If you actually pay that VAT, normally, a business don't pay VAT for its purchases
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European Union Accuses Ireland of Giving Apple Illegal State Aid with Tax Deals
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If you actually pay that VAT, normally, a business don't pay VAT for its purchases
Which is precisely what I said in the part you chose to not quote
If a business is less profitable then it will buy more stuff in general - that's skunks point
.They do pay VAT on purchases, they just claim it back afterwards.
If a business is less profitable then it will buy more stuff in general - that's skunks point
That's misconceived, you only pay VAT on inputs and collect it on outputs; cost of labour, and a plethora of other liabilities are not subject to VAT.
And in any event, the ratio of input-to-output VAT is vastly different between a manufacturer and a mere re-seller.
It's not Bermuda, it's Ireland.
I do appreciate that these tech jobs are important, you already have a corporate tax rate set at 12.5% versus 25%-40% in the rest of Europe. Ireland cut a deal which means Apple don't even pay 12.5%. Apple pays 3.7% it's wrong.
Back in the corporatist 1950's and 1960's, companies were expected to be charitable, behave morally, etc. Milton Friedman, that rock star of Libertarian economics, argued strenuously, and, victoriously, against this, arguing that corporations should stay legal and amoral, and, be as profitable as possible regardless.
http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Friedman's view won, and, anyway, it is too easy for corporations to book their profits wherever they want around the world.
I, for one, do not expect Apple to voluntarily pay more taxes than it is legally obligated to do. If we want Apple to pay more taxes, let's change the tax laws.
But, in a world dominated by international business, intellectual property and services, I'm not sure corporate taxes are an efficient way to collect taxes anyway. I think it would be simpler, cheaper, easier, and more fair to just tax the rich and super-rich.
Well actually Apple's shareholders want some of that money but Apple is just stockpiling it abroad. Wee my earlier post on activist investors who want Apple to repariate the money, pay tax and then pay them a dividend.
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Right you are ! Fortunately your government (US) has put a stop to this. We (UK) had a large US pharmaceutical company trying to buy a UK company purely as a tax inversion, that would have been step 1 before relocating the business to guess where, Ireland to reduce taxes even more.
in the short term you do pay it but in the long run you get it deducted from the total VAT from your sales.
This sums up my thoughts really; a company's first responsibility is to its shareholders or investors, or simply in general, to profit. Unless that changes somehow then we can't really blame any company for seeking out cosy tax deals to make profit.
We've had a similar issue in the UK when it was revealed that various companies paid little or no UK tax on their UK business; people erupted at the various companies indicated in the media, but the real blame lies with the tax collectors who've made deals, or failed to produce new regulation to ensure that proper taxes are collected (yet are perfectly happy to hound the smallest startup businesses for every penny they may owe).
Since it's unlikely that businesses will change any time soon, it's up to regulators to close the loop-holes that allow these things to happen, but conveniently they are often getting cosy deals of their own in return. It's a tricky area though, as Ireland doesn't exactly have a wealth of industry, so getting some money (even if it's not the correct amount) from companies that wouldn't be there if not for the country being a tax haven is obviously preferable to having no money at all. So it gets kind of muddy when EU regulations can actually badly hurt a country like Ireland which struggles to hold onto the industries it has because they all go to eastern european countries, and they aren't left many alternatives.
where does it say that is its first responsibility and exactly what it entails and what it dosent?
how does the u2 promotion fall under that, the the mass success of john browett or not pricing the mba a $100 more? is tim cook liable there?
am i liable because i dont do a double irish with a dutch sandwich?
I agree that is too low. The vast amount of foreign MNC taxes in Ireland is booked in Bermuda however, look it up, it's shocking.
I guarantee the EU will get Apple on this and they will make them pay back all the tax avoidance the EU find which will run into billions of dollars. We are talking about tax avoidance on a grand scale across multiple European countries since 1997. That is going to be one hell of a tax bill at the end. Watch your shares plummet when the poo hits the fan on this one.
I know that. I was responding to the comment that Apple's taxes should be higher. So Apple's taxes is a business expense that gets passed on to the consumer. So the consumer is paying not only sales tax, but also the business tax.
Hey, I'm not a lawyer, tax lawyer or otherwise. But, as far as I can tell, Apple has been following the (Irish) law. Quite openly. I don't see the fraud or deception. Of course, I only know what I read in the New York Times. But, if the law and regulations need to be changed, change them.
More generally, if the EU does not want for individual countries to compete with each other via tax treatment, it needs to set common tax laws across the EU. I think with situations like the current one, and, the banking crises (the "PIGS", etc.), I think it is apparent that the EU's "common market" has a lot of internal inconsistencies. Didn't matter much back when in every country, there was agriculture, manufacturing, and mostly local services. Now that a large part of the economy of every country depends on services that can be provided in part from abroad, all those inconsistencies are a huge problem.
The U.S. has a similar problem -- states are competing with each other on the basis of favorable tax treatment. Every state offers itself as a location for businesses to incorporate under state law, and, at tax time, it makes a difference. There goes your "level playing field". It didn't matter that much in the past, but, in the Internet Age, it matters a lot.
I think a common set of rules for corporate taxation should be at the center of the WTO. When the commodity flowing across borders is information, tariffs become insignificant compared to corporate taxes.
While you do make some interesting points, one fact remains starkly obviously apart.
Ireland's business tax rate was 12,5% one of the lowest in the EU, but the gave Apple a sweet heart deal at 2,7%.
As you mention the EU/EURO got it’s self in all kinds of problems over the past few years, especially the PIGS.
Well I stands for Ireland, for years their arrogance knew no bounds as they proclaimed to the world that they were the Celtic Tiger, but back in 2009 they were shown to be nothing more an an old flea bitten moggie.
They came begging for 90 BILLION EURO’s to bail them out from bankruptcy. They cannot be so naive as to believe that there would be no consequences.
At the height of the Greek EURO crisis the press blamed and rightly, the shambles of the tax system, and the wide spread of evasion as the main cause of the problem.
The news is that Apple is being made an "example of" by the EU, since Apple is the most high-profile and most profitable among many corporations that used same strategy in Ireland.
Lots of speculation and outright fiction in this post.
We don't know what Ireland "gave" Apple. Maybe they approached Apple with a deal to keep them in the country. Maybe Apple found a loophole that Ireland couldn't close within the jurisdiction of Irish tax law. Let's wait and see before getting out the blindfold and firing squad.
The Irish economy suffered from an extreme boom-bust cycle in the property market, exacerbated by the Government guaranteeing the banks' debt before ascertaining the enormous level of bad loans involved. But the economy was and is strong. It was the first country out of the bailout, it's one of the fastest growing economies in Europe, and its bond yields are now negative (borrowers are paying Ireland to look after their cash).
Ireland didn't 'come begging' for the bailout - that's complete fiction. It was being pushed by the European partners eager to avoid a contagion of bad debt to European banks (just as Irish banks had lent recklessly to Irish & international investors, European banks had lent recklessly to the Irish banks). And Ireland resisted as long as possible, trying to avoid the onerous terms of any bailout.
We do know, EU already published its findings :
http://ec.europa.eu/competition/sta...7_2.pdf?_ga=1.224811674.1694705312.1412019745
For example hee its explained bit more :
http://qz.com/273631/how-apple-got-its-2-tax-rate-in-ireland/
These agreements date back to 1990 & 2007 .
And ireland is one of the fastest grouwing economies because it gets massive EU money .
http://www.eu-oplysningen.dk/euo_en/spsv/all/79/
Thats mostly BS ireland tried to handle it themselves and spend something like 30% of its GDP trying to prop up its banks when it was clear even that wasnt enough it ran to the EU and got a bail out . If they hadnt got it, ireland would have been in deep trouble .
(and yes other EU banks with larg exposure to irish bank benefited just as much)
One of my Irish friends said that some Irish pondered becoming part of the UK again after the financial crisis. That sounds like begging to me...
And they will not get through with it cause they're doing something absolutely legal.
I 100% agree. Problem is, politicians around the world don't seem to dare do what needs to be done.
I was thinking about this idea a while ago, and it certainly has merits. Surely one of the biggest hurdles to the creation of a new business is all the paperwork involved in registering such that your business pays its taxes.
I completely support progressive tax systems, as the rich, who often earn orders of magnitude more than the middle and lower classes, do not do orders of magnitude more work. That would be impossible.
The problem with abolishing company tax is that I can't see it working for multinational companies. For example, if I were to buy an Apple product, my government would get nothing in that case. That could be solved via tariffs or regressive point of sale taxes like GST/VAT/sales tax. But again, what politician is going to have the political will to both launch an inquiry into such a fundamental change to such a complicated, and important, area? And then, make the changes???
If that money wasn't made in America then the U.S. government shouldn't tax it. If it's made in Germany pay the tax to Germany. If it's made in Italy pay the tax to Italy etc. You're suggesting double taxation.
Edit: After reading further I see that you suggested that. This would all be much simpler if tax is just paid to the country it was earned in and all these international loopholes, exploits, shell companies, etc, etc. were done away with. And if anything rates could be lower if everyone was paying.
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If the EU finds the aids illegal, any company that has received those aids have to pay the taxes not paid
They can't because Apple is moving within legal boundaries. They can declare specific tax holes illegal, but can't do anything retroactively.
Then tell that to the EU and the companies that in the past had returned illegal aids
And no, there is nothing retroactive.