Brussels probes multinationals’ tax deals [FT]
Brussels is probing Ireland, Luxembourg and the Netherlands over their tax deals with multinationals paving the way potentially for a formal investigation into illegal sweeteners. Europe’s top competition authority has asked the governments to explain their system of tax rulings and give details of assurances given to several specific companies – including Apple and Starbucks – according to people who have seen the request. The move threatens to open a new front in the global clampdown on tax evasion through enforcing the EU’s state aid rules – a unique regime that bans serious distortions of competition through tax breaks to favoured private groups.
Ernst & Young Ignored China Papers Request, Court Told [Bloomberg]
The Chinese Securities Regulatory Commission, at the request of its Hong Kong counterpart, asked [EY] Hua Ming in 2010 to hand over the documents, lawyer Jat Sew Tong said in a Hong Kong court. Hua Ming declined, Jat, who represents the Securities & Futures Commission, said. Ernst & Young Hong Kong resigned in March 2010 as the auditor for Standard Water Ltd., a Chinese water treatment company planning to list in the city, citing the discovery of inconsistencies in documents. It says it can’t provide the working papers to Hong Kong’s regulator because of mainland legal restrictions. “Ernst & Young clearly has the requested information in their possession,” Jat said in court. “There is no excuse for their non-compliance.”
Ackman Questions Impartiality of Herbalife’s Auditor [DealBook]
In a two-page note addressed to Dennis M. Nally and Robert E. Moritz, the chairmen of PricewaterhouseCoopers, Mr. Ackman urged the auditor to “carefully study the issues that we have raised” as part of its audit review. Attached to the note, which was also sent to the Securities and Exchange Commission and members of Herbalife’s audit committee, were 50 pages outlining what Mr. Ackman says are a series of accounting and disclosure issues. The letter also asks Mr. Nally and Mr. Moritz to “explain how PwC intends to overcome and resolve the appearance of impaired independence with respect to its in-progress and impending audit and review in light of nonaudit services performed by PwC and/or members of the PwC global network for Herbalife.”
How Wal-Mart’s Waltons Maintain Their Billionaire Fortune [Bloomberg]
America’s richest family, worth more than $100 billion, has exploited a variety of legal loopholes to avoid the estate tax, according to court records and Internal Revenue Service filings obtained through public-records requests. The Waltons’ example highlights how billionaires deftly bypass a tax intended to make sure that the nation’s wealthiest contribute their share to government rather than perpetuate dynastic wealth, a notion of fairness voiced by supporters of the estate tax like Warren Buffett and William Gates Sr. Estate and gift taxes raised only about $14 billion last year. That’s about 1 percent of the $1.2 trillion passed down in America each year, mostly by the very rich, former Treasury Secretary Lawrence Summers estimated in a December blog post on Reuters.com. The contrast suggests “our estate tax system is broken,” he wrote.
Grover Norquist: Don't Bogart Those Marijuana Dispensary Taxes [BBW]
Currently, cannabis dispensaries are proliferating in those states where marijuana is legal for medicinal purposes or, as in Colorado and Oregon, for simply getting baked. But dispensaries aren’t treated like other businesses as far as the federal tax code is concerned: They’re not allowed to deduct their business expenses from their taxable income, which effectively translates into a far higher tax rate. Dispensaries argue that tax policy forces them to charge more for their product, making it more likely that clients will simply turn to illegal and unregulated—and non-tax-paying—street dealers. [Earl] Blumenauer [D-OR] has introduced legislation to rectify this, and Americans for Tax Reform today will announce its support for it. This isn’t the first time Norquist has lent his name to the cause of marijuana legalization, and it probably won’t be the last. The Americans for Tax Reform’s white paper on the topic, also due to be released today, is entitled Legal Cannabis Dispensary Taxation: A Textbook Case of Picking Winners and Losers Through the Tax Code.
Public Comment Period on Lease Accounting Draws Near [AWEB]
"We encourage stakeholders to review and provide feedback on the revised Leases [Topic 842] proposal before the comment period ends this Friday, September 13," FASB spokesperson John Pappas told AccountingWEB. "The FASB looks forward to reviewing comments from a wide variety of stakeholders."
73-Year-Old Woman Arrested for Going On Wild Car-Keying Spree [Gawker]
Police in Greenwich, Connecticut have arrested 73-year-old Janina Slomiana on six counts of criminal mischief for vandalizing neighborhood cars with possibly “some sort of metal screw or chunk of metal” this Sunday (pictures here). They’re also looking at 20 other cases of vandalism reported in the neighborhood this summer, one including a truck with over $6500 in damage. Her next-door neighbor reports that her car was damaged and another woman who saw Slomiana scraping a car with her undetermined-metal-thingy alerted the police. Greenwich Police Lt. Kraig Gray, when asked why the woman would do such a thing, answered, “I don’t know the answer to that. She’s the only one that does.”