25 years ago Apple did not have billions in cash.....now they do and the governments are smelling a rather large pay da...that is why suddenly it is 'illegal'.
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European Commission Rules Apple Received Illegal State Aid From Ireland, Owes Billions in Back Taxes
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25 years ago Apple did not have billions in cash.....now they do and the governments are smelling a rather large pay da...that is why suddenly it is 'illegal'.
Yes, and Apple are the only company and/or individual that the governments are after right?
Apple has been paying a 2% effective tax rate. That's absurdly unreasonable for a highly profitable company and asking them to pay their fair share is far removed from tax tax tax tax tax.
Nope. Apple's effective tax rate is 26%.
http://www.msn.com/en-us/money/stockdetails/financials/fi-126.1.AAPL.NAS
The imaginary 2% rate is based on only foreign income while ignoring the tax payments that Apple has deferred in accordance with US tax law.
In the United States, despite the majority of their profits being earned outside. So they're siphoning off that tax to the detriment of countries outside the US. That and the fact the corporate tax rate in the US is closer to 40%. Perhaps not illegal (although the EU has something to say about that) but definitely immoral.
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Nope. That (26%) is their global effective tax rate. They pay 35-40% tax rate in the US on income from the Americas.
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And your answer to the fact they are only paying 2% tax to Europe on their profits earnt in Europe? Actually it doesn't matter what you think, the EU has already ruled it amounted to to illegal state aid and they have to pay it back.
Again, the 2% rate is made up. It is not based on real numbers. It's just a figure produced by comparing two unrelated numbers for shock value. As provided for by international tax law, Apple assigns most of the income from sales in Europe to the US where the value is created. This is perfectly normal and nobody is arguing it is illegal.
However, to overly simplify the real issue, Irish tax law allows Apple to create a stateless holding company where it can hold money generated in Europe before it is repatriated to the U.S. The EU is essentially arguing that Apple never intends to repatriate that money to the US, so it should all be taxed in Ireland even though Ireland does not claim the income as taxable. Obviously, Ireland and Apple disagree.
And you don't think that is dodgy as hell? Let's hope you're not a business ethics tutor.
For the sake of clarity, I hold the same level of scorn for all international companies that operate in this manner. Apple is not the only one to fall under the spotlight.
There is nothing dodgy about it at all. These aren't loopholes. They are provided for by Irish and US law. Apple's been operating this way for decades.