or Connect
AppleInsider › Forums › General › General Discussion › Tim Cook to reportedly testify on offshore tax practices in Senate investigation
New Posts  All Forums:Forum Nav:

Tim Cook to reportedly testify on offshore tax practices in Senate investigation

post #1 of 44
Thread Starter 
Apple CEO Tim Cook will reportedly give testimony to the U.S. Senate Permanent Subcommittee on Investigation pertaining to how the company deals with taxes, a much debated topic as Apple is thought to have about $100 billion in offshore funds.

Subcommittee


While it was known that the Senate would be holding a hearing next week Tuesday, POLITICO is reporting that Cook himself will be present to give testimony, possibly answering questions in the same vein as those answered by representatives from Microsoft and HP.

The Senate hearing is a continuation of the panel's investigation into how the practice of keeping profits offshore affects U.S. taxes.

Large domestic corporations like Apple have taken to hoarding cash away from U.S. shores to avoid paying high tax rates on overseas earnings. For example, a recent analysts by The Wall Street Journal found 60 such companies held a combined $166 billion in earnings offshore in 2012. Under U.S. tax law, companies can effectively sidestep paying the government more than 40 percent of their annual profits by not repatriating the money.

Pointing to Apple's huge offshore cash pile, the company chose to take on debt by issuing bonds to finance a planned stock buyback, despite having $150 billion in cash and equivalents. This tactic will allow Apple to avoid an estimated $9.2 billion tax hit if it were to bring the money needed for the buyback into the U.S.

According to the publication, representatives from the Treasury Department, Internal Revenue Service and other tax experts will testify at the hearing. According to the subcommittee's website, a full witness list, which would include Cook if today's report is accurate, will be published on the Friday.
post #2 of 44
If an American citizen earns money overseas, it's taxable in the US.

If an American corporation earns money overseas, it's not taxable in the US until it's moved into US-based accounts.

Seems like there is a discrepancy there somewhere...

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

    AT&T believes their LTE coverage is adequate

Reply

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

    AT&T believes their LTE coverage is adequate

Reply
post #3 of 44
Quote:
Originally Posted by John.B View Post

If an American citizen earns money overseas, it's taxable in the US.

If an American corporation earns money overseas, it's not taxable in the US until it's moved into US-based accounts.

Seems like there is a discrepancy there somewhere...


If an American citizen earns money overseas, by working at the company as an employee overseas aren't taxes collected or reported on some level?
If an American citizen living in the US, earns overseas income (like doing contract development work), are they reporting it to the US??

If I'm working in Germany, living in Germany, at a German company I can understand paying taxes to Germany.  What I think is extortion is the US coming back and saying "We know you don't actually live in the US, but we want a cut of that money even though you don't do anything here in our country."

If Apple sells a product overseas, they are paying taxes to the country it was sold in.  So as far as I'm concerned, they met their tax bill.
What the US is saying, "Yes you paid taxes to the country in which the sale was made, but we want an additional 30% simply because you should be honored to be a part of the United States of America" which I think is flat-out wrong and double-dipping.  Screw that.

post #4 of 44
Quote:
Originally Posted by John.B View Post

If an American citizen earns money overseas, it's taxable in the US.

If an American corporation earns money overseas, it's not taxable in the US until it's moved into US-based accounts.

Seems like there is a discrepancy there somewhere...

 

 

Disclaimer: I have no clue about the tax laws so this is all question and speculation on my part. 
 
If that American earned money overseas and leaves it there, they still have to pay taxes on it? If I go to Italy for contract work and leave the money in Italy (for a later vacation) then why would the U.S. Government have any claim to taxes just because I am a citizen of the U.S.? 
 
What this will lead companies to do, if the U.S. pushes the point, is to have subsidiaries in other countries so the parent company won't have to claim the income. 
post #5 of 44
Quote:
Originally Posted by sflocal View Post

If Apple sells a product overseas, they are paying taxes to the country it was sold in.

 

Probably not actually. Apple tend to move their money through tax havens like Luxembourg to reduce the overall amount of tax that they need to pay. Apple (and many of its multinational competitors) pay very little tax on goods sold in the UK, for example.

post #6 of 44

What I find hypocritical is that Apple is a politically Left leaning company which would make one thing Apple believes in the 'It's patriotic to pay more taxes' and 'the rich can afford to pay more' while all along they are doing everything they can to pay less. Just like those on the political Right want for everyone; pay less. 

 

I wonder if their board member, the ultra progressive Al Gore, thinks it okay for Apple to hide money overseas? 

 

Remove the IRS and install a flat sales tax for everyone and all these problems go away! 

post #7 of 44
Its just uncle sam wanting a cut of money. Period. Instead of cutting funding for useless projects ie the war on drugs say, they want to charge american based companies for the money made by those companies. Even if it wasnt made in america. Im an american. Nonetheless i feel america is a greedy country. To quote many rappers " bitch getchya own money"
post #8 of 44
Kinda funny to have a Senate investigation on how companies are starving the beast legally.

I wonder what they'll learn about gov. and how it taxes its people and corporations...

Flat tax or Flat sales tax. Get rid of the IRS. Let's do it already!
post #9 of 44
Quote:
Originally Posted by John.B View Post

If an American citizen earns money overseas, it's taxable in the US.

If an American corporation earns money overseas, it's not taxable in the US until it's moved into US-based accounts.

Seems like there is a discrepancy there somewhere...

No loopholes for you, 1 year, and the year after that, and the year after that......
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #10 of 44
Quote:
Originally Posted by Richard Getz View Post

What I find hypocritical is that Apple is a politically Left leaning company which would make one thing Apple believes in the 'It's patriotic to pay more taxes' and 'the rich can afford to pay more' while all along they are doing everything they can to pay less. Just like those on the political Right want for everyone; pay less. 

 

I wonder if their board member, the ultra progressive Al Gore, thinks it okay for Apple to hide money overseas? 

 

Remove the IRS and install a flat sales tax for everyone and all these problems go away! 


Once again, no one should have to pay more more taxes than legally required.  Apple and every company doing it is not doing anything illegal.  You would do the exact same thing.

There is also nothing wrong with Apple believing it's a patriotic thing to pay taxes.  The two are mutually exclusive.  Apple happens to be one of the largest tax payers in the US.  That does not mean Apple should pay more to make the government all warm and fuzzy.

A flat sales tax will still not resolve the issue.  Should a company that earns revenue overseas, and pays taxes to the country of origin on that revenue be required to pay taxes in the U.S.??  I sure has hell don't think Apple, me, or anyone else should.

post #11 of 44
Quote:
Originally Posted by Richard Getz View Post

 

 

Disclaimer: I have no clue about the tax laws so this is all question and speculation on my part. 
 
If that American earned money overseas and leaves it there, they still have to pay taxes on it? If I go to Italy for contract work and leave the money in Italy (for a later vacation) then why would the U.S. Government have any claim to taxes just because I am a citizen of the U.S.? 
 
What this will lead companies to do, if the U.S. pushes the point, is to have subsidiaries in other countries so the parent company won't have to claim the income. 


Isn't that is one of the reasons why Facebook's early investor Eduardo Luiz Saverin renounced his citizenship?  He was tired of paying US taxes when he didn't live in the US nor conducted business there.  He lives full-time in Singapore.  Arguably, I'd have done the same thing.

So if you keep it in that bank account in Italy after you paid your Italian taxes, travel to Italy and spend that money you'd probably be okay because that is essentially what Apple is doing.  But if you go to an ATM here in the U.S. and withdraw that money from your Italian account then yes you "technically" have to pay U.S. taxes on earned overseas income I would think.  Total BS.

Any confirmation on this?

post #12 of 44

If the US government wants that money brought back to the US they should look into not charging such a large amount as a de facto import duty.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #13 of 44
Quote:
Originally Posted by sflocal View Post


Once again, no one should have to pay more more taxes than legally required.  Apple and every company doing it is not doing anything illegal.  You would do the exact same thing.

There is also nothing wrong with Apple believing it's a patriotic thing to pay taxes.  The two are mutually exclusive.  Apple happens to be one of the largest tax payers in the US.  That does not mean Apple should pay more to make the government all warm and fuzzy.

A flat sales tax will still not resolve the issue.  Should a company that earns revenue overseas, and pays taxes to the country of origin on that revenue be required to pay taxes in the U.S.??  I sure has hell don't think Apple, me, or anyone else should.

 

Never suggested a law was being violated. Not once. And I take as many write downs as legally possible.

 

The two are not mutually exclusive as if people really thought that it was patriotic to pay 'more' taxes, they would not use the write downs, or claim taxes as cap gains, but as regular income, thus paying the higher tax. Such as Warren Buffett pays less than his secretary in percent of income paid in taxes and then says his taxes should be more because he can afford to pay more. Well then, simply claiming your income as standard income instead of cap gains would allow you to pay the higher percent in taxes. Also, you could stop taking deductions. All of which is very much within your power to do so. So if Apple believes the same thing, they would bring their money back to the U.S. and pay the taxes and not take deductions. It is really simple. If the rich want to give more of their taxable income to the IRS, it is a extremely straight forward process. 

 

I'm not sure you understand what a sales tax is. You don't pay a sales tax on earned income, but rather on items you purchase. Therefore a sales tax is none-descriminating. When you purchase anything (yes, in the U.S.) you pay a sales tax. 

post #14 of 44
Quote:
Originally Posted by John.B View Post

If an American citizen earns money overseas, it's taxable in the US.

If an American corporation earns money overseas, it's not taxable in the US until it's moved into US-based accounts.

Seems like there is a discrepancy there somewhere...

Apple is not a U.S. company in another country but a U.S. citizen is still a U.S. citizen when in another country.
post #15 of 44
Quote:
Originally Posted by Richard Getz View Post

When you purchase anything (yes. in the U.S.) you pay a sales tax. 

One doesn't pay sales tax on necessary items. Many groceries are sales tax exempt, depending on the state clothing is sales tax exempt. In NY all clothing less than $110 is sales tax exempt.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #16 of 44
Quote:
Originally Posted by dasanman69 View Post


One doesn't pay sales tax on necessary items. Many groceries are sales tax exempt, depending on the state clothing is sales tax exempt. In NY all clothing less than $110 is sales tax exempt.

 

Thank you for quoting State sales tax which is not a Federal Sales Tax as I suggested. I do agree that details of this none-existent tax would have to be concluded, but I think the flat, across the board, sales tax would serve the best. 

post #17 of 44

I've never seen a flat tax proposal that wouldn't raise my effective tax rate.  But I'm sure it would be great for some people.

 

Quote:
Originally Posted by sflocal View Post

If an American citizen earns money overseas, by working at the company as an employee overseas aren't taxes collected or reported on some level?
If an American citizen living in the US, earns overseas income (like doing contract development work), are they reporting it to the US??

 

Quote:
Originally Posted by Richard Getz View Post

If that American earned money overseas and leaves it there, they still have to pay taxes on it? If I go to Italy for contract work and leave the money in Italy (for a later vacation) then why would the U.S. Government have any claim to taxes just because I am a citizen of the U.S.? 

 

Quote:
Originally Posted by sflocal View Post

Any confirmation on this?

 

Some income can be excluded, up to a ceiling, and some can't.  Residency is key.  If you're really interested, look up the foreign earned income exclusion and Publication 54 (Tax Guide for US Citizens and Resident Aliens Living Abroad).


Edited by John.B - 5/15/13 at 5:42pm

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

    AT&T believes their LTE coverage is adequate

Reply

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

    AT&T believes their LTE coverage is adequate

Reply
post #18 of 44
Quote:
Originally Posted by Richard Getz View Post

Thank you for quoting State sales tax which is not a Federal Sales Tax as I suggested. I do agree that details of this none-existent tax would have to be concluded, but I think the flat, across the board, sales tax would serve the best. 

And what would happen on a state and city level?
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #19 of 44
Quote:
Originally Posted by ChristophB View Post

Apple is not a U.S. company in another country but a U.S. citizen is still a U.S. citizen when in another country.

 

Unless I'm missing your point, Apple was incorporated in the state of California back in the Apple I/II days.  It is most certainly a US corporation.

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

    AT&T believes their LTE coverage is adequate

Reply

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

    AT&T believes their LTE coverage is adequate

Reply
post #20 of 44
Quote:
Originally Posted by John.B View Post

Unless I'm missing your point, Apple was incorporated in the state of California back in the Apple I/II days.  It is most certainly a US corporation.

They have satellite 'HQs' throughout the world
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #21 of 44
Quote:
Originally Posted by John.B View Post

Unless I'm missing your point, Apple was incorporated in the state of California back in the Apple I/II days.  It is most certainly a US corporation.

Apple subsidiaries are incorporated in other countries and manage international operations from there to take advantage of lower tax rates. Dublin I think for many tech companies. Ireland gets paid for doing quite a lot of nuttin.

U.S. taxes on corporations are pretty high as compared to the rest of the first world. It's a funny thing corporate taxes. Who's really paying those?

Edit: my other implied point was that a US citizen is welcome to renounce and go elsewhere. Having spent half my life abroad and still without Warren Buffet type means, I'm happy with the protections the US provides. I thank the Maker I've not HAD to use the US Embassies but there was comfort knowing they were there.
post #22 of 44
Quote:
Originally Posted by dasanman69 View Post


And what would happen on a state and city level?

 

Whatever the State or City deems it wants to do as it is being done now. I'm not sure what the point is that you are getting at? 

post #23 of 44
Quote:
Originally Posted by Richard Getz View Post

Whatever the State or City deems it wants to do as it is being done now. I'm not sure what the point is that you are getting at? 

Reckon he means would it nullify the city, borough, county, parish, state tax or just be tacked on by the vendor and set to the appropriate authority. The consumption taxes I have seen are just tacked on to what's there.
post #24 of 44
Quote:
Originally Posted by Richard Getz View Post

Whatever the State or City deems it wants to do as it is being done now. I'm not sure what the point is that you are getting at? 

They get income tax plus sales tax, would all their taxes go solely on sales tax as well?
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
Reply
post #25 of 44
Quote:
Originally Posted by John.B View Post

 

Unless I'm missing your point, Apple was incorporated in the state of California back in the Apple I/II days.  It is most certainly a US corporation.

 

Not the Apple subsidiaries which are conducting business and holding the cash offshore.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #26 of 44
I'm sure there is some tax pro guys here, I'm not. What does make sense to me though is the fact that the profit generated by these US companies overseas is already taxed at the other countries current corporate tax rate. So now for the US to ask the companies to pay the US tax as well, is blatant double taxation. What if the US subtracted the tax previously paid to the other country and enforced the remainer to be US taxable funds? I'm assuming the US corporate tax is higher than most other countries these corporations are doing business in? Could they block subsidiaries BS, and make it as easy as saying the Country that the device/product is sold to the end user in is the countries tax that is discounted?
post #27 of 44
The US has draconian tax laws, so much so that there are other countries WAY more competitive tax-wise than the US. The founders would roll over in their graves about taxation levels in this nation. Apple is doing the right thing -- there is NO patriotic duty to pay more tax than you absolutely have to. It is in everyone's best interest to pay the absolute minimum. Problem is all these entitlements & rampant gov't spending that is out of control. The other hidden tax is the Federal Reserve -- every time they inflate and create money out of thin air, aka quantitative easing (like how they hide it with mysterious code words?!), this is a TAX, and every dollar you have becomes worth LESS.


Let's not even get started about the biggest scam of all -- income tax.

Watch the documentary movie: http://freedomtofascism.com
and
http://paynoincometax.com/great_giveaway.htm

What you learn will blow your mind.


Don't get me started about efforts to mandate internet sales taxes. 1oyvey.gif
Edited by libertyforall - 5/15/13 at 6:59pm
post #28 of 44
As usual I see a lot of incompetent theorizing about US and International Tax Laws.
post #29 of 44
Quote:
Originally Posted by ChristophB View Post


Reckon he means would it nullify the city, borough, county, parish, state tax or just be tacked on by the vendor and set to the appropriate authority. The consumption taxes I have seen are just tacked on to what's there.

 

Why would it? Current Federal income tax does not nullify State income tax? Not that all States have income tax. 

post #30 of 44
Quote:
Originally Posted by dasanman69 View Post


They get income tax plus sales tax, would all their taxes go solely on sales tax as well?

 

Delaware has no sales tax. Texas has not income tax. Just two examples. You would have whatever State tax is currently levied and then a Federal Sales Tax levied on top of that, but no Federal Income Tax, or any other forms of Federal Tax. Although I am sure a corporate tax will remain, however, I don't believe it should. 

post #31 of 44
Quote:
Originally Posted by Richard Getz View Post

Why would it? Current Federal income tax does not nullify State income tax? Not that all States have income tax. 

Not saying it would or should. I was guessing at the ask.
post #32 of 44
Quote:
Originally Posted by libertyforall View Post

The US has draconian tax laws, so much so that there are other countries WAY more competitive tax-wise than the US. The founders would roll over in their graves about taxation levels in this nation. Apple is doing the right thing -- there is NO patriotic duty to pay more tax than you absolutely have to. It is in everyone's best interest to pay the absolute minimum. Problem is all these entitlements & rampant gov't spending that is out of control. The other hidden tax is the Federal Reserve -- every time they inflate and create money out of thin air, aka quantitative easing (like how they hide it with mysterious code words?!), this is a TAX, and every dollar you have becomes worth LESS.


Let's not even get started about the biggest scam of all -- income tax.

Watch the documentary movie: http://freedomtofascism.com
and
http://paynoincometax.com/great_giveaway.htm

What you learn will blow your mind.


Don't get me started about efforts to mandate internet sales taxes. 1oyvey.gif

 

 

I agree 100%! My reference to the Patriotic aspect was Biden's comments. 

 

Thanks for the links

 

Yes, let's get you started on internet sales tax :) 

post #33 of 44
Quote:
Originally Posted by John.B View Post

If an American citizen earns money overseas, it's taxable in the US.

If an American corporation earns money overseas, it's not taxable in the US until it's moved into US-based accounts.

That's not correct. The U.S. (like most countries) tax on WORLDWIDE income. You better believe that sales in Germany, per se, are reported and taxed on the US tax return. After you calculate tax on worldwide income, you take a credit for taxes you paid to other countries already, and what you have left goes to Uncle Sammie.
post #34 of 44
Quote:
Originally Posted by John.B View Post

If an American citizen earns money overseas, it's taxable in the US.

If an American corporation earns money overseas, it's not taxable in the US until it's moved into US-based accounts.

Seems like there is a discrepancy there somewhere...

Yes, this is true, but....

I) Income up to ~$100,000 plus reasonable amounts of housing expenses are deductible;

II) Foreign taxes paid are credited;

III) The seeming unfairness of the tax code in this instance is not very different from how corporations are treated differently from individuals on a whole host of issues -- for example, tax deductibility of interest payments (allowed for corporations, but limited for individuals), ability to take depreciation tax shields (allowed for corporations, not allowed for individuals), ability to keep one set of books for tax tax purposes but another set for disclosure proposes (allowed for corporations, not allowed for individuals), etc.
post #35 of 44
Quote:
Originally Posted by BrianCPA View Post

The U.S. (like most countries) tax on WORLDWIDE income.

Can you provide a cite for that? I could be wrong, but I thought that most countries have a **territorial** (not worldwide) taxation system?
post #36 of 44

The bulk of Apple is overseas, only the R&D is here.   If the US government gets draconian about taxing worldwide income, can't Apple just move its official top holding company overseas and make the US part a division of a foreign corporation?  That way the US would only have any kind of hold over the subsidiary, not the parent.

I don't see why the US deserves a cut when a Chinese guy makes a product, a Greek guy ships it, and an French guy buys it.  Why does the US government deserve any cut of that?

 

45 2a3 300b 211 845 833
Reply
45 2a3 300b 211 845 833
Reply
post #37 of 44
Quote:
Originally Posted by e1618978 View Post

The bulk of Apple is overseas, only the R&D is here.   If the US government gets draconian about taxing worldwide income, can't Apple just move its official top holding company overseas and make the US part a division of a foreign corporation?  That way the US would only have any kind of hold over the subsidiary, not the parent.

I don't see why the US deserves a cut when a Chinese guy makes a product, a Greek guy ships it, and an French guy buys it.  Why does the US government deserve any cut of that?

 

As someone who lives in a country ( Ireland) which benefits from Apple being over-seas, I disagree. Apple adds value in design, and software. The tax should be paid where value is added, worked out on some agreed system.

 

Before this though, the US needs to reduce the rate or both companies and jobs will flee.

I wanted dsadsa bit it was taken.
Reply
I wanted dsadsa bit it was taken.
Reply
post #38 of 44
Quote:
Originally Posted by notatrader View Post

What if the US subtracted the tax previously paid to the other country and enforced the remainer to be US taxable funds? I'm assuming the US corporate tax is higher than most other countries these corporations are doing business in? Could they block subsidiaries BS, and make it as easy as saying the Country that the device/product is sold to the end user in is the countries tax that is discounted?

 

I believe that is what the US does already, unless someone has a source that proves otherwise?

 

Quote:
Originally Posted by mdriftmeyer View Post

As usual I see a lot of incompetent theorizing about US and International Tax Laws.

 

Thank you.

 

---

 

And to those arguing for a flat sales tax, HA! You think there isn't a reason that taxes are spread out over sales, estate, corporate, individual income, cap gains, etc., etc. It makes it harder to dodge taxes owed. For example, if you removed all taxes but a flat sales tax, what prevents someone from under the table sales or international sales. Someone mentioned the internet sales tax enforcement. If we can't even get our citizenry to honorably itemize what they buy on Amazon (regardless of its burdensome nature), how can we expect citizens to honorably report under the table or international sales... unless you prefer being searched and frisked at customs each time.

 

This is on top of the fact that sales tax is the most regressive tax there is, that is to say it shifts, as a percentage, more of the tax burden onto the poorest among us that can afford it least.

When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
Reply
When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
Reply
post #39 of 44
Quote:
Originally Posted by anantksundaram View Post


Can you provide a cite for that? I could be wrong, but I thought that most countries have a **territorial** (not worldwide) taxation system?

 

http://www.irs.gov/Businesses/Income-from-Abroad-is-Taxable

"... you must report income from all sources within and outside of the U.S." That's the one thing I am sure of... the rest is still kind of hazy for me 1confused.gif

 

I think the issue that arises is when companies - such as Apple in this case - set up foreign subsidiaries. Those subsidiaries earn foreign income and, unless that income is repatriated into the U.S. via dividends/distributions, it's never taxed in the U.S. I believe that, if Apple Inc. out of California opened a factory in Mexico, they would report that income on the U.S. tax return and take a credit for any taxes paid to Mexico - thus avoiding double taxation. But, if Apple were to set up XYZ Corp. in Mexico which turned around and opened a factory, the profit that factory earned would not be taxable in the U.S. because it's not income being earned by Mexican corporation, not a U.S. one. However, if XYZ issued dividends to Apple in order to return those profits back to Apple Inc., then those would be subject to U.S. tax.

 

That's my take on it. By no means am I claiming to be an expert on international taxation and I may very well be missing some key points.

post #40 of 44
Quote:
Originally Posted by Richard Getz View Post

What I find hypocritical is that Apple is a politically Left leaning company which would make one thing Apple believes in the 'It's patriotic to pay more taxes' and 'the rich can afford to pay more' while all along they are doing everything they can to pay less. Just like those on the political Right want for everyone; pay less. 

 

I wonder if their board member, the ultra progressive Al Gore, thinks it okay for Apple to hide money overseas? 

 

Remove the IRS and install a flat sales tax for everyone and all these problems go away! 


Yes, and I've come to the conclusion Apple is just a corporation like any other, for the most part and will do what they can not to pay taxes. It would be antithetical to not do so.

 

That's why corporations need to be regulated and they are not "people." Corporations definitely don't care about a lot of things, but it's own survival.

 

Apple would get hammered by investors if it voluntarily took the opportunity to just go ahead and repatriate the income and pay taxes on it. Because that's how the system works.

New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › Tim Cook to reportedly testify on offshore tax practices in Senate investigation