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Tim Cook Calls Apple's Tax Avoidance Accusations 'Total Political Crap'

VulchR said:
It's also a problem created by the EU and Ireland. No matter how Cook wants to spin this, the simple fact is that Apple has a tax haven in Ireland where supposedly its research is performed. Yet, for some reason, features and updates are always introduced in the US first, and the countries of the EU have to wait.

I like Apple in most regards, but in this regard Tim Cook is really trying it on. Is Apple tax haven legal? Yes. Is it mmoral? Yes.
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I think people mix up the Ireland tax haven and the issue of US taxing overseas income.


The US is one of the only countries that has a tax code that taxes you on profits made in other countries.

A simplified description:

If you are a US company, build a computer in China, and sell it in Germany, you pay German taxes, and then US taxes when you bring the money home.

But if you're an Irish company, build a computer in China, and sell it in Germany, you pay German taxes only. You don't pay Irish taxes on a computer that wasn't sold in Ireland.


The rest of the world operates on the latter principle. Because the US expects you to pay US taxes on foreign profits, that makes it really bad to be a US company.

So, companies go out and form a secondary company for all non-US sales, and put that headquarters in another country. In this case, Ireland is selected due to low corporate tax and because of other, separate tax tricks you can do out of Ireland. If Ireland wasn't an option, virtually every other country in the world would also work, Ireland just has other bonuses as well.


Tim Cook wants the US to drop the tax code that says "You pay US taxes on your business in other countries after paying their taxes too." Because it's not actually raising money. It's just leading to companies not bringing their money back to the US to avoid getting taxed.


Politicians spin this in silly ways. It's easy to get political points by accusing Apple as a tax avoider. Democrats and Republicans alike spin this pretty badly. I've seen several politicians do stuff like divide global profits by US taxes to claim Apple only pays 4% in "net effective" taxes. It gives them free points to villainize Apple on a stage.
 
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Doctor Q said:
Not to split hairs, but I disagree. People accuse them of using a tax haven, which is a legal way to avoid taxes. Rather than issues denials, they should say yes we legally use a tax haven. If somebody "accuses" someone of planning their estate to save taxes, they should "admit" that too.
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Why? He's not your family member. Neither is he lying. Obviously, he talks about this with his shareholders more openly than the public.

Tim Cook is the ceo of the biggest company in the world - and there is an important science called PR that most don't understand.
 
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gnipgnop said:
The money is not actually kept overseas. It sits in banks in NYC. Nothing illegal about that, but it's a myth that the money is "outside" the United States. That said, Apple could very easily take into account the 40% tax when planning their operations. It's not like that would prevent them from doing business. They just choose to do it this way because they figure Congress will eventually either hand out another tax repatriation holiday or rewrite the tax laws.
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True and it would be a 40% LOSS in that money. Not good for shareholders.

Publically ran companies are extremely cut throat.

To fund operations outside the us - can't they use that money?
 
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gnipgnop said:
The money is not actually kept overseas. It sits in banks in NYC. Nothing illegal about that, but it's a myth that the money is "outside" the United States. That said, Apple could very easily take into account the 40% tax when planning their operations. It's not like that would prevent them from doing business. They just choose to do it this way because they figure Congress will eventually either hand out another tax repatriation holiday or rewrite the tax laws.
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You want them to give 40 percent of their wealth to the US government when no law compels them to???? I want you to hand over 40 percent...
 
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JimmyHook said:
They do pay taxes in their host countries as well. Every Apple Store across Europe generates revenue and sales subject to taxes in the jurisdiction. Tell me, how is any of this illegal? The government of Ireland granted them the status. Therefore, by definition, it is legal.
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Read this and then tell me how they pay tax on revenue in Individual European countries.

http://www.mirror.co.uk/news/ampp3d/apples-uk-tax-avoidance-two-4344344


http://www.cnet.com/uk/news/apple-faces-billions-in-fines-in-tax-avoidance-probe/
 
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Doctor Q said:
The country is Ireland, the method employed is to choose to do business in a country with lower tax rates, and it is not improper.
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Exactly.

Isn't that like a movie studio going to Louisiana or Georgia to film instead of California?

Other states offer tax incentives to film there.

It sounds like Ireland does the same for corporations.
 
Sorry Tim crook, we know you are hiding behind your iMac about your statement. You know when they catch you... You will be begging engineers and NViDAs to start making better Mac pros and asking professional users to come back to OS X with better options. You sound like Obama who stated they trained ISIS....
 
Doctor Q said:
Not to split hairs, but I disagree. People accuse them of using a tax haven, which is a legal way to avoid taxes. Rather than issues denials, they should say yes we legally use a tax haven. If somebody "accuses" someone of planning their estate to save taxes, they should "admit" that too.
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As long as what you're doing is legal why do you have to admit anything? Everybody tries to pay as little tax as possible within the law. If you don't like the laws that's not Apple's problem.
 
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Matthew Yohe said:
Remind us which taxes are they not paying?
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Sorry, I forgot Ireland is the next frontier. You thought the Chinese market was huge... Please. Apple is in Ireland for one reason and one reason alone, to not have to pay taxes. It's the same reason Apple keeps hundreds of billions of dollars overseas. To avoid paying taxes. Same reason why they borrow money when they don't need to. So they don't have to pay taxes and bring money back home. They use every trick in the book and use every loophole to avoid what? Paying taxes.
 
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JimmyHook said:
They oversee their entire European operations from Ireland. It's their base of operations, since the 80s. And you really compared paying their European taxes in Ireland, where they operate, to Nazis???????? You have issues.
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no i don't do that, please don't assume the most extreme position that you can extract from single words like "nazi" out of context. i'm just reminding people, that the "lawful" argument is bull....

as you can read, i don't blame apple for using a tax haven (the political and economical landscape was different in the europe for the 80ies - a lot of countries that are now were not in the e.u. - which wasn't even called the e.u. - back then) - same argument as before goes here - what was true for the past doesn't necessarily hold true nowadays.
 
flottenheimer said:
Dear Tim,

To use your own tone of voice: That is total crap. Apple pays almost zero tax in most european countries, yet Apple earns a lot of money in every single one of them.
I am fully aware that most other multi-national companies are using the exact same tax-loopholes as Apple. But that doesn't make it right.
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"...that doesn't make it right..." I don't understand your logic. If the tax codes allow a deduction for your child's physical special needs and you take it, is that not "right"? If you can deduct miles driven from your small business return and you do, is that not right? If you clam any deductions allowed in the tax code, are you not being "right"? This seeming "logic" about following the tax code is "right" if you do it personally, but not "right" if it's done on a larger scale is baffling.
 
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It's the mirror. And they state their own logical fallacy:

Normally tax is a percentage of profit, not revenue. However, because so much of Apple's expenditure is paid to itself, we're showing their stated revenue instead.


Tell me, again, why should they pay more than they are legally compelled to? Why are you blaming a company for following laws enacted by governments?
 
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Kar98 said:
Wait, when did Tim Cook get hired by Walmart? Because Apple is at #14, right behind VW.
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Apple has the largest market cap... That is what I meant.

And honesty - #1 and #14 does not change the point I made.

Apple isn't the only company doing this - they just happen to have the largest - or one of the largest - cash piles outside the us they haven't brought in.

Are you guys bitching and whining about other companies doing the same?
 
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