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

[zin]

Exactly right. I bet the people bitching the loudest about Apple's tax arrangement are people who (1) have no job so they don't pay any taxes, or (2) have a job, pay taxes, but are clueless about how tax systems work. My guess is that the majority on this board are the former, not the latter. Cook is right, the tax system in the US is a total mess. It created this situation.

What another disgustingly patronising post from you. If you don't pay any taxes (unlikely) then you can't have a valid opinion. Pathetic.

The poster that you were quoting and agreeing with quite frankly sends shivers down my spine. The fact some people are encouraging this kind of behaviour is ridiculous. If you don't engage in aggressive tax avoidance, seeking to minimise to as near zero as possible the amount of tax that you pay, then you are a "total moron".

It appears some people have forgotten that taxes are not penalties from which you get nothing in return. These payments fund government services that everybody depends on. To say we should all be conspiring to pay as little tax as possible is akin to planning to defund the Government as much as legally possible.

Quite frankly, it sounds extremely ungrateful, ignorant, and greedy of you to be making these kind of posts.

 

[draugminaion]

-> Cook described the tax avoidance accusations as total political crap.

-> He added that repatriating the money is not reasonable due to high corporate tax rates.

Those claims contradict each other. Apple is either avoiding tax or it isn't!

I don't see how "political crap" contradicts "not reasonable".

 

[MH01]

That is incorrect for individual tax. If you are a US citizen or permanent resident you pay tax on your global taxable income. It does not matter whether that income ever arrives in the US. If you have already paid overseas tax to the other country it is generally credited against your US liability up to the equivalent US amount (form 1116). If you reside overseas and have earned (generally wages and salaries) income, there is also foreign earned income exclusion for the first $100.8k. There is no exclusion for unearned passive (investment) income or gains.

In addition you must report to the IRS any foreign assets above the threshold amount, and also separately to the Treasury (different thresholds apply). Form 8938.

Following is a quote from Pub 525

If you are a U.S. citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U.S. law. This is true whether you reside inside or outside the United States and whether or not you receive a Form W2, Wage and Tax Statement, or Form 1099 from the foreign payer. This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties).

Thank you. This is my understanding of the compliance rules. Seems many here don't understand thier tax obligations if they work outside of the US.

 

[Glideslope]

Yup, Tim's nervous about this one. Well, guess it's time to pull our 67,000 NATO Forces out, eh?

 

[VulchR]

They didn't PLACE or PUT any money overseas. It has always been there, it was generated there. They just haven't brought it into the US economy so they are not subject to US taxes.

Erm... Apple set up a research entity in Ireland. Apple pays this entity for all the research that Apple does. Who owns the entity? Apple - you know, the company in the US, the company generating sales all over the US and Europe but manages to weasel out of a reasonable tax on it.

Perfectly legal. Perfectly detestable, for it draws money out of the communities where people buy Apple products. It's Apple's 'Think locally, screw globally' policy. Just my opinion, but I would like to see the managerial class stop playing money games as though it is somehow redeeming to avoid contributing to the societies in which they ply their products.

 

[Benjamin Frost]

Cook's anger is revealing of his deceit.

It wouldn't cost anywhere near 40% to bring their money back to the States. It is common knowledge that Apple has used the loophole of Ireland's tax haven as a hiding place for all of its EU profits. Whilst it may be legal on paper, it is effectively tax evasion. If the EU deem Apple to not be observing the spirit of the law, they may decide to fine them and shut down the loophole. That would be the fair thing, in my opinion, not just for Apple, but also for the other corporations taking unfair advantage of the Irish situation.

What is total crap is Cook's continual evasion of the truth, which he has made his hallmark, first with the non-reporting of Apple Watch numbers, and now with his gross distortion of the tax status of Apple.

When you look at Apple's huge cash pile, which they have no clue with what to do but sit on, like some grotesque Smaug, and which has been stashed up thanks in large part to the avoidance of billions of dollars of tax, one has to express astonishment at Cook's amazing lack of political credibility. In a time when governments are being overwhelmed in a sea of debt and pension black holes, with recession looming and with the US's coffers starting to be drained by a just war, how the hell does Cook think he is going to win friends by losing his temper? Apple's profits are obscene, their treasure chest is obscene, the tax they pay in the EU is much lower than is the average for the EU. Not only should they have paid billions more in tax for the past 20 years, it would not even affect their long-term health if they paid the proper tax rate.

I'm sick of Apple's unjustified margins, when they try and squeeze every last ounce from musicians. I will not forget how they tried to make musicians go unpaid for three months with Apple Music. Perhaps they should donate three months of their revenue to the war against ISIS and go unpaid for three months; it's not as though it would make the slightest bit of difference to their lifestyles.

 

[Glideslope]

OT, but is it me, or does Tim look like he's gaining weight?

No. Definitely put on pounds. The stress of running Apple must be Stratospheric .

 

[VulchR]

Waiting for an oil change. And you can take your attitude and stick it up yours. If I have to pay taxes in the US, even if I were to make my money abroad, then Apple can damn well, too. And they can take /their/ attitude too and stick it.

As a US citizen in the UK, I hope that everybody understands that individual US citizens are liable to pay taxes on money they earn overseas. Of course it's reasonable in that there are deductions for taxes paid overseas if there is a tax treaty, but still why should Apple be allowed to avoid the liability by fancy legal footwork? Hmm ... I wonder: I am an academic. If I set up a research company in Ireland, and have my University (and various companies from time to time) who pay my salary pay this company, I wonder if I would be allowed to avoid paying reasonable UK and US tax. Like Apple.

 

[DoctorKrabs]

Now imagine Martin Shkreli saying the same thing in a similar position.

 

[jetlife2]

Thank you. This is my understanding of the compliance rules. Seems many here don't understand thier tax obligations if they work outside of the US

It's true whether or not you work outside of the US. If you receive interest, dividends, rent, etc. in another country, such as by having an account there; whether or not you go there, and whether or not the money returns here, it is reportable and included in your income.

 

[Mr D]

A US citizen does not have to file a tax return each year? Even if they live and work abroad?

That is NOT what is happening here.

Jesus - is it really this difficult?

 

[8281]

And totally legal. Unfortunately, this is a problem created by Congress (both parties), not Apple.

Well sort of. I have no idea if Apple hires lobbyists, but many companies do and those lobbyists are paid to work with Congress on writing laws. It's not like Congress operates in a vacuum. They become sensitive to the needs of the people around them, and the people around them just so happen to be the people with a lot money riding on the tax laws working in their favor.

The tax law is complicated because that's how some organizations wanted it.

 

[MH01]

As a US citizen in the UK, I hope that everybody understands that individual US citizens are liable to pay taxes on money they earn overseas. Of course it's reasonable in that there are deductions for taxes paid overseas if there is a tax treaty, but still why should Apple avoid the liability by fancy legal footwork. Hmm ... I wonder: I am an academic. If I set up a research company in Ireland, and have my University (and various companies from time to time) who pay my salary pay this company, I wonder if I would be allowed to avoid paying reasonable UK and US tax. Like Apple.

Well said. Seems most don't understand the obligations of US citizens to report their income to the IRS.

 

[AdonisSMU]

-> Cook described the tax avoidance accusations as total political crap.

-> He added that repatriating the money is not reasonable due to high corporate tax rates.

Those claims contradict each other. Apple is either avoiding tax or it isn't!

Why would they as they've already paid taxes in the countries they are in. Governments are trying to double dip.

 

[driceman]

Part of me thinks Apple is likely taking all the tax breaks they can get, and part of me wonders if businesses of this scale wind up breaking a lot of laws simply because there are so many to keep track of across so many countries that they do it by accident. I get that Apple doubtlessly has countless lawyers ready to jump at a moment's notice for this sort of thing, but still, it's a massive job.

Definitely excited to see Jony Ive's design studio though.

 

[MH01]

That is NOT what is happening here.

Jesus - is it really this difficult?

You had a bitch about someone's reply about personal tax, so I asked!

Is it SO hard to answer a question?

Ignore the fact that some people are bringing in example of personal tax into this debate, but don't be a douche insulting people as though it's not relevant.

People are upset that corporations get to get away with tax avoidance that they cannot through personal tax

 

[8281]

Declare a tax holiday on overseas earning and instantly add $2.1 trillion to the US economy.

We did that once a decade ago I believe and most of the money went to executives and shareholders who put it in investment accounts. It's not like it would go to middle class people who would spend it or use it to pay down their debts. Sure, declare the holiday, but let's not pretend the wealth will "trickle down."

 

[Zirel]

Hey Tim Cook, just a suggestion.

Spend those billions of € here in Europe, we have bright minds, we work cheap (specially in countries like Portugal, Poland, Czech Republic, etc), but we have ****** tech ecosystems.

Look at Google and Microsoft, they have offices all over Europe, where their money is invested, and not waiting for a safe return to the US to be wasted in one more aircraft carrier.

Don't worry, we won't be leaking the iPhone 7 on MacRumors.

 

[Sheza]

The truth lies behind Cook's response. 'We pay every tax dollar we owe'

Yes, Tim. You're not being accused of failure to pay tax owed legally, rather tax owed morally. You are being questioned about the legal but immoral practices you go through to avoid paying the taxes that any company fully based and fully operated from within the countries they sell to would pay.

The way it works:
- Apple sells stuff in the UK
- Money goes to Irish subsidiary, avoiding UK corporation tax
- This happens across Europe, all directed to Ireland, where Apple signed a low tax deal

The way it should work:
- Apple sells stuff in the UK
- Money goes to Apple UK and corporation tax at the UK rate is paid on it

Another example of how it should work:
- Apple sells stuff in Italy
- Money goes to Apple Italy and corporation tax at the Italian rate is paid on it

They pay every tax dollar they legally owe.

 

[FieldingMellish]

I'm glad Cook is on the hot seat. What a typical 1 percenter.

 

[lk400]

-> Cook described the tax avoidance accusations as total political crap.

-> He added that repatriating the money is not reasonable due to high corporate tax rates.

Those claims contradict each other. Apple is either avoiding tax or it isn't!

They absolutely aren't contradictory. Many other countries don't tax dividends paid up to a parent from its foreign subsidiaries.

Apple is also absolutely not avoiding tax. Tax avoidance is illegal. Structuring your business in a tax efficient way is not.

The only way Apples structure can be thought of as wrong, is if you take the view that the US should re-tax all the foreign business profits of companies, just because they happen to have a parent in the US. That would impact all us multinationals, not just apple, and impedes their ability to compete overseas. Tax is a huge business cost, if local companies aren't paying us tax for operating in a given non us country, if non us multinationals also aren't for their subsidiaries there, how can a us company compete?

It's these kind of draconian rules that lead to companies keeping their money offshore. Money that could otherwise be invested in the US.

 

[jaymzuk]

Look at it this way.

If Apple (And every other company for that matter) were to pay the amount of tax that they should do, if the intent rather than the clusterf**k of a tax system was followed, then the government would receive more tax income. This in turn would enable the provision of additional public services or the lowering of the personal tax burden.

So go ahead, defend Apple.

 

[codo]

I have to hand over 40% of my earning over to the UK government.... #justsaying

 

[Zirel]

The way it works:
- Apple sells stuff in the UK
- Money goes to Irish subsidiary, avoiding UK corporation tax
- This happens across Europe, all directed to Ireland, where Apple signed a low tax deal

The way it should work:
- Apple sells stuff in the UK
- Money goes to Apple UK and corporation tax at the UK rate is paid on it

No, no, no, that's not how EU works.

Do you want that?

Then quit the EU, and you will see...

There are tax loopholes involving all countries, and not only Ireland.

 

[Rogifan]

See post number 3 on this thread. sums up the situation, in a nice comtradiction.

Any educated person knows they are avoiding tax, though no....Tim says they are not lol. even you know they are avoiding it legally......

What tax are they legally required to pay that they're not paying? do you report any deductions on your taxes? If you do does that mean that you are also avoiding paying taxes?