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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.

Actually, it's all to do with Apples earnings.. If they weren't earning above £79,000 (I think!) then they wouldn't need to pay VAT and wouldn't need to register for VAT. It's up to Apple, not the consumer.
 
Whilst I am generally supportive of Apple, their tax avoidance schemes make me sick.

Along with HP, Dell, Amazon, Paypal, Google. Oh wait, they're all American companies.

Countries such as Luxembourg and Ireland are having a joke at the expense of the rest of the EU countries, charging vastly lower rates of taxation, but the amount of revenue that passes through their books is 100 or even 1000 times what the country is actually due.

.
 
Apple will actually lose out whether they absorb the extra UK VAT, or instead pass it onto the customer. Simply because many customers will then choose to download their files illegally after a relatively large price increase.

More people will sign up to rival music streaming services, jailbreak their iPhones for free apps etc.
 
Whilst I am generally supportive of Apple, their tax avoidance schemes make me sick.

Along with HP, Dell, Amazon, Paypal, Google. Oh wait, they're all American companies.

This isn't a tax avoidance scheme for Apple. VAT is collected on the goods and passed to the govt in the country of sale. The only advantage Apple gains is by selling out of a EU state with a lower VAT rate they can sell goods cheaper to the user and therefore sell more.

Just think of the base song price hypothetically being 50 cent. VAT in one state will go over a euro and in another just under a pound but the amount Apple gains is still only 50 cent per sale. They aren't avoiding tax on sales. The difference in costs is taken by the state to pay for all those public services we use every day - or in this case Luxembourgers enjoy every day ;-)

If we were outside of the EU, as the isolationists and little islanders want, Apple could still sell out of Luxembourg but we would have to pay an additional import tax equivalent to local VAT on top, therefore we would all get taxed twice on our iTunes purchases. The costs to set up a second store outside the Union on declining iTunes sales wouldn'€™t be worth it.
 
And how could Amazon like it if Google took advantage of the loopholes and pay even less taxes for selling the same thing from the same country as Amazon?

You do understand what loopholes mean, right? Because if you do, you'd understand the loopholes are by their definition legal and it is your government who made them possible in the first place. As long as the loopholes exist, anybody's allowed to take full advantages of it and the same legal minimal taxes as everybody else.

If you want Amazon/Apple to start paying the same taxes next as your small company in your country, then you have to close all loopholes and make it fair to everybody.

That's why if you read my comment properly, you will see I stated Apple were not the only ones, Google and Amazon are also included.
They are changing the laws because the scandal was brought to light in the media, and the public rightly demanded action.

These companies DO trade in the UK, they employ people in the UK, they should pay UK tax.

Look at these:

http://www.bbc.co.uk/news/magazine-20560359
http://www.bbc.co.uk/news/business-22549434
http://www.theguardian.com/technology/2012/apr/04/amazon-british-operation-corporation-tax

It's been going on for years. They won't stop at this and will hopefully make all the American giants pay their full corporate tax.
 
Because in the UK American companies make an absolute killing with vastly, and I MEAN vastly inflated prices.

Take the iPhone 5S 16gb, in the US it is $649 on the Apple website so I guess tax not included, here in the UK on Apples website with our tax it costs $905.

So in the UK with tax I pay $256 more, and that is par for the course. I think some of you need to understand that before bloating, why should Apple absorb the cost...

Much of that 250 dollars goes to strengthening your long term entitlement system and healthcare, in the United States in theory should use that for paying our healthcare and 401k for retirement.

Personally I think the UK method is much more logical, since you don't double dip your profit, whereas when I put that 250 into my 401k or healthcare payment some of that also goes to another company X to manage/supply. Resulting in actual investment of 150 or so dollars into my personal benefit. No system is perfect but in the United States we send money through many more "middle men" that take their piece.
 
Apple should simply ****ing absorb the VAT. It's not as if they did not already profit enough from those tax leaks and make quite some money anyway.

You wanna make money in a certain country? Pay this country's taxes.
Just ridiculous to pay taxes in Luxembourg or Ireland but sell goods and services in a completely different country?

Why in the world would Apple pay your sales tax? Any company sets the price they want for an item. Sales tax isn't a price increase, it's a charge your government imposed for the privilege to buy something. Don't like it? Complain to the government.

All of these things you demand for free are not free. Corporate taxes are added to product price. Mandatory warrantees are added to product price. 'Free' healthcare is paid for by higher taxes. Anytime you require a company or government to provide a good or service you're going to end up paying for it somewhere.
 
Ok, let's play this game. App is £10. Currently, developer gets £7 and Apple £3. Under 1-Jan-2015 laws, and your proposal, Apple should, from their £3 profit, pay the £2 tax. Ok, the still make £1. What, then, stops the government from stating the VAT is 40% starting 1-Jan-2016. Should Apple then absorb that loss, too? So charge the customer £10, pay the developer £7, pay the government £4 and write off that £1 loss. Yeah, great idea.

This is going to come to the states soon enough. It is part of the problem that needs to be addressed because the laws have not kept up with the times.

No, the developer would pay £1.40 and Apple would pay 60p. You don't honestly think that Apple would absorb the full cost do you?
 
I'm not sure they will be able to do this. It'll probably be yet another example of jumping in without reading the small print and being forced to another U-Turn in a few months.

This change is about inter-EU sales. The current system sees Apple pay tax at the rate set by the country they are SELLING from. Naturally, Apple will 'sell' from the country with the lowest tax.
 
So are we just going to attach the little man

Or are GIANT companies such as Apple going to be stopped using money men to relocate company money around the world to avoid paying tax?
 
That's why if you read my comment properly, you will see I stated Apple were not the only ones, Google and Amazon are also included.
They are changing the laws because the scandal was brought to light in the media, and the public rightly demanded action.

These companies DO trade in the UK, they employ people in the UK, they should pay UK tax.

Look at these:

http://www.bbc.co.uk/news/magazine-20560359
http://www.bbc.co.uk/news/business-22549434
http://www.theguardian.com/technology/2012/apr/04/amazon-british-operation-corporation-tax

It's been going on for years. They won't stop at this and will hopefully make all the American giants pay their full corporate tax.

My bad, I did misread it.
 
So are we just going to attach the little man

Or are GIANT companies such as Apple going to be stopped using money men to relocate company money around the world to avoid paying tax?

The more complex the tax system, the more likely loopholes will exist.

The more money at stake, the more accountants get paid to find those loopholes.

Simplify the tax system = less/no loopholes!

It is the job of an accountant to legally reduce the tax paid by his employer and no account or company should ever be criticised for doing so. ALL criticism should be directed at the people who make the system. POLITICIANS!!
 
This change is about inter-EU sales. The current system sees Apple pay tax at the rate set by the country they are SELLING from. Naturally, Apple will 'sell' from the country with the lowest tax.

Yes I know, that's what I said. However over the past four years Osborne has made a number of budget statements about things which has been forgotten or ignored because he found legally he couldn't do it. This is one of those probably worth flagging to the local MEP to look into.
 
Don't feel bad, UK. Many here in the US know your pain. I live in New York State, which a while back instituted the "Amazon tax", making us one of the few states that actually taxes Amazon purchases. New York - the state that never met a tax it didn't love.

Where in New York are you because I remember paying sales tax on Amazon purchases since '07, which is why I stopped using them.
 
I suspect we would riot in the streets if they increased tax to 40% and I am NOT joking on that. We would literally have a civil uprising. So that is what is stopping them.
And I agree, Apple should absorb the increase, they have made enough billions by dodging the UK taxes they had a duty to pay by exploiting loopholes. They are not the only ones either.

Here in Denmark we pay around 55%. No riot in the streets here. But i guess it didn't happen in a single day.. :confused:
 
Not sure what the point of taxing something in the UK that was created in the US and distributed by a US company... Just because the user happens to be sitting in the UK at the time of purchase. Digital things should not be bound to a location!
 
Much of that 250 dollars goes to strengthening your long term entitlement system and healthcare, in the United States in theory should use that for paying our healthcare and 401k for retirement.

Personally I think the UK method is much more logical, since you don't double dip your profit, whereas when I put that 250 into my 401k or healthcare payment some of that also goes to another company X to manage/supply. Resulting in actual investment of 150 or so dollars into my personal benefit.

I pay national insurance for the national healthcare, has nothing to do with Apple's prices. Not sure if the 20% tax goes on the entitlement system as I have to pay for that with my income tax every pay cheque.

But the US tax system I find to be nuts, I seriously wouldn't want to every year work out how much tax I have to pay. But then again at least you know it'll be accurate?
 
Corporations need to stop avoiding paying tax. This is the only intelligent thing I have to say on the matter.
 
Ok, let's play this game. App is £10. Currently, developer gets £7 and Apple £3. Under 1-Jan-2015 laws, and your proposal, Apple should, from their £3 profit, pay the £2 tax. Ok, the still make £1. What, then, stops the government from stating the VAT is 40% starting 1-Jan-2016. Should Apple then absorb that loss, too? So charge the customer £10, pay the developer £7, pay the government £4 and write off that £1 loss. Yeah, great idea.

This is going to come to the states soon enough. It is part of the problem that needs to be addressed because the laws have not kept up with the times.

It would be absolutely bunkers if that happened. I agree with you that surely Apple should never do that.

Another way they could do this is to pay 70% of the ex-VAT sum. This essentially means that if the digital content were £1, and:

1. VAT is 5%, the app writer gets 66.67p, Apple gets 28.57p, and the government get 4.76p.

2. VAT is 20%, the app writer gets 58.33p, Apple gets 25p, and the government gets 16.67p.

3. Even in bizzaro world where VAT is 40%, the app writer gets 50p, Apple gets 21.43p, and the government gets 28.57p.

It's worth noting that quite strangely, items selling for $1 on the US Apple Store cost 69p, in the UK Apple Store, which about $1.15, which already is a 15% 'charge' above US prices.
 
You will alway pay any tax as a consumer. It's always you who will pay corporate taxes. I'm sure you will never understand.

Now you get what you wanted in first place. Pay your tax peon.

No, it's not. Business class 101: price elasticity. Look it up before making uneducated assumptions.
 
It would be absolutely bunkers if that happened. I agree with you that surely Apple should never do that.

Another way they could do this is to pay 70% of the ex-VAT sum. This essentially means that if the digital content were £1, and:

1. VAT is 5%, the app writer gets 66.67p, Apple gets 28.57p, and the government get 4.76p.

2. VAT is 20%, the app writer gets 58.33p, Apple gets 25p, and the government gets 16.67p.

3. Even in bizzaro world where VAT is 40%, the app writer gets 50p, Apple gets 21.43p, and the government gets 28.57p.

It's worth noting that quite strangely, items selling for $1 on the US Apple Store cost 69p, in the UK Apple Store, which about $1.15, which already is a 15% 'charge' above US prices.

Why would you think that the app writer would not have to pay some of the tax? and that Apple should pay it all out of their 30%profit, the app writer also makes a profit.
 
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:eek:

Hold on, it's not the companies who are avoiding taxes in this case, but the consumer. VAT and/or sales taxes are paid by the end consumer, and that's us, who've been getting a 'break' so far. I've always suspected that such a 'free ride' would sooner or later come to an end, with the insatiable appetite for tax revenue of governments of all stripes, and not just in the UK.

Without commenting on whether this right or wrong, with this being on the radar of one government, don't be surprised if this will become the norm in most countries before too long. We're talking about billions of potential revenue here, globally speaking.
 
I'm a British citizen and I have lived there, thank you.

I could go on about a lack of rights, censorship in the extreme, lack of privacy, crime, ill-conceived immigration policies, and astronomically high taxes...but that'd be too easy.
It's reassuring to know that wherever you are in the world you can still get hold of the Daily Mail.
 
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