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Apple Must Pay Ireland €13bn in Tax

 2 min read / 

The Story:

Apple has agreed to pay the Irish government €13bn after the EU Commission found the tax benefits received by the company breached EU law. The amount is almost 6% of Apple’s liquid assets (August 2017), but Ireland reportedly does not want the money. The ‘special’ relationship appears to be threatened by the EU, who see the Irish government as enabling the company to avoid tax via Apple’s Irish subsidiaries.

Why It’s Important:

Both Apple and the Irish government are appealing the decision, which is based on state aid rules. EU law allows different member states to set their own corporate tax rates but prohibits what it called “state aid”, rules which benefit individual companies. Taxing companies differently is treated no differently from the state gifting the company money, which is illegal according to the EU commission.

While corporation tax in Ireland is 12.5%, Irish law meant Apple paid as little as 0.005% tax on profits in 2015. In return, the Irish government receives foreign investment and jobs for Irish workers. While the pair has enjoyed a fruitful relationship since the early 90s, the EU appears to be cracking down on this arrangement.

Apple Sales International and Apple Operations Europe are the subsidiaries allegedly used to funnel money through Ireland. Both are based in the country and reigning in large profits, despite neither company having any employees or real offices, says the EU Commission. The Commission has also targeted Starbucks and Fiat for their tax dealings in the Netherlands and Luxembourg respectively.

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Asia

Google to Open Artificial Intelligence Centre in China

 2 min read / 

Google AI China

Google will be opening its first artificial intelligence (AI) research centre in China, despite many of its services being blocked there.

Fei-Fei Li, Chief Scientist of Google Cloud, said:

“I believe AI and its benefits have no borders. Whether a breakthrough occurs in Silicon Valley, Beijing or anywhere else, it has the potential to make everyone’s life better for the entire world. As an AI first company, this is an important part of our collective mission. And we want to work with the best AI talent, wherever that talent is, to achieve it.”

The research centre will focus on basic AI research, and will consist of a team in Beijing, who will be supported by Google China’s engineering teams.

Google’s search engine and its Gmail are banned in China. However, the country has 730 million internet users, making the market too large to ignore.

Google is not the only tech giant facing restrictions in China. Facebook is also banned, while Apple’ App Store has been subject to censorship. In order to comply with government requests, Apple removed many popular messaging and virtual private network (VPN) apps from its App Store in China earlier on this year.

China has recently announced plans to develop artificial intelligence, and wants to catch up with the US. However, human rights groups are concerned by China’s use of artificial intelligence to monitor its own citizens.

Keep reading |  2 min read

Companies

A Deal Looks Likely for Disney’s Fox Takeover

 2 min read / 

Disney's Fox Takeover

The Story

Disney is on the cusp of confirming a deal to buy most of 21st Century Fox in a $60bn deal, reports claim. The sale would see Disney acquire 20th Century Fox film studios as well as Sky and Star satellite broadcasts in the UK, Asia and Europe, according to the BBC.

21st Century Fox would retain broadcasting network Fox News and Fox Sports 1. While both would remain independent initially, they “could consider a merger later with the Murdochs’ publishing company, News Corp.,” reported Bloomberg’s David Hellier and Anousha Sakoui.

Fox CEO James Murdoch could potentially be offered a senior position at Disney once the deal is done.

Why It’s Important

Fox has reassessed its place in the current media landscape and decided that to in order to be successful it would need to scale up. Disney has the scale that Fox lacks. By consolidating their efforts around news and sports, Fox will be able to play an important role in the media industry.

On the other hand, Disney’s acquisition will extend the company’s reach. Plans to roll out a new Disney streaming service could benefit from the increased international exposure, where there appears to be the most growth.

Disney would also acquire Fox’s streaming service Hulu, opening new opportunities for Disney to compete with the likes of Netflix and Amazon Prime Video.

Keep reading |  2 min read

Companies

ExxonMobil under Shareholder Pressure

ExxonMobil Shareholder

The world’s largest oil group has agreed to publish the impact of climate policies on its bottom line.

In recent years, shareholders of the world’s largest oil and gas conglomerates have been pushing companies to publish analysis of the threat they face from climate change and the threat of green policies. In a regulatory filing, Exxon announced that it would change how it reports its results to include a paper on how climate policies are hurting its business. The proposal was backed by around 60% of Exxon’s shareholders back in May, which was led by the New York state employees’ retirement fund. The move follows Exxon’s gradual shift towards addressing climate change; in the 90s, the group campaigned against the Kyoto protocol but has since committed to reducing emissions.

Keep reading |  1 min read

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