25/10/2013 World Business Report

monarchs. Coming up next, the money news with

Sally. EU leaders try to agree on a common

corporate tax regime to plug loopholes for big multinational

companies. Samsung Electronics makes record profits, boosted by an

upswing in its chips division, and strong mobile phone sales.

This is World Business Report. Also, it is that time of year where in

many countries clocks change. We will unravel the mysteries of

daylight savings time. First of all, European leaders meet in Brussels

for a second day, high on the agenda is the digital economy. In

particular, the so`called Google tax. The French proposal is for a

European wide tax on digital companies. In recent months, Google,

Apple and Amazon have come under attack for using their web of

international businesses to avoid paying tax on sales generated in

high tax countries such as France. Currently, Google and Apple channel

much of their income through low tax EU countries, like Ireland and

Luxembourg, as well as traditional tax havens such as the Bahamas.

France is key to convince fellow EU states that a common agenda is

needed to make sure EU states do not miss out on much`needed tax revenue.

Good morning George, thank you for being on the programme. Tell us more

about the France proposal the France proposal is very simple. It is to

target the top five to seven internet companies and levy an

annual tax on what they do. These companies are thought to be making

away with huge amounts of tax, and are two angles to this. It is a

tricky position, no country would be able to tax its way to success. So

the European wide agreement will really be necessary. It has to be

all countries agreeing and signing on the dotted line. Because Ireland

has already taken various steps, but if Ireland did that on its own it

wouldn't achieve much, would it? No, Ireland made its announcement

earlier, but they say it doesn't matter because that would come in

until 2015. So big companies now have 14 months to restructure their

tax affairs and find other loopholes. Interestingly, UK

politicians, David Cameron cetera, have been very vocal this. It is a

very political issue, and yet the UK is a very attractive place for

international companies. The UK has a very delicate line to tread. We

have said will have the main rate tax by 2015, which will mark us out

as a bit of a tax haven. The other is the USA. Broadly, they have a

policy that says that corporate profits are not taxed battle they

are repatriated. Really, what we need is a global answer. Will we

ever get that? I don't think we will get an EU answer from the French tax

proposal. People this morning was smiling and saying, well, the latest

tax issue has got the French football is on strike, will they use

the intranet Google goes on strike. Thank you. We will keep you

up`to`date on that story, and incidentally we are talking about

the football tax story in France when we review the papers. But let's

move on. This weekend, millions of people across Europe, the Middle

East and Mexico will get an extra hour in bed as daylight saving time

comes to an end. But is merit, spare a thought for the millions in

Brazil, Chile, Australia who lost an hour this month when the clocks went

forward. Half of the world does not adhere to this at all, and opinions

remain divided on the merits. Here in Japan, they tried daylight

saving for a little while in the 1940s, but people didn't like it so

they scrapped it. Now there is talk so bring it back, mainly because of

the Fukushima disaster and the need to save electricity. Experts say it

would change about 1% of the electricity consumption. So a more

compelling reason would be to boost the economy. People are still

reluctant. Mainly because they think the extra long summer evenings won't

be used for more leisure, but formal workforce here, the Greenwich

Marillion line at the Royal Observatory was the yardstick from

which all the world's time was measured. One study suggested it

increased its takings in the EU's leisure industries by 3%. We have a

Londoner for suggesting `` we have a Londoner to thank for suggesting the

idea. Here in Russia, it is summertime all the time, and the man

they have to think for that was an ex`president. He said that turning

the clocks back upset people by rhythms and upset the towers. I

haven't asked Russian cow is what they think about staying on

summertime, but I do know that a lot of people here have been grumbling

about it, and complaining it is far too dark when they wake up on winter

mornings. In Brazil, daylight saving is not

implemented across the whole country. But in the big cities it is

enforced. During the hot summer months, there is a huge demand for

electricity, and official figures suggest that about 400 million, or

the equivalent of $200 million, could be saved by using daylight

saving. Daylight saving is not used in Argentina, Colombia or Venezuela.

I will relish my extra hour in bed this weekend. I have to grab every

moment I can get. Now, Samsung has posted a record profit thanks to a

recovery in its memory chip business, and is from mobile phone

sales. The operating profits rose to 9.6 billion American dollars.

Profits in the memory chip business rose to its highest in three years.

Samsung doing very well indeed, which is a massive boost to the

South Korean economy. It is a big player, and we did see some growth

figures from the South Korean economy today, rising 1.1% in the

last quarter. Samsung has posted a record operating profit, in six of

the past seven quarters, mostly due to the growth of its smart phone

division. What sets it apart from its bigger rivals like Apple, is

Samsung has enjoyed lots of success in both the top end as well as the

lower end of the smart phone market. Remember, Apple really only makes

top end iPhones, but Samsung expects that smartphone sales will rise even

further during the year and promotions over the holiday season

as well, and there is a hugely improved line`up of mass`market

phones there too. There are some concerns over whether Samsung can

continue to grow at such a strong pace, with an onslaught of

competition, saturation, some of the key market as well. Some `` the

company needs to come up with some new products. The memory chip

business or most double, to its highest in the most three years. ``

the last three years. Samsung supplies lots of chips to lots of

other smartphone makers, including the likes of Apple, so it is in good

demand there. Thank you. The internet retail platform, Amazon.com

has posted a smaller quarterly lost for its third quarter. It is also

expanding aggressively. Most of the increase came from its US market,

but retail is making big inroads overseas as well. There are a lot of

corporate stories for the markets to digester day, we haven't got enough

time to mention them all. `` digester today. In South Korea, we

can't show you the market, but very disappointing. The yen is

strengthening, which is possibly why Japan is having such a tough

session. I will see you soon. Here in the UK, women prisoners will

be kept as close to their homes as possible and the new plans being

announced by the government today. It is hoped the change will allow

female offenders to have better family relationships and find local

employment when they are released. Styal Prison