Apple Reaches Deal With France to Pay Estimated $571M in Back-Taxes

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Apple has reached a deal with French authorities to pay an undeclared amount of back-dated tax, according to multiple reports today.


Apple's French division confirmed the tax payment agreement to Reuters, but didn't disclose how much it had agreed to pay, although French media suggest the sum is around 500 million euros ($571 million).
"As a multinational company, Apple is regularly audited by fiscal authorities around the world," Apple France said in a statement. "The French tax administration recently concluded a multi-year audit on the company's French accounts, and those details will be published in our public accounts."
France has been working diligently to stop tech companies like Apple from exploiting tax loopholes in the country. The loopholes are said to have allowed Apple to "minimize taxes and grab market share" at the expense of Europe-based companies.

French President Emmanuel Macron is one of the leaders behind the tax crackdown on international tech companies, with a goal of bringing a more unified corporate tax system across the nineteen euro area states.

As noted by iPhon.fr, Apple and French tax authorities reached the agreement for the payment of several years of unpaid taxes in December, according to French newspaper L'Expansion. The agreement followed a meeting in October between Apple CEO Tim Cook and President Macron, in which both reportedly agreed that a solution would ultimately be enacted by the European Union rather than France.

Apple has had trouble with French tax activist groups accusing the company of wide-scale tax evasion and occupying its Parisian retail stores. In February 2018, Apple sued the activist group "Attac" for its protests in stores, but the High Court of Paris denied Apple's request for an injunction that would have blocked the group from protesting.

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Article Link: Apple Reaches Deal With France to Pay Estimated $571M in Back-Taxes
 

ksec

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Dec 23, 2015
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Can someone explain, why would a company with majority of its R&D spent in US, and purchase component from Global sources, need to pay Tax in France? And What % does it need to pay?
 
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KrisLord

macrumors 68000
Sep 12, 2008
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“The loopholes are said to have allowed Apple to "minimize taxes and grab market share" at the expense of Europe-based companies“

I don’t get this part.

Yes it save Apple money, but how does it impact market share at the expense of Europe based companies? It’s not like there’s lots of EU phone companies manufacturing stuff here.
 

KrisLord

macrumors 68000
Sep 12, 2008
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Can someone explain, why would a company with majority of its R&D spent in US, and purchase component from Global sources, need to pay Tax in France? And What % does it need to pay?
They’ve likely a French legal entity making retail sales in France, they’ll owe corporation tax based on the profit earned there.

These decisions are always about what intercompany cross charges between Apple companies are allowed and what aren’t....
 

timber

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Aug 30, 2006
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Can someone explain, why would a company with majority of its R&D spent in US, and purchase component from Global sources, need to pay Tax in France? And What % does it need to pay?
Did you notice these news were from Apple's French division?
That is a company in itself.
As any other company it will pay taxes on its profits just like a champagne retailer will pay in the USA.
 

drumcat

macrumors 6502a
Feb 28, 2008
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So, did they break a law? Or did the French government set up tax laws it regretted, and backtracked and arm-twisted a ransom from someone they saw as an easy target?

I swear up and down this would not have happened if Trump was actually for American companies.
 

frifra

macrumors 6502a
Nov 29, 2008
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I don't know the details here, but tax evasion is a common game with multi-national companies.

Starbucks for example does not make any profits in Germany for years, at least according to their tax statements. So, why keep the stores open? Well, if you just shift your profits by making your stores pay "license fees" to its mother company and list those as costs, then you don't make any profits.
 

[AUT] Thomas

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Mar 13, 2016
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So, did they break a law? Or did the French government set up tax laws it regretted, and backtracked and arm-twisted a ransom from someone they saw as an easy target?

I swear up and down this would not have happened if Trump was actually for American companies.
https://forums.macrumors.com/threads/apple-agrees-deal-with-france-to-pay-571-million-in-back-taxes.2168487/#post-27066305

Other than that: Trump can't do much here. Apple is barely paying taxes in the US. They are paying like 2% in Ireland.
AFAIK the US Finance Administration is as much interested as the EU on eliminating tax loop holes like IP boxing.
Because, in fact, a large corporation paying like 2% tax while a new start up faces the regular tax means it's even more complicated for them to be competitive and actually "start up".
What would make sense is to ramp up sales tax and drop stupid things like wage taxes. That way, consumption would be taxed rather than labour. Taxing labour only makes production in western countries expensive, driving away jobs to (e.g.) China.
 

ksec

macrumors 65816
Dec 23, 2015
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They’ve likely a French legal entity making retail sales in France, they’ll owe corporation tax based on the profit earned there.

These decisions are always about what intercompany cross charges between Apple companies are allowed and what aren’t....
Did you notice these news were from Apple's French division?
That is a company in itself.
As any other company it will pay taxes on its profits just like a champagne retailer will pay in the USA.
Which the French Apple Entity will have to pay back its amount owned to US Apple's IP. ( Or more like Irish Apple IP ). After subtracting the Rent and Employees in Apple Retail there should be relatively little profits left.

This isn't really Tax evasion. Apple is still going to paid Tax in US ( Some day ) when it moves those money back to US Shores.

Apple is barely paying taxes in the US. They are paying like 2% in Ireland.
Barely? Seriously? Or have you got it mixed up with Amazon ? Apple is the largest tax paying Company in US.
 

BvizioN

macrumors 603
Mar 16, 2012
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Tim ain’t gonna be happy about this. Be prepared for a price hike of 2019’s iPhone.
I find it hilarious that most people seem to think iPhone prices did increase on 2018 compared to the previous year model, when in fact they did not.
I wish Tim created a "trash" version of iPhone for anyone who loves barging and doesn't care about quality.
 

Romeo_Nightfall

macrumors 6502a
Aug 8, 2018
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Vienna
Can someone explain, why would a company with majority of its R&D spent in US, and purchase component from Global sources, need to pay Tax in France? And What % does it need to pay?
is this a real question? or sarcasm
apple sells tons of stuff in the european union, which france is a part. due to tax loopholes the european union has created for multi national companies to settle down in ireland and netherland "double dutch irish sandwich" us and multis hardly pay ANY tax - they pay around 1 percent total tax for everything they sell and do.
its not apples fault to use such holes, but the politicians need money to feed their entourage - and hence they now attack their beloved multis too.
500 million is peanuts anyways
 

dilbert99

macrumors 68020
Jul 23, 2012
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Can someone explain, why would a company with majority of its R&D spent in US, and purchase component from Global sources, need to pay Tax in France? And What % does it need to pay?
Global companies operate and sell things globally. They should be prepared to pay their fair share of taxes.
 
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dilbert99

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Jul 23, 2012
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I find it hilarious that most people seem to think iPhone prices did increase on 2018 compared to the previous year model, when in fact they did not.
Its easy to look at two adjacent years and not see particular price rises, but over time you can see the increase in price due to both price rises and currency fluctuations. Apparently Apple fans could also see the marvelous, the gorgeous, the beautiful robe on that emperor.:D
I wish Tim created a "trash" version of iPhone for anyone who loves barging and doesn't care about quality.
Such a happy chappy, but whatever.
 
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FreakinEurekan

macrumors 68040
Sep 8, 2011
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Eureka Springs, Arkansas
This isn't really Tax evasion. Apple is still going to paid Tax in US ( Some day ) when it moves those money back to US Shores.
Perhaps you missed the news? President Spray-Tan lowered Apple's tax rate from 35% to 21%, and gave them a one-time 15.5% rate for repatriated funds. It's all back, it cost Apple just $38 billion to USA and $16 billion to Ireland to move all $252 billion it had been storing there. So they "Only" get to keep $198 billion of it. https://www.irishtimes.com/business/technology/apple-to-incur-38bn-us-tax-bill-as-it-repatriates-irish-cash-pile-1.3359240