Tuesday, April 14, 2009
Intel : The One percent Solution
(That's quite a magic trick... reducing your tax rate to 1%. Although in the disclaimer one might deduce that Intel is guessing as to what the 'result' of audits might be. It's amazing what these companies can pull out of the grab bag.If you recall Goldie did something similar for 2008 , a press release at the time stated: GS expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007. The company’s effective income tax rate dropped to 1 percent from 34.1 percent.However for Intel this is a one-quarter 'jam job' for further in the release it states, Full -Year 2009 Tax rate: Approximately 24 percent for the second, third and fourth quarters. Maybe they should hire some CPAs from Goldie.-AM)
From Intel's 1Q report:
INCOME BEFORE TAXES
Provision for taxes
The effective tax rate was 1 percent, lower than the expectation of approximately 27 percent, driven primarily by settlement of various federal and state tax matters related to prior years and a higher percentage of profits in lower tax jurisdictions.
The tax rate expectation is based on current tax law and current expected income. The tax rate may be affected by the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the ability to realize deferred tax assets.
Due to continued economic uncertainty and limited visibility, Intel is not providing a revenue outlook at this time. For internal purposes, the company is currently planning for revenue approximately flat to the first quarter.