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MacRumors

macrumors bot
Original poster
Apr 12, 2001
52,411
14,116



The U.K. government announced in Wednesday's annual budget that it plans to clamp down on tax avoidance by increasing the tax it collects from online giants such as Apple and Amazon.

In his Treasury speech to the Commons, Chancellor Philip Hammond said income tax would be charged on royalties relating to U.K. sales, even when they are paid to a low-tax jurisdiction and would not normally be taxed in the UK under current rules.

3343806_-xlarge_trans_NvBQzQNjv4BqgsaO8O78rhmZrDxTlQBjdGtT0gK_6EfZT336f62EI5U-800x500.jpg

The new rules are due to come into effect from April next year, and estimates suggest they will raise approximately 800 million pounds ($1.07 billion) in extra tax over the next five years. However, Hammond admitted they would only go some way to balancing out the taxation treatment of digital firms, and that more would have to be done to tackle tax avoidance.
Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed and some of those relate to UK sales.

This does not solve the problem, but it does send a signal of our determination and we will continue work in the international arena to find a sustainable and fair long-term solution that properly taxes the digital businesses that operate in our cyberspace.
Apple recently came in for criticism when the so-called Paradise Papers revealed that the company sidestepped a 2013 crackdown on its controversial Irish tax structure by moving the majority of its offshore cash holdings to the small island of Jersey, a self-governed territory with loose ties to the United Kingdom.

The papers showed that Apple's two key Irish subsidiaries were managed from the Jersey offices of offshore tax law firm Appleby from 2015 until early 2016. Apple reportedly chose Jersey after exploring several potential tax havens, such as Bermuda and the Cayman Islands.

Apple apparently turned to Jersey after European officials began to crack down on the so-called "Double Irish" tax structure it had exploited. The loophole allows for multinational corporations to funnel revenue through an Irish subsidiary, which in turn sends that money to another Irish subsidiary that has residency in a tax haven. The practice has enabled Apple to save billions of dollars in taxes globally.

Apple responded to the revelations contained in the Paradise Papers by saying that it made regulators in the U.S. and Ireland, and the European Commission, aware about the reorganization of its Irish subsidiaries, and added that the changes haven't reduced its tax bill.

Last year, the European Commission ordered Ireland to collect $14.5 billion in back taxes from Apple, after it concluded that the country's tax agreements with the tech giant represented "illegal state aid". Both Apple and the Irish government are currently appealing the ruling.

Apple has repeatedly highlighted its position as the largest taxpayer in the world and reiterated the fact that it holds overseas cash because that's where the majority of its products are sold. Apple CEO Tim Cook has said that Apple is willing to repatriate some of its offshore cash holdings into the U.S., but he also recently said that tax reform is "sorely needed" first.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: U.K. Government Targets Tech Giants Like Apple and Amazon Over Tax Payments
 

Jambalaya

macrumors 6502a
Jun 21, 2013
693
106
UK
Well done, we have to ask outselves why it has taken so long. Apple’s behaviour is morally corrupt and CEO Cook well knows it.
[doublepost=1511439055][/doublepost]
The hole is getting deeper.

The UK is getting what it wanted - ‘freedom’!

Hope your enjoying your kippers!

No deal, no money.

We are enjoying every single second as the EU squirms for money for which it has no legal claim whatsoever. Apple owes Ireland €13bn and the EU is suing Ireland for non-collection. What a mess
 
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Stella

macrumors G3
Apr 21, 2003
8,603
5,567
Canada
Well done, we have to ask outselves why it has taken so long. Apple’s behaviour is morally corrupt and CEO Cook well knows it.
[doublepost=1511439055][/doublepost]

No deal, no money.

We are enjoying every single second as the EU squirms for money for which it has no legal claim whatsoever. Apple owes Ireland €13bn and the EU is suing Ireland for non-collection. What a mess

Wasn’t a good budget outlook yesterday, was it? Growth cut amongst other bad news.

A ‘no deal’ outcome isn’t going to be good for the UK. A growing number of Tory PMs beginning to realize this.

The euro zone outpacing the UK.

The May government in constant turmoil.
 
Comment

vmistery

Contributor
Apr 6, 2010
823
565
UK
It’s hardly clamping down, a tiny amount divided amongst those huge corps. Weak Govt trying to distract us from the aweful growth forecasts. Never mind though, the skilled workers can always emigrate if things get too bad.
 
Comment

PickUrPoison

macrumors G3
Sep 12, 2017
8,131
10,720
Sunnyvale, CA
If the UK government raises taxes on Apple, does Apple just eat it, or simply raise prices on goods sold in the UK?

Do the citizens of the UK actually benefit, or do grandstanding politicians just get a nice photo op, and the chance to crow about raising tax revenue from foreign corporations come election time?
 
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Kaibelf

Suspended
Apr 29, 2009
2,445
7,441
Silicon Valley, CA
Well done, we have to ask outselves why it has taken so long. Apple’s behaviour is morally corrupt and CEO Cook well knows it.
[doublepost=1511439055][/doublepost]

No deal, no money.

We are enjoying every single second as the EU squirms for money for which it has no legal claim whatsoever. Apple owes Ireland €13bn and the EU is suing Ireland for non-collection. What a mess

It has no legal claim? Since when? And your Prime Minister seems to disagree.
 
Comment

MaxinMusicCity

macrumors regular
Mar 20, 2013
186
69
Nashville



The U.K. government announced in Wednesday's annual budget that it plans to clamp down on tax avoidance by increasing the tax it collects from online giants such as Apple and Amazon.

In his Treasury speech to the Commons, Chancellor Philip Hammond said income tax would be charged on royalties relating to U.K. sales, even when they are paid to a low-tax jurisdiction and would not normally be taxed in the UK under current rules.

3343806_-xlarge_trans_NvBQzQNjv4BqgsaO8O78rhmZrDxTlQBjdGtT0gK_6EfZT336f62EI5U-800x500.jpg

The new rules are due to come into effect from April next year, and estimates suggest they will raise approximately 800 million pounds ($1.07 billion) in extra tax over the next five years. However, Hammond admitted they would only go some way to balancing out the taxation treatment of digital firms, and that more would have to be done to tackle tax avoidance.
Apple recently came in for criticism when the so-called Paradise Papers revealed that the company sidestepped a 2013 crackdown on its controversial Irish tax structure by moving the majority of its offshore cash holdings to the small island of Jersey, a self-governed territory with loose ties to the United Kingdom.

The papers showed that Apple's two key Irish subsidiaries were managed from the Jersey offices of offshore tax law firm Appleby from 2015 until early 2016. Apple reportedly chose Jersey after exploring several potential tax havens, such as Bermuda and the Cayman Islands.

Apple apparently turned to Jersey after European officials began to crack down on the so-called "Double Irish" tax structure it had exploited. The loophole allows for multinational corporations to funnel revenue through an Irish subsidiary, which in turn sends that money to another Irish subsidiary that has residency in a tax haven. The practice has enabled Apple to save billions of dollars in taxes globally.

Apple responded to the revelations contained in the Paradise Papers by saying that it made regulators in the U.S. and Ireland, and the European Commission, aware about the reorganization of its Irish subsidiaries, and added that the changes haven't reduced its tax bill.

Last year, the European Commission ordered Ireland to collect $14.5 billion in back taxes from Apple, after it concluded that the country's tax agreements with the tech giant represented "illegal state aid". Both Apple and the Irish government are currently appealing the ruling.

Apple has repeatedly highlighted its position as the largest taxpayer in the world and reiterated the fact that it holds overseas cash because that's where the majority of its products are sold. Apple CEO Tim Cook has said that Apple is willing to repatriate some of its offshore cash holdings into the U.S., but he also recently said that tax reform is "sorely needed" first.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: U.K. Government Targets Tech Giants Like Apple and Amazon Over Tax Payments

Just can't get enough of that funky stuff :rolleyes:

Hey, isn't JUST the UK. It's worldwide!
 
Comment

Plutonius

macrumors G3
Feb 22, 2003
8,800
7,995
New Hampshire, USA
In his Treasury speech to the Commons, Chancellor Philip Hammond said income tax would be charged on royalties relating to U.K. sales, even when they are paid to a low-tax jurisdiction and would not normally be taxed in the UK under current rules.

Typical government. Instead of changing the laws, they ignore them.
 
Comment

Jsameds

Suspended
Apr 22, 2008
3,525
7,986
Hey - UK Government - if you don't want people to use the loopholes, why don't you just close them down rather than pointing the finger at those who use them?
 
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Porco

macrumors 68040
Mar 28, 2005
3,163
6,153
£800m over 5 years?
So £160m a year between all companies avoiding UK taxes? That's what, one or two minor ad campaign's worth each? Yeah, that'll teach 'em :rolleyes:

The latest 'fig leaf' measure to look like they're doing something while actually doing very little. They have talked about cracking down on tax avoidance for years but never seem to do anything to seriously tackle it. They said as much... "send a signal of our determination", lol, yeah, it tells us you aren't really going to anything serious at all.

It would be lovely if Apple, and all companies, chose to pay tax by the spirit of the law and not just the letter of the law, but they don't. It's up to governments to make sure the spirit of the law and the letter of the law are not so different that tax can be avoided to such a degree.
 
Comment

Plutonius

macrumors G3
Feb 22, 2003
8,800
7,995
New Hampshire, USA
£800m over 5 years?
So £160m a year between all companies avoiding UK taxes? That's what, one or two minor ad campaign's worth each? Yeah, that'll teach 'em :rolleyes:

The latest 'fig leaf' measure to look like they're doing something while actually doing very little. They have talked about cracking down on tax avoidance for years but never seem to do anything to seriously tackle it. They said as much... "send a signal of our determination", lol, yeah, it tells us you aren't really going to anything serious at all.

It would be lovely if Apple, and all companies, chose to pay tax by the spirit of the law and not just the letter of the law, but they don't. It's up to governments to make sure the spirit of the law and the letter of the law are not so different that tax can be avoided to such a degree.

It's up to the government to have a tax structure with no loopholes.

It's up to a company to avoid paying taxes where a loophole exist.
 
Comment

SharksFan22

macrumors regular
Dec 29, 2003
173
23
Bay Area, CA
If the UK government raises taxes on Apple, does Apple just eat it, or simply raise prices on goods sold in the UK?

Do the citizens of the UK actually benefit, or do grandstanding politicians just get a nice photo op, and the chance to crow about raising tax revenue from foreign corporations come election time?

I believe you are correct. Apple is not going to simply lower profit, they will raise prices - just as any other company would do. The politicians tell the people that they’re “sticking it to those mean corporations” and confiscating their profits but all that does is either increase prices or cause a company to abandon the market.
 
Comment

Solomani

macrumors 601
Sep 25, 2012
4,124
8,955
Slapfish, North Carolina
Apple should just close down operations in UK. Their contribution to worldwide Apple sales is negligible anyways. Desperate Brits can still get Apple products through the grey market dealers (probably Russian importers who will make huge profits).
 
Comment

MH01

Suspended
Feb 11, 2008
12,107
9,298
Hey - UK Government - if you don't want people to use the loopholes, why don't you just close them down rather than pointing the finger at those who use them?

Cause it's a cat and mouse game. And would you believe Apple, google etc can afford better tax lawyers than HRMC .... to find these loopholes .
[doublepost=1511454423][/doublepost]
Apple should just close down operations in UK. Their contribution to worldwide Apple sales is negligible anyways. Desperate Brits can still get Apple products through the grey market dealers (probably Russian importers who will make huge profits).

The regent store is the biggest seller in EU. For many Europeans it's cheaper to fly to London and do their shopping ;)
 
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cableguy84

macrumors 68000
Sep 7, 2015
1,608
2,207
Apple should just close down operations in UK. Their contribution to worldwide Apple sales is negligible anyways. Desperate Brits can still get Apple products through the grey market dealers (probably Russian importers who will make huge profits).

Nice try.
I don’t think you realise the contribution the UK has to Apple products.

Jony Ive - English
ARM processors designed by British firm ARM.
Until recently imagination, a British company, designed Apple graphics chips.
By the way , Canada’s population is tiny so how about Apple stop sales there too.
 
Comment

Falhófnir

macrumors 603
Aug 19, 2017
5,147
5,757
About time they started closing these loopholes, the corporation tax rate is only 20% anyway, I’d hardly call that crippling or punitive. Apple paying an effective tax rate of 0.6% is ridiculous. In 2015, on their approximately £2 billion of profits made here, they paid just £11.9 million in tax. 20% would amount to about £400m a year, so they’d still be making a more than healthy profit paying to the spirit of the law rather than the letter.

Apple should just close down operations in UK. Their contribution to worldwide Apple sales is negligible anyways. Desperate Brits can still get Apple products through the grey market dealers (probably Russian importers who will make huge profits).
And lose out on £2 billion in profits a year? I’m guessing you don’t run a successful multinational corporation ;)
 
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webbuzz

macrumors 68000
Jul 24, 2010
1,906
6,419
Apple should just close down operations in UK. Their contribution to worldwide Apple sales is negligible anyways. Desperate Brits can still get Apple products through the grey market dealers (probably Russian importers who will make huge profits).
A detour from your usual posting?
 
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Falhófnir

macrumors 603
Aug 19, 2017
5,147
5,757
Well, we've got to dig ourselves out of the 600ft deep Brexit hole somehow?
Don’t see what that’s got to do with anything. Debt and deficit problem has been going since 2008, when there was no hint of Brexit. The EU didn’t stop us racking up £1.7trn of debt, it didn’t stop Apple avoiding tax (indeed it helped facilitate legal tax avoidance), it didn’t stop our productivity being abysmal, it didn’t help us manufacture and export, or to maintain a good balance of trade.

This is a completely separate issue, whether Brexit is a good or bad thing, it’s irrelevant to this discussion. This is about the British government making a move towards a no ifs no buts 20% means 20% on corporation tax, and it should be welcomed by any sane taxpayer.
 
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