Displaying items by tag: US Treasury

Social networking behemoth Facebook has formally announced that it would like to launch its own cryptocurrency next year according to reports by the BBC.

Unused analogue and television spectrum is being auctioned by the Federal Communications Commission (FCC), the US government agency which regulates interstate and international communications by radio, television, wire, satellite and cable, in an incentive to free up more spectrum for 4G and 5G and also advanced wireless services such as mobile and video.

The two-sided auction for the spectrum was intended to pay broadcasters a fair share for their assets before selling them to the highest-bidding mobile carriers. After several months, bids from those looking for more spectrum totaled up to $19.63 billion for 70 MHz of spectrum sold by broadcasters in an earlier, reverse auction phase.

What follows is a smaller assignment phase that could generate extra funds as bidders try to get more specific frequencies in markets. But with the auction mostly complete, the US Treasury will reportedly get about $7 billion for deficit reduction.

The second forward phase of the auction just came to a close. Once the assignment phase comes to an end in a few weeks, the FCC will reveal the bid winners from the spectrum auction. According to reports, broadcasters from the reverse auction are allowed to discuss the winnings publicly, but forward participants must remain silent for now.

Broadcasters that decide not to participate will have their spectrum 'repacked' into other bands to protect their signals from neighboring interference and ensure uninterrupted TV services, Rapid TV News reports.

The FCC has proposed setting aside up to two UHF (Ultra High Frequency) channels in every US TV market for Wi-Fi and other unlicensed services too, but this proposal dubbed 'vacant channel' has been controversial, as some broadcasters argue it takes valuable real estate away from low-power television stations (LPTVs) looking to source new homes after the FCC's repacking.

A Chinese company’s attempt to purchase a German technology firm that specializes in the semiconductor industry has been blocked by the US Treasury. A review conducted by the Committee on Foreign Investment in the USA - which is chaired by out-going US President Barack Obama, found the potential takeover posed too many risks to national security.

It was able to block the purchase of German technology company Aixtron by blocking the inclusion of Aixtron’s US business in the proposed deal. In a statement issued by the US Treasury in relation to the attempted takeover, it said that the proposed purchase could place sensitive technology with potential military applications in Chinese hands.

A spokesman for the US treasury said: “CFIUS and the president assess that the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation.”

It said publicly-traded Aixtron SE's expertise in technology key to making advanced compound semiconductors used for LED lighting, lasers and solar cells also has military applications.
Washington does not want to see such technology end up in the hands of the Chinese government-backed company which wants to buy Aixtron, Grand Chip Investment.

The Treasury said Aixtron's US business is an important contributor to that technology. In late October, the German government withdrew its initial approval for the 670 million euro ($714 million) takeover after Washington raised security concerns. Citing German intelligence sources, Handelsblatt daily reported that the United States had expressed fears that China could use Aixtron technology to bolster its nuclear program.

After receiving the information, the German economy ministry said on October 24 that it would reopen its review of the deal. The US Treasury said Friday that Grand Chip, a German company, expressly set up for the deal and is "ultimately owned by investors in China, including some which have Chinese government ownership."

It added that the deal would be financed by a unit of China IC Industry Investment Fund, a Chinese government-supported industrial investment fund designed to support the country's integrated circuit industry.

The massive back-tax bill the European Commission slapped on Apple has put a spotlight on $2.4 trillion in untaxed earnings parked offshore by U.S. companies, a tempting target for governments seeking to strengthen their finances. While Washington lays claim to rights to tax the money, critics say it represents profits transferred out of other countries' jurisdictions by accounting tricks. They say that the companies hold the money in no-tax or low-tax havens like Ireland to ensure it stays out of the reach of fiscal authorities, Paul Handley reports for AFP.

But industrial and tech titans like Apple, Microsoft, Google, General Electric and Pfizer, also say they are waiting for Washington to cut corporate tax rates to reasonable levels before they repatriate the funds.

On Tuesday, August 30, the European Commission ruled that Ireland's deep tax breaks for Apple were “illegal” under EU rules and told the company to pay $14.5 billion in back taxes. Apple has since said it will fight the bill, and the U.S. Treasury accused EU authorities of breaking with international practice and assessing taxes retroactively. But the Treasury also made clear that Washington believes it has the right to tax the cash hoards that U.S. companies hold offshore, and that the European Commission was overextending.

"It reflects an attempt to reach into the US tax base to tax income that ought to be taxed in the United States," said Treasury Secretary Jacob Lew.

U.S. tax law allows companies to retain earnings offshore with taxes put off until the money is repatriated, and the sum out there has climbed quickly over the past decade, Handley reports. According to a July report by Boston-based Audit Analytics, the top 1,000 U.S. companies held $2.43 trillion in untaxed earnings offshore at the end of last year, double that of 2008 and up $130 billion since 2014. Companies say they want to see a lower U.S. tax rate before they bring it back; currently the top rate is 35 percent.

In 2004, Washington offered a tax holiday, cutting the rate on the repatriated funds to 5.25 percent, and attracted back some $300 billion. The goal was for the money to be invested in job-creating activities. But later studies showed most of the repatriated profits went to shareholders and corporate executives.

"Unfortunately, there is no evidence that it increased U.S. investment or jobs, and it cost taxpayers billions," assistant Treasury secretary Michael Mundaca wrote in 2011. Now the companies say they are ready to pay taxes on the money in the United States, just not at the current rate the U.S. government would assess.

"The U.S. should reform its tax system," Jenifer McCloskey, director of government affairs at the Information Technology Industry Council, a powerful tech industry lobby, told AFP. "On paper that money is owed to the United States at a certain rate of taxation. We have been working for years now to try and find a way forward with tax reform that rationalizes our system."

But with the piles of profits mounting offshore, tax activists say the companies are simply holding out for another tax holiday, and that the rules on taxation need to be reformed.

"Apple has systematically organized its Irish affairs in a way designed solely for tax avoidance," said Matt Gardner of the Institute on Taxation and Economic Policy. He said U.S. regulators "should take a page from the European Commission's book and crack down on rampant corporate tax avoidance."

Howard Gleckman of the Tax Policy Center said the Europeans are acting because the erosion of the global taxation system by multinational company activities has essentially gone too far.

"Now the ground may be crumbling from under that system," he said after the Apple ruling. "By forcing member countries to collect taxes from those US-based firms, the EU is trying to break the cycle of tax competition that has largely benefited those US multinationals. In effect, it is creating a new minimum tax for multinationals."