When the European Union decided to fine Apple €13.5 billion for tax evasion in Ireland last week, it didn’t take long for the Irish government to join with Apple to announce it would appeal the ruling.
The EU’s ruling that Apple must pay the Irish tax authorities €13 billion in back taxes appears to be a victory for fair tax campaigners. The amount is equal to about 30% of the total tax take in Ireland, or almost €7,000 for every employee in the country.
However, at a macro level, the ruling is profoundly misguided. It is bad news for Apple, the Irish government and the EU’s relations with the US.
As of 1 May 2016, China has fully replaced its business tax with a value-added tax (VAT) across all industries in a bid to streamline tax structures and reduce the tax burden. China first established the current VAT system back in 1994, applying it to the sale or import of goods as well as processing and repair services. The business tax was applied to other services transactions, intangible assets and real estate.
The health of European banks has reemerged as an important market factor this year. The IMF warned that the greatest risk to global financial stability stems from three European banks. Branches of two European banks failed the Federal Reserve's stress test. In addition, this does not even mention the Italian banks, and especially the oldest bank in the world, Monte Paschi, which has been the immediate focus.
The results of the latest stress tests on European banks are expected to be released at 10:00 am CET (5:00 am ET). The tests cover a little more than 50 of Europe's largest banks, with around 80% domiciled in the Eurozone.
The banks will be tested under two scenarios. The first scenario is EC's economic forecasts made last year. That is the baseline. The second is a stress scenario developed by the European Banking Authority (EBA) and the European Systemic Risk Board. This scenario includes shocks in numerous markets.
Over 31 million consumers in Vietnam researched or purchased a product online in 2015. Just ten years ago, internet connectivity was only starting to become common. Digitization is changing how people trade. There are even more dramatic changes happening under the hood. The way trade is financed, processed and regulated has entered a period of disruption. We take this opportunity to consider the short and long-term implications of digitization of the trade process.
Although the Coalition government has been reinstated, it is still faced with the problem of dealing with multinational tax avoidance. The issue escaped a lot of scrutiny during the election campaign and the current measures designed to address the issue fail to deal with the most common form of avoidance - interest deductions on intra-group debt.
The FTSE Italian bank index was down nearly 40% this year through the day of the UK referendum. It fell another 33% from the results of the referendum to the middle of last week.
In recent days, investors appear to have become more optimistic that the political will from the EU and Italy is sufficient to avert a full-fledged banking crisis. The FTSE Italian bank index rose almost 8% today, posting its fourth consecutive advancing session, over which time it has risen about 24%. It leaves the bank index off around 18% since June 24.