Moderator Note
The off-topic Scottish Independence discussion has been moved to it's own thread in the PRSI forum.
The off-topic Scottish Independence discussion has been moved to it's own thread in the PRSI forum.
I think you are confusing the threshold at which VAT must be collected, and my point, which is that the VAT is a tax on purchases, not earnings. VAT is collected by a vendor on behalf of the government for all sales, but has no relation to the vendor's earnings. It is a direct tax on the consumer based on the price of the good/service purchased by the consumer. Therefore, if Apple previously did not have to collect the tax for certain downloads, that benefit is received by the purchaser, not Apple. Said another way, VAT is a tax on consumers, not businesses. Consumers are the beneficiaries of this tax avoidance scheme, if we want to call it that, not Apple. At least, that is how I would characterize this situation.
I'm pretty sure Apple didn't profit from using this loophole, consumers did. The only way they would have profited is if more people bought an app because it was cheaper, which doesn't seem like a bad thing. Apple (and other companies) were using this loophole to keep prices for consumers down!
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Apple was not the one profiting from this, consumers were! You paid less for downloads before because you were paying less tax. If you support the tax, you should support paying the tax.
I doubt the double Irish w/Dutch sandwich is the intents of the tax code, to put it mildly.
There is a difference between "more than legally required" and "exploiting loopholes" - Apple's strategy (and various other international corporations, Apple is by no means singled out here) is definitely covered by the latter. And fixing those loopholes is a big priority right now...
Except for prescription charges, dental charges and sight and glasses/contacts charges, wigs and supports charges, and extortionate hospital profit-making car parking charges. In the UK we have been, and still are, taxed to the hilt. We even pay some service taxes after income tax. If you like paying your taxes without complaint, then fine. I prefer to petition to have them lower. I am not allied to any political movement, I just look at policies and criticise them if they need it (which they usually do). It's a pity that politicians do not stick to the policies that they push come election time, though I appreciate they package them to be as ephemeral as possible. Politician = liar, cheat and deceiver. And that's just the UK. I haven't the time to comment on the Europolitians. Suffice to say, add even more of the lying, cheating and deceiving with a lot more incompetence thrown in. I propose a halving of all income, local and value added taxes but that yours are doubled to pay for my cuts!Many of the posts here seem to be getting a bit too emotional.
If we bring in the facts:
1. This has nothing to do with Apple minimising its global tax costs. This is purely to do with the UK charging a tax on the place of consumption, versus the place of purchase.
2. The EU has nothing to do with this. There are EU rules regarding VAT, but they stipulate that EU countries should impose a minimum of 15% VAT. And that's it.
So this is all a bit of a mountain out of a mole hill.
And for all the 'UK/EU are socialist countries' contributors, might I suggest you take a moment to add up the costs of your healthcare premiums and add them on to your tax costs. In the UK, healthcare premiums are part of UK tax costs.
Don't let the door hit your behind on the way out will you![]()
I think i am split over-this decision:
on one side, i feel that tax avoidance by companies like apple, amazon and starbucks is diabolical, given that the customer originated from the uk - a deontological virtue, to pay taxes in a righteous manner
on the other side, this means all my apps will cost me more![]()
Good lord lots and lots of verbiage and ranting here, all based on an article that got it entirely the wrong way around.
Currently VAT is charged at the seller's tax residence.
So Apple, tax resident in Ireland (not Luxembourg at all!) charges UK customers 23% VAT.
After the EU wide change to VAT, VAT will be charged at the buyer's tax residence.
So Apple will now charge UK customers the UK's 20% VAT.
23% is not 20% larger than 20%. Apple will actually be paying 3% less tax on UK sales... I think Apple are going to be entirely happy with absorbing this change of tax.
What a stupid article, and to be frank what a bunch of hot air in the above replies. Retraction printed soon I hope.
I really think you are missing the point here. I fail too see how your response makes sense:Actually, isn't it the UK citizen that avoided paying the tax? It's a tax on what the individual purchases, collected by the company for the benefit of the UK government. It has nothing to do with Apple's earnings.
NO! well, maybe, indirectly.isn't it the UK citizen that avoided paying the tax?
referenceeg an app sells for £1.49 here in the UK. The dev will get ninety-one pence from Apple for each sale.
If we take that £0.91 and add back the 30% that Apple take we get £1.30. Then we add VAT, which in the UK is 20%, and we get… £1.56.
It turns out that downloads are billed from Luxembourg where the sales tax rate is 15%. Because both countries are in the EU there’s a reciprocal tax agreement which means we don’t have to add UK tax as well.
If we do the same calculation as before but with a 15% tax rate we get… £1.49.
Fair enough, Apple's page is misleading then.um. no. at the moment itunes purchases are from itunes sarl in luxembourg.
the article is completely correct.
Fair enough, Apple's page is misleading then.
Except that "Prices may increase up to 20%" is still pretty blatantly wrong use of percentages. Prices won't go up by 20%.
And realistically, prices are likely to stick to .99 ended selling points. Prices on consumer goods very rarely change except to the next selling bracket, not on variation with every change in taxation, or supply costs or with gradual inflation changes. Consumer pricing is not volatile, unlike trading commodities, the price stickers don't get changed day to day. There are indeed strong forces that'll maintain pricing inertia, a £1.99 app is going to be a lot more attractive than a £2.39 app. It'll take till inflation pushes it all up to £2.99 that a lot of apps will change.
Except for prescription charges, dental charges and sight and glasses/contacts charges, wigs and supports charges, and extortionate hospital profit-making car parking charges. In the UK we have been, and still are, taxed to the hilt. We even pay some service taxes after income tax. If you like paying your taxes without complaint, then fine. I prefer to petition to have them lower. I am not allied to any political movement, I just look at policies and criticise them if they need it (which they usually do). It's a pity that politicians do not stick to the policies that they push come election time, though I appreciate they package them to be as ephemeral as possible. Politician = liar, cheat and deceiver. And that's just the UK. I haven't the time to comment on the Europolitians. Suffice to say, add even more of the lying, cheating and deceiving with a lot more incompetence thrown in. I propose a halving of all income, local and value added taxes but that yours are doubled to pay for my cuts!![]()
Fair enough, Apple's page is misleading