Apple Could Owe More Than $8 Billion in European Tax Probe

[MH01]

Precisely. It's never sunny out when the sun isn't out. And Apple isn't in Ireland because of the sweet workforce. In all these posts, I've yet to see someone explain to me the benefit of Apple being in Ireland, OTHER than the 1.8% tax rate.

And for me, that's the point. Apple <3 Ireland ONLY for 1.8%. I would think you would do better with your European hub in say London...

Also people need to understand that the Irish government have created this situation, in an attempt to lure international companies to operate of out Ireland, as this results in investment and jobs.

International Giants did not stumble onto these loopholes, they were opened up for them , asking them to come.

The Eu commission has the right to look into this.

Same would happen in the US if one of the states gave huge tax breaks and all the EU companies were based on that state. I'm sure everyone on here would be in arms that the EU companies pay thier share of tax.

My opinion, Ireland government is at fault, they knowingly created this situation , and the result is all these huge companies that are based there.

Don't blame the player, blame the game. Ireland's field

 

[GoodWatch]

What I'll never understand is why it is considered greedy to want to keep money that you've earned, but it's NOT considered greedy for someone to take someone else's money that the earner has earned and the taker hasn't.

What I'll never understand why it's considered perfectly OK (clever even) for a plus 28% net profit company like Apple to have to pay only 1.8% tax. (Because they have the means, tax lawyers and a huge global footprint). But Apple's customers (you and me) have to pay way, way more because we lack the same means and resources. That also seems to be OK......

 

[thekev]

I've heard it explained this way, not sure if it is entirely accurate, could someone else confirm?

John is headquartered in the US, and sells apples around the world for $1. His cost to produce the apples is $0.20 in China. If he sells an apple to Mary in France, he would owe tax on his profit of $0.80 in France. For simplicity, let's assume the tax rate is 20% in France. Of John's $0.80 profit, he pays France $0.16, leaving him with $0.64 of his original $0.80 profit. If John tries to bring his profit back to the US, it will be taxed again at 20% and he will end up with about $0.51 of his original $0.80 profit.

That person who explained it arrived at the right numbers through the wrong (or at least highly misleading) calculations. The recently quoted estimate of 39-40% assumes taxation at the state level. The marginal federal rate is roughly 35% minus any tax paid to a recognized foreign government, assuming proper filing.

This means that John would pay $0.16 to France, then 35% ($0.13) to the federal government in the US. It's ($0.29 - $0.16). This is of course assuming the highest marginal rate. It would be applicable in Apple's case, pending any other mitigating factors. I just thought the original wording was quite inaccurate. Anything John paid in France would be deducted from what is owed in the US. Assuming a genuine liability to a recognized foreign government, he wouldn't ever have to pay anything higher than the US rate. This means that if France's rate was higher, he would not pay a higher total.

 

[KnighsTalker]

Everybody wants a piece of the pie... Apple pie!

That's more money than some people see in a lifetime.

Some people? Where do you live because I want to live there too!

 

[subjonas]

What I'll never understand is why it is considered greedy to want to keep money that you've earned, but it's NOT considered greedy for someone to take someone else's money that the earner has earned and the taker hasn't.

What? Are you saying governments in no way helped Apple make money and therefore don't deserve a cut? That's insane. The question isn't whether or not the government has earned a cut. It's how much have they earned. And as long as there are people on both sides, and people are people (greedy), that will always be in question.

 

[mikecorp]

problem is. what government or European union does with the money?

company hires people, gives them social and health insurance and pay salary.
any customer pay 20% -21 % tax if they buy any goods.

what does governments do with that money? giving it to refugees and aid to 3d world countries!!

 

[B2k1977]

Well in the U.S. conservatives generally seem to not feel like the government should get any money. Or at least they feel like the government should get a lot less money to use.

Maybe they wouldn't feel that way if ol' uncle sam didn't piss money away on phony programs and give the money to people who sit on their ass and vote for a living rather than get a job. Just maybe.

 

[winston1236]

No, Apple should pay fair taxes in countries where they operate, now they don't.

Exactly, taxes are a cost of doing business that has been around far longer than Apple. I wish they would focus on great products instead of how to weasel their way around their tax obligations.

 

[warrior2000]

Incorrect. Page 61 of their SEC filing in 2012 is where the 2% headline figure comes from. It breaks down their foreign taxes paid along with foreign pre-tax income. 1.9% is the correct figure for foreign profits. Apple stopped breaking down their provision for income taxes and in their most recent filing, they only report the total provision instead of domestic and foreign.

I wonder why.

Nice job pulling information 4 years old.

Bottom line is Apple's company wide tax rate was 25% in 2015.
It is mathematically impossible for Apple to only have a 1.8% foreign tax rate if total profits are 45% USA.

 

[Bubba Satori]

Apple should just buy the European Union.
Make it start turning a profit, lowering the 12% unemployment rate
and paying off mega trillions of debt. Insanely Magical.

 

[verpeiler]

Very good.. I hope someday in the future Apple and other big companies pay their taxes... Go EU !

 

[warrior2000]

What I'll never understand why it's considered perfectly OK (clever even) for a plus 28% net profit company like Apple to have to pay only 1.8% tax. (Because they have the means, tax lawyers and a huge global footprint). But Apple's customers (you and me) have to pay way, way more because we lack the same means and resources. That also seems to be OK......

And where do those Apple profits go to? Does Apple Inc take vacations on Malibu Beach? Does Apple Inc have wife and kids?

All those profits you speak of trickle down to INDIVIDUALS. And those individuals have to pay taxes AGAIN on those Apple profits.

40% corporate tax on Apple Inc
15-25% dividend taxes
10-30% capital gains taxes

Its taxes on taxes. By right corporations should not even pay any taxes.
[doublepost=1452883515][/doublepost]

Very good.. I hope someday in the future Apple and other big companies pay their taxes... Go EU !

And when that happens Apple and all the other big companies will just raise prices. How is that a win?

The only people 'winning' will be those who freeload on government programs that those taxes pay for.

So unless you are a freeloader getting government aid you will be losing out.

 

[azentropy]

If they are breaking the existing laws then yes they should owe back taxes. However if the laws are changing or being clarified then I don't see how they can make them pay the additional "back" taxes.

 

[aaronvan]

So this is how the EU plans to pay for it's endless Greek bailouts. Good luck with that.

 

[GadgetDon]

Also people need to understand that the Irish government have created this situation, in an attempt to lure international companies to operate of out Ireland, as this results in investment and jobs.

International Giants did not stumble onto these loopholes, they were opened up for them , asking them to come.

The Eu commission has the right to look into this.

Same would happen in the US if one of the states gave huge tax breaks and all the EU companies were based on that state. I'm sure everyone on here would be in arms that the EU companies pay thier share of tax.

My opinion, Ireland government is at fault, they knowingly created this situation , and the result is all these huge companies that are based there.

Don't blame the player, blame the game. Ireland's field

I've got zero problem with the EU commission looking into it and, if the international agreements allow it, tell Ireland "You can't do that, raise those rates". Given that those rates have been well known for a long time, and the EU hasn't forced Ireland to raise the rates, it wouldn't shock me to discover that the EU doesn't have the authority to tell Ireland that, but maybe it just wasn't on people's radar.

The problem is that they're going after Apple (and presumably other countries) for taking advantage of those rates, and not just saying "you can't take advantage of them any more" but "and we're going to fine you for taking advantage of all those rates". Because it's not like Tim Cook of 2016 can send Tim Cook of 1990 a note saying "It's going to be illegal for you to take advantage of Ireland's rates so obey the future law and don't do it".

And it's not even retroactively raising the rates, which would be bad enough. It's a fine. So should Apple want to bring the money to the U.S., it's still considered to have been taxed at the 1.8% rate.

 

[blacktape242]

never use the word "fair" when talking about gov. or taxes....doesnt exist nor is there a such thing....

 

[citysnaps]

Don't need to be an expert to know a company is trying everything it can do NOT to pay taxes, even if legal.

And of course every year you volunteer to pay extra tax, just for the heck of it. Even though you know paying what the tax laws specify, is legal.

 

[Zwhaler]

The EU should really stick to what it does well and keep its hands off countries tax policies.

Are you defending AAPL?

 

[Michael Scrip]

There is also Google who plays the same game as Apple. And Microsoft etc.

Most of these company have registered their businesses in Ireland because of low taxes there.

And Apple has been in Ireland since 1980.

That's over 35 years... is the EU just now catching on?

 

[Zwhaler]

And of course every year you volunteer to pay extra tax, just for the heck of it. Even though you know paying what the tax laws specify is legal.

Legal doesn't equal moral. And corporations don't pay anywhere near the rate of average individuals.

 

[t0mat0]

On the upside if this happens perhaps Apple has a window where the stock is likely to lower and for them to be able to buy at a reduced rate?

 

[Zwhaler]

If they are breaking the law, make them pay. If they aren't, then fix the damn tax laws so they can bring the money home.

True, the problem is that countries simply adapt in order to avoid taxes. That's what happened with manufacturing. If outsourcing manufacturing was taxed 5% higher than keeping it at home, you better believe those jobs would be coming back to America.

 

[warrior2000]

Legal doesn't equal moral. And corporations don't pay anywhere near the rate of average individuals.

Thats silly talk. Of course corporations don't pay as much as individuals.

The corporate profits trickle down to individuals and they have to pay taxes. Why should stockholders pay taxes TWICE? When was penalizing strong companies helpful to the economy? This will only hurt the EU as tons of large corporations will leave the EU for greener pastures. There goes hundreds of thousands of jobs and BILLIONS in tax revenue.

Let see how much taxes Apple pays for $1 of profit:
40% Federal/State taxes
PLUS
15-25% on dividends
PLUS
15-40% on individual income tax

Thats a tax rate of 55-65% that Apple owners need to pay. How the hell is that not enough?

 

[2010mini]

Why does anyone defend a multi-billion dollar company from paying their taxes considering how much they benefit from the rest of society?

I'll never ever understand the conservative mindset, it's rather nutty.

That kind of thinking is not of the conservative mindset. That's Neo-Con thinking.

 

[GadgetDon]

Legal doesn't equal moral. And corporations don't pay anywhere near the rate of average individuals.

The main moral responsibility of a corporation is to preserve and grow shareholder value. Because these aren't NGEs or non-profits - they are individuals putting money into a corporation at the hope of getting more out.

I'm not saying that's their only responsibility. But it's their primary responsibility. "Let's give a lot more of our shareholder's money to government than we are legally required to give them" is a violation of that responsibility.