Apple Tax (serious)

[PigletJohn]

Rather unusually, FT have a free public article here

I will confess that my starting position is that tax should not be optional, and it is not right that the rich and powerful should be able to manipulate the world to avoid it.

In the last couple of days an alternative lobby sprang up in the US which looks to me like they are saying it's not fair foreigners should make American owned companies pay tax.

here are a few interesting bits:

"About 90 per cent of Apple’s foreign profits are earned by Irish subsidiaries, which are highly profitable because they hold rights to Apple’s intellectual property.

But these Irish entities paid little tax because they were not tax resident anywhere — a structure that exploited differences between the US and Irish definitions of residence.

and

"EU investigators have examined how Apple paid a tax rate of less than 1 per cent on European sales in some years"

This is a huge news story in Ireland at the minute.

Apple owe 13Bn in tax to the Irish Government. Well, I say owe. They haven't paid with the full collusion and consent of the government.

Now. Normally, I'm aghast and disgusted by this. Particularly during a time when medical cards were taken from sick children. But that 13bn wouldn't have gone tohealth or education but to paying down the IMF debt. The banks and bondholders.

Yes it's shit and unfair and all the rest of it. But I suppose the thinking was, better a sliver of a big pie than none of any pie.

yes, the "sliver of pie" means that big companies can play off competing countries as they auction downwards.

"Come to me and pay 5%"
"No, come to me and pay 4%"
"Only 1% here!"

An auction where the only winner is the multibillion big company.

If countries were in charge, they could get together and agree fair rates instead of competing to bankrupt each other. What a shame the UK has recently decided to cut itself adrift.

Hmmm.

Almost like a 'Union' for countries, you say? That does sound like a good idea.

And yet what is this?

yes, I remember after the Brexit vote she said she would abandon European cooperation on tax wheezes.

If every country tries to gain an advantage over its neighbours we are in a race to the bottom.

I suppose she is desperate to find ways of making up for the economic damage.

Sigh.

And this whole apple thing is why I voted leave its not up to the eu weather or not irland allow people to tax doge they are a sovereign nation it's up to them and them the voters decided weather the government have been twats in all this

I am sure there are compnys in France , Germany Denmark Ect who haven't paid every last euro of tax this deal in terms of jobs would have not just been good for the Irish but may have benfifitted many in northen irland

Meddling fuckers and can't wait till were gone

poster PigletJohn Wed 31-Aug-16 11:21:15

We no fucker in irland will get a job at Apple now or in northern irland and they still may not pay so no fucker gets anything
Well done eu round of applause

I tempted to forgo the tax and invite them to have there head quarters here to stick one to the eu

Its really Americas fault for not taxing them at source. Most, if not all, of the intellectual property is created in the US, so should be taxed there. Who can blame Ireland for grabbing a lifeline in their recession. If Apple had to pay 13bn tax to Ireland they could offset it against any US tax bill and deny them money that is probably rightfully theirs.

The tax system was never designed to cope with the kind of multi-national intellectual property which is impossible to easily determine where the profit is made.

The EU won't solve it with this ruling because there are other tax havens Apple can move to. Countries need to find a way to tax companies fairly in ways they can't avoid. Don't blame Apple for a broken system, blame governments for not sorting it out yet.

.

The advantage of a large union of nations, like the EU, is that if it can agree tax-dodgers are not welcome, it can set out some commonly held rules.

Perhaps something like "if you want to come here and use our infrastructure, our educated workforce, our investment grants, and sell to our consumers, you have to conform to our rules, which includes paying x% corporation tax on the profits you make here (and not sending them to tax havens)"

I think the US might be on a sticky wicket. For example, I am not a US citizen, I do not live in the US, I do not work in the US, I am not eligible for any US benefits, but they charge me 15% tax on the (tiny) dividends on a few US shares I own. They also make me fill in US tax forms periodically, for no perceptible reason, perhaps in case I have suddenly become an American.

It also seems possible for non-US companies operating in California, and possibly other parts of the US, to be charged tax on profits earned outside the US, but I have looked at some of the tax documents and can't understand them.

should have added, if everybody pays their fair share (whatever that is) then the people without tax havens can pay less, because they are no longer subsidising the billionaire tax dodgers.

Can we do the Daily Mail's notorious tax-dodging Lord Rothermere next?

great idea. How you going to do that?

Isn't Apple's motto, "don't be evil" ?!?

Google is dont be evil. Apple is 'make people bend over and take advantage'

However, what is the fair share? Apple investors were on a sticky wicket before the iphone. Remember Blackberry and Nokia? How much risk should investor take?

DD1 is a US citizen and DH, not a US citizen, has only just stopped filing returns so I have a passing interest in this. As I understand it the rules are different for corporate identity and taxation than they are for US citizens, otherwise US companies would be at a huge disadvantage operating overseas in lower tax environments, ironically like Ireland and the EU.

According to Simon Jack of the BBC companies like Apple cannot remit profits back home because this would incur US tax of 35% which would lead to their shareholders accusing them of not acting in the best interest of the company. I agree the system may have made sense in a World of fixed capital investment but not for intellectual property in a global technologically connected environment.

it's not just Intellectual Property. That's just a figleaf.

Making coffee in a high street shop does not depend on inventions created in the US. Starbucks avoids paying perceptible tax by cunning wheezes and cross-border transfer pricing. Paying tax is purely optional for multinationals, so they've only started chipping in to the UK economy out of generosity fear of a consumer boycott.
uk.reuters.com/article/us-britain-starbucks-tax-idUSBRE89E0EX20121015

There is no suggestion Starbucks has broken any laws. Indeed, the group's overall tax rate - including deferred taxes which may or may not be paid in the future - was 31 percent last year, much higher than the 18.5 percent average rate that campaign group Citizens for Tax Justice says large U.S. corporations paid in recent years.

Interesting article but the above paragraph is what stands out for me.

Fascinating to see all the international trade linked to supplying and financing my local coffee shop and the article doesn't even touch on arrangements with growers.

DH and I were musing over lunch if there would be potential for Apple to buy a loss making company and offset the tax liabilities. I think this has driven a number of US / UK mergers in recent times.

Another thought which occurred to me is how Bill Gates uses international tax arbitrage to finance his foundation. Also of interest would be Zuckerman's financing of his ventures to democratise the internet for India and Africa, since he is in the news today.

It will also probably be very interesting to be a fly on the wall the next time the EU and the US get together to discuss Greek debt refinancing or clamping down on tax havens.

uk.finance.yahoo.com/news/why-apple-tax-witchhunt-could-133918027.html

This article comes at the issue from the other pov.

interesting to see the pro-Apple article begins:
"European Commission's belief that Apple should pay tax on 60% of its global profits in Ireland "

Is that what the EU believes? Why would all of Apples Global Profits flow into Ireland?

Why just Apple? What about the other multinationals in Ireland operating in this way?

In Ireland super rich tax exiles can park their planes in Belfast and drive ( or are driven ) south so no one knows whether they are in or out of the country. It gets around the law about only being allowed in the country for X amount of days.
One super rich tax exile is regularly praised in the media for their contributions to this or that charity or local amenities.
How many of us would like to pay little or no tax and then donate to our favoured charities and get lots of good publicity for so doing ?
Sadly I live in a banana republic
I hate the Irish tax system- Apple et all.

Is it because you've got to start somewhere?

Do you know a better one to go after?

en.wikipedia.org/wiki/Double_Irish_arrangement

Pick one:

"Companies using the arrangement"

"A number of major companies are known to employ the double Irish strategy, include:"

1.Abbott Laboratories
2.Adobe Systems
3.Apple Inc.
4.Eli Lilly and Company
5.Facebook
6.Forest Laboratories
7.General Electric
8.Google
9.IBM
10.Johnson & Johnson
11.Microsoft
12.Oracle Corp.
13.Pfizer Inc.
14.Starbucks
15.Yahoo!
16.Medtronic Inc.

Piglet Ireland houses the Apple company that sells in Europe (and some other countries). I assume it makes 60% of Apple profits. Can't be arsed to google the 10k

If anyone can find this programme (?) it's well worth a watch.

It's a "how to" guide in corporate tax minimisation

www.bbc.co.uk/programmes/b06ygl19

I think perhaps the answer to the question "Why would all of Apple's Global Profits flow into Ireland?" (if indeed it is true)

might be "because Ireland offered them a tax haven and for no other reason"

If Pig Boy's investments were in Panama, can we think of a reason why that might be?