Logitech a Swiss Company who operates in Australia via a Singapore base subsidiary is set to be drawn into the row over the non payment of taxes in Australia by multinational Companies such as Google, Apple and Amazon.
The Australian operation is registered with the Australian
Companies and Securities Commission as Logitech Australia Computer Peripherals
Pty Ltd, Australian management report into Singapore.
Executives at the Australian Company are refusing to say how
much revenue the Company generates in Australia with no financial records
registered with ASIC.
They have also refused in the past to say whether they have
an arrangement with the Australian tax office relating to transfer pricing.
This is the cost that the Company lists as the import cost
prior to Logitech goods being sold in Australia.
On tax avoidance by multinational companies Australian Federal Treasuer Joe Hockey said at this weekends G20 finance ministers meeting that members were united in their ambition to “modernise global tax rules” and close loopholes that have emerged in recent years.
He hit out at technology Companies such as Apple, Google, and Amazon who are using taxation loopholes to avoid paying taxes similar to an Australian Company.
“We’ll bring international tax rules into the 21st century and ensure they keep up with changing multinational business models,” Hockey said.
“Tax evasion and avoidance is a global problem and the effects are sometimes felt hardest by the poorest people in the poorest countries. Our work on financial regulation has been central to future-proofing our system against shocks.”
“We have endorsed far-reaching initiatives which will arm our tax authorities with the information they need to identify tax evaders through the automatic exchange of information using a common reporting standard.”
From 2017, information will be exchanged under that common standard to send a strong deterrence message.
Earlier this month Logitech International announced that
based on the findings of a financial investigation into the Companies
operations the Audit Committee of its Board of Directors had determined that previously
issued Logitech financial statements for Fiscal Years 2011 and 2012 and the
first quarter of Fiscal Year 2012 can no longer be relied on.
The Company that was struggling prior to the release of the
UE Ears range of products claims that the problems with their accounts was due
to an accounting misstatement for inventory valuation reserves for Logitech’s
It is believed that Logitech had millions of dollars’ worth
of dead stock on their books with several retailers returning PC related stock
that did not sell.
The Company said that they will restate these financial
statements as part of its Fiscal Year 2014 10-K filing.
The company claims that they have discussed the matter
relating to the restatement with its independent registered public accounting
firm, PricewaterhouseCoopers who are the same accountants that advised Sony
Australia when they were liable for millions in back taxes by the Australian
Logitech has said that the new set of accounts will include
an increase in the provision for inventory reserves during the fourth quarter
of Fiscal Year 2011 and a decrease for 2012 resulting in a fall in revenues.
The restatement is not expected to materially impact Fiscal
Years 2013 or 2014.
The Audit Committee is continuing its investigation as to
how the Company came to understate their financial records.
The Company that is keen to spruik information about their
products appears to be very media shy when it comes to financial matters, and
whether they actually pay taxes in Australia.
We also want to ask questions as to how they pay bonuses and
incentives to senior management and whether these payments are made in
Australia or overseas.