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

Posted:
in General Discussion edited February 2014
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.
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Comments

  • Reply 1 of 90
    asdasdasdasd Posts: 5,312member
    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.
  • Reply 2 of 90
    asciiascii Posts: 5,941member

    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" ?

  • Reply 3 of 90
    FYI: The reason Google's stock has been intentionally run up: Declared Stock Split.
  • Reply 4 of 90

    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: [email protected]




     

    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!

  • Reply 5 of 90
    asdasd wrote: »
    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.
  • Reply 6 of 90
    asdasdasdasd Posts: 5,312member
    crosslad wrote: »
    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.
  • Reply 7 of 90
    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.

  • Reply 8 of 90
    asciiascii Posts: 5,941member
    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).

  • Reply 9 of 90
    chris_cachris_ca Posts: 2,543member
    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.
  • Reply 10 of 90
    asdasdasdasd Posts: 5,312member
    ascii wrote: »
    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).
  • Reply 11 of 90
    crosslad wrote: »
    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?"
  • Reply 12 of 90
    asdasdasdasd Posts: 5,312member
    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.
  • Reply 13 of 90
    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.
  • Reply 14 of 90
    asdasdasdasd Posts: 5,312member
    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.
  • Reply 15 of 90
    MacProMacPro Posts: 18,295member
    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! :no:
  • Reply 16 of 90
    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.

  • Reply 17 of 90
    hill60hill60 Posts: 6,991member
    crosslad wrote: »
    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?

    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.
  • Reply 18 of 90
    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.

  • Reply 19 of 90
    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.

  • Reply 20 of 90
    asdasdasdasd Posts: 5,312member
    marubeni wrote: »
    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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