Tim Cook Calls Apple's Irish Tax Avoidance Accusations 'Total Political Crap'

[zin]

That's a sufficiently vague and unsupported response.

Here's the more specific explanation from Cook:

Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

A "fundamental principle" is not a law. The Commission's investigation pertains to the taxes paid by Irish entities, not Apple Inc.

In addition, what Mr. Cook is saying is insincere. If Apple believed that its international profits should be taxed in the country where 'value' is created, then it should be funnelling them to Apple Inc. and paying the U.S. corporate rate, not through an Irish subsidiary and paying a virtually zero rate, and certainly not hoarding those profits outside of the United States.

There is nothing illegal with that particular arrangement (minus the illegal state aid regarding the very low rate), but it is at odds with what Mr. Cook wrote in justifying the low tax rate on profits earned through Irish subsidiaries. One the one hand, in justifying the zero rate in Europe, Mr. Cook says taxes should be paid in the United States. On the other hand, Mr. Cook says he won't funnel those profits to the United States because paying the U.S. corporate rate would not be "appropriate".

Mr. Cook is a hypocrite. If he wants to win this argument, then he cannot have it both ways.

 

[BaldiMac]

Not angry at all? But I do find it funny with people such as yourself, who very clearly have little to no comprehension or understanding about the charges or the tax issue, why they exist, how they have come about to exist, and yet you continue repeatedly to post false opinions presented as facts.

Which facts that I have posted do you believe are false?

 

[Luscious]

Cry me a river Tim!

 

[nebo1ss]

"A.O.I., short for Apple Operations International. And this version of Apple is much harder to pin down; it’s something like a quantum corporation whose very nature depends on who is observing it. A.O.I. is, in one sense, huge, among the largest companies that ever existed, with more than two hundred billion dollars in assets. It is also as small as a company can be, with no physical address and no employees. Phillip Bullock, the head of tax operations for Apple, told a U.S. Senate committee in 2013 that “A.O.I. is incorporated in Ireland; thus, under U.S. law it is not tax resident in the U.S.” That seemed clear enough until his next sentence. “A.O.I. is also not tax resident in Ireland because it does not meet the fact-specific residency requirements of Irish law.” It’s Irish, according to American law; not Irish, according to the Irish. A.O.I., in fact, does not legally exist anywhere, even as it takes in much of the profits from Apple sales outside of the United States."

source

One article I read said you can consider A.O.I resident in outer space since it has no residency. There were figures published for 2011 which showed that Apple paid $400,000 tax but this was only on Irish originated income at the 12.5 percent rate. The majority of its INTERNATIONAL earning went through A.O.I with zero tax, and if they had paid the 12.5 percent tax on all of its earning for 2011 the bill would have been over 3 billion.

It appears the money that flows through A.O.I ends up in Bermuda or Cayman Islands.

How Tim Cook can continue to defend this with a straight face is unbelievable.

 

[Thunderhawks]

Well in that case how about a $50 per iPhone tariff for Chinese imports Mr. Cook?

How about no more money donated to any party and we compensate for it further by closing the MacPro factory
and stop all donations to charity?
We will also tell FoxConn to close it's US operations and whomever we do business with.

We will then continue to outsource more jobs to foreign countries, so you will get less payroll taxes and.....and ....and........

It's not as if Apple wouldn't have any weapons, if that could even be pushed through legally.

Finally the $ 50 per iPhone is now in the new retail price starts at 349 vs. 299

 

[BaldiMac]

A "fundamental principle" is not a law. The Commission's investigation pertains to the taxes paid by Irish entities, not Apple Inc.

In addition, what Mr. Cook is saying is insincere. If Apple believed that its international profits should be taxed in the country where 'value' is created, then it should be funnelling them to Apple Inc. and paying the U.S. corporate rate, not through an Irish subsidiary and paying a virtually zero rate, and certainly not hoarding those profits outside of the United States.

There is nothing illegal with that particular arrangement (minus the illegal state aid regarding the very low rate), but it is at odds with what Mr. Cook wrote in justifying the low tax rate on profits earned through Irish subsidiaries. One the one hand, in justifying the zero rate in Europe, Mr. Cook says taxes should be paid in the United States. On the other hand, Mr. Cook says he won't funnel those profits to the United States because paying the U.S. corporate rate would not be "appropriate".

Mr. Cook is a hypocrite. If he wants to win this argument, then he cannot have it both ways.

Again, you are ignoring the fact that the money will be taxed. U.S. law allows for exactly what Apple is doing.

Your argument also ignores the fact that Apple has not been taxed at a "very low rate" in Ireland. They take advantage of an Irish law that allows them to form a stateless corporation which holds most of their foreign tax free until they need it. If they want to spend it, they will need to pay taxes on it.

 

[Thunderhawks]

I love how Tim says Apple "finds itself in an unusual position" in the matter. People who simply pay the taxes they're asked to pay don't fall into such a position. When you claim to be an Irish company for the sole reason of dodging taxes elsewhere in Europe, you may find yourself in an "unusual position".

The unusual position is created by the laws enabling this type of a tax set up.
Created by politicians.

Instead of repeating non facts, it may be helpful to use what we really know:

Apple paid all the taxes they were asked for by Ireland.
Apple does not claim to be an Irish company.
They own a company in Ireland with employees and all.
That company manages some of it's European business.

Now, if we want to add the moral or ethical component of the tax issue, it just fails,
because "fair share" and any other objection does not trump laws.

 

[apolloa]

Again, you are ignoring the fact that the money will be taxed. U.S. law allows for exactly what Apple is doing.

Your argument also ignores the fact that Apple has not been taxed at a "very low rate" in Ireland. They take advantage of an Irish law that allows them to form a stateless corporation which holds most of their foreign tax free until they need it. If they want to spend it, they will need to pay taxes on it.

You see you keep going on about Irish law and then either choose to ignore or are oblivious to the fact those laws are superseded European laws and legislation, which is what the ruling is based on.

 

[wschutz]

Tim Cook has chops, and he's absolutely, 100% right.

If the EU commission has a problem with alleged Ireland state aids, then it should fine Ireland, not Apple.

Obeying the current law should never lead to punishment.

You should read better (the comission's report).

Having said the previous... there is no fine from anyone to anyone. The EU comission is simply asking Ireland to recover some money that the EU considers illegal state aid.
In the EU, states have freedom for their economical and fiscal matters (up to a certain level), but if some of these matters get to a EU level, the EU comission has jurisdiction over them (as it has been the case not only with Apple by the way...).

So again... there is no fine. The EU just considers this an illegal state aid from Ireland and asks Ireland to recover it (plus interests of course). Other EU members can request to Ireland their cut of all this money (yummy...).

Of course, should this happen more often... Ireland could get in trouble, but that is another story. Apple is liable to tax ruling from Ireland but also from the whole EU.

Sorry to disappoint you but Tim is just doing his job, defending his employer. He is not right, and he knows that because there is no single brain in this world who can understand that paying not even 0.1% of taxes is fair when any employee of Apple pays much more on taxes (proportionally of course)...

 

[pat500000]

"My precious....." -Tim

 

[zin]

Again, you are ignoring the fact that the money will be taxed. U.S. law allows for exactly what Apple is doing.

Your argument also ignores the fact that Apple has not been taxed at a "very low rate" in Ireland. They take advantage of an Irish law that allows them to form a stateless corporation which holds most of their foreign tax free until they need it. If they want to spend it, they will need to pay taxes on it.

An Irish law that no longer exists and was signed for specially with Apple (and perhaps others) in 1991 and 2007. The existence of the law is perfectly legal (the Commission notes this), but the selective agreements are not. The EC have an infographic on the arrangement.

The last claim you made is unsupported by what I've read in the EC briefing. The way the funds were allocated means they already avoided paying taxes on it. They don't have to pay taxes if they wish to spend it. Of course, if they send it to the United States, they will have to do so, but that's a different matter and nothing to do with European Union law.

 

[MyopicPaideia]

I always enjoy the 'holier than thou' posts demanding Apple pay all their taxes. They do pay all their taxes. That's why they employee, presumably very well remunerated, tax experts to ensure they pay exactly the taxes they need to an not a penny more. This is something they are legally required to do because they have a fiduciary responsibility to their shareholders to maximize profit and which means don't pay a penny more in taxes than you need to whilst still operating within the law.

I wonder how many people here purchase from Amazon, pay no sales tax and then write a cheque to their state to pay the tax they should have paid if they'd purchased the item in the state? I'm guessing there aren't many? How many of the small business owners don't itemize and 'expense' everything they can to minimize their tax bill? I'm guessing the answer is not many!

How many of the people complaining about big corporations not paying their taxes voted for Bernie Sanders who ran on a platform of closing loopholes and ensuring everyone paid their fair share, and getting big money out of politics, which is what pays the politicians who make the tax laws that favor big businesses and the very wealthy?

There is nothing, absolutely nothing that could have said this better. You win the thread.

 

[bitslap47]

Are we sure that some aren't equating tax deferment to tax avoidance?

If so, those two things are not even close to being the same.

I think maybe people are adding in tax deferred revenue to come up with that 0.005% number that's being thrown around.

Just saying...

 

[wschutz]

But the EU doesn't want any money. The EU wants Apple to pay money to Ireland, and Ireland doesn't want it.

Ireland doesn't want to collect the money because it would set a bad name for it given its long history of companies landing there due to their 'advantageous' tax policies. But not all the money will go to Ireland... the remaining EU members will request their cut, I am sure they will given the amount (the EU commission has said so, if any EU state wants to get their proportional amount... Ireland will not be entitled to everything of course).
Ireland is just defending one of its sources of income. The EU is defending the whole EU. In any case... this is entirely Ireland's fault for using these tactics to attract foreign investments and of course the companies who settle there...

 

[bitslap47]

The last claim you made is unsupported by what I've read in the EC briefing. The way the funds were allocated means they already avoided paying taxes on it.

Maybe the EC is mistaken.

One solution is that Apple and Ireland could put together the relevant documents as well as write a narrative explaining the process and progress as it relates to compliance. Then, they could present that piece of the picture to be reviewed by some impartial third party bound to decide whether or not the rules and regulations were followed.

Hmm... if only such a process/mechanism existed.

 

[macfacts]

So many angry Apple investors in this thread.

 

[Otaviano]

Again, you are ignoring the fact that the money will be taxed. U.S. law allows for exactly what Apple is doing.

Your argument also ignores the fact that Apple has not been taxed at a "very low rate" in Ireland. They take advantage of an Irish law that allows them to form a stateless corporation which holds most of their foreign tax free until they need it. If they want to spend it, they will need to pay taxes on it.

Not going to be taking advantage of it much longer. Only two things certain in life, death and taxes.

They should have known this would catch up to them eventually.

 

[62tele]

No Tim. They are not crap!!

According to one report "Apple Sales International and Apple Operations Europe: According to the European Commission, these companies had no employees or real offices but still realized large profits. Apple paid virtually no tax to Ireland, or to any country, on these profits because of a former law in Ireland. In the last year that the law was in effect, 2015, Apple Sales International paid just 0.005% tax, according to the commission."

 

[Johnny907]

So Cook's reaction to a legitimate international legal issue is to act like a spoiled five year old. Yup, pretty much what I've come to expect from him.

 

[developer13245]

Funny how an Obama supporter complains about "political crap"...

 

[BaldiMac]

You see you keep going on about Irish law and then either choose to ignore or are oblivious to the fact those laws are superseded European laws and legislation, which is what the ruling is based on.

I'm not ignoring or oblivious to that fact. I've already said that Apple could very well be in violation of EU law.

An Irish law that no longer exists and was signed for specially with Apple (and perhaps others) in 1991 and 2007. The existence of the law is perfectly legal (the Commission notes this), but the selective agreements are not.

There are no selective agreements signed with Apple. There were tax rulings that applied to anyone doing business in Ireland. Apple simply benefited from them.
http://europa.eu/rapid/press-release_IP-16-2923_en.htm

The EC have an infographic on the arrangement.

The last claim you made is unsupported by what I've read in the EC briefing. The way the funds were allocated means they already avoided paying taxes on it. They don't have to pay taxes if they wish to spend it. Of course, if they send it to the United States, they will have to do so, but that's a different matter and nothing to do with European Union law.

I've posted the same graphic multiple times. It doesn't disagree with what I said.

 

[tongxinshe]

"$400 Million tax paid to Ireland in 2014" -- Apple says,
"0.005% tax rate on Apple's European profit paid in 2014" -- EC says
There is no way that both of them are correct facts, since Apple's 2014 global profit is far far far less than 8 trillion.

 

[zin]

I'm not ignoring or oblivious to that fact. I've already said that Apple could very well be in violation of EU law.


There are no selective agreements signed with Apple. There were tax rulings that applied to anyone doing business in Ireland. Apple simply benefited from them.
http://europa.eu/rapid/press-release_IP-16-2923_en.htm


I've posted the same graphic multiple times. It doesn't disagree with what I said.

The first paragraph of the EU briefing notes that Ireland gave selective treatment to Apple, allowing it to pay substantially less than others. The Commission appears to believe that what you are saying is not the case.

 

[Larry-K]

Tim,

Take a break, count your cash, watch "Ash & the Evil Dead", then put those lawyers back to work.

If that doesn't work, stop selling stuff in Europe.

 

[thermodynamic]

How about no more money donated to any party and we compensate for it further by closing the MacPro factory
and stop all donations to charity?
We will also tell FoxConn to close it's US operations and whomever we do business with.

We will then continue to outsource more jobs to foreign countries, so you will get less payroll taxes and.....and ....and........

It's not as if Apple wouldn't have any weapons, if that could even be pushed through legally.

Finally the $ 50 per iPhone is now in the new retail price starts at 349 vs. 299

Didn't people scream for Apple to find better business partners in 2010 after all the reports of suicides, forced morale parades, etc, were going on by Foxconn?

http://www.telegraph.co.uk/news/wor...st-at-Apple-manufacturer-Foxconn-factory.html

http://www.businessinsider.com/chinese-iphone-factory-foxconn-holds-creepy-anti-suicide-rally-2010-8
(don't they all look happier than Barney the Dinosaur??)

http://www.zdnet.com/article/is-apples-suicide-factory-outsourcing-to-even-cheaper-chinese-peasants/
(another happy smiling person, wow... yeah, feel free not to care - unless it happens to you personally, right?)

http://www.dailymail.co.uk/news/art...shop-factory-workers-paid-just-1-12-hour.html
(otherwise known as "reasonable labor costs" by other MSM outlets, never forget...)

But I won't post links to videos that show all this stuff in action, you might not want to be edified to the point all them hollyweird movies look like fakes by compareeson...


Also, and you'll really love this, the US has allowed and given corporate welfare to companies that offshored to other countries for years if not decades. Obama and Clinton are against doling out the corporate welfare under those conditions but were overruled by the folk who voted NO on this list: http://www.ontheissues.org/SenateVote/Party_2005-63.htm

Also, Steve Ballmer threatened Obama with more job offshoring if he didn't get his way:

http://www.businessinsider.com/ballmer-threatens-obama-says-hell-move-jobs-overseas-2009-6

Even though other news articles dating to 2007, 2003, etc, with Microsoft already having offshored jobs and giving source code exist, like these:

http://www.zdnet.com/article/does-m...e-with-china-and-russia-pose-a-security-risk/
http://archive.fortune.com/magazines/fortune/fortune_archive/2007/07/23/100134488/index.htm

So, what's the issue people hate, again? Because there are so many it seems we're all getting confused, especially me.