Apple Targeted by EU Probe into Irish Tax Policies as U.S. Considers Tax Holiday for Cash Repatriation

Discussion in 'Politics, Religion, Social Issues' started by MacRumors, Jun 11, 2014.

  1. macrumors bot

    MacRumors

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    The European Commission today launched a formal investigation into Apple's tax arrangements in Ireland, seeking to determine whether the company's tax deals in the country are considered illegal state aid. The Commission is also investigating Starbucks and Fiat Finance & Trade SA.
    Apple's tax policies have been under scrutiny in recent years, as it utilizes multiple subsidiary companies headquartered in the Irish city of Cork to move money around the world without significant tax penalties because companies managed and controlled abroad but located in Ireland are not subject to taxes. Last year, Apple's arrangements earned it a tax rate of 3.7 percent on non-U.S. income.

    Apple has maintained that its tax policies are entirely legal, a position it echoed today in a statement to Bloomberg. An SEC investigation also found Apple's tax policies to be legal.
    As the European Commission begins its investigation, the U.S. Senate is considering a one-time tax break to repatriate cash held overseas. Back in 2013, Apple CEO Tim Cook defended Apple's tax practices and responded to accusations of "extensive tax-avoidance strategies" with a call for tax reform, asking for simplified corporate tax policies and lower rates for repatriation.

    Apple holds more than $100 billion in cash overseas and at current tax rates, it would have to pay a 35 percent corporate income tax to bring the money back to the United States, "a very high number," as Cook has said.

    If a tax holiday is granted, the rate could be much lower. A repatriation holiday in 2004 allowed companies to bring cash to the U.S. at a rate of 5.25 percent, which could cut Apple's tax bill down significantly if it brought money back from overseas.

    Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

    Article Link: Apple Targeted by EU Probe into Irish Tax Policies as U.S. Considers Tax Holiday for Cash Repatriation
     
  2. macrumors regular

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    #2
    woah... is that true ? " as U.S. Considers Tax Holiday for Cash Repatriation"
     
  3. macrumors 68000

    AngerDanger

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    #3
    I don't know; perhaps somebody should write an article about it. :p
     
  4. macrumors 6502a

    Nunyabinez

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    #4
    A "tax holiday" simply means a reduction in the amount of tax. Getting a smaller chunk of a huge amount is better than getting nothing at all.
     
  5. macrumors regular

    Joined:
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    #5
    One of the few things the federal government might get right. Money does go where it's welcome.

    https://www.youtube.com/watch?v=QlochF3gAns
     
  6. macrumors 65816

    irnchriz

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    #6
    Legal and 'moral' are two entirely different things. This fact plus these governments are pissed off that they don't get their cut of these billions regardless of the fact that said governments won't spend any of it on the general populace anyway.
     
  7. macrumors G4

    Eraserhead

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    #7
    Because avoiding tax is good…

    Given how much the US spends on the military you have a bit of a point, however most of the rest of the money (e.g. healthcare, pensions etc) is spent on the "general populace".
     
  8. macrumors 6502a

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    #8
    When active in business, I was not only annoyed at the tax rate, but also what it was being spent on, so, suitable arrangements were made.
     
  9. macrumors 6502a

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    #9
    Love the comment by Chowder-head or whatever his name is about "special secret deals should be outlawed". If governments would stop trying to take money that isn't rightly theirs, subject secret deals wouldn't be needed. As for the US, I'm all for a tax holiday that allows American companies like Apple to bring the cash back home. Even if that means the US government gets their hands on more money that will evaporate instantly.
     
  10. macrumors G4

    Eraserhead

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    #10
    Sorry, what exactly about tax is governments taking money that "isn't rightly theirs"?

    ----------

    So what government spending do you object to? Military spending? Pensions? Healthcare for the old and the poor?
     
  11. macrumors 65816

    tevion5

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    #11
    I'm an Apple collector and user and also an Irish citizen. This issue of multinationals not paying much tax is a topical issue here.

    See, we don't charge much tax in I order to attract many multinationals. As a result, almost every Silicon Valley company has it's HQ in Ireland today. We also are well educated as speak English.

    However, the EU hate that we don't change them enough corporate tax. But, if we did charge them a normal amount, they would most likely leave. Then, we would get no tax and loose all the jobs and infrastructure these campanies bring with them.

    I don't think we will see much change. It's not ideal, but it's about the best case scenario for Ireland right now.

    Also, the manner in which Google and Apple "dodge" taxes in the US is 100% legal. It's the government that is to blame for any loss in tax. The multinationals can't be blamed for being as efficient as legally possible, within the most capatalist country on earth.
     
  12. macrumors G4

    Eraserhead

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    #12
    I don't disagree, but I'd have thought in a fair world Ireland would only have its fair share of international companies, which given its tiny population probably shouldn't be very high.
     
  13. macrumors 65816

    luckydcxx

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    #13
    If Apple manufacturers the phone in China and sells it outside of the US then why should they pay US tax? I think every person on this forum would do the same.

    I do think the new Mac pros built and sold in the US should have to be taxed accordingly.
     
  14. macrumors 6502a

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    #14
    In a fair world people (and countries) compete with each other.
    I'm all for equality of opportunity , equality of result not so much.
     
  15. macrumors 65816

    tevion5

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    #15
    Exactly, things are about as good as they can be for us. We are a low population rock in the Atlantic Ocean. Any business is good business!

    But, I understand how the rest of Europe sees this as unfair. However, we don't have the vast industrial power of Germany or France, let alone the resources. We almost need these companies to remain a first world country!
     
  16. macrumors G4

    Eraserhead

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    #16
    It is fair that they pay some US tax on such sales as Americans likely came up with the idea of the phone.
     
  17. macrumors 65816

    tevion5

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    #17
    Capitalism with a healthy drop of socialism here and there creates the most happy people IMO. Pure unregulated capitalism is 100% fair, and arguably so is communism. However, neither system creates a happy majority.
     
  18. macrumors 6502a

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    #18
    Shouldn't they be paying Chinese tax on phones sold in the US then?
    And UK tax since the A7 is based on UK tech.
     
  19. macrumors 603

    apolloa

    Joined:
    Oct 21, 2008
    #19
    This has been all over the news today. It's got something to do with 'special' letters the Irish government wrote to Apple advising them on the best way to basically avoid tax penalties. If they are found to have done this then as per the EU have stated, this is a breach of state aid laws.

    It was going to come to this eventually, I think the european people are fed up having to pay the full tax, when American giants are paying next to nothing. Hardly fair.
    I am in two minds about it personally, on one hand Apple employ I think they said around 2000 people in Ireland, but on the other they are doing so on the back of tax avoidance that possibly IS illegal.

    According to the news stories even the US senate have criticised Irelands deals with American corporations on tax.
     
  20. macrumors 65816

    Joined:
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    #20
    Every international company does this. Apple is just an easy target for criticism.

    If the U.S. wants this money in the U.S., all that needs to be done is simplify the tax system and close all the loopholes that allow this, but nobody in either party has the guts to do this, probably not ever in my lifetime.

    Tim Cook's secretary probably pays a higher tax rate than him, but that's not his fault. It's the government's fault.
     
  21. macrumors 65816

    ctdonath

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    Mar 11, 2009
    #21
    Yes. This has been discussed for a long time. The US gov't doesn't want to do it because it likes that 35% cut, but no way is :apple: going to hand over $35,000,000,000 just to bring $65,000,000,000 home when it can do plenty with that cash overseas. Briefly suspending the high tax rate is far more likely to entice :apple: to hand over $5,250,000,000 as it could bring $84,750,000,000 home ... when the current situation means the US gov't gets $0.

    Another example of the "Laffer Curve": increasing taxes increases revenue up to a point, above which point those subject thereto start taking steps to reduce their tax liabilities, causing tax revenue to decrease.
     
  22. macrumors 603

    apolloa

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    #22
    If you read the story on the news websites, not here, you will see they are also talking about Fiat and Starbucks in the same breath, so they are not singling out Apple. Fiat is Italian.
     
  23. macrumors G4

    Eraserhead

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    #23
    Yes, that's why international taxation is so complicated.

    ----------

    Very true.
     
  24. macrumors 6502a

    crisss1205

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    #24
    You mean like this sentence on this website?

     
  25. macrumors 603

    thekev

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    #25
    That sentence is extremely funny if read out of context.
     

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