Hey, 🥤Coca-Cola joins the gang!
The beverage giant has placed too much of the profit on its foreign operations because its home country, the USA, is a much higher tax jurisdiction. And Coca Cola might have to pay $3.3B for tax years 2007 to 2009 over foreign transfer licensing.
And even more, if the subsequent years are taken into account…
✂️ A Cut for the Common App?
“Small businesses are the backbone of our global economy and the beating heart of innovation.” – Tim Cook
📢 Fanfare for the common app. Apple will now allow any developer with less than $1M in annual sales to ‘qualify’ for a reduced App Store cut of 15%. The cut is half of Apple’s standard 30% fee and more than 28M registered users might qualify.
🏛️ Pillar of digital services strategy. The App Store is the most important business for Apple beyond its iconic iPhone. It generated an estimated $50B in revenue in 2019. And according to Tim Cook, this might very well be the future. To put the strategy in place: an estimated 98% of developers would be eligible for the 15% cut. But these developers contributed only 5% of the App Store’s total revenue last year.
🎩 Gerrymandering the community with a patchwork of special deals – said Epic Games. This is the same game creator (of Fortnite) who sued Apple over the 30% commission on in-app purchases. But Epic Games is not the only one who’s against Apple. Spotify, Netflix, and many more try to avoid Apple’s App Store 30% fee by preventing users from paying for subscriptions through its iOS app.
With the growing importance and power of the App Store during this pandemic, developers are calling the 30% cut ‘highway robbery.’ Furthermore, the 15% tax cut might just be an attempt to divide the creators and establish a monopoly.
🙉 Taxes on WFH
Wait! What? Almost a week has passed since economists at Deutsche Bank Research released a report titled “What We Must Do to Rebuild.” It floated the idea of imposing a 5% ‘privilege’ tax on the gross earnings of people working from home. Isn’t this the same bank to which Donald Trump still owes at least $300M in loan repayments, and which was fined for laundering Russian money in 2017?
The suggestion was made on the assumption that those affected would enjoy a better deal staying at home while allegedly not giving back enough to the economy. It could raise $49bn per year in the US, €20bn in Germany, and £7bn in the UK. That can fund subsidies for the lowest-paid workers who usually cannot work from home.
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🎈 The Tethered Tax – Crazy Tax Story
Hot air balloons NOT tethered to the ground get a tax-break. It is really difficult for lawmakers to ‘not’ come up with such ideas. Kansas and Missouri are two states with this peculiar law. So if you want to take a tax-free ride in a hot air balloon, make sure it’s actually going somewhere.
The Law. Kansas taxes sales of admissions for “any place providing amusement, entertainment or recreation services”. But the Federal Tax Act of USA prohibits states and local jurisdictions from imposing fees on airlines and other airport users.
Now here’s the fun illustration of the interplay of federal and state taxing authority in the USA. According to the Missouri Department of Revenue, untethered hot air balloons fly in federal airways and participate in air commerce. But tethered flights, which usually top out at 80 feet, do not.
The result? Hot air balloons that are tethered to the ground – and stay there – are taxed, because technically their occupants don’t go anywhere. Hot air balloons that are piloted “some distance downwind from the launching point” – i.e: the ones that actually travel – don’t have to pay the amusement tax.
💭 Byte of the Day
