Tag: treasury

US taxman cometh for Apple

taxmanWhile Apple claims that the EU  is all part of an “anti-American plot” it would appear that the US taxman is about to demand a slice of the action.

The US Treasury said it was tightening restrictions on companies’ use of foreign tax credits to reduce what they owe in US taxes.

Treasury Assistant Secretary for Tax Policy Mark Mazur said the government was closing another tax loophole that contributes to the erosion of the US tax base.

Analysts have speculated whether Apple could cut its US tax bill by claiming foreign tax credits for its extra tax bill in Ireland.

Under normal circumstances, US companies can reduce the taxes they owe the US government by the value of the tax credits they claim for taxes paid abroad on foreign profits. No US tax is due on those profits until they are brought into the United States, or repatriated.

But the new rule will prevent companies faced with back tax bills from “splitting,” a strategy that allows companies to bring foreign tax credits into the United States without repatriating the income from which they were derived.

Apple is not saying anything of course. The Treasury had no comment on whether its notice would have an impact on Apple directly, but a spokesperson said the notice applies to all companies required by a foreign government to pay additional taxes, including those hit by state-aid cases.


Everybody's a winner in UK 4G auction

Ofcom has announced the winners of its 4G spectrum auction and it seems like every carrier got its share of the cake. Telefonica (O2), Vodafone, EE, Three and BT subsidiary Niche Spectrum Ventures all won spectrum.

However, the government managed to raise £2.34 billion in the auction, far short of the £3.5 billion estimated in the budget. The 3G auction in 2000 raised £22.5 billion. Vodafone has paid £790 million for a bit of spectrum in 2.6GHz and 800MHz bands, while others paid considerably less.

The low frequency 800MHz band was freed up when analogue TV was switched off and it is ideally suited for widespread mobile coverage. The 2.6GHz band is better at delivering capacity needed for high data speeds, so combining the two has some obvious benefits.

At the moment the UK has just one 4G carrier, EE, which launched its LTE service late last year.

However, it is not doing very well. Ofcom believes things will pick up very soon and by the end of 2017 almost the whole UK population will be covered by 4G mobile services. Whether all consumers will rush to upgrade remains to be seen.

Under the terms of the auction O2 will have to provide indoor reception for at least 98 percent of the population and at least 95 percent of the population of England, Northern Ireland, Scotland and Wales. No rush though, it needs to meet the targets by 2017. 

British boffins warn science spending cuts mean "game over"

Some of Britain’s most influential boffins have warned the government that 20 percent cuts to science funding would mean “game over”.

The Royal Society has laid its cards on the table in its submission to the Treasury over the potential funding cuts to the sector, the New Scientist reports.

In the submission it outlined three scenarios: Constant cash with a reduction in real terms, which “could be accommodated”, a 10 percent “slash and burn” option which would have “serious consequences” and the 20 percent cuts option – translating as “game over”. The Royal Society’s president Martin Rees said this third option would cause irreversible destruction and be “very tragic”.

Speaking today, Rees warned that, as other countries invested in research, the UK risked becoming a less attractive option to mobile talent and young people.

Just to ram the point home at today’s talk, held at the Royal Institution and part of an event organised by the Campaign for Science and Engineering and the Science Media Centre, Rees shared the stage with five prominent university vice chancellors who also warned of the serious ramifications of the proposed cuts.

These included respected figures such as Simon Gaskell of Queen Mary, University of London, who said the move threatened to harm the UK’s pool of natural talent. Meanwhile, Andy Haines of the London School of Hygiene and Tropical Medicine pointed out that health research would suffer, especially as other countries such as the US and China were actually investing more in research and development.

Academics also told the New Scientist that they were worried that the government didn’t seem to be able to grasp the long-term nature of scientific research – and that the idea of cutting funding was out of step with other major economies.

The comments followed a warning yesterday from the head honcho on the House of Lords Science and Technology Committee that the UK faced a “brain drain” if proposed funding cuts were to go ahead. In a letter to the science minister David Willetts, Lord Krebs said scientists were likely to head overseas for more attractive positions and pay.

All we can do now is wait until the Government’s 2010 Spending Review – due next month – to find out how deep the cuts will be. But all government departments have been told to prepare for cuts of at least 25 percent in their budgets.

Sadly, this belt tightening threatens one of the things Britain currently does well. We can punch above our weight when it comes to science and research and this translates as positive news for the economy. 

Start slashing the funding and we risk no longer being able to attract or keep the best brains in the business.

Why ditch investment in something we’re actually good at.

US Government website hacked

A range of US official websites has fallen victim to a spate of hacking attacks.

The Treasury’s Bureau of Engraving and Printing, BEP.gov, BEP.treas.gov, Moneyfactory.gov and Moneyfactory.com have been targeted in an attack.

They were redirected to a Ukrainian website that then launched a variety of web-based attacks. which redirects visitors to external websites in the Ukraine.

According to an AVG software vendor official,  the first to report the hack in an official blog,  it redirected people to a Ukrainian website that then launched a variety of web-based attacks.

Claudia Dickens told AFP that the hosting company used by the Bureau of Engraving and Printing had a break-in, affecting numerous other websites.

The sites have been suspended until security boffs can work out how to fix the problem.