that the current tax system is fine as it is. These arguments usually derive from the fear of change. People are scared of the actions that these companies will take in order to counter act the new law set by the government.

It is imperative for tax professionals to understand the ethics environment of the practice. This paper is focused on the ethical responsibilities of tax professionals.

Intercompany transactions could occur across national borders, it would lead MNC companies to get more exposure to the differences of the tax regulations between countries. This might lead MNC companies to set up their objective to minimize their taxes through the use of discretionary transfer prices. These issues are attracted the attention of the member of the U.S. senate, foreign governments and international organization such as the OECD, G20 and European Union (EU).

The actions of multinational corporations (MNCs), which derive from their morally dubious goals, may be completely legitimate within a capitalist society. One of these actions that will be examined in this essay is the use of tax havens, as a way of avoiding higher tax liability. This paper will utilise the case study of Apple’s tax avoidance, in examining the legitimation of a company’s goal of profit maximisation, a goal that is against the moral/social consensus

The purpose of this paper is to examine the merit of three basic systems, which is exemption system, credit system and deduction system. These systems are dealings with the essence of tax relief from international double taxation.