Apple Releases Statement Ahead of Tim Cook's Senate Appearance on Tax Policy

[rmwebs]

Google was up before the UK equivalent of a senate hearing just last week and they really laid into Google. It was funny to watch them try and worm their way out of it.

I was watching that on the news this morning, BBC were talking to an ex Google ad salesman from the UK office, and he claims they regularly do deals in the UK, however Google have allegidly been putting down on paper that the deals were done in the taxhavens, and thus werent taxable.

If they are found guilty they have billions in backdated tax to pay, and likely a big fine. It'll also open the flood gates - the EU will be all over this like a rash, and you can guarantee that the big US corporations will have to pay big bucks for such dodgy and poor practices.

So far we're up to:

- Google
- Amazon
- Starbucks
- Apple

I daresay a few OEMs will be added to the list, along with the likes of McDonalds, Microsoft, etc.

Someone needs to slap these corporate idiots and pretty damn hard.

 

[milbournosphere]

Apple wants to make clear to the Subcommittee that the Company does not use its Irish subsidiaries or any other entities to engage in the following tax practices...

It would appear that the committee found otherwise:

...By officially locating them in places like Ireland, Apple was able to, in effect, make them stateless – exempt from taxes, record-keeping laws and the need for the subsidiaries to even file tax returns anywhere in the world.

In 2011, for example, one subsidiary paid Ireland just one-twentieth of 1 percent in taxes on $22 billion on pretax earnings from various operations; another did not file a corporate tax return anywhere and has paid almost nothing on $30 billion in profits since 2009.

“Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,” said Senator Carl Levin, a Michigan Democrat who is chairman of the Senate Permanent Subcommittee on Investigations. “Apple sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere.”

http://www.nytimes.com/2013/05/21/business/apple-avoided-billions-in-taxes-congressional-panel-says.html

 

[AppleMark]

I cannot believe the amount of people on this forum that think it is ok for large corporations to exploit loopholes in global taxation legislation and then cry "it's the governments fault". In the UK (as around the world), there are some policy decisions made to entice and promote business (low corporation tax etc.), however the 'governments' did not expect these corporations to go to these further length's to avoid tax.

Some of these corporations have more money than the governments, who's tax law's they are exploiting and so can theoretically afford better accountants and tax lawyers to that end.

Google have argued in the UK, that it is perfectly legitimate to provide a sales service in the UK, where the client is likely to think it is doing business in the UK, but then to 'close' the sale in Ireland, unknown to the UK client... Purely for (reduced) tax liability reasons.

This is like standing in line in the Apple store after being shown and 'sold' a new product only for you to be passed onto a man with a beard dressed as a leprechaun who takes your debit card and takes payment on behalf of Apple.

Would you find this a bit suspicious if this happened every time you made a payment at the Apple store etc? Well that is what is happening on a global market scale..., except they are not even bothering with a proper disguise, it is that blatant.

Governments are now getting wise, as they did with the banks and the higher level of scrutiny is exposing what is pure greed.

 

[Plutonius]

Or they start dividends when they amass an unjustifiable amount of cash.

The "Apple must no longer be a growth story because they're now issuing dividends" argument is flawed.

Apple is no longer considered a growth based company but is now considered a value based company by most investors in the market (similar to Microsoft). The dividends didn't cause the market to consider Apple a value based company. Instead, Apple started dividends in response to investors selling off stock because they no longer considered Apple to be a growth stock (i.e. the dividends were not the cause of Apple being considered a value based stock but instead were the result of the investors thinking that Apple was now a value based stock).

 

[tito2020]

Hes cooked govt gets you one way or another.

 

[coolfactor]

Yes, funny how all these "patriots" seem to constantly pick apart their American company while constantly bolstering a Korean conglomerate with questionable practices both in Korea and abroad. And Apples the "unpatriotic" one? Irony at its finest.

Yah, as nice and prevelant as Samsung products are becoming, I absolutely *refuse* to give Samsung even a dollar. And I'm not shy about telling everybody around about that. Shame that so many consumers just don't care.

----------

So if I understand correctly, the US government wants Apple to pay [more] taxes on revenue earned in other countries, simply because Apple is US-founed and based. If there's an ounce of truth to that, it's simply an act of greed.

Apple's statement is clear, concise and honest. Let's hope this goes in their favor, and that a reform happens.

 

[Krazy Bill]

Apple finds a legal way to optimize the investments made by public shareholders thereby making said shareholders more money. Those sneaky bastards! Then, the same politicians responsible for writing and enacting tax laws squawk in disbelief.

Must be an election circling the wagons somewhere.

Hee. Hee. Hilarious.

 

[samcraig]

Are you suggesting they initiated a dividend in 2012 because it would be good PR for when they might be called before congress some day to discuss the taxes they pay?

No. That's not what I was saying at all. I'm saying that it's handy that they did. Do you not agree? Do you think if they weren't giving out dividends now that it would help their recent statement? Don't you think it's a good bullet point to include?

 

[69650]

Boy are you naive. The more they get the more they want.

It's the governments who are always looking at ways to game the system. Let us find a way to double-dip. Wait, that little piggy got more than me. I want my spot at the trough.

"I want my spot at the trough" And you call me naive.

1. I'm happy for my government to tax and spend because I use the services they spend it on.

2. Big corporations should pay their fair share of taxes. Not a penny more, not a penny less, just their fair share. Don't see what's wrong with that.

3. You obviously don't watch the news. In case you hadn't noticed the US and Europe are in a hole. Deep in debt with ordinary people hurting. They need the freaking money.

 

[69650]

Funny how you saw it this way I listened to google saying the same thing as they've always said, rather arrogantly and along the lines of : 'We're following your laws and trying our best to pay as little tax as possible... It's your fault'
I've got utmost respect for them... their 'worming' is absolutely insignificant compared to all the other big American firms that have been singled out (strange how they're all American?), look at the wording in apples statement for one (although judging by a couple of the response posts, it works ). Starbucks being singled out was a little silly for example, was Nero mentioned in comparison? They're registered in the Isle of Man and paid absolutely zilch...

It was absolutely embarrassing watching the government trying to guilt trip PwC... they don't live in the real world - They're too busy trying to balance (marketing+++) the simpleton electorate's view that the rich should be heavily taxed, with the reality that there's 10000 ways round their ridiculous tax laws and 100 countries that will happily accept their business. Why pay money if you don't have to? Any 'nice-guys' payments by these firms are simply for good publicity.

I agree that the fault lays with the politicians for having allowed these loopholes to occur and maybe with so much public outrage they will finally do something about it.

I run a small business and I have to account for every penny to HMRC otherwise I could get fined or go to prison. It can't be that difficult to design a system that stops these corporate tax dodgers. Personally I would just tax them all based on their revenue generated in the UK. Forget about their profits. If they don't like it they can clear off elsewhere and we give the revenue to someone else who does pay their taxes.

 

[Mike Valmike]

"I want my spot at the trough" And you call me naive.

2. Big corporations should pay their fair share of taxes. Not a penny more, not a penny less, just their fair share. Don't see what's wrong with that.

You ARE naive. Hopelessly. Because in #2 you seem to take for granted that what one person thinks is "fair" and what another person thinks is "fair" will always be in accord. It could hardly be less so in reality.

I plan on getting on with my day, so I won't even get into all the problems with your point #1.

 

[69650]

You ARE naive. Hopelessly. Because in #2 you seem to take for granted that what one person thinks is "fair" and what another person thinks is "fair" will always be in accord. It could hardly be less so in reality.

I plan on getting on with my day, so I won't even get into all the problems with your point #1.

Fair in relation to what other tax payers pay in that country. If I run a business earning £100m a year profit I would probably pay between £20m and £30m in taxes at the moment.

In 2012 Amazon paid £3m in UK corporation tax on UK revenues of £4bn. An effective tax rate of less than 1%.

If you think that's right then please don't bother me with your comments ever again.

 

[Mr. Gates]

This topic has become Republicans against everyone else (Including themselves but they don't know it)

Apple should pay more in Taxes. Trying to beg John Boehner for a tax holiday a year ago so they can squeak by without paying on their offshore assets doesn't help their case .

Apple is an American company and if they started anywhere else in the world we would never know about them.

Trying to "Cook" up new ways to dodge their obligation to the American people is disgraceful.



Also... (Off Topic)... I don't believe a damn thing out of Cooks mouth

 

[etrinh]

Your post didn't make sense. The blame is with the US Govt and solely the US govt for they are the ones who created the tax laws. If they want a company to pay more taxes than write it into law. Easy as pie. As log as Apple didn't break US laws they have nothing to worry about.

The tax code was already in place before Apple incorporated. If they didn't like it then don't incorporate. It's as simple as that.

To play the victim & point the finger of blame on the government is weak, pathetic & typical of the entitlement mentality.

----------

What I can't believe is that you believe the US tax code is OK. It has a lot of tax loopholes. But who wrote those loopholes? US politicians! If they want to complain about a company taking advantage of those loop holes they should write a law to close them. Having a hearing is just grandstanding and not doing anything but to put on a show for the public.

I cannot believe the amount of people on this forum that think it is ok for large corporations to exploit loopholes in global taxation legislation and then cry "it's the governments fault". In the UK (as around the world), there are some policy decisions made to entice and promote business (low corporation tax etc.), however the 'governments' did not expect these corporations to go to these further length's to avoid tax.

Some of these corporations have more money than the governments, who's tax law's they are exploiting and so can theoretically afford better accountants and tax lawyers to that end.

Google have argued in the UK, that it is perfectly legitimate to provide a sales service in the UK, where the client is likely to think it is doing business in the UK, but then to 'close' the sale in the Ireland, unknown to the UK client... Purely for (reduced) tax liability reasons.

This is like standing in line in the Apple store after being shown and 'sold' a new product only for you to be passed onto a man with a beard dressed as a leprechaun who takes your debit card and takes payment on behalf of Apple.

Would you find this a but suspicious if this happened every time you made a payment at the Apple store etc? Well that is what is happening on a global market scale..., except they are not even bothering with a proper disguise, it is that blatant.

Governments are now getting wise, as they did with the banks and the higher level of scrutiny is exposing what is pure greed.

 

[djjclark]

Fair in relation to what other tax payers pay in that country. If I run a business earning £100m a year profit I would probably pay between £20m and £30m in taxes at the moment.

In 2012 Amazon paid £3m in UK corporation tax on UK revenues of £4bn. An effective tax rate of less than 1%.

If you think that's right then please don't bother me with your comments ever again.

So you get taxed on your profits and Amazon gets taxed on their revenue? You understand the difference?

 

[MikhailT]

Apple should pay more in Taxes. Trying to beg John Boehner for a tax holiday a year ago so they can squeak by without paying on their offshore assets doesn't help their case .

US has one of the highest corporate tax rates in the world, almost all international companies are avoiding shifting their profits into USA because of this reason. They already paid their taxes on revenue made in those international markets and they'd have to pay again when they shift the profits into USA.

Apple was NOT the only company who asked for it. Google, Microsoft, and others have requested the same tax holiday.

Apple is an American company and if they started anywhere else in the world we would never know about them.

They're headquartered in US, but they are a global company with branches all over the planet. Majority of their revenue are international, they make more money in other countries than they do in US.

They're using those profits to expand their businesses in those countries, as long as they're doing it there, they should not be entitled to pay US taxes when none of the profits have anything to do with USA.

 

[AppleMark]

What I can't believe is that you believe the US tax code is OK. It has a lot of tax loopholes. But who wrote those loopholes? US politicians! If they want to complain about a company taking advantage of those loop holes they should write a law to close them. Having a hearing is just grandstanding and not doing anything but to put on a show for the public.

I did not state anywhere in my post that US Tax codes were OK.

As for loopholes, you need to think of them as computer viruses. The software engineer makes an honest and perfectly viable program, as far as he is aware for normal use as he intended. However there will always be somebody who will look to exploit vulnerabilities in that program for either self gain or malicious reasons.

Loopholes in legislation written in good faith are an example of that, otherwise you are blaming the software engineer every time a 'black hat' decides to run havock. We just need a new patch to close the current vulnerability.

However as we know already...., you patch one exploit just as another one is opened. That is not to say that we should never try patch vulnerabilities.

Before you can pass a new law or amendment, you need awareness and support from both the public and politicians, therefore "Having a hearing is just grandstanding and not doing anything but to put on a show for the public." is required to meet that end.

 

[tevion5]

Tim Cook said Apple would build some PCs here months ago, long before these hearings were scheduled.

Apple are going to make PC's?

 

[iPadPublisher]

As they say...

Don't hate the player. Hate the game.

I hate to say it, but I agree with the quote above. As long as they're following the letter of the law, in ANY country, I don't see why the public shaming. No company, or individual for that matter, is going to overlook legal (meaning legitimate) ways to reduce their tax burden. Close the loopholes, and plug the leaks if its a problem, but don't hate on companies for playing by the rules as they are currently written.

 

[69650]

So you get taxed on your profits and Amazon gets taxed on their revenue? You understand the difference?

Yes of course I do. But that's the point Amazon et al make sales in the UK but channel the profits through offshore tax havens so they can declare little or no profit in the UK and therefore pay no corporation tax.

How can you sell £4bn worth of goods and make no profit? Simple answer is you can't. It's tax avoidance clear and simple. It might be legal but it's not right and hopefully it won't be legal either soon.

 

[rdowns]

Hoping Tim Cook can summon up his inner Jobs and say, You ass holes wrote this tax code. Drops mic, walks out.

 

[Dr McKay]

Funny how you saw it this way I listened to google saying the same thing as they've always said, rather arrogantly and along the lines of : 'We're following your laws and trying our best to pay as little tax as possible... It's your fault'
I've got utmost respect for them... their 'worming' is absolutely insignificant compared to all the other big American firms that have been singled out (strange how they're all American?), look at the wording in apples statement for one (although judging by a couple of the response posts, it works ). Starbucks being singled out was a little silly for example, was Nero mentioned in comparison? They're registered in the Isle of Man and paid absolutely zilch...

I listened on Radio 2 and I didn't think it was "worming" either, they are breaking no laws, I seriously have no idea how people think they can be punished. It's the legal system that's broken, these Corporations found the loopholes and exploited them. If anything the Government should be grateful these loopholes were exposed and fix them.

 

[lolkthxbai]

I think Apple is very aware that they are under an intense amount of scrutiny from almost every angle, so they're playing pretty much everything as straight as possible. I really doubt that Tim and Peter would go and lie in front of congress. Apple gets headlines for merely having magnets in their products; imagine what lying about their taxes would do.

I was honestly thinking the same thing but I can't help but wonder how they manage to allegedly pay so little tax if not by tax evasion or if they are really innocent and do pay all their taxes.

 

[mbh]

I was honestly thinking the same thing but I can't help but wonder how they manage to allegedly pay so little tax if not by tax evasion or if they are really innocent and do pay all their taxes.

There's a difference between tax evasion (not paying taxes you are lawfully required to) and tax avoidance (avoiding taxable situations legally). Nobody in these hearings is claiming that Apple broke any laws. I think they are following the law, but congress is upset that their byzantine tax laws aren't producing the results they want, or are producing results that look unfair.

 

[Mr. Gates]

US has one of the highest corporate tax rates in the world, almost all international companies are avoiding shifting their profits into USA because of this reason.

What does that have to do with anything?

It is what it is. Just because you don't like it or don't think its fair doesn't mean they should be able to dodge the system ....and by what logic ???? That they have such a hugely obscene amount of money now that they just can't bear to part with it ?