Apple Lobbying India to Change Tax Law

[MacRumors]

Apple is lobbying India to amend a decades-old tax law that could expose the company to billions of dollars in taxes on equipment it owns inside local iPhone factories, Reuters reports.

Apple is reportedly urging the Indian government to modify provisions in the Income Tax Act of 1961 to ensure it is not taxed simply for owning high-value manufacturing machinery supplied to its contract manufacturers, including Foxconn and Tata Electronics. The issue is a potential obstacle to Apple's expansion in the country.

Indian law currently treats such ownership as creating a "business connection", effectively making the company's global iPhone profits taxable in India. In China, Apple operates under a different model. The company buys the specialized machinery required to assemble iPhones and provides it to its manufacturing partners without becoming liable for local corporate tax. In India, the same practice could trigger significant tax exposure under existing law.

Legal experts say India's stance may stem from precedents such as the 2017 Supreme Court ruling against Formula One, which held that the UK-based company was liable for local taxes during its Grand Prix event because it exercised control over the circuit despite not owning it. A similar interpretation could apply if Apple were to maintain ownership of machinery used in Indian factories.

Discussions with the Indian government on taxation rules impacting Apple are said to be ongoing. The effort comes amid rapid expansion of its Indian operations. Since 2022, the country's share of global iPhone shipments is believed to have increased fourfold to around 25%. While China still produces around 75% of all iPhones, India is increasingly viewed as a critical secondary hub as Apple diversifies its supply chain. Foxconn and Tata have together invested more than $5 billion to open five large manufacturing facilities for Apple in the country.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Apple Lobbying India to Change Tax Law

 

[tyranne201]

Made in America…. Ooopsss

 

[con2apple]

The question is not whether Apple lobbies. But how.
With the same old lies and phrases.
"Innovation is being hindered," "We can't create jobs," "Apple's influence is being decimated," and so on and so forth...

To this day, I don't understand why people support such claims and act against their own interests.
Here: Indian newspapers and citizens (although this applies to every country, we usually talk about the US and the EU).

It's simple: A state finances itself through taxes.
Roads, police, water supply, electricity, waste, administration

Everyone who works in a country – from simple farmers to billion-dollar corporations – benefits from a functioning state. They benefit from built roads, protection by the police, and carefully maintained power lines.
Even Apple calls the police and expects its lawsuits to be heard in court.

But Apple does not want to contribute to the financial basis of the state like everyone else. Neither in India nor in the US or everywhere else.

And the question is, why is this attitude supported by ordinary people?
What does the Apple fan, who spends $5,000 at Apple every year, get out of it if the corporation does not contribute to the infrastructure that the fan also uses?

Because one thing is clear:
Apple customers have never benefited from discounts. Apple has never lowered prices because it made more profit.

 

[con2apple]

Made in America…. Ooopsss

I have to give Apple credit for this: they have never claimed that.
Unlike other large companies, they always write: "Designed by Apple in California." In every advertisement, too.
At least in this respect, they are not lying to us.

 

[ItsASpider]

I'd much rather every country introduces laws like that. That sounds great.

 

[mattwolfmatt]

I'd much rather every country introduces laws like that. That sounds great.

Who pays corporate taxes?

You and I do.

 

[Aluminum213]

Poor underdog Apple

 

[WarmWinterHat]

Who pays corporate taxes?

You and I do.

No, customers do. You don't have to buy a product, but they still have to pay taxes.

Either way, we all benefit by it coming back into the coffers.

 

[SoldOnApple]

India will probably aquiesse. Manufacturing in India could help do for India what it did for Japan, Taiwan, and China. Jobs in these factories for the average person in India would be like winning the lottery and all that wealth could rapidly modernise India in just a few decades. The demand for high quality stuff worldwide is only going to go up with time.

 

[neuropsychguy]

The question is not whether Apple lobbies. But how.
With the same old lies and phrases.
"Innovation is being hindered," "We can't create jobs," "Apple's influence is being decimated," and so on and so forth...

To this day, I don't understand why people support such claims and act against their own interests.
Here: Indian newspapers and citizens (although this applies to every country, we usually talk about the US and the EU).

It's simple: A state finances itself through taxes.
Roads, police, water supply, electricity, waste, administration

Everyone who works in a country – from simple farmers to billion-dollar corporations – benefits from a functioning state. They benefit from built roads, protection by the police, and carefully maintained power lines.
Even Apple calls the police and expects its lawsuits to be heard in court.

But Apple does not want to contribute to the financial basis of the state like everyone else. Neither in India nor in the US or everywhere else.

And the question is, why is this attitude supported by ordinary people?
What does the Apple fan, who spends $5,000 at Apple every year, get out of it if the corporation does not contribute to the infrastructure that the fan also uses?

Because one thing is clear:
Apple customers have never benefited from discounts. Apple has never lowered prices because it made more profit.

I don't understand all the implications of this particular law in India. Let's not assume that every law is just or is a good law, including tax law. Some of them are anti-citizen (another example) and anti-business (example: India had a tax law passed in 2012 that included a retrospective tax on indirect share transfers, which unfairly taxed businesses; it was repealed with refunds given in 2021). Some end up doing more harm than good (e.g., Denmark's quickly repealed "fat tax").

"But Apple does not want to contribute to the financial basis of the state like everyone else."

Citation needed here. Apple pays a lot of taxes. Apple's products and services also generate considerable economic activity around the world.

"What does the Apple fan, who spends $5,000 at Apple every year"

It looks like I'm not an Apple fan. I like that definition because it means you cannot criticize my reply to you as something coming from an Apple fan.

"Apple has never lowered prices because it made more profit."

Not increasing the price of the flagship (Pro) iPhones for years although there was considerable inflation wasn't effectively lowering prices?

 

[arcite]

Apple's market cap is almost greater than India's entire GDP....India is a country of 1.45 billion people - most of whom are still incredibly poor. India still has the world's highest child malnutrition rates. Of course, there is a 'modern side' of India, where these hi-tech factories are built....but how is India to continue developing itself if it merely becomes a low cost manufacturing and assembly destination....where cheap labor have few rights, and middling pay....with most workers having little hope to make it to the middle class. Apple is a global behemoth, but are they above the authority of the governments in the countries they operate?.... in other words, India might be the last stand in the fight back against neoliberalism. We shall see.

 

[arcite]

India will probably aquiesse. Manufacturing in India could help do for India what it did for Japan, Taiwan, and China. Jobs in these factories for the average person in India would be like winning the lottery and all that wealth could rapidly modernise India in just a few decades. The demand for high quality stuff worldwide is only going to go up with time.

Japan/Taiwan/China all developed domestic 'winners', they didn't sign over their fates to foreign American megacorps.

 

[KENESS]

I don't understand all the implications of this particular law in India. Let's not assume that every law is just or is a good law, including tax law. Some of them are anti-citizen (another example) and anti-business (example: India had a tax law passed in 2012 that included a retrospective tax on indirect share transfers, which unfairly taxed businesses; it was repealed with refunds given in 2021). Some end up doing more harm than good (e.g., Denmark's quickly repealed "fat tax").

"But Apple does not want to contribute to the financial basis of the state like everyone else."

Citation needed here. Apple pays a lot of taxes. Apple's products and services also generate considerable economic activity around the world.

"What does the Apple fan, who spends $5,000 at Apple every year"

It looks like I'm not an Apple fan. I like that definition because it means you cannot criticize my reply to you as something coming from an Apple fan.

"Apple has never lowered prices because it made more profit."

Not increasing the price of the flagship (Pro) iPhones for years although there was considerable inflation wasn't effectively lowering prices?

A well thought out and well reasoned counterargument. YOU WILL BE DESTROYED!

 

[arcite]

And the question is, why is this attitude supported by ordinary people?
What does the Apple fan, who spends $5,000 at Apple every year, get out of it if the corporation does not contribute to the infrastructure that the fan also uses?

Because one thing is clear:
Apple customers have never benefited from discounts. Apple has never lowered prices because it made more profit.

The ultimate goal is to create robot manned orbital manufacturing - fully automated, no pesky humans involved. Of course, who will be the customers? Capitalism devours itself.

 

[wanha]

Who pays corporate taxes?

You and I do.

Sure, but we also get to benefit from the corporate tax money in the form of education, healthcare, public roads, parks, military, and environmental protection.

If you allow companies to move profits to their home country, then only the tax payers of that home country benefit from it (along with the share holders who don't care about any country).

 

[ThomasJL]

Tim Crook wants the Indian government to allow Apple to not pay it's fair share of taxes while shifting a large portion of Apple's tax burden onto ordinary Indian taxpayers and make them pay an unfair share. This is the same thing Cook does in the U.S. and in other countries. Cook is pure neoliberal scum.

 

[wanha]

Not increasing the price of the flagship (Pro) iPhones for years although there was considerable inflation wasn't effectively lowering prices?

Inflation doesn't affect all parts of the economy evenly or in some cases at all.

Wages, for instance, have not "suffered" from inflation.

Also, rapid advances in technology and components has meant that companies are able to produce products more cheaply than ever before, which has served as a counterweight to inflation elsewhere.

The obvious place to look on this is whether Apple's iPhone profit margin has gone down over the past several years. My guess is that it hasn't, which would indicate Apple didn't "hide" inflation by lowering their margins.

The only way the statement "Apple has effectively lowered prices of iPhone Pros" is true is by comparing it to some other, unrelated product category like groceries or building materials which has suffered high inflation or to the average inflation rate in general.

 

[jlc1978]

Indian law currently treats such ownership as creating a "business connection", effectively making the company's global iPhone profits taxable in India

That is the key sentence. It would not be unreasonable, for example, to tax the added value or even the value of the equipment as an ad volorem tax.

Taxing global profits would make it crazy to expand in India.

 

[Alfred.Woodden]

Pay your taxes, Apple. Seriously.

 

[chmania]

India will probably aquiesse. Manufacturing in India could help do for India what it did for Japan, Taiwan, and China. Jobs in these factories for the average person in India would be like winning the lottery and all that wealth could rapidly modernise India in just a few decades. The demand for high quality stuff worldwide is only going to go up with time.

Sure, and that wealth should stay in India, so the taxes must stay put!
And perhaps an increase in corporate tax for companies like Apple and the like.

 

[turbineseaplane]

Indian law currently treats such ownership as creating a "business connection", effectively making the company's global iPhone profits taxable in India. In China, Apple operates under a different model. The company buys the specialized machinery required to assemble iPhones and provides it to its manufacturing partners without becoming liable for local corporate tax. In India, the same practice could trigger significant tax exposure under existing law.

I don't know guys ...

The Indian law seems to make sense to me in the context of how the modern world now works.

 

[iMac The Knife]

Whatever puts a few extra pennies in Cook's coffers I suppose.

 

[chmania]

Indians now own a significant amount of Western assets these days, including factories, iconic cars, and even some run renowned US companies, Microsoft, Google etc.

 

[Kingcoherent]

I don't know guys ...

The Indian law seem to make sense to me in the context of how the modern world now works.

The world isn’t really setup correctly for multinationals. My personal opinion is that there shouldn’t be double taxation on the same activity, and that the activity should be taxed where it happens (if it’s a tax on activity), or where the consumer is (if it’s a tax on spending).

The US is very weird in that it taxes its nationals income made abroad (IIRC the only other country that does that is Sudan or Ethiopia). But even then, my understanding it only taxes what hadn’t already been taxed; i.e. if the local tax rate is lower than the US federal tax rate, you pay the difference, but if the local rate is higher there’s no tax to pay.

There really does need to be a global accord to handle this properly, otherwise we just incentivise companies (or very wealthy individuals) to « financially engineer » activity to be somewhere tax efficient. This is bull***t, and ultimately unfair on normal people.

 

[turbineseaplane]

There really does need to be a global accord to handle this properly, otherwise we just incentivise companies (or very wealthy individuals) to « financially engineer » activity to be somewhere tax efficient. This is bull***t, and ultimately unfair on normal people.

Completely agree with you.

These shell games by the multinationals have been going on way too long already.

Apple is at the top of the list with their fleet of "tax experts".