Global Risks and Resilience Flashcards
what is profit repatriation
the process by which a company transfers profits earned in a foreign country back to its home country in hard currency (i.e. USD) after meeting the host nations tax obligations
Apple -> case study
Name some facts about Apple’s plan to repatriate $285 million back into the US
- Trump revealed that he would reduce the tax per cent rate from 35% to 15.5% to get big companies like Apple to bring their money back to the USA from overseas holdings
- Apple’s money was kept in Ireland for years, before the EU investigated Apple about its ability to pay taxes, causing them to move it to the small island of Jersey off the coast of Normandy (2015), which hardly taxes corporations -> Ireland stated it would ban tax avoiding corporations
- The rate of corporation tax in Ireland was the most competitive in Europe at 12.5%, but Apple had arranged whereby the max tax rate was just 1%, and in 2014 it only paid 0.005%
- Apple’s first step is to buy back even more of its shares. It has already purchased 22% of its outstanding shares since 2012
Define tax avoidance
a process used to reduce the amount of tax payable by means that are within the law.
what is a tax shelter
one type of tax avoidance
What is a tax haven
A tax haven is a country or jurisdiction that offers very low or even zero tax rates on certain types of income, making it attractive for individuals and businesses seeking to reduce their tax obligations.
name 2 examples of tax avoidance
- multinational corporations moving certain business activities or profits to countries with lower tax rates (often tax havens)
- others who refuse to repatriate profits back to their country of origin, again as a way of reducing tax burdens.
Nandos case study - tax avoidance
Briefly describe ->
- use the tax havens of Jersey
- if a Jersey-based company technically “owns” Nando’s image rights, the UK-based Nando’s restaurants must pay that offshore company for the right to use its own branding and logos. These payments are treated as business expenses, which lowers the profits (and, consequently, the tax owed) in the UK by about £20 million, while the income earned by the Jersey company is taxed at a lower rate.
- a place in the British Virgin Islands was anonymously owned, by the Nandos family trust to hold money there, therefore inheritance tax could not be paid
Who are the winner of tax dodging _ explain with stats or facts
big corporations and super-rich people:
- Since 2015, the richest 1% have more wealth than the world combined
- The super-rich use tax havens to continue to dodge their taxes
- 2014 -> saw the leak of the Panama papers -> unveiling how tax evasion and avoidance have become a standard practice globally
- 50 biggest US companies stashed $1.6 trillion offshore in 2015
- Europe’s biggest banks have registered over a 1/4 of their profits in tax havens
Who are the losers of tax dodging + explain
Ordinary people and poor countries:
- When rich people stash their profits overseas in tax havens, they deprive governments of resources they need to provide public services like schools and hospitals
- Governments either have to cut back on these services or collect higher taxes from everyone else
- tax dodging costs poor countries at least $100 billion every year -> enough to provide an education for 124 million childrena nd prevent almost 8 million deaths of children and mothers
- Africa loses $14 billion due to tax havens taht could save 4 million lives and get every child into the education system there.
what are disruptive technologies + example
a technology which brings major changes to the way people live and work instead of merely supporting and enhancing the current way things are done. One example is a drone -> unmanned aerial vehicles operated by a remote control - either by an operator or an on-board computer
benefits of drones
- people can mount cameras for their aerial films
- surveillance to help locate victims in earthquake and hurricane zones
- conflict can be waged remotely using armed drones
- can be used for companies -> Amazon use drones to deliver goods to customers
- can make structural surveys of buildings -> to monitor env conditions and provide farmers with info
- employment -> through manufacturing and tech
- monitor large crowds for saftey
cons of drones
- drones are not always properly accurate for war and conflict
- hacking drones - causing civilian fatalities
- spying - invading peoples privacy
- may desensitise armed personnel to war and killing
- problems of cost, breakdown and malfunction of computer software, and human error in operation
- used by terrorist organisations to conduct mass killings or killings of important people, i.e prime ministers, creating chaos within the country
what were the gatwick drone incident 2018
when drones were irresponsible flown closing Gatwick airport - an international transport hub at one of the busiest times of the year
impacts of the gatwick drone incident
- delayed and diverted flights
- introduction of technology to catch and stop drones
- business people may not be able to conduct work
- loses confidence/ rep in Gatwick
- transport on perishable goods may be diverted or lost
Whats is 3D printing
Technology that allows for the creation of 3D physical objects from a digital model, by building it up in a sequence of layers
What can 3D printing be used for? Advantages
- bone replacement, prosthetics -> medical advantages
- less waste from the design
- digital designs can be shared easily via online platforms
- short time
- parts may be printed for aircraft manufacturing (i.e. the fuel nozzles for Boeing and Airbus aircrafts)
- more energy efficient
- could cut the cost to produce manufacturing parts
Disadvantages of 3D printing
- lack of legislation - guns (3d printed gun was used to attack former Finnish PM), weapons and counterfeit goods can be created
- create tools to unpick locks - i.e. off handcuffs (german prisoners picked their handcuffs locks)
- could replace labour in increasingly complex tasks
what is risk?
A real or perceived threat against any aspect of social or economic life
How has hacking increased globally
- 15% of hackings originate from China
- over 10% of hacking attacks come from in Russia
- 16,000 websites hacked each year in India
- 25% of all hacking attacks come from within the USA
what are the new threats created by technological and globalising processes to businesses and individuals
Businesses:
- hacking
- trolls
- stealing money
Individuals:
- identity theft
- phishing
- hacking
- trolls
- pop up ads
- spam emails and calls
what is nationalism
Nationalism is a political, social and economic system characterised by the promotion of the interests of a particular nation, especially with the aim of gaining and maintaining sovereignty (self-governance) over the homeland
what are the 4 aspects of nationalism
- the nation
- national identity
- civic vs ethnic nationalism
- sovereignty
what is sovereignty in a nation?
the nation should not be controlled by any other nation or corporation and should have self-governance
what is the difference between hacking and identity theft?
hacking is gaining unauthorised access to data in a system or computer, whereas, identity theft is the fraudulent practice of using another person’s name and personal info to obtain credit, loans, etc
