The real cost of tax avoidance

The net result of all this complex finagling, according to SOMO, is that Turquoise Hill Resources ended up paying just $89 million (U.S.) over six years in corporate income tax in tiny Luxembourg (where it has a single part-time employee). That’s an effective tax rate of just 4.19 per cent.

At the same time, it dodged paying $470 million (U.S.) in Canadian tax and $232 million (U.S.) more to the government of Mongolia, which it pressured by firing staff and delaying a planned expansion of the mine. One of the authors of the report, Vincent Kiezebrink, calls it “shameless tax avoidance.”

It could just as well be called clever tax avoidance, since all these complex arrangements are, by all accounts, perfectly legal. That’s the defence that Turquoise Hill put forward when SOMO sought out its side of the story.

In fact, a spokesperson for the company’s parent firm, Rio Tinto, said the tax

... read more at: https://www.thestar.com/opinion/editorials/2018/02/05/the-real-cost-of-tax-avoidance.html

by