Explain and evaluate one integrity measure used by a country other than Australia to combat international tax avoidance or evasion.

The worldwide media has been saturated with examples of large multinational corporations minimising their taxes by utilising offshore structures.
In Australia there has been a reform of many international tax integrity measures (for example thin capitalisation, transfer pricing etc). Recently, on the 20th January 2014 a newspaper report stated Oxfam had asked Prime Minister Tony Abbott to call for a crackdown on tax havens at the World Economic Forum.
Required
PART ONE
1.    Explain and evaluate one integrity measure used by a country other than Australia to combat international tax avoidance or evasion. Please note you can choose any type of integrity measure except for transfer pricing,(examples of other measures include thin capitalisation, controlled foreign corporations, information sharing, anti treaty shopping articles etc). Your evaluation should consider how this measure ranks according to equity, certainty, simplicity, neutrality and efficiency.
10 marks
PART TWO
T
2.    Consider the following Extract from the United Kingdom, House of Commons, Public Accounts Committee, HM Revenue and Customs Annual Report and accounts:
Starbucks told us that it has made a loss for 14 of the 15 years it has been operating in the UK, but in 2006 it made a small profit. We found it difficult to believe that a commercial company with a 31% market share by turnover, with a responsibility to its shareholders and investors to make a decent return, was trading with apparent losses for nearly every year of its operation in the UK. This was inconsistent with claims the company was making in briefings to its shareholders that the UK business was successful and it was making 15% profits in the UK. Starbucks was not prepared to breakdown the 4.7% payment for intellectual property (which was 6% until recently) that the UK company pays to the Netherlands based company. The Committee was sceptical that the 20% mark-up that the Netherlands based company pays to the Swiss based company on its coffee buying operations, with a further mark up before it sells to the UK, is reasonable . Starbucks agreed that it had a special tax arrangement with the Netherlands that made it attractive to locate business there, which the Dutch authorities asked Starbucks to hold in confidence, and that Switzerland offers a very competitive tax rate. In addition, there is an inter-company loan between the US Starbucks business and the UK Starbucks business over a period of time with the interest rate set at higher rate than any similar loan we have seen. We suspect that all these arrangements are devices to remove profits from the UK to these areas with lower tax.
What was the reaction of the UK public to Starbuck’s international tax structuring? Do you think cultural factors or backgrounds impact a taxpayer’s attitude to international tax avoidance or evasion? Should multinational companies pay only what they are legally obligated to pay or should they pay their “fair share” in the countries where they derive their income from? How does one determine what is a “fair share” of tax? What ethical issues might this raise? Explain  20 marks
GENERAL NOTES:
1.    The total length for this paper should not exceed 3000 words (A4, 12 point font ,Arial single spacing, not including footnotes).
2.    You must complete all parts/elements of the question.
3.    The Australian Guide to Legal Citation (AGLC) style of referencing must be used. http://www.law.unimelb.edu.au/mulr/aglc. Further links and information are available on Blackboard.
4.    Ensure your discussion is analytical rather than descriptive and don’t be diffident on expressing your views for/against positions ensuring you support your views with relevant authorities.
5.    This assignment is designed to test your research skills, critical thinking skills and your ability to identify and analyse socio-cultural issues in business scenarios. A rubric is attached to this Assignment setting out the criteria used to assess the paper. You are advised to read this carefully.
6.    It is very important you carefully proof read your work. You will be penalised for poor written expression.
1.    Review a training program at your internship site – you should select one you can actually attend.  Include a copy of the training program or an outline of it in your final project.
Training program was the orientation
2.    What are the driving forces behind this training (why is it being given)?
3.    Do they contract externally for any of their training?
4.    Do a critical review of the training program you reviewed or attended and answer the following questions about it:
•    Was it scheduled at appropriate times for the employees? 3 days
•    Was the curriculum appropriate with a front, middle, and end? Yes
•    Was the program sequenced properly? Yes
•    Was transfer of training built into the program?
•    Were different methods of instruction employed?
•    Was it active training for the participants? Yes
•    Was there an ice breaker or opening exercise?
•    What type of tool was used to evaluate the training program (i.e. use of surveys, focus groups, interviews, pre-test post-test, etc.)?
•    Did the evaluation tool measure levels 1-4 according to Kirkpatrick’s model?
•    How often is this training given? For every new employees
•    Who conducted the training? Department heads
•    What training media and equipment were used? Computer and papers
•    What was the cost of the training? 150 $ per employee
5.    How would you change the program to improve it?
The third assignment requires that you evaluate or review an existing evaluation program at your internship site.  You may wish to review the four levels of evaluation suggested by Kirkpatrick (1998) prior to developing an evaluation process.  Those four levels are:
Level 1 – Trainees’ reaction to the course.  Did they like it?  When they walked out, did they feel their time had been well spent?  Did the material make sense to them?  Was the instructor knowledgeable and helpful?  Do they believe the learned material will be helpful to them on the job?  This can be done with a questionnaire, the use of focus groups, interviews, performance or certification tests, or by examining on-the-job performance.
Level 2 – Measure of actual learning.  Did the trainees acquire the knowledge, skills, or attitudes that were intended to be taught?  This can be done with a questionnaire, the use of focus groups, interviews, performance or certification tests, pre-test post-test method, or by examining on-the job performance.
Level 3 – Application and use of skills in the job environment.  Assessment at Level 2 has determined that the individual actually knows what has been taught and could actually perform the required task – but doesn’t.  The key to evaluating Level 3 is determining if the taught behavior is being used in the job setting.  This may require observation and a checklist to determine if the knowledge gained is being applied.  Sometimes the final product is a good indicator that the appropriate behavior is being used.
Level 4 – Business results as an outcome of training.  Key to this level is the determination that if the trainee is using the behavior as determined in Level 3, what impact does this have on the company?  This can be measured in customer satisfaction, quality, profit, and by other procedures which focus on the goals and purpose of having a training organization.
Reference
Kirkpatrick, D.L. (2006).  Evaluating training programs:  The four levels (3rd ed.).
San Francisco, CA:  Berrett-Koehler.

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