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First discussion LA

1. Research your MNC and report on any major issue(s) of international taxation that is (are) addressed in this chapter.  Post this assignment in the chapter conference.

 

Walmart has built a network of 78 subsidiaries and undisclosed branches in 15 overseas tax zones that the company could use to reduce foreign taxes in retail sales and avoid its taxes. From those foreign revenues, these confidential subsidiaries have never been subject to public scrutiny. They remain mostly visible because Walmart failed to list in the annual 10-K document with the U.S. Securities and Exchange Commission, SEC. Walmart’s preferred tax heaven is Luxemburg, which has been called “magic fairyland” for companies that want to collect profits from taxation.

 

 

2. Discuss how your MNC handles transfer pricing.

Walmart handles the transfer pricing by creating uniform rules for transfer

pricing arrangements, which the company uses to set prices for transactions between their own subsidiaries. This method is being used due to the pandemic, which the state tax agencies released guidance on several issues. This includes distant workers’ tax practices, taxability of federal subsidies, and President Trump’s payroll tax holiday.

 

References

ADP, Walmart among businesses still craving Covid tax guidance. (2020).  https://news.bloomberglaw.com/daily-tax-report-state/adp-walmart-among-businesses-still-craving-covid-tax-guidance

The Walmart web. (n.d.). Americans For Tax Fairness.  https://americansfortaxfairness.org/issues/corporate-tax-dodgers/the-walmart-web/

Second Discussion rob

Research your MNC and report on any major issue(s) of international taxation that is (are) addressed in this chapter.  Post this assignment in the chapter conference.

eBay pays local, state and federal income tax as well as foreign exchange taxs. They also had to encounter a new sales tax law which required ebay buyer/customers to start paying a sales tax, in 2019. Once buyers noticed, the companies sales started to decrease. This could also lead into auditing hassles for sellers on. One other risk eBay encounters is as debt increase, the amount of risk increase. If eBay is unable to generate sufficient cash flow from operations in the future to service there debt, they may be required to,

· "Incur the tax cost of repatriating funds to the United States

· Seek additional financing in the debt or equity markets

· Refinance or restructure all or a portion of our indebtedness

· Sell selected assets

· Reduce or delay planned capital or operating expenditures"

Discuss how your MNC handles transfer pricing. 

Topics of discussion can include but are not limited to:  Are transfers from a subsidiary to its parent (upstream)? From the parent to a subsidiary (downstream)? Or from one subsidiary to another of the same parent?  Transfer pricing methods?  What are the objectives of your MNCs transfer pricing practices?  What law(s) govern your MNCs practices?  What method is used?

As mentioned before, most of eBay's income comes outside of the United States. "Foreign exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency into U.S. dollars for financial reporting purposes". eBay pays input on value added taxes applicable taxable purchases within the various countries. eBay continues to have procedures put into place to comply with federal laws globally. eBay states that there are laws (Federal Arbitration Act) that require them to transfer "information between or among ourselves, our subsidiaries, and other parties with which we have commercial relations". They will have all consumers and user of ebay sign an agreement which informs them of the laws.

References: 

SCOTT F. SCHENKEL, Dec 31, 2019 eBay Sec 10k   https://ebay.q4cdn.com/610426115/files/doc_financials/2019/ar/2019-Annual-Report-(3).pdf

Thank you,