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Re: "Apple tax dodging highlights need for reform"

Letters to the Editor

 


When looking at this whole issue, its worth understanding some history and background. The current system of tax treaties and international structuring arose from a desire by many national governments to try and maximize the tax revenue they collect.

They did this by recognizing that there are constantly situations where an international corporation may be obligated to pay tax on the same revenue but numerous times. Of course, this would result in no net revenue and the corporation going bankrupt.

Therefore in order to attract the good or service to their jurisdiction, try to get as much tax revenue as possible, and try to encourage the corporation to set up some of its physical structure and work force in their jurisdictions, countries like the US, UK and Ireland set up tax treaties between themselves and other countries. It is key to understanding this underlying motivation for the current system.

This system arose not out of some noble desire to relieve taxpayers of the unfairness of double taxation or even at the bequest of the lobbyists of those taxpayers. It came out of a logical self-interest of various governments.

With this background in mind, let’s look at the Apple situation and compare it to Google and Starbucks (which are also under fire in the international media for their tax planning).

David Lesperance

 

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