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

[Popeye206]

Precisely.

This entire fiasco is a cash grab, and Apple is the golden goose. They have the money so now it's important for the EU to scrutinize these policies when it is those policies that helped Apple build their business.

That's not to say I am anti-tax, far from it. I just think Apple is the wrong golden goose to go after. Consumer products and income from those products can dry up so quickly that the EU needs to be pragmatic about their tax structure. It's more feasible to go after resource and energy companies because they use consumable lands and environments and do little to return those costs. BP, Shell, Exxon -- these are the companies that lobbied for these loopholes, bought and paid for governments (i.e. Middle East wars), and then refuse to support the burden they've imposed.

The EU and politicians won't go after these companies because they are bought and paid for by them. Instead, they go after companies like Apple which have very little lobbying power or interest.

MY god.... a voice of reason.... also.... could it be that many EU countries are desperate for revenue? So, why not go after Apple... they are the golden egg if they can prove a case... why piddle around with companies where they may just get a fews 100 million Euros... when they can get Billions of Euro's if they can prove a case against Apple.

This is nothing but politics and bad tax policy at work... and iLunar has it dead on about why they would never go after Exxon or BP... too much grease in the palms there.

 

[warrior2000]

Hundreds of Thousands? LOL I think you need to scale that back quite a bit. Apple doesn't have that many employees.

I'm talking about jobs throughout the whole EU from all USA and foreign countries. Jobs from Apple, Google, Microsoft, ect. Plus all the other jobs related to those jobs such as App writers.

if this law passes there will be a mass exodus of corporations leaving the EU. And why not? If the EU has the right to go back 30 years and change laws retroactivitely only a stupid corporation would stay in the EU. If the EU can say Apple should pay 12% tax on profits made decades ago what is stopping the EU from saying the taxes should be 30% next time?

This will set a horrible precedent and the EU will lose all credibility.

 

[Popeye206]

1.8% tax on foreign profit. Ridiculous. Tim Cook and his moral must feel proud.

You do realize that "profit" was already taxed once at the local level... heck... might as well tax it 20% there, 30% more and 40% on the way back to the US.

Not sure why people think this is a moral issue? That is what's ridiculous.

 

[warrior2000]

1.8% tax on foreign profit. Ridiculous. Tim Cook and his moral must feel proud.

In exchange for the low tax rate Apple provides hundreds of jobs and billions in tax revenues. If it wasn't a good deal for Ireland they would not be defending Apple. Its just people like you and the EU who are jealous of a good arrangement.

 

[Khedron]

Apple will pay this from petty cash if they have to.

On the subject of FAIR: That has been discussed and businesses are not legally obligated to be FAIR.

They are run to make money, for shareholders, owners etc.

Also, all laws and tax codes will be taken apart by much smarter people than those who write them, especially outdated laws and regulations.

And, for those who think it's a European issue, read up on how US companies pay NO taxes through INVERSION.
They save BILLIONS.

The lawmakers will never be able to block every loophole.

That's because the US decided to make companies legally obligated to act like cancers to society. Growth at any cost. What could possibly go wrong.

 

[warrior2000]

That's because the US decided to make companies legally obligated to act like cancers to society. Growth at any cost. What could possibly go wrong.

Cancers?

Where do you think those profits from Apple go to?
They go to shareholders who receive dividends and pay 15-25% taxes on that.
Or shareholders who sold their shares and pay 15-40% taxes.

 

[JamesPDX]

I should have been a tax attorney or a lobbyist. Why not both? Sigh...

 

[DrewDaHilp1]

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

Wealth redistribution?

 

[Mackan]

In exchange for the low tax rate Apple provides hundreds of jobs and billions in tax revenues. If it wasn't a good deal for Ireland they would not be defending Apple. Its just people like you and the EU who are jealous of a good arrangement.

By that reasoning, why not get rid of taxes for companies altogether then? Since they "pay back" to the society by providing jobs.

 

[MacOG728893]

As a business owner, I full understand trying to save as much money on your business taxes as possible. On the other hand, I know that breaking the law isn't right. I see no problem making the tax system work in your benefit, however, this does not allow for rule breaking.

I don't know the details of this case to come to a conclusive decision.

 

[Alenore]

If you study EU law, you may want to brush up on anti-corruption laws and specifically bribery. I highly doubt Apple gave any bribes unless they wanted to take the chance of being banned from doing business in the EU and the US. The EU and US laws are very tough on this. I'd be shocked if Apple or any repeatable company would risk such consequences. Makes no logical sense.

Oh I don't think I did. However the guy I was responding to seemed to believe the governments were corrupt and all. If that was that common and tax money was so useless becuase it all went to politicians, you'd think it'd come from the one who have the best deal and who make the most money out of it. Including Apple

 

[8281]

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.

You're using a common, but I think false analogy. Taxes are used to not only defend the nations in which Apple operates but also to support the infrastructure Apple depends on to earn its profit. No one is stealing from Apple.

If Apple would like to lobby for a simpler tax code, they are free to do so.

 

[copykris]

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

sharp observation bro

 

[Thunderhawks]

The taxes paid in the US are reduced by the taxes paid in the other country.

So if you are taxed at 20% in the other country and then bring it back to to the U.S. where the applicable tax rate is 35%, the company just pays the additional 15% to the U.S. The main issue is that overseas transactions are often structured where the tax rate is very low. Example is this Irish structure. So bringing back some cash often exposes the entire profit to almost the complete U.S. taxes.

Yes, but they would have to pay twice, which is why that money is not coming here.

Just read your other post about the foreign credit.

That is of no interest to Apple, I guarantee it!

 

[Jvanleuvan]

I actually study european law. If the deal Apple has with Ireland is found to be illegal (because Ireland proposed something going against european laws), then Apple AND Ireland both will have to pay.
The problem here isn't that Apple is in Ireland, it's that they're paying only 2% (if memory serves) instead of the 12.5% required by law.
Ireland pretty much screwed the rest of the EU if they did so, and Apple having generated profit from this (illegal) deal, would have to pay just like Ireland would have.

Just because a country struck a deal with someone doesn't mean this something is legal. in fact you said so yourself : the government is often corrupt. Someone might just have accepted a big bribe from Apple to get that accepted despite the fact it's not valid, or Ireland plainly decided to offer a VERY nice deal tgat could be considered illegal because way too profitable and screwing every other company.

The EU's law system get the priority over any country laws. Mostly because it needs a way to have countries behave and follow the rule everyone edicted.
In this case, if the deal is effectively illegal, Ireland pretty much screwed every company without a deal in addition to being anti competitve towards other countries that could have offered Apple a fair deal, or any country more interesting from other point of view (like the installed user base, etc)

That's insanity! Assuming that Apple didn't bribe anyone or the such, then apple shouldn't be responsible if Ireland enacted an illegal tax deal. The whole concept violates the assumption of the rule of law.

If you turn down a street and see a "50 MPH" sign, do you drive 50 MPH? how do you know that the official that set that speed limit really had the authority? Or if he filed all the appropriate paperwork? Or he got all the appropriate permissions? Would it be legal (or moral) for the state to then come after all the drivers who drove on that road for violating speed laws? even though they followed the law ostensibly created and enforced by the entity that has direct jurisdiction?

Common sense would dictate that, given the erroneous "50 MPH" speed limit, that the state government should go after the local mayor/governor/magistrate that set this incorrect speed limit and get it changed to the correct one, not retroactively go after the citizens following the rules set-forth by the person in direct authority over them.

In the same vein, if Ireland's taxes are illegal, then the EU should force Ireland to fix it, and possibly even hold some legislators accountable, but it is unconscionable to force people, and companies that are under these legislators jurisdictions to be responsible for the actions of the government.

 

[Thunderhawks]

That's because the US decided to make companies legally obligated to act like cancers to society. Growth at any cost. What could possibly go wrong.

That is not just a US issue. It is part of business worldwide.
All the countries which basically are competing with each other, never realized that the genie out of the bottle they opened with tax incentives etc. is not going back into their bottle.

 

[warrior2000]

By that reasoning, why not get rid of taxes for companies altogether then? Since they "pay back" to the society by providing jobs.

Corporations should not be taxed at all. All those profits get distributed to INDIVIDUALS who pay taxes on dividends and capital gains.

The amount of taxes paid is already ridiculous.

Corporations/Shareholders already have to pay:
1. Unemployment taxes
2. Social security taxes on employees
3. Social security taxes for employer
4. Sales taxes/VAT
5. Corporate taxes
6. Taxes on Dividends
7. Taxes on Capital gains

I mean how much more taxes do you want?

Unemployment taxes 3%
SS/Medicare taxes 13%
Sales tax 7%
Corp Fed/State tax 40%
Dividend tax 15-35%
Capital gains tax 15-40%
Property taxes 5%

 

[Thunderhawks]

You're using a common, but I think false analogy. Taxes are used to not only defend the nations in which Apple operates but also to support the infrastructure Apple depends on to earn its profit. No one is stealing from Apple.

If Apple would like to lobby for a simpler tax code, they are free to do so.

I think Apple has better things to do then lobby for tax code changes, certainly not if it would cost them money.

EMOJI, Live photos and ................
[doublepost=1452891671][/doublepost]

Corporations should not be taxed at all. All those profits get distributed to INDIVIDUALS who pay taxes on dividends and capital gains.

The amount of taxes paid is already ridiculous.

Corporations/Shareholders already have to pay:
1. Unemployment taxes
2. Social security taxes on employees
3. Social security taxes for employer
4. Sales taxes/VAT
5. Corporate taxes
6. Taxes on Dividends
7. Taxes on Capital gains

I mean how much more taxes do you want?

Unemployment taxes 3%
SS/Medicare taxes 13%
Sales tax 7%
Corp Fed/State tax 40%
Dividend tax 15-35%
Capital gains tax 15-40%
Property taxes 5%

Workers Compensation mandated
Disability Insurance = mandated

 

[warrior2000]

As a business owner, I full understand trying to save as much money on your business taxes as possible. On the other hand, I know that breaking the law isn't right. I see no problem making the tax system work in your benefit, however, this does not allow for rule breaking.

I don't know the details of this case to come to a conclusive decision.

So Apple was breaking the law for 35 years in Ireland?
And only now the EU is going after them?

Do you seriously think a company like Apple would intentionally break tax laws? Hell no. Apple followed the law to the T. If the law is a bad law then change it. But don't go back 35 years and try to retro actively collect taxes.

This is like an employer saying you own him $100,000 because 35 years ago he paid you too much wages. Get real.

 

[Jvanleuvan]

Nobody said Apple is trying to break the law. They're just doing their best to hide the fact that they're being greedy asses.

I know they are being greedy, but being greedy isn't against the law.

 

[zin]

Apple said that in the USA they pay 40% federal+state tax.
45% of the profits were USA profits.

$100 billion profit x 45% = $45 billion in USA profit
$45 billion x 40% = $18 billion in USA taxes

$100 billion profit x 55% = $55 billion in foreign profit
$55 billion x 2% = $1.1 billion in foreign taxes

Total taxes = $19.1 billion
Tax rate = 19.1%
Actual tax rate = 24%

In order for the company wide tax rate to be 24% Apple would have had to pay $6 billion in foreign taxes.
That gives a foreign tax rate of 11%

They don't pay 40%, certainly not effective. Where are you getting this? The percentages given by Apple are not profits, either. They are percentages for net sales.

In addition, your suggestion is that the effective taxes paid since 2012 in foreign jurisdictions has increased 5.5 fold.
[doublepost=1452892715][/doublepost]

I know they are being greedy, but being greedy isn't against the law.

That's right, it isn't.

Doesn't mean I can't shame them for gaming the system.

 

[warrior2000]

They don't pay 40%, certainly not effective. Where are you getting this? The percentages given by Apple are not profits, either. They are percentages for net sales.

In addition, your suggestion is that the effective taxes paid since 2012 in foreign jurisdictions has increased 5.5 fold.
[doublepost=1452892715][/doublepost]

That's right, it isn't.

Doesn't mean I can't shame them for gaming the system.

Cook said Apple pays 40% taxes on USA profits.
35% federal and 5% state.

 

[MH01]

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.

Agreed. Welcome to our ****** governments.

 

[MacLawyer]

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.

Not to "defend," but let's consider for a moment. Apple's management has a fiduciary duty to the shareholders to do everything legal to minimize taxes. If they don't do that they are accountable to a potential shareholder derivative suit, with possible personal liability.

If tax counsel advised management that what Apple did tax-wise was the most tax efficient approach for shareholder value, they pretty much HAVE to use the Ireland loophole, even if the EU invalidates it later.

It's never an issue of "fairness." "Fair" is too subjective a term.

 

[bsolar]

Cook said Apple pays 40% taxes on USA profits.
35% federal and 5% state.

Yes, that's exactly why he stated that he would "love" to repatriate Apple's foreign profits, but since it would cost him 40% he will not do that.