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Apple's Cook meets with Irish PM to discuss taxes, future growth at European HQ

post #1 of 85
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Apple CEO Tim Cook on Friday addressed employees at the company's European headquarters in Cork, Ireland before meeting with Prime Minister Enda Kenny to discuss EU tax regulations and ongoing operations in the country.

Cork


In a private meeting with the Taoiseach, or prime minister of the Republic of Ireland, Cook discussed possible expansion of Irish operations, as well as issues regarding EU tax regulations, reports Business ETC.

On the topic of taxes, Kenny went on record as saying Ireland is . The country's corporate tax laws came under scrutiny after it was discovered companies like Apple, Google and Microsoft were exploiting a legal loophole to saves billions of dollars in taxes.

"I pointed out to Cook that Ireland, as a member of the [European] Union, is participating in the OECD (Organisation for Economic Co-operation and Development ) discussions that are taking place now about an international response in terms of clarity about the tax position," Kenny said. "There are fifteen different sectors involving that and Ireland is participating in them all."

In October, Ireland's finance minister called for legislation to close the loophole, which in essence makes multinational corporations "stateless." The Taoiseach is staving off rumors that his government makes special deals with certain large corporations to foster job growth, the publication said.

Cook was reportedly "exceptionally happy" with the work being done in Cork. When asked about possible job expansions at the plant, Kenny reveled little, saying only that Apple was pleased with results so far and "want that to continue."

Apple's European headquarters now has over 4,000 employees, a huge jump from the roughly 2,800 workers accounted for less than two years ago. In 2012, the company announced it would be expanding operations in Europe, which created an additional 500 jobs at the Cork plant.
post #2 of 85
The solution here is to tax where value is added. That's hard to work out maybe for most countries but for Apple it's Cupertino.
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post #3 of 85

I believe a lot of European governments are getting together now to close the tax loopholes. The "Double Irish" as they call it.

 

p.s. isn't there some words missing from article after "Ireland is" ?

post #4 of 85
FYI: The reason Google's stock has been intentionally run up: Declared Stock Split.
post #5 of 85

This kind of crap just gets old:

 

http://au.ibtimes.com/articles/536731/20140131/apple-inc-aapl-australia-taxes.htm#.UuwtWT08eEI

 

Quote:
 

Apple Inc Generates $6 Billion Sales in Australia, Pays Only $36 Million Tax

By Reissa Su | January 31, 2014 6:55 PM EST

Apple Inc has paid $36.4 million in tax for 2013 fiscal year despite declaring revenues of over $6 billion in Australia. The Cupertino-based tech giant generated $52 million after paying $88.5 million, according to The Australian. The company had acquired a net profit after tax from $58.5 million in 2012  to $40.1 million when Apple paid taxes in Australia.

 

REUTERS/Jonathan Alcorn


Black Friday shoppers walk past an Apple Store inside the Glendale Galleria in Glendale, California November 29, 2013. Black Friday, the day following the Thanksgiving Day holiday, has traditionally been the busiest shopping day in the United States. REUTERS/Jonathan Alcorn

 

Despite a drop in profits, Apple Inc hit an an all-time high in revenues from $5.99 billion in 2012 to $6.1 billion in 2013. According to documents filed in the Australian Securities and Investments Commission, Apple Inc Australia had paid $154 million dividend to its parent company in the U.S.

 

Apple Inc Q1 FY2014 earnings summary

Apple Inc has released its Q1 FY 2014 earnings and surpassed analysts' and its own expectations with $57.6 billion sales with earnings per share of $14.50. The Cupertino-based tech giant announced that the company sold 51 million iPhones, 26 million iPads and 4.8 million Macs. The iPhone and iPad sales for Q1 FY 2014 broke records as Apple claimed they were both quarterly and all-time highs.

 

Apple continues to enjoy strong demand outside of the United States with international sales accounting for 63 per cent of Apple's Q1 FY 2014 revenue.

 

In a press release, Apple Inc CEO Tim Cook announced the company is "really happy" with record-breaking iPhone and iPad sales, including the strong performance of Macs in the world market. He also acknowledged the continued growth of iTunes, software and services. Mr Cook added that Apple loves having loyal, satisfied and engaged customers.

 

Chief Financial Officer Peter Oppenheimer stated that Apple was able to generate a cash flow of $22.7 billion from operations. The company returned $7.7 billion in cash to Apple's shareholders by offering dividends and share buybacks. Mr Oppenheimer said cumulative payments under the program have now reached more than $43 billion.

 

OECD to curb use of corporate tax havens

Apple Inc is one of the several multi-billion dollar companies including Microsoft and Google Australia to be under scrutiny for the use of tax havens to reduce tax payments.

 

In 2013, the Organisation for Economic Cooperation and Development (OECD) was asked to develop measures to stop corporations from using tax havens to escape local tax payments. 

To contact the editor, e-mail: editor@ibtimes.com

 

I don't give a rat's ass if you think ``It's legal, no laws were broken'' is ethical. It's getting effing old. These rates are the very reason corporations are strong-holding the direction of all US Policies.

 

Pay your goddamn share of taxes, not this tax havens for every corporation who can spread them out across the globe!

post #6 of 85
Quote:
Originally Posted by asdasd View Post

The solution here is to tax where value is added. That's hard to work out maybe for most countries but for Apple it's Cupertino.

I have to disagree with you here. If I buy an app or album from iTunes in the UK, that sale should be counted as being made in the UK, not Ireland. Apple should therefore pay any tax on that sale in the UK. I think this is the only way to stop large multinational companies avoiding their tax liabilities.
post #7 of 85
Quote:
Originally Posted by Crosslad View Post

I have to disagree with you here. If I buy an app or album from iTunes in the UK, that sale should be counted as being made in the UK, not Ireland. Apple should therefore pay any tax on that sale in the UK. I think this is the only way to stop large multinational companies avoiding their tax liabilities.

You are confusing corporate profits ( declared after expenses taxed at headquarters) with VAT. I think. In either case you are wrong. The UK has no claim on Apples revenues, it's either Ireland or the US.

BUying something does not mean you get to tax the companies profit. The UK doesn't tax Germany for BMW sales. BMW dealerships do pay VAT however bit that's because of a physical presence.

If you mean VAT on Internet services then the last thing the UK - a major seller of Internet services - should want, as it would be bankrupt.
Edited by asdasd - 1/31/14 at 3:53pm
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post #8 of 85
Quote:

I have to disagree with you here. If I buy an app or album from iTunes in the UK, that sale should be counted as being made in the UK, not Ireland. Apple should therefore pay any tax on that sale in the UK. I think this is the only way to stop large multinational companies avoiding their tax liabilities.

 

Quote:
 You are confusing corporate profits ( declared after expenses taxed at headquarters) with VAT. I think. In either case you are wrong. The UK has no claim on Apples revenues, it's either Ireland or the US.

BUying something does not mean you get to tax the companies profit. The UK doesn't tax Germany for BMW sales. BMW dealerships do pay VAT however bit that's because of a physical presence.

If you mean VAT on Internet services then the last thing the UK - a major seller of Internet services - should want, as it would be bankrupt.

 

Totally agree here.

 

VAT is paid, and it is paid locally. Apple does not dodge sales tax in any way, 20% of Apple UK face value charge is taxed.

 

Corporation tax on the other hand, should not be paid in the UK - the vast majority of the work is done in the US and Apple's shares are on the NASDAQ in the US.

 

If Apple wanted to return it's own profits from the UK to the US, it would be taxed by the US for corporation tax on the profits it brings in. If Apple paid UK corporation tax, and returned their money to the US, they would effectively pay corporation tax twice.

 

Not going to happen.

post #9 of 85
Quote:
Originally Posted by asdasd View Post


You are confusing corporate profits ( declared after expenses taxed at headquarters) with VAT. I think. In either case you are wrong. The UK has no claim on Apples revenues, it's either Ireland or the US.

There is the argument that the primary (not only, but primary) job of a government is to enable law and order within a given geographical area. This in turn enables the people to conduct their commerce (there's no such thing as peacefully trading with each other if there's no law and order - people can just knock a shopkeeper on the head and take his goods instead of paying).

 

So by creating that peaceful environment in the UK, the UK government enabled the client side of the iTunes transaction to take place from there. And taxes are a supposed to be a cut off the top of commerce to pay for the maintenance of the peaceful environment that enabled it. But the server was in the US, so they should get some too. The US and UK govt should split the taxes, as one provided the commerce-enabled environment where the client computer was and the other provided the same environment for the server (not to mention the corporate HQ where, as you said, all the magic happens).

post #10 of 85
Quote:
Originally Posted by mdriftmeyer View Post

This kind of crap just gets old:

 

http://au.ibtimes.com/articles/536731/20140131/apple-inc-aapl-australia-taxes.htm#.UuwtWT08eEI

 

 

I don't give a rat's ass if you think ``It's legal, no laws were broken'' is ethical. It's getting effing old. These rates are the very reason corporations are strong-holding the direction of all US Policies.

 

Pay your goddamn share of taxes, not this tax havens for every corporation who can spread them out across the globe!

 


They paid (AUS) of $36.4 million in tax for 2013 and had an after tax profit of $40.1 million.
Note that this is corporate tax.
They also collected/paid sales tax/VAT to the government.
post #11 of 85
Quote:
Originally Posted by ascii View Post

There is the argument that the primary (not only, but primary) job of a government is to enable law and order within a given geographical area. This in turn enables the people to conduct their commerce (there's no such thing as peacefully trading with each other if there's no law and order - people can just knock a shopkeeper on the head and take his goods instead of paying).

So by creating that peaceful environment in the UK, the UK government enabled the client side of the iTunes transaction to take place from there. And taxes are a supposed to be a cut off the top of commerce to pay for the maintenance of the peaceful environment that enabled it. But the server was in the US, so they should get some too. The US and UK govt should split the taxes, as one provided the commerce-enabled environment where the client computer was and the other provided the same environment for the server (not to mention the corporate HQ where, as you said, all the magic happens).

Well actually the server is probably in Ireland. Or holland. All the UK is providing is consumers, not roads, police or healthcare for the non existant Apple headquarters, or data center in the UK. ( I think the location of the server doesn't matter.)


Now who do you think should pay tax on

1) Economist ads served from the UK sold in the US
2) guardian ads served from the UK sold in the US
3) online sales of GTA served from a UK server sold across the world.
4) a UK app dev who sells £1m in any year.

If VAT is paid where sold the world economy would collapse. App devs would have to return VAT records to every country in the world they sell to.

( in all of these cases the IP is also from the UK).
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post #12 of 85
Quote:
Originally Posted by Crosslad View Post

I have to disagree with you here. If I buy an app or album from iTunes in the UK, that sale should be counted as being made in the UK, not Ireland. Apple should therefore pay any tax on that sale in the UK. I think this is the only way to stop large multinational companies avoiding their tax liabilities.

Well, call me ignorant, but I really thought Ireland was part of the UK. If not, then what's "united" about the term, "UK?"
post #13 of 85
Quote:
Originally Posted by Macky the Macky View Post

Well, call me ignorant, but I really thought Ireland was part of the UK. If not, then what's "united" about the term, "UK?"
.

Most of the island of Ireland is an independent nation and has been since 1921. Which is about 40% of the time since Anerican Independence.

About 20% of the area is part of the UK - which is formally the United Kingdom of Britain and Northern Ireland. That's what's united.
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post #14 of 85
I understand Cook's opening statement to the Prime Minister went something like this, "Let's discuss half your country's tax income moving to another country..."

Tea was spilled. Cups rattled in saucers.
post #15 of 85
Quote:
Originally Posted by Macky the Macky View Post

I understand Cook's opening statement to the Prime Minister went something like this, "Let's discuss half your country's tax income moving to another country..."

Tea was spilled. Cups rattled in saucers.

But they are not paying tax, anywhere.
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post #16 of 85
Quote:
Originally Posted by Macky the Macky View Post

Well, call me ignorant, but I really thought Ireland was part of the UK. If not, then what's "united" about the term, "UK?"

Wow, just wow! 1oyvey.gif
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post #17 of 85
Quote:
Originally Posted by mdriftmeyer View Post
 

This kind of crap just gets old:

 

http://au.ibtimes.com/articles/536731/20140131/apple-inc-aapl-australia-taxes.htm#.UuwtWT08eEI

 

 

I don't give a rat's ass if you think ``It's legal, no laws were broken'' is ethical. It's getting effing old. These rates are the very reason corporations are strong-holding the direction of all US Policies.

 

Pay your goddamn share of taxes, not this tax havens for every corporation who can spread them out across the globe!

 

Ho, ho, ho! Try to extort Apple and they'll only be too happy to move their operations elsewhere. And the country that gains them will be grateful.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #18 of 85
Quote:
Originally Posted by Crosslad View Post

I have to disagree with you here. If I buy an app or album from iTunes in the UK, that sale should be counted as being made in the UK, not Ireland. Apple should therefore pay any tax on that sale in the UK. I think this is the only way to stop large multinational companies avoiding their tax liabilities.

Should the App developers also have to pay UK and every other country's taxes where the App is sold out of their 70% cut, too?

Quote:
Originally Posted by mdriftmeyer View Post

This kind of crap just gets old:

http://au.ibtimes.com/articles/536731/20140131/apple-inc-aapl-australia-taxes.htm#.UuwtWT08eEI


I don't give a rat's ass if you think ``It's legal, no laws were broken'' is ethical. It's getting effing old. These rates are the very reason corporations are strong-holding the direction of all US Policies.

Pay your goddamn share of taxes, not this tax havens for every corporation who can spread them out across the globe!

Apple do, legally there are costs involved in importing tech into various countries and selling it at 6 billion gross is not taxable, the Australian government also took 10% GST on each and every one of those sales.
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post #19 of 85
Quote:
Originally Posted by asdasd View Post

The solution here is to tax where value is added. That's hard to work out maybe for most countries but for Apple it's Cupertino.

 

That's what you think, but actually Apple is licensing all of its IP from Apple Ireland. You might claim this a tax dodge, but it does stand up in the courts.

post #20 of 85
Quote:
Originally Posted by asdasd View Post


But they are not paying tax, anywhere.

 

Yes, they are. Just not as much as they could be. And what they are paying is quite considerable for a small country like Ireland.

post #21 of 85
Quote:
Originally Posted by marubeni View Post

Yes, they are. Just not as much as they could be. And what they are paying is quite considerable for a small country like Ireland.

Expert on Ireland now are we?
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post #22 of 85
Quote:
Originally Posted by asdasd View Post

But they are not paying tax, anywhere.

They are paying tax in Ireland, at an attractive rate and their 4,000 employees are also paying tax.

Apple could shut down and pull out if Ireland attempts to extort more money.

"4,000 sacked due to government action" would make a good headline.

Tea spills as politicians fall off their chairs.
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post #23 of 85
Quote:
Originally Posted by mdriftmeyer View Post
 

This kind of crap just gets old:

 

http://au.ibtimes.com/articles/536731/20140131/apple-inc-aapl-australia-taxes.htm#.UuwtWT08eEI

 

 

I don't give a rat's ass if you think ``It's legal, no laws were broken'' is ethical. It's getting effing old. These rates are the very reason corporations are strong-holding the direction of all US Policies.

 

Pay your goddamn share of taxes, not this tax havens for every corporation who can spread them out across the globe!

 

If Apple paid "its share of taxes", then it would have to raise the prices of its products to maintain the same level of after-tax income, which means that sales would go down, which means that  the companies everyone here loves to hate (Google, Samsung) would win. And before you say "well, but they would be paying higher taxes too", remember: if they do, they just pass the costs on to the consumer, but in the case of Samsung (which is, basically, Korea Inc), the government would be happy to keep their taxes low.

post #24 of 85
Quote:
Originally Posted by asdasd View Post


Expert on Ireland now are we?

 

Do you actually disagree with anything I say, or are you just having digestive problems?

post #25 of 85
Quote:
Originally Posted by hill60 View Post

They are paying tax in Ireland, at an attractive rate and their 4,000 employees are also paying tax.

Apple could shut down and pull out if Ireland attempts to extort more money.

"4,000 sacked due to government action" would make a good headline

If Ireland acts, which would only happen with changes to EU government law, then where would Apple go?
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post #26 of 85
Quote:
Originally Posted by marubeni View Post

Do you actually disagree with anything I say, or are you just having digestive problems?

No I am mocking you. Up until exactly 20 minutes ago you didn't know that Ireland wasn't in the UK, now you are an expert on its tax. I'm impressed you can type. Good typing.

EDIT: oh that wasn't you. Disregard.
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post #27 of 85
Quote:
Originally Posted by asdasd View Post


If Ireland acts, which would only happen with changes to EU government law, then where would Apple go?

 

South Africa? The Caymans? Switzerland? Russia? Do you really think no one would want to enhance their revenue?

post #28 of 85
Quote:
Originally Posted by asdasd View Post


No I am mocking you. Up until exactly 20 minutes ago you didn't know that Ireland wasn't in the UK, now you are an expert on its tax. I'm impressed you can type. Good typing.

 

Reading comprehension issues? Look back and check on who did not know Ireland was not in the UK (more precisely, whether it was me). I am afraid it is yourself you are mocking.

post #29 of 85
Quote:
Originally Posted by marubeni View Post

Reading comprehension issues? Look back and check on who did not know Ireland was not in the UK (more precisely, whether it was me). I am afraid it is yourself you are mocking.

Touché. Ok, as I have been arguing morally this money belongs to the US. I don't think Apple owes Ireland for IP and Ireland won't raise taxes. We are largely on the same page. Sorry for the mistakes.
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post #30 of 85
Quote:
Originally Posted by marubeni View Post

South Africa? The Caymans? Switzerland? Russia? Do you really think no one would want to enhance their revenue?

Any subsequent export from these countries into the EU would involve a customs tariff. If the EU forced a European wide tax do you thing every company would leave? The US corp tax is 35%.
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post #31 of 85
Quote:
Originally Posted by asdasd View Post


Touché. Ok, as I have been arguing morally this money belongs to the US. I don't think Apple owes Ireland for IP and Ireland won't raise taxes. We are largely on the same page. Sorry for the mistakes.

 

No problem :) I completely agree that the IP thing is a tax dodge, but what I am saying is that we live in a world governed by law (not the same as justice), and Apple had very qualified lawyers draw up the papers to indicate that Apple Ireland owns the IP,  which it licenses to Apple US (or whatever it is called). Similarly, for tax purposes, Apple's cash hoard is held by Braeburn capital, which is domiciled in Nevada, and hence not subject to (quite high) California taxes. A dodge? Yes, but a perfectly legal one. I believe it would be quite difficult and time consuming to change the law, which is not an argument that it should not be done, but simply an argument that Apple will not be losing any sleep (especially as, when things get serious, they have a few billion dollars to find SuperPACs with).

post #32 of 85
Quote:
Originally Posted by marubeni View Post

No problem 1smile.gif I completely agree that the IP thing is a tax dodge, but what I am saying is that we live in a world governed by law (not the same as justice), and Apple had very qualified lawyers draw up the papers to indicate that Apple Ireland owns the IP,  which it licenses to Apple US (or whatever it is called). Similarly, for tax purposes, Apple's cash hoard is held by Braeburn capital, which is domiciled in Nevada, and hence not subject to (quite high) California taxes. A dodge? Yes, but a perfectly legal one. I believe it would be quite difficult and time consuming to change the law, which is not an argument that it should not be done, but simply an argument that Apple will not be losing any sleep (especially as, when things get serious, they have a few billion dollars to find SuperPACs with).

Yes I agree that the laws won't change. Ireland won't do it unilaterally. The EU will find it impossible to agree on a number, and to plug all the loopholes, and even if they did I don't think Apple would leave the EU ( and therefore Ireland) but that's moot.

The best outcome is a tax holiday in the US - bring the money home. US senators should realise that low tax elsewhere means more potential tax in the US on any potential repatriation, because of double taxation agreements.
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post #33 of 85
Quote:
Originally Posted by marubeni View Post
 

 

You obviously are somewhat clue deficient. If Apple paid "its share of taxes", then it would have to raise the prices of its products to maintain the same level of after-tax income, which means that sales would go down, which means that  the companies everyone here loves to hate (Google, Samsung) would win. And before you say "well, but they would be paying higher taxes too", remember: if they do, they just pass the costs on to the consumer, but in the case of Samsung (which is, basically, Korea Inc), the government would be happy to keep their taxes low.

 

To drive the point a bit further: these tax scams are bad because to perpetrate them you have to have a fairly large and wealthy company, so this poses a barrier to entry for startups. On the other hand, consumers would certainly not benefit in the short term from Apple paying higher taxes.

post #34 of 85
Quote:
Originally Posted by asdasd View Post


If Ireland acts, which would only happen with changes to EU government law, then where would Apple go?

 

Join Amazon in the Caribbean.

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post #35 of 85
Quote:
Originally Posted by asdasd View Post


Any subsequent export from these countries into the EU would involve a customs tariff. If the EU forced a European wide tax do you thing every company would leave? The US corp tax is 35%.

 

A customs tariff would bring about a trade war, everything made in the EU would have equivalent tariffs applied when exported, say to the US.

 

Then there are the major EU corporations that pioneered all this tax haven stuff, Nestle, Philips the big EU based multinational drug companies.

 

There is no way in hell that the EU would do anything to cause major price increases across all their exports.

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post #36 of 85
Quote:
Originally Posted by marubeni View Post
 

 

If Apple paid "its share of taxes", then it would have to raise the prices of its products to maintain the same level of after-tax income, which means that sales would go down, which means that  the companies everyone here loves to hate (Google, Samsung) would win. And before you say "well, but they would be paying higher taxes too", remember: if they do, they just pass the costs on to the consumer, but in the case of Samsung (which is, basically, Korea Inc), the government would be happy to keep their taxes low.

 

Don't talk about mathematics and Economies of scale to me. It gets fucking old reading about how US and EU Corporations will just relocate. I'm advocating the entire G20 Summit do what it was charged to do: Fix the tax dodging at fair and reasonable rates.

 

Apple paying 0.6% in taxes is fucking pathetic.

 

When I worked at NeXT and Apple Engineering there was no fucking way we only paid so little. This hording of accounting practices comes after Fred Anderson left and Peter Oppenheimer arrived.

 

Shit, we paid $900k/month on network and communications services at NeXT before the merger. Spare me on how accounting practices work. Any Engineer worth a shit laughs at the simplicity of Finance and Accounting. It's clear the tax codes are fucked up.

 

By the way, this ``they'll pass the costs onto the consumer'' is a fucking red herring that would not pan out [pass the smell test] once the Tax Code is fixed. Tax Law would strictly forbid such egregious practices.


The real loser is the institutional investors who spend billions lobbying for this never to happen.

post #37 of 85
Quote:
Originally Posted by asdasd View Post


Well actually the server is probably in Ireland. Or holland. All the UK is providing is consumers, not roads, police or healthcare for the non existant Apple headquarters, or data center in the UK. ( I think the location of the server doesn't matter.)


Now who do you think should pay tax on

1) Economist ads served from the UK sold in the US
2) guardian ads served from the UK sold in the US
3) online sales of GTA served from a UK server sold across the world.
4) a UK app dev who sells £1m in any year.

If VAT is paid where sold the world economy would collapse. App devs would have to return VAT records to every country in the world they sell to.

( in all of these cases the IP is also from the UK).

UK pays for the health of the customers.

post #38 of 85
Quote:
Originally Posted by hill60 View Post

Join Amazon in the Caribbean.

Amazon are also hqered in Ireland.
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post #39 of 85
Quote:
Originally Posted by hill60 View Post

A customs tariff would bring about a trade war, everything made in the EU would have equivalent tariffs applied when exported, say to the US.

Then there are the major EU corporations that pioneered all this tax haven stuff, Nestle, Philips the big EU based multinational drug companies.

There is no way in hell that the EU would do anything to cause major price increases across all their exports.

The EU has tariffs already. It's not going to worry about a trade war with the Carribean. In any case most workers in Europe will stay in Europe. But I don't think the EU can normalise taxes across the EU.
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post #40 of 85
Quote:
Originally Posted by marubeni View Post

South Africa? The Caymans? Switzerland? Russia? Do you really think no one would want to enhance their revenue?

I'd think some of the new eastern members to EU would be happy to see someone like Apple move into their country. What a shot in the arm it would be for them!
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