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Like Apple, Google & Yahoo also avoid taxes by way of Ireland - Page 4

post #121 of 133
Quote:
Originally Posted by Marvin View Post


.... It's one thing to take advantage of tax breaks written into law for the purposes of tax relief in order to encourage economic growth and another to use bizarre international setups to get away with paying almost an order of magnitude less tax and then keeping it in a massive cash pile and not using it. They aren't the same thing at all. The intent of tax breaks is not to help insanely wealthy people build up huge piles of money they don't need and have no intention of using.

 

Marvin, here are some facts that should be considered before dumping on Apple, even 'tho it's popular these days to do so, : (1) Apple paid 6 Billion dollars to the us government and this year expects to pay closer to 7 Billion. That puts them near, or at the top of the list in paid taxes to the US government. (2) The government writes the tax code, not Apple. It's not Apple's responsibility to fix the mistakes of government. (3) Apple's after tax profits belong to all of the shareholders, most of whom are invested in pension funds, mutual funds, etc. I wouldn't classify those shareholders as : insanely wealthy people (who) build up huge piles of money they don't need and have no intention of using. (4) Finally, do you have the same feelings about the millions of citizens who use all of the deductions available to reduce their tax burden? Do you not use deductions to reduce your tax burden or do you "leave money on the table" to "encourage economic growth" ?
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post #122 of 133
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Originally Posted by newbee View Post

 

You obviously don't know what you are talking about. Do yourself a favour and go to the c-span site and watch the complete replay of the senate hearings and then, after you have been exposed to the facts, instead of your own personal interpretations of the soundbites that are reported, come back here and try another post. You know, it's been said that the only thing worse than a man who can't read is one who won't.

 

I've watched them, and I've read the testimony, and I've read analysis of it.  Please point out where the facts diverge from my interpretation.  I don't think my interpretation is controversial at all outside of this forum.

 

To steal something Steve Jobs once said, I readily admit that there are many things in life where I don't have the faintest idea what I'm talking about.  But I'm trying to work through that.  If you know I'm wrong the help me out rather than just saying I'm wrong and slamming the door in my face.

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post #123 of 133
Quote:
Originally Posted by s.metcalf View Post

Given the state of the Irish economy I'm surprised Ireland is continuing to allow virtually tax-free status to corporations while its citizens undergo extreme austerity measures.  It seems like Ireland should be pursuing all of these visiting corporations for more tax.

 

It also seems to me that since Apple effectively imports all its products, they should at least be slugged an import or sales tax on each product sold, currently equivalent to 10 % in Australia.  Why the government doesn't pursue this avenue is beyond me, but having worked for governments I know how incompetent and stupid they usually are.

 

Of course, this applies to all corporations that are doing the same thing, not just Apple.

The Irish government's import tax would be the same as the EU import tax. I don't know if import tax applies to goods transferred between the same companies.

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post #124 of 133
Quote:
Originally Posted by Crowley View Post


You may define "proper" differently to me in this context, but I think it's very apparent that this isn't actually the case. The Irish subsidiaries are clearly being used to transfer profits out of the European markets before they are subject to corporation taxes in the country of sale. The numbers tell that story.

 

Corporation tax is not taxed in the country of sale. The UK is making a lot of noise about this, but it is not true, is never true, and can't ever be true. Its taxed where the company is headquartered, or registered. ( regional or worldwide).

 

Vat is also where the company is registered. I can see that changing - at least for large transitions - but corporate tax would never change.

 

If you do believe that a company owes corporation tax where items are sold, then you can't also argue that Google or Apple are withholding US taxes, because they pay all those for sales in the US.

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post #125 of 133
Quote:
Originally Posted by asdasd View Post

 

Corporation tax is not taxed in the country of sale. The UK is making a lot of noise about this, but it is not true, is never true, and can't ever be true. Its taxed where the company is headquartered, or registered. ( regional or worldwide).

 

Not in Ireland, which has a weird loophole where corporate income tax is only paid if the company is incorporated there and is controlled by there.  Which is why Apple subsidiaries there are able to effectively operate in a "nationless" state of existence, and not pay corporate income tax to anyone.

 

The UK is making a lot of noise about this because Apple as a corporation is making profit in the UK, but not paying UK corporation tax, and is getting away with not paying corporation tax anywhere (if it repatriated the money to the US then it would pay there, but it hasn't and is resisting doing so as is well documented).  This is a feature of foreign companies trading, and you're right that corporations pay corporate income tax on their profits in the country that they're incorporated, which is why this network of subsidiaries is so interesting, why the resistance to repatriation on the grounds of "we've already paid tax, why should we pay again" (or the more odious "why should we pay to the US government, what have they done"), and why Apple achieving an effective corporate income tax of less than 2% outside of the US is seen as a scandal.

 

If they were paying in the US that would be fine (generic local grumbling about foreign companies aside).  If they were paying somewhere else that would be fine too.  They aren't paying a reasonable corporate income tax anywhere, which is why this is seen as an issue.

 

 

Yes, it's legal and Apple is acting in the interests of its shareholders etc, that's all a given.  And yes "reasonable corporate income tax" is subjective, but many seem to think Apple aren't there.  And yes, this is a regulatory issue to fix holes in tax systems across different countries, not an Apple issue.

 

 

I think I'm all out on tax, don't much want to discuss it any more.  I've made my thoughts pretty clear, and been called a liar and a fool for my trouble (with no evidence or justifications forthcoming).

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post #126 of 133
Quote:
Originally Posted by asdasd View Post

The Irish government's import tax would be the same as the EU import tax. I don't know if import tax applies to goods transferred between the same companies.

 

 

The Irish companies are not 'tax residents of Ireland'. In fact the funds that are stored in the Irish subsidiaries is considered 'ocean income' e.g. not coming from anywhere. The money is still however stored in New York banks. As far as the Irish are concerned the goods never cross their borders, I think you'll find it is why Apple bargained for the ~2% tax rate in Eiré.

 

 

Quote:

Originally Posted by asdasd View Post

 

Corporation tax is not taxed in the country of sale. The UK is making a lot of noise about this, but it is not true, is never true, and can't ever be true. Its taxed where the company is headquartered, or registered. ( regional or worldwide).

 

Vat is also where the company is registered. I can see that changing - at least for large transitions - but corporate tax would never change.

 

If you do believe that a company owes corporation tax where items are sold, then you can't also argue that Google or Apple are withholding US taxes, because they pay all those for sales in the US.

 

 

 

 

Again it's the fact that the entities in Ireland are being run from the US (as Tim Cook & Peter Oppenheimer said), but the monies raised from them are not making their way back home so the US gets no tax on them. The system is allowing the Irish entities to a mass $100 billion dollars in earnings, whilst not being tax resident anywhere. Apple are also sending funds & IP to Ireland to help them lower thier US tax bill. 

 

Crowley hasn't mentioned VAT, or corporation tax. It is tax on earnings that Apple is dodging.  

post #127 of 133
Quote:
Originally Posted by Steven N. View Post

You did not even read the list or stopped at "education" and immediately went to "private". Of course, why should the poor have an education since they are just field workers and day laborers, right?

And regulations on food and safety? Do you really think private business can self regulate? Bangalore anyone?

Any form of IP protection on the honor system? Are you serious?

Do you want to pay a toll on every single road you drive on? Seriously? Do you think every road should be a toll road? Every side street? Every highway? Every Interstate?

Do you think private business would have made it to the moon in the 60's and, in doing so, created the multi-trillion dollar silicon industry. That industry alone got a 10 to 15 year boost due to the government spending on big science. Do you think private industry would build things like the Tevatron (I still weep for the near sighted fools that killed the SCSC)?

While privatization can be a good thing (basic utilities for example) it can also be disastrous (prisons for example) when the needs of the private company do not align with the needs of society.

Well said ...Or alternatively of course we could do away with any government or taxes and still be running America like the wild west ... ;l)

It is all about balance in MHO. Too much either way is a problem. Centrists of the World Unite. 1smile.gif
Edited by digitalclips - 5/23/13 at 8:17am
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post #128 of 133
Quote:
Originally Posted by Crowley View Post

Not in Ireland, which has a weird loophole where corporate income tax is only paid if the company is incorporated there and is controlled by there.  Which is why Apple subsidiaries there are able to effectively operate in a "nationless" state of existence, and not pay corporate income tax to anyone.

The UK is making a lot of noise about this because Apple as a corporation is making profit in the UK, but not paying UK corporation tax, and is getting away with not paying corporation tax anywhere (if it repatriated the money to the US then it would pay there, but it hasn't and is resisting doing so as is well documented).  This is a feature of foreign companies trading, and you're right that corporations pay corporate income tax on their profits in the country that they're incorporated, which is why this network of subsidiaries is so interesting, why the resistance to repatriation on the grounds of "we've already paid tax, why should we pay again" (or the more odious "why should we pay to the US government, what have they done"), and why Apple achieving an effective corporate income tax of less than 2% outside of the US is seen as a scandal.

If they were paying in the US that would be fine (generic local grumbling about foreign companies aside).  If they were paying somewhere else that would be fine too.  They aren't paying a reasonable corporate income tax anywhere, which is why this is seen as an issue.


Yes, it's legal and Apple is acting in the interests of its shareholders etc, that's all a given.  And yes "reasonable corporate income tax" is subjective, but many seem to think Apple aren't there.  And yes, this is a regulatory issue to fix holes in tax systems across different countries, not an Apple issue.


I think I'm all out on tax, don't much want to discuss it any more.  I've made my thoughts pretty clear, and been called a liar and a fool for my trouble (with no evidence or justifications forthcoming).

Well I for one have appreciated your erudite posts on the subject and thank you for all the effort.
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post #129 of 133
Quote:
Originally Posted by Crowley View Post

 

Not in Ireland, which has a weird loophole where corporate income tax is only paid if the company is incorporated there and is controlled by there.  Which is why Apple subsidiaries there are able to effectively operate in a "nationless" state of existence, and not pay corporate income tax to anyone.

 

The UK is making a lot of noise about this because Apple as a corporation is making profit in the UK, but not paying UK corporation tax, and is getting away with not paying corporation tax anywhere (if it repatriated the money to the US then it would pay there, but it hasn't and is resisting doing so as is well documented).  This is a feature of foreign companies trading, and you're right that corporations pay corporate income tax on their profits in the country that they're incorporated, which is why this network of subsidiaries is so interesting, why the resistance to repatriation on the grounds of "we've already paid tax, why should we pay again" (or the more odious "why should we pay to the US government, what have they done"), and why Apple achieving an effective corporate income tax of less than 2% outside of the US is seen as a scandal.

 

If they were paying in the US that would be fine (generic local grumbling about foreign companies aside).  If they were paying somewhere else that would be fine too.  They aren't paying a reasonable corporate income tax anywhere, which is why this is seen as an issue.

 

 

Yes, it's legal and Apple is acting in the interests of its shareholders etc, that's all a given.  And yes "reasonable corporate income tax" is subjective, but many seem to think Apple aren't there.  And yes, this is a regulatory issue to fix holes in tax systems across different countries, not an Apple issue.

 

 

I think I'm all out on tax, don't much want to discuss it any more.  I've made my thoughts pretty clear, and been called a liar and a fool for my trouble (with no evidence or justifications forthcoming).

 

I am not opposed to the US getting the vast majority of Apple's earnings when earned abroad. I made that point earlier, it should go where the IP is.

 

My point still stands however. The UK's grumbling is a mis-understanding of how corporation tax is applied. The UK is owed tax on profits in the Apple stores based in the UK, because they are physically there ( and this profit is the difference between the wholesale cost of iDevices and the retail cost of iDevices minus the expenses in operating the Stores in the UK, this is the same as when Currys sells an iPad). Thats it, and thats all.And they are paid.

 

The British press is whining about how little Apple pay on all Apple's retail sales, ignoring that you pay on profit, not sales, and where you are based, not where you sell.

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post #130 of 133

Oh you don't want to get me started on the inadequacies of the British press 1devil.gif

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post #131 of 133
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Originally Posted by Droid View Post

 

 

 

 

Again it's the fact that the entities in Ireland are being run from the US (as Tim Cook & Peter Oppenheimer said), but the monies raised from them are not making their way back home so the US gets no tax on them. The system is allowing the Irish entities to a mass $100 billion dollars in earnings, whilst not being tax resident anywhere. Apple are also sending funds & IP to Ireland to help them lower thier US tax bill. 

 

Crowley hasn't mentioned VAT, or corporation tax. It is tax on earnings that Apple is dodging.  

Tax is charged on profits, not earnings. And that is Corporation tax. I was pointing out the lack of understanding in this debate. 

 

Its still not understood. The tax avoided in Ireland is not tax avoided in the US, and won't be unless Apple bring it home and then avoid it. Nobody gets this, certainly Levin didn't. Until repatriation there is no American tax payable on that income. The transfer of IP and the other stuff avoids tax in Ireland.  Not in the US. not yet.

 

In fact that avoidance in Ireland is liable to allow Apple to pay more in the US, on repatriation, than otherwise precisely because it is not paid in Ireland. And Apple seem like they want to do this - repatriate, that is - at a lower than 35% rate, but at a rate greater than 0%. Whatever rate is agreed is higher than it would other wise be were tax being paid overseas.

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post #132 of 133
Eric Schmidt was asked about this in a recent interview:

http://uk.news.yahoo.com/video/google-chief-calls-tax-debate-010506375.html

Evil or not evil, that is the question. He's pretty much saying the same as Apple that it's up to the government to change the law. He also suggested their tax avoidance allows them to give services away for free and even said they 'can't fix it'. That last part is clearly false. It's not that they can't pay the expected and explicit tax rates, it just puts them at a disadvantage vs a competitor that aims to pay the lowest rates.

There's going to have to be an international government agency formed with an international tax agreement. The French tax authority is investigating Amazon now too:

http://www.zdnet.com/amazon-in-250m-probe-by-french-tax-authority-7000014610/

The fix has to be done on an international level because if companies are going to inflate the prices selling into a country, no matter how they force payment of the tax rates, that circumvents it. They need to ban marking up prices between subsidiaries of the same company - there is absolutely no justification for marking up products internally in your own company because that can be done at the point of sale.

When it comes to the issue of declaring separate subsidiaries as single entities, they can just have a split tax. For example, if a company based in France sells only to France, they can pay 50% of the profits to France based on where they sell from and 50% based on where they sell to - in this case 100% of the French tax rate to France. For a company based in Ireland, they'd pay 50% of the profit at the French rate to France and 50% of the profit at the irish rate to Ireland. This only works if they ban subsidiary markups.

The Corporate Taxes can't be fully paid to one country or the other because that means the profits either only subsidise the base of operations or the infrastructure they take advantage of to sell and it needs to be both. The split doesn't have to be 50/50 but that might be the easiest to compute. That still gives international companies an advantage over local companies but it makes it much fairer and it wouldn't require a change to any current international business, they just get taxed differently.

There also needs to be an international ban on companies having no tax jurisdiction. Every company should have a tax jurisdiction where they are functionally managed. The country of incorporation can stay fixed and the tax jurisdiction can be moved freely.
post #133 of 133
Rather than allow the tax jurisdiction to be moved freely I think the obligation should be to register in the same location as where the primary command structure exists. Ironically I think Ireland is sort of right in their odd rule, but it's the disconnect with the rest of the world that's the problem. And by operating in a country a company should be obliged to declare where it is registered for corporate income tax, to enable free information exchange. Every available measure should be taken to close down the toxic influence of secrecy jurisdictions.

A 50-50 split tax is an interesting idea. Pegging it to a hard percentage might make it workable, but you'll definitely need country-by-country reporting to be in place.

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