A little help on the News Corp -4.5bil tax "bill"

[Slowhand]

so why cant everyone pay 35%, no rebates, no refunds, no subsidies, no loop holes.

The difference in timing between cash-flows and paper profits, to begin with.

[Hobie]

Many people pay the percentages I listed, the average is above 27%, which is still nearly the highest in the world. I'm sorry you cannot understand that.



Reading comprehension. I was answering the post below. Maybe you shouldn't be so asshurt all the time.



Stevo

GET PAID 4.5 BILLION BY THE US TAXPAYER CALL IT PUNITIVE - HERP DERP!
I know that's not what you said, but c'mon, your responses have been off-topic and meaningless.





Can anyone that actually knows what they're talking about, perhaps an accountant or accounting major, actually address the topic of the thread in the first post and accurately help explain it?

I read some of the "alarmist" links where they seem to make it out as if newscorp basically just got a 4.5 billion dollar pay out from the US taxpayer, but I know a tiny bit about accounting and I know that's not accurate. The reuters link helps to explain it. Obviously they don't get 4.5 bil free and clear, but it still seems like their effective tax rate is really really low. Can anyone help explain what it actually is?

We've already had enough posts of the unrelated, irrelevant, and restating of the painfully obvious.

[stevo]

GET PAID 4.5 BILLION BY THE US TAXPAYER CALL IT PUNITIVE - HERP DERP!
I know that's not what you said, but c'mon, your responses have been off-topic and meaningless.





Can anyone that actually knows what they're talking about, perhaps an accountant or accounting major, actually address the topic of the thread in the first post and accurately help explain it?

I read some of the "alarmist" links where they seem to make it out as if newscorp basically just got a 4.5 billion dollar pay out from the US taxpayer, but I know a tiny bit about accounting and I know that's not accurate. The reuters link helps to explain it. Obviously they don't get 4.5 bil free and clear, but it still seems like their effective tax rate is really really low. Can anyone help explain what it actually is?

We've already had enough posts of the unrelated, irrelevant, and restating of the painfully obvious.

That article is (was, since it is no longer a working link, maybe they knew it was bullshit and took it down) claiming a "WHAT IF" number, and adding years of interest on it to inflate the number. It is just bullshit, you know it is bullshit, and yet you keep repeating it.

Let me try this one more time: CITIES/STATES/COUNTRIES ALL GIVE LARGE COUNTRIES TAX BREAKS FOR EITHER MOVING TO THEIR AREA OR TO STAY IN THAT AREA, AMONG OTHER REASONS. Could you read that? Do understand that? They get incentives for being located in certain areas because the entity that is giving them the tax breaks finds it beneficial for them to be located there. Most of these tax incentives have a time limit, after they expire the company goes to a more applicable tax rate.

Instead of you bawling like a calf in a hail storm and posting stupid pics again, spend that same 10 minutes that it took you to write that shit, do a search and start reading. You may come out looking less like an idiot.

Stevo

[Hobie]

I'm likin' ireland. Just don't earn the ire of...ireland. That's where the IRA is from.

12.5% sucks, 0 is better

There is no income tax, corporate tax, sales tax, capital gains tax, wealth tax, inheritance tax, property tax, gift tax or any other kind of direct taxation in Cayman Islands. This is one of the most significant reasons that Cayman Islands has attracted the registration of many offshore businesses (about 50,000) from all over the world.

"Double Irish"

The Double Irish Arrangement is a tax avoidance strategy that U.S. based multinational corporations use to lower their income tax liability. The idea is to use payments between related entities in a corporate structure to shift income from a higher-tax country to a lower-tax country. It relies on the fact that Irish tax law does not include effective transfer pricing rules.

"Dutch Sandwich"

The addition of a Dutch Sandwich to the Double Irish scheme further reduces tax liabilities. Ireland does not levy withholding tax on certain receipts from European Union member states. Revenues from income of sales of the products shipped by the second Irish company are first booked by a shell company in the Netherlands, taking advantage of generous tax laws there. Funds needed for production cost incurred in Ireland are transferred there, the remaining profits are transferred to the first Irish company in Bermuda. If the two Irish holding companies are thought of as "bread" and the Netherlands company as "cheese", this scheme referred to as the "Dutch Sandwich".[3]. The Irish authorities never see the full revenues and hence cannot tax them, even at the low Irish corporate tax rates. There are equivalent Luxembourgeois and Swiss sandwiches.

Not all business types can take advantage of the above. I think it's focused on businesses selling intangibles, but I'm not entirely sure. Google, Microsoft, and Oracle all utilize these strategies.


What's the strategy involving the Cayman's called?

Goldman Sachs and JP Morgan operate a lot of companies from the Cayman's.
Almost nothing is taxed in the Cayman's.


You need not be a multi-national to engage in a clever tax avoidance strategy, individuals can do it too.

Five Flag Theory
Perpetual travelers may attempt to organize their affairs around the "Five Flags" theory[1][2][3], arranging for different facets of their lives to fall under the jurisdiction of separate countries or flags. This is W.G. Hill's[4][1] own "2 flag" extension of investment advisor Harry Schultz's[1] original "Three Flags" approach.
Whether to minimize governmental interference (via taxes or otherwise), or to maximize privacy, the theory proposes that you arrange for each of the following to be in a separate country:
Passport and Citizenship - in a country that does not tax money earned outside the country.
Legal Residence - in a tax haven.
Business Base - where you earn your money, ideally somewhere with low Corporate tax rates.
Asset Haven - where you keep your money, ideally somewhere with low taxation of savings interest and capital gains.
Playgrounds - where you spend your money, ideally somewhere with low consumption tax and VAT.

All this shit is above my head for now, but someday, someday...

[Hobie]

That article is (was, since it is no longer a working link, maybe they knew it was bullshit and took it down) claiming a "WHAT IF" number, and adding years of interest on it to inflate the number. It is just bullshit, you know it is bullshit, and yet you keep repeating it.

Let me try this one more time: CITIES/STATES/COUNTRIES ALL GIVE LARGE COUNTRIES TAX BREAKS FOR EITHER MOVING TO THEIR AREA OR TO STAY IN THAT AREA, AMONG OTHER REASONS. Could you read that? Do understand that? They get incentives for being located in certain areas because the entity that is giving them the tax breaks finds it beneficial for them to be located there. Most of these tax incentives have a time limit, after they expire the company goes to a more applicable tax rate.

Instead of you bawling like a calf in a hail storm and posting stupid pics again, spend that same 10 minutes that it took you to write that shit, do a search and start reading. You may come out looking less like an idiot.

Stevo

you mad & dumb, thanks for playing!

[stevo]

you mad & dumb, thanks for playing!

Coming from a guy with a bed-shitting sig like yours....
Your butthurt cup runnith over.

Stevo

[slow99]

Can anyone that actually knows what they're talking about, perhaps an accountant or accounting major, actually address the topic of the thread in the first post and accurately help explain it?

Look at the cash flows to see how much actual taxes a corporation is paying... not the accrual figures from the income statement.

[SMEGMA STENCH]

Yeah, it's only one of the PIIGs.

I know what the PIIGs are, I just couldn't find what the acronym actually stands for. Then again I didn't look real hard. Perhaps you could alleviate my ignorance in this matter.

[slow99]

I know what the PIIGs are, I just couldn't find what the acronym actually stands for. Then again I didn't look real hard. Perhaps you could alleviate my ignorance in this matter.

Portugal Ireland Italy Greece Spain. The shitty countries of Europe that are bankrupt.

[Slowhand]

Can anyone that actually knows what they're talking about, perhaps an accountant or accounting major, actually address the topic of the thread in the first post and accurately help explain it?

It's pretty simple:

The tax-calendar revolves around a 365-day calendar year; few business cycles fit into such a timeframe. Some cycles are 18 months, some can last years. The point of this is that these differences in the timing of cashflows leads to accruals (A/R and A/P) for which revenue (income) is recognized on the company's books, but for which no cash has yet been received.

You can see the problem that would arise if a company's tax liability was calculated on accrual numbers: they'd owe taxes on 'cash' they've never received. For this reason, the tax liabilities are calculated on a cash basis only. This involves a conversion from the accrual books that 99% of businesses (and 100% of Fortune 1000 businesses) publish to books on a cash basis.

What it all means is that you can have a shitload of revenue, but until you're paid in cash you don't owe any tax on the revenue.

You've also got to figure in deferred tax attributes. You can carry back a current year loss 5 years to offset profits in previous years, and you can also carry forward that loss 20 years to offset profits in future years. Again, this is all to smooth out the cyclical nature of business cycles that don't fit in to a calendar years. Over a long enough period of time, however, a company will wind up paying the same amount of taxes regardless of deferred tax assets.

The final piece that fits in here is that very large corporations with many operating subsidiaries can offset profits in one entity with losses in another.

But I'll go ahead and leave the rest of this discussion to the expert IT and salesmen of dfwmustangs.