The Emergence of Google Tax

Yesterday, George Osbourne, British Chancellor, announced that a new tax, entitled “Google Tax”, will come into effect on the 1^st April 2015. This tax is set to cost large multinational companies 25% of their profits and is expected to raise £3.1 billion in 5 years. This means that MNCs who have avoided paying their taxes up until now, will be in for a major shock!

The tax applies to companies whose annual revenue is equal to or greater than £250 million, assuming they are found guilty of artificially diverting profits to a low-tax destination.

Because of tax avoidance, companies such as Apple, Amazon, Google, and Facebook, will be paying a whopping 5% more than the Corporate Tax of 20% levied in the UK.

This new tax will mean that MNCs based in Ireland will now be paying the Google Tax on profits made from their UK sales.

Now for the big question – What does this mean for Ireland?
Enda Kenny is adamant that Ireland’s 12.5% company tax “won’t and can’t be changed”. But if countries like France & Germany hop on the Google Tax bandwagon, then it’s possible that, while not entirely abolishing the Irish 12.5% tax rate, they may be able to render it completely irrelevant.

Analysts estimate that almost €3.2 billion comes from multinationals. So if the tax inflow from these MNCs was to cease, then the government would have to raise this money another way, which would most likely be by increasing the USC charge to a figure looming around 10%.

I know for sure if this came to be, then myself, and all others would be outraged by almost 10% of their earnings being taken just like that, and spending would certainly decline, dealing yet another blow to the already decrepit Irish economy.

Ireland clearly needs to wake up & get in the game, because unless we do, we’re going to lose.

Find more on the topic here and here

The Rise of Apple Pay

This week, Apple is all anyone seems to be talking about, and I’m not an exception. 

Aside from the obvious Apple Watch and new Macbook design, a less reported on topic is the growth of Apple Pay -  Apple’s mobile payment service that allows you to make in-store payments using your iPhone, iPad or Apple Watch.

While we have all heard whispers about the emergence of Apple Pay, we didn't understand just how big it was getting. But at the Apple Watch event on March 9^th, Apple’s CEO, Tim Cook, showed us just how rapid its growth is. Almost 2,500 card-issuing banks support the technology, and in recent months, the number of locations that accept Apple Pay has essentially tripled to nearly 700,000! This includes approximately 40,000 Coca Cola vending machines, which is expected to reach 100,000 by the end of the year. A total of 61 American stores now accept this form of payment, and as companies continue to sign on to the initiative, it will only continue grow.

And now, with the fast approaching release of the Apple Watch, Apple Pay will soon experience a surge in use. It’s clear that the adoption and rise of Apple Pay is accelerating at a breakneck speed.

But is it too good to be true? What are the drawbacks? At the moment, the only clear disadvantage is the rise in frauds, meaning that banks will have to tighten their security measures, and crack-down on the fraudsters. Apart from that though, it seems to be a clear winner!

So, how long will us non-Americans have to wait until we can hop on the band wagon of wireless payments? There’s no clear answer just yet, but Visa Europe have announced this week a new secure way for their customers to pay retailers via smartphones and such. Could this be opening the door for Apple Pay in Europe? Only time will tell. 

For more information on Apple Pay click here and here

IBM's Newest Acquisition

On Wednesday 4^th March, it was announced that IBM Watson Group bought AlchemyAPI - a rapidly growing business that specialises in the collection and analysis of unstructured data - for an undisclosed amount.

The reason for this acquisition is to provide Watson with another key piece of machine learning technology. AlchemyAPI have been developing cognitive apps, which IBM have described as “systems that learn and interact naturally with people to extend what either humans or machine could do on their own.” This acquisition will now give Watson the ability to take full advantage of visual recognition technology which is not currently available on the Watson platform.

Stephen Gold, the vice president of IBM Watson Group has told techology news site TechCrunch that “from a technology perspective, AlchemyAPI’s deep learning platform will augment Watson’s ability to identify information hierarchies and understand relationships between people, places, and things across both structured and unstructured data.”

If, like myself, you’ve been wondering how exactly IBM are planning to monetise Watson, and make a profit, then look no further, as IBM have reported that before they purchased AlchemyAPI, developers have developed over a whopping 7,000 applications using Watson, thanks to the Watson Developer Cloud. Developers can also use IBM’s platform as a service (PaaS), IBM BlueMIx to access “The Watson Zone” which grants them access to 13 services while they create applications.

There seems to be big opportunities for Watson in businesses such as healthcare services, law, and any other service that has a huge amount of unstructured data. IBM’s finance chief has even given Watson working in a call centre for a financial adviser, as an example of what the super-computer is capable of! So keep an eye out, who knows what the super-computer will be doing next!

You can find more information on this subject here, here, and here.