Governments, companies, businesses...they are all the same.
It is just a matter of who can get away with it.
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Big Tech Companies to Be Hit by 'Historic' International Tax Agreement
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It is just a matter of who can get away with it.
We’re talking here about multinational corporations, not a winemaker, a knife-maker, or any other small enterprise.
But I’ll buy that argument. Ok, let’s say the small entrepreneurs and small business need to follow the same procedures as big, multinational corporations. Another soultion to the fiscal paradise issue, at least in europe, could be unifying the taxes and fiscal politics on all the EU territory. That way it would much easier to always pay the right taxes to the right country.
The only fair way is a direct revenue tax at the time and point of sale - can't avoid that and the location making the sale gets the tax - seems fair. Taxing profits is a game as profits reported get massaged to not mean much. Of course we already do the direct tax of revenue in most places - it is called a sales tax or value added tax. Just raise it and don't bother taxing profits at all. Most companies only care about profit after tax anyway, taxes is just another expense item to them.
Those who raise taxes live under the misguided belief that companies will just eat it. I can assure you they do not and will not eat it. Same holds for material costs increases.
that's only half the tax apple charges developers.
The finance ministers from the G7 met at Lancaster house in London. The heads of state are to meet in Carbis Bay from 11th-13th June for the actual G7 summit.
Except the fee charged on app sales is not a tax.
This cost will simply be passed on to us. Plain and simple. WE just got a tax increase.
It needs to be an AMT style thing. For too long companies like Amazon were able to use deep pockets and stock options/issues to undercut competition until driving them out of business, then use those phony “losses” to avoid taxation far into the future.
I say phony losses because the investors know that they will profit from their stock, so “losing” the capital only helps their investment in the long term.
I say phony losses because the investors know that they will profit from their stock, so “losing” the capital only helps their investment in the long term.
I’m not convinced they’ll get the results they expect. I worked for a well know software company in the early 1990s who used what was called a commissionaire agreement to avoid tax. This has been around for a long time, and they’ll found a way around it.
Some of the world's richest countries have today reached a landmark agreement to close international tax loopholes used by some of the biggest multinational corporations, including big tech companies like Apple, Google, and Amazon (via Reuters).
At the G7 summit in London, representatives of the U.S., UK, France, Germany, Canada, Italy, and Japan reached an agreement on a coordinated effort to support a minimum global corporation tax rate of at least 15 percent and committed to ensure that multinational corporations pay taxes in the countries where their business operates.
"After years of discussion, G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age," said the United Kingdom's Chancellor of the Exchequer, Rishi Sunak.
The joint accord, which is expected to form the foundation of a global pact next month, is aimed to stop what U.S. Treasury Secretary Janet Yellen called "thirty-year race to the bottom on corporate tax rates," where countries have felt compelled to slash tax rates and introduce exemptions to remain appealing to corporate giants.
The deal will put pressure on other countries to follow suit and join the agreement. A meeting of the G20 next month is expected to continue the talks with a wider group of nations, including Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
Any broader, final agreement could have repercussions for low-tax countries and tax havens, such as Ireland, where Apple is headquartered outside the U.S. Low-tax countries are expected to try to build support for a minimum rate as close as possible to around 12.5 percent or seek exemptions.
American multinationals play a significant role in Ireland's economy, attracted by the country's "BEPS" tools, that protect their non–U.S. profits from the U.S. "worldwide" corporate tax system, and provide an effective Irish tax rate of zero to 2.5 percent. As a result, large multinational companies, particularly in the technology industry, such as Apple, Google, Amazon, and Facebook, are expected to be heavily impacted by the new international tax plans.
The agreed minimum corporation tax rate of 15 percent is still above the level in countries such as Ireland, but below the lowest level in the G7. The 15 percent rate is lower than the 21 percent that was expected ahead of the summit, and some countries, such as France, are arguing that the 15 percent rate should be viewed as a base level for setting a higher, more ambitious rate.
A move toward making companies declare their environmental impact in a standardized way, primarily so that it is clearer to investors, was also agreed upon.
Article Link: Big Tech Companies to Be Hit by 'Historic' International Tax Agreement
It's a step in the right direction, but still much to do to make the tax system for global corporations fair for everyone.
The idea is supposed to sound good but this seems like a way for big business to further lower their potential rates instead of government agreeing to uniformity at the marginally higher rates of today.
On average, the 30 year race to the bottom just took another downward jump even before companies figure how-to get around that rate.
good concept with bait and sucker rates is just another game to screw society for the few invested in these companies.
On average, the 30 year race to the bottom just took another downward jump even before companies figure how-to get around that rate.
good concept with bait and sucker rates is just another game to screw society for the few invested in these companies.
“At the G7 summit in London...” 
Really? London? Lazy write up and ignorant of geography as well as current affairs. Try Cornwall, as far west as you can get from the capital. British equivalent of Amalfi or Hawaii, with serious eco/green credentials.
Really? London? Lazy write up and ignorant of geography as well as current affairs. Try Cornwall, as far west as you can get from the capital. British equivalent of Amalfi or Hawaii, with serious eco/green credentials.
This is a tax on people. Corporations don’t pay taxes, people do. Corporations merely collect taxes from people buying a product, employees and shareholders. Some person, somewhere pays.
Claiming otherwise is obfuscation at its best and using the politics of envy and greed to keep people in power.
Politicians hate monopolies except when it is their monopoly. Competition between countries is good. Lack of competition only helps the power-hungry class.
It is the height of naïveté to believe that someone else is going to pay when the reality is that it will be the people buying Apple’s products. But the politics of envy is an easy sell when people aren’t paying close attention.
Claiming otherwise is obfuscation at its best and using the politics of envy and greed to keep people in power.
Politicians hate monopolies except when it is their monopoly. Competition between countries is good. Lack of competition only helps the power-hungry class.
It is the height of naïveté to believe that someone else is going to pay when the reality is that it will be the people buying Apple’s products. But the politics of envy is an easy sell when people aren’t paying close attention.
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I’m definitely for it 100%, but I question if this tax is going to be passed to the consumer. I see a gradual increase of products cost like iPhones, MacBooks, etc few percent every year until it reaches 10-15%, thus resulting in positive revenues and more profit. I feel like this cycle won’t end.
Prices are determined by supply and demand. Neither is directly impacted by this 15% tax... even indirectly, I don't think that's the case.
Demand comes from consumer wages and what a company actually has to offer... I don't see this tax having an impact on the wages, and it obviously has no impact at all on what features Apple chooses to offer on the iPhone.
Supply for Apple is largely dictated by Chinese factories. I don't think international taxes matter too much there as those companies have always and will always just pay whatever the taxes are in China.
It's true - Apple could decide they want to maintain an arbitrary profit margin and so raise prices. But that would lower demand, which would cut revenue. When it comes to growth companies, which people often categorize Apple as, growing revenue is more important than profits - growing profits comes later, when revenue is maximized and all that's left to do is cut expenses.
I get that it's tougher to do, but I don't really see the point in raising corporate taxes if the effective tax rates are going to remain so much lower. Seems like that should be the focus (or just drop corporate taxes more or altogether and look to make it up by taxing individuals, although if they were going to do that you'd need to restructure capital gains and stock taxes.)
From your last few paragraphs, all I read is “human must be purified and reforged by mother nature”.
Greed, corruption and such are built in strats those wealthy will never admit. Changing tax rates is just merely big players game. Nothing much else.
Apple's GPM (and NPM) are not arbitrary, but rather targeted. They'll hit their targets, within a few points, one way or another (raise prices, reduce COGS, remove features, whatever). I was surprised to see their GPM jump from around 38% to greater than 42% last quarter. I wouldn't be shocked if that was already planned in anticipation of increased international taxes, which if imposed, could lower their GPM back down to around 38%.
Plot twist: this will hit hard on small business owners and the big corps keep flying with 0%.