Apple faces scrutiny again after paying no 2012 corporate taxes in UK

Posted:
in General Discussion edited January 2014
Apple may once again come under the spotlight over taxes, as the iPhone maker's latest filings reveal that it paid no corporate taxes in the United Kingdom last year, despite having pulled in billions of dollars from its European operations.

ireland
Headquarters of Apple Sales International in Ireland, which handles most of Apple's overseas revenue.


Deductions from share awards to employees essentially negated Apple's corporate tax liabilities in the UK through September of last year, The Financial Times reported this week. Apple's U.K. subsidiaries ? Apple (U.K.), Apple Europe, and Apple Retail U.K. ? reported pre-tax profits of ?68 million in the year through September 2012, with some ?27.7 million in taxes deducted due to

Apple's sales in the United Kingdom accounted for less than 10 percent of its overall sales.

The California based company's European operations pulled in $36.3 billion in net sales to European customers in 2012. Of that, Apple reported that $15 billion was operating profit.

Those European sales, along with Apple's other international operations, make up nearly two-thirds of the company's revenue. Much of that revenue is routed through Apple Sales International, an Irish subsidiary that ? due to Ireland's tax structure ? is not listed as a tax resident anywhere. That status allows Apple to pay just 0.05 percent in taxes in Ireland, a rate that contributes greatly to the company's massive profitability.

Apple has recently come under fire in the U.S. and abroad for what many have called tax avoidance. Most recently, Apple chief Tim Cook and a number of other Apple executives were called to testify before a Senate subcommittee to defend the low tax rate Apple pays on its overseas earnings. Cook maintained that Apple had done nothing wrong.

"We pay all of the taxes we owe," Cook said, "every single dollar. We not only comply with the laws, but we comply with the spirit of the laws."

The new U.K. tax revelation is not the first time Apple has garnered scrutiny due to its tax practices in that country. Last year, a British report found that basing its operations out of Ireland allows Apple to pay about half the U.K, taxes it would otherwise. A similar report from Spain's El Pa?s showed that Apple had routed 99 percent of its Spanish sales through its Irish subsidiary. That allowed Apple to pay about 2.6 million euros in taxes for the yeari in Spain, even though sales at Spanish Apple Stores were up 86 percent.
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Comments

  • Reply 1 of 95
    MacProMacPro Posts: 18,249member
    I hope the UK powers that be are checking into Google, Microsoft, etc. etc. etc .... :no:
  • Reply 2 of 95
    rob53rob53 Posts: 2,032member


    So Apple paid employees using stock awards to offset taxes. Sounds like good financial planning to me. It puts money in the hands of the people who sold Apple products instead of in the hands of greedy politicians. Of course, this type of income also requires the recipient to pay income taxes so Apple is simply passing on the tax liability to its employees. If this is legally allowed, then why are we complaining about it?

  • Reply 3 of 95
    sflocalsflocal Posts: 4,622member


    Waiting for the liberal freetards to come out of the woodwork and whine about Apple (but not Google, Microsoft, Intel, etc..) not paying any taxes that they legally did not have to pay, and fully approved by the government in which the brouhaha is occurring.

  • Reply 4 of 95
    reefoidreefoid Posts: 158member

    Quote:

    Originally Posted by digitalclips View Post



    I hope the UK powers that be are checking into Google, Microsoft, etc. etc. etc .... image


    They are actually.  Google, Amazon and Starbucks have all been hauled in front of parliamentary committees recently over this exact same issue, so this isn't picking on Apple.


     


    The issue is the Irish tax setup.  The Irish government says corporations incorporated in Ireland pay tax on where they're managed and controlled from (for Apple, this is the U.S.) but US rules (and most other major economies) say the tax should be paid where the company is incorporated.  If Ireland got in line with everyone else, a lot of this would go away.

  • Reply 5 of 95
    jessijessi Posts: 302member
    This is not accurate.

    When you buy an Apple product in the UK, you pay a VAT of %20. This is a huge amount of money on a MacBook Pro!

    The government collects its taxes at sales time. The UK government has made a lot of money from Apple.

    Further, since Apple made use of tax writeoffs for employee compensation, and the government taxes the employees income, the government collected taxes there.

    For Apple to have paid taxes on that, and then the employee pays taxes on that would be double dipping-- something governments really like to do.

    Taxes are theft. This is indisputable objective reality.

    I look forward to the AppleInsider article "Apple, once again, doesn't have $4B in product stolen by thieves!"

  • Reply 6 of 95
    jungmarkjungmark Posts: 6,694member
    Blame Ireland, not Apple.
  • Reply 7 of 95


    So sick of these articles.  If Apple did something illegal than fine, lets see it.  If they are just following the tax laws which are all screwed up anyway than lets praise them instead since they are looking out for the interests of their shareholders.  They are doing nothing different than most other companies out there.

  • Reply 8 of 95
    icoco3icoco3 Posts: 1,459member


    And one has to wonder how much VAT that same moaning government extracted from the consumers that purchased all that Apple product??

     

  • Reply 9 of 95
    reefoidreefoid Posts: 158member

    Quote:

    Originally Posted by Jessi View Post



    This is not accurate.



    When you buy an Apple product in the UK, you pay a VAT of %20. This is a huge amount of money on a MacBook Pro!



    The government collects its taxes at sales time. The UK government has made a lot of money from Apple.

     


    I think you misunderstand VAT.  The consumer pays VAT at 20% at the point of sale, not the company.  Additionally, some consumers can reclaim VAT through their business so its not paid on every transaction.

  • Reply 10 of 95
    jessijessi Posts: 302member

    Quote:

    Originally Posted by sflocal View Post


    Waiting for the liberal freetards to come out of the woodwork and whine about Apple (but not Google, Microsoft, Intel, etc..) not paying any taxes that they legally did not have to pay, and fully approved by the government in which the brouhaha is occurring.



     


    Of course the greed of politicians is insatiable.  Once they've gotten accustomed to a new level of theft, they always want more.


     


    What better way to pave the ground for raising even more taxes than to run around and be "aghast" that people aren't already paying more taxes?


     


    Get enough people duped into thinking taxes are too low (never mind that the people in the UK have a lower standard of living as a result of their high taxes) and they'll buy into the idea that taxes should be raised. 


     


    Even better if you can make the people suffering from your theft think someone else is getting away with avoiding the theft, then they'll vote you the power to engage in even more theft, and never even realize that they are the ones who will suffer the most!


     


    I think governments can only exist due to people's gullibiltiy and desire to have someone else "take care of them"... even though they are made worse off as a result. 


     


    I lived in the UK, and have travelled the world extensively.  There are many poor countries, but the UK is a rich country where the people are impoverished.  Cheap chinese shoes that would be $1 in the US at Walmart go in the UK for 5 pounds!  Just one example of many. 

  • Reply 11 of 95
    rogifanrogifan Posts: 10,669member
    Has Apple done anything illegal? If not than this is a non story and AI shouldn't even be reporting on it. :no:
  • Reply 12 of 95
    jessijessi Posts: 302member

    Quote:

    Originally Posted by reefoid View Post


    I think you misunderstand VAT.  The consumer pays VAT at 20% at the point of sale, not the company.  Additionally, some consumers can reclaim VAT through their business so its not paid on every transaction.



     


    I understood VAT precisely. Nothing you said contradicts my point.  The VAT is a tax on Apple's business.  Who "pays" is one of those shell games that pro-tax people like to pay -- They pretend that the employer pays for your social security here in the US, which is silly, becuase you're salary is lower in order to cover that tax, so you're really paying.   Same thing with VAT.... Apple's sales are lower as a result of machines being higher cost due to VAT.  Apple and the consumer both suffer.  (as is the same case with social security- the employer and the employee both suffer.) 


     


    Who pays games are silly evasions to avoid the fact that this theft hurts the economy and hurts the people. 

  • Reply 13 of 95
    richlrichl Posts: 2,213member

    Quote:

    Originally Posted by sflocal View Post


    Waiting for the liberal freetards to come out of the woodwork and whine about Apple (but not Google, Microsoft, Intel, etc..) not paying any taxes that they legally did not have to pay, and fully approved by the government in which the brouhaha is occurring.



     


    I think you're mistaking "fully approved by the government" with "complex accounting practices that the government is actively trying to shut down".


     


    And just because it's legal doesn't mean that it's right. Paying no tax is sociopathic behaviour. If everyone did the same, society would collapse. And the more tax that the world's most profitable company doesn't pay, the more the rest of us pay.


     


    Google, Amazon, Starbucks et al are no better.

  • Reply 14 of 95
    crowleycrowley Posts: 5,831member


    Quote:

    Originally Posted by Applehawk View Post


    So sick of these articles.  If Apple did something illegal than fine, lets see it.  If they are just following the tax laws which are all screwed up anyway than lets praise them instead since they are looking out for the interests of their shareholders.  They are doing nothing different than most other companies out there.



     


    If the tax laws are screwed up then how do you propose fixing them, other than by investigating how companies are taking advantage of them?


     



    Quote:

    Originally Posted by Jessi View Post


     


    Of course the greed of politicians is insatiable.  Once they've gotten accustomed to a new level of theft, they always want more.



     


    If politicians are greedy and taxes are theft and these things are getting worse, then why do we have the lowest levels of corporate taxation and capital gains taxation in a century?

  • Reply 15 of 95
    paxmanpaxman Posts: 4,595member

    Quote:

    Originally Posted by Jessi View Post



    Taxes are theft. This is indisputable objective reality.

     


    Why undermine your own argument with such a dumb statement?

  • Reply 16 of 95
    richlrichl Posts: 2,213member

    Quote:

    Originally Posted by Jessi View Post


    Get enough people duped into thinking taxes are too low (never mind that the people in the UK have a lower standard of living as a result of their high taxes) and they'll buy into the idea that taxes should be raised. 



     


    There doesn't seem to be much correlation between living standards and taxes. Norway (high tax) ranked above the US. However, if you look at happiness, high tax countries dominate the top 10. There's an even stronger bias towards high tax once you look at education or health.

  • Reply 17 of 95
    reefoidreefoid Posts: 158member

    Quote:

    Originally Posted by Jessi View Post


     


    I understood VAT precisely. Nothing you said contradicts my point.  The VAT is a tax on Apple's business.  Who "pays" is one of those shell games that pro-tax people like to pay -- They pretend that the employer pays for your social security here in the US, which is silly, becuase you're salary is lower in order to cover that tax, so you're really paying.   Same thing with VAT.... Apple's sales are lower as a result of machines being higher cost due to VAT.  Apple and the consumer both suffer.  (as is the same case with social security- the employer and the employee both suffer.) 


     


    Who pays games are silly evasions to avoid the fact that this theft hurts the economy and hurts the people. 



     


    Doesn't change the fact that VAT is not paid on every transaction, and can be claimed back by the consumer, not Apple.

  • Reply 18 of 95
    SpamSandwichSpamSandwich Posts: 31,125member
    jessi wrote: »
    This is not accurate.

    When you buy an Apple product in the UK, you pay a VAT of %20. This is a huge amount of money on a MacBook Pro!

    The government collects its taxes at sales time. The UK government has made a lot of money from Apple.

    Further, since Apple made use of tax writeoffs for employee compensation, and the government taxes the employees income, the government collected taxes there.

    For Apple to have paid taxes on that, and then the employee pays taxes on that would be double dipping-- something governments really like to do.

    Taxes are theft. This is indisputable objective reality.

    I look forward to the AppleInsider article "Apple, once again, doesn't have $4B in product stolen by thieves!"

    You are a voice of reason, therefore you must be ignored or attacked.
  • Reply 19 of 95
    SpamSandwichSpamSandwich Posts: 31,125member
    richl wrote: »
    I think you're mistaking "fully approved by the government" with "complex accounting practices that the government is actively trying to shut down".

    And just because it's legal doesn't mean that it's right. Paying no tax is sociopathic behaviour. If everyone did the same, society would collapse. And the more tax that the world's most profitable company doesn't pay, the more the rest of us pay.

    Google, Amazon, Starbucks et al are no better.

    Now paying no taxes LEGALLY is "sociopathic"? Get bent.
  • Reply 20 of 95

    Quote:

    Originally Posted by RichL View Post


     


    I think you're mistaking "fully approved by the government" with "complex accounting practices that the government is actively trying to shut down".


     


    And just because it's legal doesn't mean that it's right. Paying no tax is sociopathic behaviour. If everyone did the same, society would collapse. And the more tax that the world's most profitable company doesn't pay, the more the rest of us pay.


     


    Google, Amazon, Starbucks et al are no better.



    Yea cause everyone filling out there tax returns at yearend looks to pay the most tax they can.  So glad our society will not collapse now.

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