Hey,
Yet another investment… and this time it is GOOGLE! An investment of USD 4.5 billion (INR 33,737 crore) for 7.7% stake in JIO to develop an affordable O.S. for entry-level 4G/5G smartphones.
This Week’s Dose
- Will Fall 2020 Happen Online?
- The Tariff War- USA vs France
- The Debt Saga
Will Fall 2020 Happen Online?
When foreigners attend our great colleges & want to stay in the U.S., they should not be thrown out of our country.
— Donald J. Trump (@realDonaldTrump) August 18, 2015
Roughly, one-year in the presidential mansion, President Donald J. Trump, tweeted this. Why is this old tweet resurfacing, you ask?
On July 7, 2020, the USA said that for Fall 2020, they wouldn’t allow any international students to be in the country if they have a fully online semester.
A battle of sorts brewed
and we could best summarise it as – Trump administration wanted to go back to on-campus classes starting this Fall 2020, but due to health concerns, universities were ready to fight back and not let its international students face troubles.
What did Universities do?
They filed a lawsuit against the Trump Administration (Google, Facebook, Microsoft join this lawsuit) opposing this rule. How did the Trump administration take this? Mr. President threatened to pull the tax exemptions of schools. He said in a tweet “Too many Universities and School Systems are about Radical Left Indoctrination, not Education. Therefore, I am telling the Treasury Department to re-examine their Tax-Exempt Status…”
The lawsuit judgment as of July 14, 2020- *drumrolls 🥁* – the Trump Administration has lost this war and rescinded the said law. This is an official victory for international students & their visa status remains safe!
But are the Universities safe from this Russian roulette or do they risk their Tax-Exempt Status?
The Tariff War- USA vs France
The French designer handbag is about to get a lot more expensive for Americans to carry. USTR (United States Trade Representative) announced a 25% tariff on handbags and cosmetic imports worth USD 1.3 billion.
Ouch! This is going to hit the land of Haute Coutre where it hurts the most.
This is a direct response to France’s intention to levy a GAFA tax on Silicon Valley’s biggest tech giants. The GAFA tax ( Google, Apple, Facebook, Amazon) would take a 3% cut of any revenue earned in France for tech companies based abroad. The GAFA tax, in turn, was a result of Tax Dumping by these tech heavyweights. They ‘escape’ taxes by locating their European HQs in tax haven countries like Ireland & Luxembourg. This helps them save corporate tax.
Ireland’s corporate tax rate is 12.5%, while Luxembourg is 21% as compared to France’s 31% & Germany’s 30%. FM of France Bruno Le Maire accused the brunt of the business as unfair.
USTR has already launched investigations targeting digital services taxes in India. Is the USA setting an example for other countries?
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The Debt Saga
As if we didn’t see COVID-19 affecting everything that the sun touches – here’s something more. The Corporate Debt around the world increases by USD 1 trillion due to Coronavirus. In 2020. This 12% jump to USD 9.3 trillion from 2019, is because now the corporates want to play it safe.
We know you must be thinking – Corporate Debt always increases (it did increase by 8% in 2019 too!). However, the reasons differ. The overall borrowing increased to have a “fortified” balance sheet from the said pandemic, not due to an increase in financial activities like before. Surprisingly, the pre-tax profits for the same firms rose a collective 9.1% to USD 2.3 trillion!
Does this mean that such huge borrowing justifies itself?
What’s Happening- Tax Updates
@IncomeTaxIndia has already released New ITR Forms for FY 2019-20 (AY 2020-21). All ITR Utilities will be out soon! Don’t know which ITR form to file? Here’s something for you.
‘Millionaires for Humanity’ Club – Crazy Tax Story
“But we do have money, lots of it. Money that is desperately needed now and will continue to be needed in the years ahead, as our world recovers from this crisis.”
Millionaires for Humanity a.k.a. a group of the world’s richest have called on Governments to permanently increase taxes on them!! The list includes Disney heir Abigail Disney; Ben and Jerry’s Ice Cream co-founder Jerry Greenfield; New Zealand’s second-richest man Sir Stephen Tindall; British director and screenwriter Richard Curtis. They cited the fact that how the effect of the pandemic will last for decades and push half a billion more people into poverty.
The millionaires of the world are joining hands against the battle for COVID.
Byte of the Day
“Tax day is the one day of the year I disappoint the government as much as it disappoints me.”
-unknown