Originally Posted by ksec
So if Apple sell iPhone in UK, they would have to pay 20% VAT, then paid another 35% tax on top?
Apple doesn't pay the VAT, the consumer does. That's why it's bad for corporations selling products to evade the tax rate on earnings that consumers are subject to. Consumers get a high percentage deducted from income tax and then on every product, pay 20% in tax. Apple is only being taxed on their profits, which is the same as consumers being taxed on their earnings. Income tax for UK consumers isn't a flat tax though, the lowest earners can pay under 10%, while people earning say 500k per year can pay 50% income tax (e.g if you make £500k, you pay ~£250k tax).
A UK iPhone costs £500 without a contract. 20% of this (£83) is a tax on the consumer (after deducting this, the remainder is the equivalent price on the US Stores). The remaining £417 goes to Apple. This isn't profit though, just revenue and they tend to make 25% profits on their earnings (deducting parts, R&D, staff, stores, shipping etc) so the profit margin would be £104. Of that profit, they'd pay 24% (it's not 35%) = £25 but they don't, as they use Ireland and others to pay 12.5% or less (£13).
Per product, the consumer pays over 6x more tax than Apple currently pays and they pay their fair share of income tax on their earnings beforehand. Even if Apple paid the proper corporate tax rate, the consumer would pay 3x more tax per product.
To reiterate the point of Apple being the target, it's easy to forget as they have grown wealthy very quickly, but they now make more profit than any company in the world. That puts them in the spotlight for their taxes. While we can easily dismiss the hypocritical musings of politicians, the economy is not in a state where we can dismiss the issue. Money hasn't been destroyed to create this recession, it has just been displaced and it certainly hasn't gone to the lowest earners.