power of love - Hong Kong Institute of Certified Public Accountants

NEWS
INTERNATIONAL
Cameron calls for global crackdown
on tax avoidance by businesses
British PM warns against aggressively complex arrangements
The British prime minister, David
Cameron, called for global action
on tax avoidance in his keynote
speech at the World Economic
Forum in Davos, Switzerland,
last month. Cameron told world
leaders that as the head of the G8
group of the largest economies
this year, the United Kingdom
would continue to focus on corporate
revenue dodgers.
“Any businesses who think
that they can carry on dodging
that fair share or that they can
keep on selling to the U.K. and
setting up ever-more complex tax
arrangements abroad to squeeze
their tax bill right down – well,
they need to wake up and smell
the coffee because the public who
buy from them have had enough,”
he said, adding that some forms
of tax avoidance have become “so
aggressive.”
The speech comes after a
British parliamentary commit-
Google announced a jump in
annual revenues after a strong
fourth-quarter performance.
The world’s largest Internet
search engine company earned
a net profit of US$2.89 billion
in the final three months of last
year, up 6.7 percent from the year
earlier.
The company reported fourthquarter
revenue of US$14.42
billion, up 36 percent from the
same period the year before.
6 February 2013
“We ended 2012 with a
strong quarter,” said Larry Page,
Google’s cofounder and chief
executive. “We hit US$50 billion
in revenues for the first time last
year – not a bad achievement in
just a decade and a half.”
According to analysts, the
company benefited from business
growth in international
markets. “Business looked really
strong, especially from a profitability
perspective. They really
AFP
David Cameron
tee questioned executives from
multinationals such as Amazon,
Google and Starbucks in November
2012 for paying little U.K. tax.
Last year, Starbucks said it would
voluntarily make tax payments
of £20 million over the next two
years after a Reuters investigation
found that the company had not
paid British corporation tax in the
previous three years.
Cameron’s “smell the coffee”
reference was widely regarded as
a dig at Starbucks in particular,
upsetting the American-owned
beverage chain. “The PM is
singling the business out for
cheap shots,” the Daily Telegraph
quoted an unnamed company
source as saying.
The House of Commons public
accounts committee said last
month it would hold a hearing at
which senior tax specialists from
PricewaterhouseCoopers, Ernst
and Young, KPMG and Deloitte
would answer questions over
their roles in assisting big companies
to minimize their tax bills.
E&Y’s Mark Otty, managing
partner for Europe, Middle East
and Africa, told the Telegraph that
companies have an “obligation”
to their investors to pay the
lowest tax possible. “The only
way you can resolve this issue is
through a legal code,” he said.
grew their margins in the core
business,” Sameet Sinha, an analyst
at B. Riley Caris, told Reuters.
“Most of that strength seems to
be coming from international
markets which grew revenues
quite substantially: up 23 percent
year over year, versus the 15 percent
growth in the third quarter.”
The revenue results pleased
investors who had been concerned
about a decline in digital
ad sales following the increasing
Apple’s shares
slide 12 percent
on poor results
Shares in Apple fell 12 percent in
a day as the technology company
reported disappointing Mac and
iPhone 5 sales. About US$50
billion was wiped off Apple’s
market value on 24 January
after it posted its slowest profit
growth since 2003.
Results from its first fiscal
quarter caused Apple’s shares
to fall to US$450, before
recovering some of its losses,
raising concerns over the
company’s smartphone growth
prospects. The shares had hit a
high of US$702 in September
2012.
The released figures also
indicated that profits had
remained the same from a year
earlier at US$13.1 billion, while
revenue was US$54.5 billion,
an increase of 18 percent from a
year ago.
Analysts had expected
revenues of about US$55 billion.
Google’s annual revenue hits US$50 billion in fourth-quarter surge
AFP
popularity of smaller screened
smartphones.
Google executives told analysts
in a conference call that the
company had focused on improving
the average cost-per-click, a
metric which indicates the price
advertisers pay Google.
The fourth-quarter figures
include Motorola Mobility, which
Google acquired in May 2012. The
subsidiary had an operating loss of
US$353 million during the quarter.