EU says .005% and Apple says they paid 400m in taxes in that same year? There has to be proof of that 400m, right? If so, then how can EU claim its .005%?
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Tim Cook Calls Apple's Irish Tax Avoidance Accusations 'Total Political Crap'
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EU says .005% and Apple says they paid 400m in taxes in that same year? There has to be proof of that 400m, right? If so, then how can EU claim its .005%?
Beebs business editor:
http://www.bbc.com/news/business-37242205
Full story:
http://www.bbc.com/news/world-europe-37242357
Looks like Tim went the other way then and in the process killed any remaining respect for Apple. This is not privacy crusade. This is the 0.5%!!
http://www.bbc.com/news/business-37242205
Full story:
http://www.bbc.com/news/world-europe-37242357
Looks like Tim went the other way then and in the process killed any remaining respect for Apple. This is not privacy crusade. This is the 0.5%!!
Not so simple, since Ireland is not entitled to tax those earnings according to Irish law. It's a made up number for political shock value. It's kinda like computing an effective tax rate based on revenue instead of profits.
Tim chose the wrong moral argument. Instead of saying "we are good and we do the right thing by paying our fair share to the government", he should have argued "we are good and we do our moral duty to our shareholders" by doing what is legally permissible to make apple successful.
In other words in case I am failing to explain this idea....
Not sure I really buy that Apple paid its "fair share" -- in fact it sounds kind of ludicrous given the apparent facts. But I do buy that Apple was looking out for its own self interests legally... And the latter is a kind of a moral responsibility to shareholders.
In other words in case I am failing to explain this idea....
Not sure I really buy that Apple paid its "fair share" -- in fact it sounds kind of ludicrous given the apparent facts. But I do buy that Apple was looking out for its own self interests legally... And the latter is a kind of a moral responsibility to shareholders.
Umm. No way is that happening.
1. Tim Cook won't get any blame for this tax situation which is from 1991 to 2014. Tim Cook didn't start at apple till 1998! PS. since 2014 apple pays the higher 12.5% tax rate in ireland like everyone else.
2. No WAY will cook resign before the iPhone 8 comes out. If its as big of a upgrade as people say, then why would he leave before hand???
I agree wholeheartedly - but I have a horrible feeling that 'money and economic warfare' will be to the 21st century what the tanks and artillery were to the 20th century. Misery to a lot of people.
I'm not sure if "defer" is the right word as it implies the taxes will be paid later.
That's exactly what I intended it to mean. Do you really think Apple is going to let 100s of billions of dollars sit in limbo forever?
Because Tim himself may think he's had enough. I'm not blaming him for this tax story - but eventually it takes a toll. and fresh leadership after 6 years may not be a bad thing
Again, not sure what you mean here. Are you simply asking what taxes are for? The obvious answer is to financially support the functions of the government. But I have no idea what this has to do with our conversation.
I just searched for Apple subsidiary or Apple holding company and found Apple has hundreds of them. Some are listed here ... http://www.businessinsider.com/apple-subsidiaries-are-named-for-apples-2016-8
Agree with Tim. Apple is following the law and is simply trying to legally reduce it's tax burden as much as possible. We all do it, and we all should continue to do so. If you disagree, don't take any deductions for which you are legally entitled, otherwise, you're a hypocrite.
I also finding it amazing that everyone here honestly thinks that paying taxes is some sort of moral obligation. Governments spend so little on beneficial services in relation to waste, fraud, abuse, wars, and further enriching the already rich. I hardly consider contributing to those things a moral activity, whereas I find the act of stealing someone's wealth through the use of force incredibly immoral.
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Wrong. A majority of taxes are to financially support corrupt politicians and their friends.
I also finding it amazing that everyone here honestly thinks that paying taxes is some sort of moral obligation. Governments spend so little on beneficial services in relation to waste, fraud, abuse, wars, and further enriching the already rich. I hardly consider contributing to those things a moral activity, whereas I find the act of stealing someone's wealth through the use of force incredibly immoral.
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Wrong. A majority of taxes are to financially support corrupt politicians and their friends.
From Apple's very own words:
"Apple carefully manages its foreign cash holdings to support its overseas operations in the best interests of its shareholders.
Apple uses its foreign cash for business operations, geographic expansion, acquisitions and capital investments, and to fund other expenses required by its overseas operations, such as the capital-intensive construction of retail stores in Europe and Asia and the purchase of customized tooling equipment.
If the Company repatriated these funds, they would be reduced by a 35% US corporate tax rate. Apple serves its shareholders by keeping these funds overseas where they can be deployed efficiently to fund international operations at a lower cost.
As Apple’s recent bond issuance demonstrates, the Company can return capital to shareholders using debt at a far lower cost than through repatriation of foreign cash."
as well as
"The dividends distributed among Apple’ s international affiliates, including AOI, are
not subject to US corporate income tax. AOI and other Apple subsidiaries in Ireland
play an important role in the Company’s international business activities. [...] For cash management
purposes, these subsidiaries distribute foreign, post-tax income as dividends within Apple’s corporate structure. Under US tax law, these foreign intercompany payments are
not taxable. AOI is incorporated in Ireland; thus, under US law,
it is not tax resident in the US. AOI is also not tax resident in Ireland because it does not meet the fact-specific residency requirements of Irish law."
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This. Ireland drew up the agreement therefore if the agreement is deemed illegal then Ireland should be responsible.
Yes,
If it has been taxed already the US will not see a penny of it. (If you think it will come to the US)
They can easily use that money to buy companies, pay vendors, fund R&D centers all over the world etc.etc.
I am sure they have some financial guys at Apple who can figure this out
without causing "taxation losses"
If it has been taxed already the US will not see a penny of it. (If you think it will come to the US)
They can easily use that money to buy companies, pay vendors, fund R&D centers all over the world etc.etc.
I am sure they have some financial guys at Apple who can figure this out
without causing "taxation losses"
Right. I think many others here simply do not understand how the international tax system, much less the Irish or EU tax systems, work.
Here's the short version: In the 1980s Apple established two business units in Cork to manage global sales. These units held the rights to much of Apple’s intellectual property such as product designs, patents, etc.. In payment for those licenses, the Irish units remitted large portions of their profits to the U.S. each year to fund research at Apple headquarters. Irish law allowed them to do this. The rest of those profits generally weren’t taxed under longstanding Irish law, since the money was earned overseas. The money wasn’t taxable elsewhere since the laws of other countries held that it was up to Ireland to decide whether and how much to tax it. And, as BaldiMac has repeatedly pointed out, in the US, the tax was deferred until Apple repatriated the profits. That’s it. That’s the supposed "tax evasion". Apple paid all the taxes it owed under existing tax laws around the world.
The EU commissars in Brussels, however, can't make the taxation argument since the law is not on their side. Instead, they use an antitrust argument, in essence saying that the low tax rate in Ireland amounts to a state aid subsidy under EU rules for corporations based there. Brussels is trying to force Dublin to collect €13 billion in revenue and interest that the Irish government never wanted. A specious claim if I ever heard one.
Apple has $200+ million dollars in an off shore corporation that is essentially allocated as income for the main U.S. office. (In reality, the corporation is stateless which is possible using Irish law.) The U.S. can't tax that money under current laws until the money is repatriated.
But Apple can't do anything with that money without transferring it to a jurisdiction where they will have to pay tax. So, eventually they will pay tax on the money. They would prefer to bring it in to the U.S., but they can't justify paying the current 35% corporate tax rate to repatriate the money when they don't even need it.
As an aside, Apple does pay the 35% U.S. corporate tax rate on all income generated in the Americas.
So how does it benefit Apple to get around the 12% tax of Ireland to only hold that money and pay nearly three times that rate later?
I'd assumed that counted as a normal function of government.
Exactly!
Not quite. It will reduce Apple's tax liability, but not eliminate it. The U.S. charges a higher corporate rate than most other countries. For example, if Ireland charges 12.5%, the U.S. can still collect the difference (35%-12.5%=22.5%).
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Because they are hoping that the U.S. eventually lowers the tax rate they will charge to repatriate the money.
(And Apple doesn't pay anything to Ireland on the income allocated to the stateless corporation.)