or Connect
AppleInsider › Forums › General › General Discussion › In-depth report finds Apple moved $8B in untaxed profits out of Australia over past decade
New Posts  All Forums:Forum Nav:

In-depth report finds Apple moved $8B in untaxed profits out of Australia over past decade - Page 2

post #41 of 188

Perfectly legal.   Shouldn't be.  Offshoring has been around and has stunk since long before Apple made it out of the minor leagues.  Somehow it never got addressed because the largest offenders always seemed to be the 'big oil' companies who people somehow expect to be evil.  The issue never really gained a lot of attention, and lawmakers are always happy to turn a blind eye for a PAC contribution.

 

When Exxon Mobil was in front they were getting the heat for it.  Apple fans didn't notice, mostly because Exxon isn't Apple.  Now Apple is the biggest offender and they get the heat.

 

Apple hasn't done anything wrong, but hopefully enough attention gets drawn to the issue that our politicians fix it.  And by fix it I mean fix the laws, not hold hearings pretending it is the evil corporations fault for legally maximizing profits.

 

Ireland obviously benefits tremendously from this.  US corporations, and others, get all the benefits of being US based.  They use our roads, our people, are defended by our military, and benefit tremendously from higher education system.  When they have an international trade dispute, they clog and congest the US court system, not the Irish one, with appeal after appeal.  All those things cost money, and US taxpayers (and I'm sure Aussies, Brits, Germans etc respectively) it stinks when  some of the entities benefitting the most from them are percentage wise paying the least.


Edited by Frood - 3/6/14 at 4:17am
post #42 of 188
Quote:
Originally Posted by GTR View Post

Another one of those beautiful ironic examples that we find in life, where one individual's selfishness benefits the many.

For another example, see 'Steve Jobs'.

And no doubt many others.

Self-interest is the core of human existence. This is not a 'temporary condition' or a 'one time thing' or limited to class, race or position... It describes every human being that has or ever will exist!

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #43 of 188
Quote:
Originally Posted by hmm View Post


How would you account for inventory under such a system? Many companies would have to massively rethink distribution, yet under your suggestion they wouldn't be able to write off those costs. This is a problem with scrapping everything and starting over, not to mention the conceptual problems with your entire theory Mr. Economist. You also ignore why the article was published. If they use a big brand like Apple, it gets attention. Apple is incredible at managing PR and attracting media attention, so some of that that will be negative. The net effect of such attention remains in their favor.

  Quote:

Much of the time the issue comes down to how profits are calculated. If allowed companies will mess with transfer pricing so that it appears they made nothing.

I've no idea to what your comment or criticism specifically refers.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #44 of 188
Quote:
Originally Posted by GTR View Post

I also believe that a single company should not be held responsible for providing the entire R&D of the world, nor it's income either. That's something that should be shared among many.

Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
Quote:
Originally Posted by asdasd 
companies are taxed where they are based not where they sell.

They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.

Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
Quote:
Originally Posted by Entropys 
The journo who wrote this, Chenoworth, has form. He is clearly of the school of thought that all your money belongs to the government and whatever it leaves you you should be grateful.
I agree with Kerry Packer. You should pay as little tax as possible as the government will never spend Other Peoples' Money as well as the Other People that earnt it.

In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.

Paying as little tax as possible doesn't take away what needs to be paid for. How are you going to support yourself once you retire? If you live for 30 years of retirement and have paid off your house and manage to get by on $10k per year (including medical bills), that's still $300k. If you don't plan to retire with that in the bank then that support comes from taxes on the working class. What if you lose your eyesight? Tim Cook made sure that you'll be able to use an iPhone but you won't be able to buy one because that support comes from taxes.

If people think taxes are too high then tackle the cause of them and not the effect of them. The cause is that there are too many old people, too many unemployed, too many kids and too many nutjobs wanting to kill you.
Quote:
Quote:
Good old Kerry, when he survived a heart attack he equipped all the ambulances in NSW with defibrillators.

Another one of those beautiful ironic examples that we find in life, where one individual's selfishness benefits the many.

If he'd paid taxes in the first place, maybe there would have been defibrillators in there already. That's why there is such a thing as a governing body that doesn't operate on its own self-interest. It's designed to work in the best interests of the entire population.

It's inefficient and costs too much as a result and it encourages entitlements but it's necessary and there's not a better option. People think there's a better option by making most things private but that's how it was in the past and it creates a class system that spans generations. It restricts opportunity to the offspring of parents who can afford it.
Quote:
Originally Posted by ascii 
I think those health care costs would be a lot lower if the sellers of health care goods and services knew they were selling to individuals and not the government.

You don't have to guess at it:

http://www.theguardian.com/commentisfree/2013/nov/25/america-canada-freedom-of-choice-public-healthcare

The US drug prices are the result of the supposed free market utopia. They aren't cheaper because they monopolise the supply.
post #45 of 188
But they don't send it to the caymans do they.
post #46 of 188
Quote:
Originally Posted by Marvin View Post

Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.

Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.

Paying as little tax as possible doesn't take away what needs to be paid for. How are you going to support yourself once you retire? If you live for 30 years of retirement and have paid off your house and manage to get by on $10k per year (including medical bills), that's still $300k. If you don't plan to retire with that in the bank then that support comes from taxes on the working class. What if you lose your eyesight? Tim Cook made sure that you'll be able to use an iPhone but you won't be able to buy one because that support comes from taxes.

If people think taxes are too high then tackle the cause of them and not the effect of them. The cause is that there are too many old people, too many unemployed, too many kids and too many nutjobs wanting to kill you.
If he'd paid taxes in the first place, maybe there would have been defibrillators in there already. That's why there is such a thing as a governing body that doesn't operate on its own self-interest. It's designed to work in the best interests of the entire population.

It's inefficient and costs too much as a result and it encourages entitlements but it's necessary and there's not a better option. People think there's a better option by making most things private but that's how it was in the past and it creates a class system that spans generations. It restricts opportunity to the offspring of parents who can afford it.
You don't have to guess at it:

http://www.theguardian.com/commentisfree/2013/nov/25/america-canada-freedom-of-choice-public-healthcare

The US drug prices are the result of the supposed free market utopia. They aren't cheaper because they monopolise the supply.

I'm sorry, but we're going to have to agree to disagree.

I see the government as a ship with a rather large hole in the bottom and I don't think Apple paying everybody to row in the same direction will quite cut the mustard.

1wink.gif

Bring on tax reform!
The recent false claim that iCloud was hacked has shaken my ability to trust those people who would steal my photos and post them online without my permission...
Reply
The recent false claim that iCloud was hacked has shaken my ability to trust those people who would steal my photos and post them online without my permission...
Reply
post #47 of 188
Quote:
Originally Posted by pauldfullerton View Post

I have absolutely no reason to believe that Apple did anything illegal in Australia, but what it has done is certainly not ethical. Nor is it good business practice because it risks a consumer and government backlash in many countries, particularly Australia. And Apple really doesn't need to take that sort of risk with its brand.

Apple would be wise to admit that these taxation policies are unethical, and make very significant payments to countries that have been 'diddled' out of taxation revenue by transfer pricing practices. It would be interesting to see how Google and Microsoft responded to this.

And then Apple would get get sued by its' shareholders for making these voluntary yet 'illegal' payments as it would be a breech of the corporation's fiduciary responsibilities to its' shareholders.

"A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools." Douglas Adams

Reply

"A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools." Douglas Adams

Reply
post #48 of 188
Marvin, your ongoing defense of nearly everything 'the government' floats as good and/or necessary I personally find disturbing.

With the many important revelations from Snowden, that even one person could think our tax dollars are not being misspent and used inappropriately at every level of government I find shocking and willfully ignorant of the deep corruption of unchecked power.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #49 of 188
Quote:
Originally Posted by GTR View Post

I'm sorry, but we're going to have to agree to disagree.

I see the government as a ship with a rather large hole in the bottom and I don't think Apple paying everybody to row in the same direction will quite cut the mustard.

1wink.gif

Bring on tax reform!

At the bare minimum, I'm pushing for a flat tax, elimination of write-offs and the shutdown of the IRS. I'm not asking for much, really. 1smile.gif

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #50 of 188
Quote:
Originally Posted by Realistic View Post

And then Apple would get get sued by its' shareholders for making these voluntary yet 'illegal' payments as it would be a breech of the corporation's fiduciary responsibilities to its' shareholders.

I keep seeing these "breach of fiduciary responsibility" comments. Bogus IMO. Didn't Tim Cook just go off an a group of investors who didn't think Apple should be spending money on environmental issues that decreased net profits??

As an example one of Apple's competitors "wastes" money on lots of public programs that cost the company yet don't contribute a penny to revenues. No investors are suing them for "breach of duty" that I'm aware of, and even if they did do you really think Google would change what they've done since they incorporated.

Heck, Apple donates products, makes various monetary contributions, offers scholarships, etc and doesn't get sued for giving away investors money. IMO that "breach of duty" claim simply serves as FUD to avoid serious discussion of corporate tax policy. Who do you think takes up the slack when some of the wealthiest companies (and people) on the planet get to hold on to all but 50 cents of every $1000 in profit. You and me sir, and I'm getting quite irritated by it. Shocked if you aren't too.
melior diabolus quem scies
Reply
melior diabolus quem scies
Reply
post #51 of 188
Some good comments here. It's clear Apple is doing what all corporations do, and all smart people do: minimize tax liability. I mean, is anyone honestly shocked or even mildly disappointed here? Apple's responsibility is to its SHAREHOLDERS. Paying more tax is not in the interest of its shareholders, whereas paying less tax (as long as its legal) definitely IS. As macaholic_1948 said...change the law if you don't like it.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #52 of 188
Quote:
Originally Posted by lilgto64 View Post

The "spirit of the law" when spoken by a politicians to me sounds like "we'll grab every last cent we can get away with" 


It may be well know that all corporations do what they can to minimized expenses across the board, not just "tax burden" (ever wonder why the word burden is used?) but I must be traveling in the wrong circles because I have never before seen the phrase "Double Irish with a Dutch Sandwich" before and had someone asked me what that phrase meant corporate tax law would likely have been my first thought.

Odd that you never hear any of these stories about prosecuting companies who followed exactly the same practices but who do NOT have billions of dollars in the bank. It sounds more like the stories of folks who win the lottery who then have every one and their cousin asking them for money or to invest or loan etc etc. Apple's, or any corporation's, SEC filing that lists a cash in the bank value should not be seen as an invitation to governments and others to try to take it away through lawsuits. 

I remember going over the Double Irish in business school. This was years ago. Apple was mentioned.

This isn't a new thing. Ignoring ethics, it's also pretty brilliant from a business standpoint. No comment on those ethics, mind you.
post #53 of 188
I cannot see how creating empty companies with huge bank accounts rhymes with abiding to the spirit of the law.

As an aside, has any major development on the OS's ever been performed in Ireland?
post #54 of 188
Quote:
Originally Posted by Marvin View Post


Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.

Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.
 

 

Its the caterwauling from Australia which makes no sense. Also, and most people get this wrong, if Apple were taxed in Ireland then the US would not - given double taxation agreements - be due any money at all, or much less. As it now stands, the US is owed 35% if money is repatriated, if Ireland charges it 12.5% the US is owned much less ( and Ireland gets a bonanza).

I wanted dsadsa bit it was taken.
Reply
I wanted dsadsa bit it was taken.
Reply
post #55 of 188
Quote:
Originally Posted by Blitz1 View Post

I cannot see how creating empty companies with huge bank accounts rhymes with abiding to the spirit of the law.

As an aside, has any major development on the OS's ever been performed in Ireland?

 

Some, back in the day. Cork was mainly a manufacturing centre though.

I wanted dsadsa bit it was taken.
Reply
I wanted dsadsa bit it was taken.
Reply
post #56 of 188
Quote:
Originally Posted by aussiepaul View Post

Tim Cook said that he complies with the "spirit" of the law.
These practices don't sound very ethical to me, especially considering it's only large corporations who can afford to set up these mazes.
I hope ASIC and the ATO change the reporting and taxation requirements to clamp down on this, not just for Apple of course.

Economies of Scale:  Do you say the same things when large corporations (intel) make chips for pennies and sell them to you for dollars, and small fabs make them for dollars and sell them for $10's of dollars, because only the scale of Intel can get the production price down.

 

corporate ethics is quite simple:  make the largest  profit for the least amount of work(ing capital), and follow enough rules so you don't go to jail.   There is nothing wrong with reading the rules, engineering a solution that maximizes held profit, putting a pot of money aside for fines and lawyer's fees (Risk Management) and making it happen.

 

The ethical issue is in gov't.  not in corporations.  and in fact, it's the global economy that makes this tax arbitrage happen.   The tax code in the US would be real simple if they built an ethical tax structure, and if every country did the same, and effectively made the foreign tax tariff reasonable (Ireland was set up to drive commerce and industry into their country... it was supposed to drive jobs there, but the fine print just said 'bring your money here, and if you profit (assume after paying 1000's of jobs and payroll taxes), keep your profits if you send it to a trading partner country'.   The flaw in that model is the information and sales industries, which basically set up shell corps... 'make a profit,' pay 10's of people banking wages, and offshore the bounty.   

 

And the problem is... This year it's Ireland and Singapore, and if they change their laws next year it will be Fiji and Morocco.   Corporations will find the best suppliers in their money supply chain.

 

And if it all does get taxed at local market rates... those markets will have a higher priced product.   The last thing Apple/Google/Monsanto/GE/Oracle will do is take less substantially less net profit.

 

Small corporations can do it too, it's that latter part (don't go to jail) that makes it harder to achieve.   I've known people who off shored income in similar ways, and the 'Patriot Act' (more like the 'we have a private judge who let's us bypass your constitutional rights') was used by the DoT/IRS/DoJ who said, 'we followed the money, while it appears tax legal, it 'could be' a conspiracy to fund terrorism, and because you don't have friends who pay friends who 'lobby' in Congress, We're taking your offshore profits as tax and penalty, and we've already frozen those assets in those countries, and turned off your passport.   The 2 I knew didn't have the legal staff, or the 'onshore' funding buffer to hire legal staff, and had to walk away from those funds.   Probably paid for some lobbyist's buddy's micrometer Xray mating sold to the TSA.

post #57 of 188
I want to let everyone know that is commenting for Australia to "Suck it" and change our laws if we don't like Apple dodging taxes here - WHAT THEY DID IS ILLEGAL UNDER AUSTRALIAN LAW!!!!! In Australia it is illegal to use transfer pricing to move profits from an Australian subsidiary to an offshore enterprise where it is evident the transfer was intended to dodge taxes.

The Australian government (my government) will pursue Apple for this money and there is a very good chance that Apple may have to fork out a multi billion dollar settlement to cover the matter. That money will be used to pay for roads, schools, healthcare and education.. Something Apple should be proud to contribute to.
post #58 of 188
Quote:
Originally Posted by GTR View Post

I see the government as a ship with a rather large hole in the bottom and I don't think Apple paying everybody to row in the same direction will quite cut the mustard.

Ok but is avoiding paying going to fix the problem or make it worse? Will the government being unable to afford to support the elderly, disabled, children, unemployed and so on improve anything?
Quote:
Originally Posted by SpamSandwich 
Marvin, your ongoing defense of nearly everything 'the government' floats as good and/or necessary I personally find disturbing.

I find most anti-government rhetoric to be dishonest and hypocritical. People repeatedly laud the free market system as if it's the solution to everything even after witnessing as many catastrophes to suggest otherwise. The hypocrisy comes from the fact that everyone here has most likely gone through a state-funded education and now uses this education to argue against government spending. Most will look forward to a government supported retirement and will currently rely on state-provided law enforcement and transport infrastructure.

This dogma that government needs to go and taxation should be as close to zero as possible just doesn't hold up to reality.

I don't condone how government spends its funds at all, I just think people should be honest about how much they rely on it. They shake their right fist in condemnation and hold out their left hand for support.
Quote:
Originally Posted by SpamSandwich 
With the many important revelations from Snowden, that even one person could think our tax dollars are not being misspent and used inappropriately at every level of government I find shocking and willfully ignorant of the deep corruption of unchecked power.

What does transparency have to do with cost? Nobody knew what Enron or Lehman was up to either. You can see the breakdown of tax spending and most of it goes to things that are nothing to do with spying:

http://www.usfederalbudget.us/federal_budget_estimate_vs_actual_2013
http://www.theinquirer.net/inquirer/news/2291739/snowden-leaks-cia-and-nsa-black-budget

The entire budget is $3.5 trillion, the spying appears to be in the tens of billions. They aren't going to shut down the intelligence agencies because a few people decide not to pay their taxes.
Quote:
Originally Posted by SpamSandwich 
I'm pushing for a flat tax, elimination of write-offs and the shutdown of the IRS

So you want to eliminate the organisation that checks tax returns while maintaining some form of taxation. Before you suggest this tax checking duty can be performed by a private company, who would check their tax returns and that they aren't being bribed?
Quote:
Originally Posted by SDW2001 
Paying more tax is not in the interest of its shareholders

Starbucks decided to change their mind when they saw the reaction from customers over their taxes. Amazon kind of gets a free pass because they don't make enough profit anyway. I don't think Apple will suffer much backlash over it because all their competition does the same thing but it doesn't do much good for their brand. Brand perception is important for the shareholders too over the long term.
Quote:
Originally Posted by asdasd 
Its the caterwauling from Australia which makes no sense

It might be because they have a subsidiary to manage the operations in Australia:

http://www.yellowpages.com.au/nsw/sydney/apple-pty-ltd-13387772-listing.html

That would likely be taxed in Australia but they do their transfer pricing to Ireland so it reports the income made by the Australian subsidiary to be far lower than it really is.
post #59 of 188
Quote:
Originally Posted by asdasd View Post

This report and most of the comments are spurious.

1) companies don't owe tax on revenue you owe it on profits.
2) companies are taxed where they are based not where they sell.

A company like Apple has subsidiaries all over the world for practical reasons and to comply with laws in local countries. Apple operates in Australia and has entities incorporated in Australia and it is these entities that trade here, are taxed here and are operating in contravention of the law by dodging taxes through transfer pricing to move money into tax havens.

Apply also collects and pays sales tax in Australia and operates under an Australia ABN (Australian Business Number)... Required for it to operate here.

If you haven't been to Australia and have no first hand knowledge of how Apple operates here how did you think you would be able to make an informed post?
post #60 of 188
Quote:
Originally Posted by jd_in_sb View Post

An alternate title for this story might be "Australia law allows companies to legally avoid paying taxes." That is more to the point.

You are wrong. Australia has laws against tax evasion - in particular it prohibits using transfer pricing arrangement to shift profit overseas. Make no mistake - Apple has broken the law and will be pursued by the Australian government.

The government may not be particularly quick at finding and correcting tax fraud but that does not mean that it was not tax fraud (and illegal) in the first place.
post #61 of 188
You
Quote:
Originally Posted by Frood View Post

Perfectly legal.   Shouldn't be.  Offshoring has been around and has stunk since long before Apple made it out of the minor leagues.  Somehow it never got addressed because the largest offenders always seemed to be the 'big oil' companies who people somehow expect to be evil.  The issue never really gained a lot of attention, and lawmakers are always happy to turn a blind eye for a PAC contribution.

When Exxon Mobil was in front they were getting the heat for it.  Apple fans didn't notice, mostly because Exxon isn't Apple.  Now Apple is the biggest offender and they get the heat.

Apple hasn't done anything wrong, but hopefully enough attention gets drawn to the issue that our politicians fix it.  And by fix it I mean fix the laws, not hold hearings pretending it is the evil corporations fault for legally maximizing profits.

Ireland obviously benefits tremendously from this.  US corporations, and others, get all the benefits of being US based.  They use our roads, our people, are defended by our military, and benefit tremendously from higher education system.  When they have an international trade dispute, they clog and congest the US court system, not the Irish one, with appeal after appeal.  All those things cost money, and US taxpayers (and I'm sure Aussies, Brits, Germans etc respectively) it stinks when  some of the entities benefitting the most from them are percentage wise paying the least.

You say it is legal. It is not. Please do some research into Australia taxation law (which you are obviously unfamiliar with) before posting.
post #62 of 188
Quote:
Originally Posted by macaholic_1948 View Post

When ethics and law are at cross purposes, one must follow the law. That is good corporate governance. It is a fiduciary responsibility that must be met. It is ethical behavior. And, most importantly, it supports the rule of law. If you don't like that ethics and the law are at odds, change the law to suit your ethical purpose. If you can't do that, accept that others' views of what is ethical are at odds with yours. If that is still unsettling, either change your ethical values or work to change others'.


Sorry I have to correct you. Under Australian law (tested in the courts) fiduciary duty (to shareholders) is not considered preeminent over common ethics and the good of society. If a business can be shown to have acted within the law, but with the intended PURPOSE of contravening the SPIRIT of the law than they may still be found guilty of the crime. The cases may be quiet challenging to prosecute but there is precedent in Australia and our laws are cleverly written to this effect. What you say may be true under US law but respectfully is incorrect under Australian law which you are obviously unfamiliar. It is a contravention of Australian law to knowingly circumvent the spirit of the law for the benefit of shareholders - let's be very clear about that.
post #63 of 188
Quote:
Originally Posted by lghulm View Post

Sorry I have to correct you. Under Australian law (tested in the courts) fiduciary duty (to shareholders) is not considered preeminent over common ethics and the good of society. If a business can be shown to have acted within the law, but with the intended PURPOSE of contravening the SPIRIT of the law than they may still be found guilty of the crime. The cases may be quiet challenging to prosecute but there is precedent in Australia and our laws are cleverly written to this effect. What you say may be true under US law but respectfully is incorrect under Australian law which you are obviously unfamiliar. It is a contravention of Australian law to knowingly circumvent the spirit of the law for the benefit of shareholders - let's be very clear about that.
In my opinion, you would be hard pressed to show that following the tax law to the letter is unethical. But, that is really not totally material to the discussion.

Apple is a multinational company. They have investors in multiple jurisdictions. Their fiduciary responsibility is defined in the larger sense by the locations within which they are incorporated, the locations wherein they are headquartered for primary taxing purposes, and to a smaller extent by the locations from within which their investors legally purchased shares and the locations within which they physically conduct business. (Operations conducted between the various business arms of a multinational corporation are complex. That is one of the reasons that multi-nationals use multiple incorporated entities to conduct business across national boundaries. There are costs and benefits to doing so. The taxation issue is one of them.)

In other words, your point has less impact on Apple than you might think. Apple is bound to follow written Australian law for business conducted in Australia. However, their ethical considerations extend far beyond Australia. While their may be precedent for your position, whether or not it should or even would apply to Apple in this situation is up to Australian courts to decide... Not for you to pronounce as fact.

Your statements as to the impact on Apple are opinion. As opinion, they do not make my opinions wrong.

As for the court ruling you indicate, I sincerely hope you are wrong. People should not be required to guess what is and is not legal. That is the true impact of what you suggest. Nor should they be subject to the whims and vagaries of ethical opinion laid down by individuals at a trial by jury.

As for common ethics, paying taxes according to the law would be the common ethical standard I would think. As to common good, that would be swayed by opinion and is one which will always be tilted against minorities and fictional persons. That is not fair to all in equal measure and a quite good case could be made that it is not ethical.
Edited by macaholic_1948 - 3/6/14 at 8:05am
post #64 of 188
So they followed the laws that let them do this. Not avoided taxes illegally like the lede implies.

Yes this shows that the laws need to be changed. But if you look at other companies they likely do the same thing to equally great amounts. Not just Apple. So let's see an unbiased review in the proper context of convincing the Australian government why they need to change the laws to keep at least some of that tax money local.

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply
post #65 of 188
Quote:
Originally Posted by Lerxt View Post

Haha. I have this feeling Apple will be paying a lot more tax in Australia in the future.

Australia needs Apple a lot more than Apple needs Australia.  They could pull out completely and their bottom line would not even hiccup - they are that big.

 

$8,000,000,000.00 might sound like a lot of money, but that is over 10 years.  Apple makes that much elsewhere in minutes.  Who cares about Australia?  They had better watch out or Apple will just cut them off.

post #66 of 188
Quote:
Originally Posted by AppleInsider View Post

 From there, Apple's still untaxed profit can be sent to the Caribbean or Cayman Islands.

According to this document:

 

http://www.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf   

 

"Apple does not hold money on a Caribbean island, does not have a bank account in the Cayman Islands, ... "

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #67 of 188
Originally Posted by lghulm View Post
WHAT THEY DID IS ILLEGAL UNDER AUSTRALIAN LAW!!!!! 

 

Nope. Not at all.

 
…evident the transfer was intended to dodge taxes.

 

Except that wasn’t the case.

 
The Australian government (my government) will pursue Apple for this money and there is a very good chance that Apple may have to fork out a multi billion dollar settlement to cover the matter.

 

Good luck¡

 
That money will be used to pay for roads, schools, healthcare and education.

 

Nah.

post #68 of 188
Quote:
Originally Posted by ascii View Post

 given the tendency of producers to sell at whatever price the market will bear, what will happen to prices in any market the government enters? They have the most money of any organisation, due to taking up to 40% of everyone's income in taxes. So I think those health care costs would be a lot lower if the sellers of health care goods and services knew they were selling to individuals and not the government.

Yes!  Because so many fewer could afford it, demand for health care would fall sharply, so they would have to lower prices!  And likely, population levels would fall too, further reducing demand and thereby further reducing prices.

 

Why don't we do this?

post #69 of 188
I have no issue with a company taking advantage of every tax loophole that governments allow. It is no different from an individual taking advantage of every tax deduction he/she is entitled to under the law. If they are (company or person) break the law, than that is a different situation.

It seems funny though that the media brings up Apple as the primary target here and Google and Microsoft as an afterthought. I doubt these are the only major players in the field.

How about reporting on this kind of stuff when it becomes illegal?
post #70 of 188
Quote:
Originally Posted by Realistic View Post
 
 this.

And then Apple would get get sued by its' shareholders for making these voluntary yet 'illegal' payments as it would be a breech of the corporation's fiduciary responsibilities to its' shareholders.

Not if the PR value exceeded the expense.  Why do you think Apple installs so much renewable energy?  Because it is the cheapest way to power stuff?  People LIKE "green" companies and buy their stuff.  Being green is a path to increased profits, despite the small extra costs.  

 

So too giving money to charity, like sponsoring big music festivals.  So too (maybe) paying a fair amount of income tax.  

 

But it seems obvious that Apple does not think that paying a fair amount of income tax would yield profits in excess of the expense.  So they don't do it.  Tim knows exactly how this stuff works, believe me...

post #71 of 188
Quote:
Originally Posted by lghulm View Post


You are wrong. Australia has laws against tax evasion - in particular it prohibits using transfer pricing arrangement to shift profit overseas. Make no mistake - Apple has broken the law and will be pursued by the Australian government.

The government may not be particularly quick at finding and correcting tax fraud but that does not mean that it was not tax fraud (and illegal) in the first place.

 


 There is no “transfer pricing” here. Transfer pricing would mean that the actually work, or IP, in creating an iPad happened in Australis and was transferred to Ireland or the US. Thats not what happened. Australians bought iPads, and the profits on those sales were declared where they always were declared, that is where the headquarters are. There is a problem in Irish law, but there is ABSOLUTELY NO WAY THAT AUSTRALIA IS OWED ANY PROFIT ON MARGINS OF IPADS AUSTRALIANS ARE BUYING. Australia already gets taxes on sales ( sales tax) and on retail profiles in the stores. Thats all Australia will ever get even if Ireland charges Apple 35% of tax.

I wanted dsadsa bit it was taken.
Reply
I wanted dsadsa bit it was taken.
Reply
post #72 of 188
Quote:
Originally Posted by lghulm View Post


If a business can be shown to have acted within the law, but with the intended PURPOSE of contravening the SPIRIT of the law than they may still be found guilty of the crime. The cases may be quiet challenging to prosecute but there is precedent in Australia and our laws are cleverly written to this effect. What you say may be true under US law but respectfully is incorrect under Australian law which you are obviously unfamiliar.

Let me get this straight:

Australia has "cleverly written" laws  that find parties "guilty of the crime" even if it is shown that they "acted within the law".

 

Unless Australia has access to three pre-cogs hooked up in a pool somewhere I have a hard time believing in your interpretation of Australian law.  :-)

post #73 of 188
This article is just another red herring that uses Apple's name to draw attention to itself. You could substitute "Apple" with any one of hundreds or more similarly involved companies and it would not change the relevant facts one iota. Do we really want to argue tax law on a technology site? Talk about mind numbing blather.

Just another case of lazy journalism. Wallpapering Apple logos on pig does not change the fact that it's still a pig.
post #74 of 188
Quote:
Originally Posted by charlituna View Post

So they followed the laws that let them do this. Not avoided taxes illegally like the lede implies.

The laws didn't encourage them to do it. Their intent was to avoid taxes and used the law as a measure of how much they could get away with. The law doesn't stop you from sniffing people's seats:

http://www.telegraph.co.uk/news/newstopics/howaboutthat/1906799/I-did-sniff-colleagues-chair-admits-politician.html

It doesn't mean the law encourages you to go around doing it nor should people be congratulated when they do it.
Quote:
Originally Posted by Masteric 
It is no different from an individual taking advantage of every tax deduction he/she is entitled to under the law.

A closer phrase would be that it's no different from an individual billionaire taking advantage of every tax deduction. It is different from a deduction though, deductions are explicit incentives for growth. There is no explicit deduction being used here, Apple used the law against its intent.
Quote:
Originally Posted by asdasd 
There is no “transfer pricing” here. Transfer pricing would mean that the actually work, or IP, in creating an iPad happened in Australis and was transferred to Ireland or the US. Thats not what happened. Australians bought iPads, and the profits on those sales were declared where they always were declared, that is where the headquarters are.

http://www.afr.com/p/technology/cracking_the_apple_tax_code_CvOq1Ut248VX6QkybMcfCP

"ASI (Apple Sales International, Ireland) purchased the finished goods from the manufacturer in China and then resold them to an Apple retail store in Australia, with ASI taking ownership of the products while in transit to Australia, then reselling them at a substantial profit to the Apple retail entity upon arrival.

In 2009 ASI’s accounts filed with ASIC show it paid $US7.5 billion ($8.4 billion) to Chinese manufacturers who build Apple’s products, before turning around to resell these products to Apple subsidiaries in Australia and other countries for $US12.3 billion. ASI pocketed the $US4.8 billion price mark-up as its gross operating profit, which is its gross margin."

Apple Australia is incorporated in Australia so they would be due taxes on profits they make in Australia. What they do is buy marked up products from Apple's Irish subsidiary so it looks like their costs are higher than they are. Apple's Irish subsidiary is then liable for the tax on the profit made by selling to their Australian subsidiary. However, their Irish subsidiary has no tax residency.
post #75 of 188
Quote:
Originally Posted by SudoNym View Post
 

Australia needs Apple a lot more than Apple needs Australia.  They could pull out completely and their bottom line would not even hiccup - they are that big.

 

$8,000,000,000.00 might sound like a lot of money, but that is over 10 years.  Apple makes that much elsewhere in minutes.  Who cares about Australia?  They had better watch out or Apple will just cut them off.

 

It's obvious that you're trying to represent an arguably silly viewpoint that you don't personally support.

post #76 of 188
Quote:
Originally Posted by asdasd View Post

This report and most of the comments are spurious.

1) companies don't owe tax on revenue you owe it on profits.
2) companies are taxed where they are based not where they sell.

No.
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
Reply
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
Reply
post #77 of 188
Quote:
Originally Posted by GTR View Post

Another one of those beautiful ironic examples that we find in life, where one individual's selfishness benefits the many.

For another example, see 'Steve Jobs'.

And no doubt many others.

The Kerry citation is not an example of selfishness.
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
Reply
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
Reply
post #78 of 188
Quote:
Originally Posted by Benjamin Frost View Post

The Kerry citation is not an example of selfishness.

I agree.

The selfishness comment was in reference to his heart attack.
The recent false claim that iCloud was hacked has shaken my ability to trust those people who would steal my photos and post them online without my permission...
Reply
The recent false claim that iCloud was hacked has shaken my ability to trust those people who would steal my photos and post them online without my permission...
Reply
post #79 of 188
Quote:
Originally Posted by Frood View Post

Perfectly legal.   Shouldn't be.  Offshoring has been around and has stunk since long before Apple made it out of the minor leagues.  Somehow it never got addressed because the largest offenders always seemed to be the 'big oil' companies who people somehow expect to be evil.  The issue never really gained a lot of attention, and lawmakers are always happy to turn a blind eye for a PAC contribution.

When Exxon Mobil was in front they were getting the heat for it.  Apple fans didn't notice, mostly because Exxon isn't Apple.  Now Apple is the biggest offender and they get the heat.

Apple hasn't done anything wrong, but hopefully enough attention gets drawn to the issue that our politicians fix it.  And by fix it I mean fix the laws, not hold hearings pretending it is the evil corporations fault for legally maximizing profits.

Ireland obviously benefits tremendously from this.  US corporations, and others, get all the benefits of being US based.  They use our roads, our people, are defended by our military, and benefit tremendously from higher education system.  When they have an international trade dispute, they clog and congest the US court system, not the Irish one, with appeal after appeal.  All those things cost money, and US taxpayers (and I'm sure Aussies, Brits, Germans etc respectively) it stinks when  some of the entities benefitting the most from them are percentage wise paying the least.

I disagree. Apple are largely taking advantage of the EU. If Europe consisted of politically and economically independent countries, then Apple would be obliged to pay whatever tax those countries set. But because the EU treats many European countries as one state, Apple can take advantage of this.
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
Reply
"If the young are not initiated into the village, they will burn it down just to feel its warmth."
- African proverb
Reply
post #80 of 188
Quote:
Originally Posted by Benjamin Frost View Post


I disagree. Apple are largely taking advantage of the EU. If Europe consisted of politically and economically independent countries, then Apple would be obliged to pay whatever tax those countries set. But because the EU treats many European countries as one state, Apple can take advantage of this.


Corporations all do that. It may be problematic and grant the largest businesses an unfair advantage, but it needs to be dealt with via updated laws. As Frood pointed out, Apple just happens to be big enough to attract attention. I would add that Apple clamors for press attention, so it happens to include negative attention when they engage in something that should be admonished.

New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › In-depth report finds Apple moved $8B in untaxed profits out of Australia over past decade