<div class="quote-container" data-huddler-embed="/t/161853/apples-cook-meets-with-irish-pm-to-discuss-taxes-future-growth-at-european-hq/40#post_2466516" data-huddler-embed-placeholder="false">Quote:
<div class="quote-block">Originally Posted by <strong>Gatorguy</strong> <a href="/t/161853/apples-cook-meets-with-irish-pm-to-discuss-taxes-future-growth-at-european-hq/40#post_2466516"><img alt="View Post" src="/img/forum/go_quote.gif" /></a><br />
<br />
<br />
Isn't that a tax paid by the end-user? Not entirely sure as I'm not in that region.</div>
</div>
<strong> If Apple is not paying the government in the consumer's country then the consumer himself should.</strong><br />
</div>
</div>
</div>
<p> </p>
<p>The consumer does pay on every penny of profit a company makes when selling something in any particular country that collects these taxes, the money collected at point of sale is paid to the government.</p>
<p> </p>
<p>Amazon was avoiding these taxes at the state level in the US, eroding local businesses ability to compete.</p>
So it's not the seller's money being paid then? They're simply accepting it as an agent of the government and passing it along. So there shouldn't be any tax on the profit realized by the seller. I guess that's what Hill60 is getting at. VAT isn't a tax the company pays at all, they simply collect it like I do with Sales Tax here and that's the end of their tax obligation. Did I get that right?
Like in the Australian example posted before $6 Billion in sales would have generated $600,000,000 in GST added to the price paid in store.
So it's not the seller's money being paid then? They're simply accepting it as an agent of the government and passing it along. So there shouldn't be any tax on the profit realized by the seller. I guess that's what Hill60 is getting at. VAT isn't a tax the company pays at all, they simply collect it like I do with Sales Tax here and that's the end of their tax obligation. Did I get that right?
VAT is not company revenue, it's never reported top line. It's also charged to customers at the rate if the country the online service is located. Hence Luxembourg.
Well do you live in EU? I do and from my business dealing with other EU state (Spain, France etc) the idea of EU law is as laughable as united state try to do a gun control. Each of the member all got their own agenda - and in practice they still running their own country. I am sure as hell they don't want the German to dictate what they do.
At least in UK - nobody gives a sh*t what the EU said.
If there were no corporate taxes, the money would flow freely into the pockets of shareholders and employees, and then would get taxed.
Over what period of time though? Corporation tax is only charged if this event doesn't take place within a financial year. If they did freely put all their yearly profits into the pockets of shareholders and employees, they wouldn't have to pay any corporation tax. The shareholders and employees would then be taxed on earnings in their financial year so single taxation.
Corporation tax exists because incorporated companies are considered separate entities ( http://en.wikipedia.org/wiki/Incorporation_(business) ). If they hold onto their profits and don't spend them, they are taxed once in that fiscal year just like a person would be. If they pay the money out later on, it does get taxed again in the form of income tax but that's because it's a different fiscal year. Some dividends have a 0% tax rate because of this:
Corporation tax is easier on corporations than income tax is on people. People get taxed before they receive their salary and then use the remainder to buy goods that have sales tax on top. Corporation tax is considered after a company buys products (as long as they are for business use) and after any sales taxes are paid. Salaried employees should be able to claim back the amount of income tax paid in sales tax.
This doesn't happen though because it is easier for tax authorities to collect money from individuals that don't have the resources to avoid paying tax and this keeps the poor poorer and reduces upward mobility.
This is why corporation tax can't be eliminated because business owners would simply pay for items they use personally and it would reduce their taxable income.
My position is the US is owed most of these taxes, morally. Not Ireland.
I wouldn't necessarily agree that the bulk should go to the US but certainly not to Ireland where they don't even have a store apparently. Why pay tax on the bulk of European profits to a country that has little to no part in generating them?
I think morally, the tax on such a large amount of profit should be paid to the country it is generated in because the corporation has a presence in the country in much the same way an employee does.
Apple says they want to be able to bring the taxes to the US. They say they are currently paying 26% on US profits:
"The Company’s effective tax rates for all periods differ from the statutory federal income tax rate of 35% due primarily to certain undistributed foreign earnings, a substantial portion of which was generated by subsidiaries organized in Ireland, for which no U.S. taxes are provided because such earnings are intended to be indefinitely reinvested outside the U.S."
The subcommittee noted that this 26% tax allowance Apple put in the filings was also not what they actually paid.
This tax setup with Apple in Ireland has been setup since the 80s and they've been paying significant US corporation taxes. As their international operations have expanded over the years, especially with the iOS products, it has created a situation where they've tried to avoid taxes in non-US countries and avoid repatriation tax so profits get left overseas, even though the actual cash (digital money) is held in US financial institutions so only overseas legally.
Tax laws need to be rewritten to work better for international business and I feel that sales tax should not exist but only tax on profits or income and this tax should be paid where it is generated.
The consumer does pay on every penny of profit a company makes when selling something in any particular country that collects these taxes, the money collected at point of sale is paid to the government.
This is incorrect. None of the taxes collected at point of sale has anything to do with company profit. It is a simply a tax paid by the consumer based on the amount of purchase. This is in addition to any corporate tax paid (the story of this article) on the profit made by the seller.
Comments
<div class="quote-block">Originally Posted by <strong>Gatorguy</strong> <a href="/t/161853/apples-cook-meets-with-irish-pm-to-discuss-taxes-future-growth-at-european-hq/40#post_2466516"><img alt="View Post" src="/img/forum/go_quote.gif" /></a><br />
<br />
<br />
Isn't that a tax paid by the end-user? Not entirely sure as I'm not in that region.</div>
</div>
<p> </p>
<p>This is what I was replying to:-</p>
<p> </p>
<div class="quote-container">Quote:
<div class="quote-block">
<div> </div>
</div>
</div>
<p> </p>
<p>The consumer does pay on every penny of profit a company makes when selling something in any particular country that collects these taxes, the money collected at point of sale is paid to the government.</p>
<p> </p>
<p>Amazon was avoiding these taxes at the state level in the US, eroding local businesses ability to compete.</p>
So it's not the seller's money being paid then? They're simply accepting it as an agent of the government and passing it along. So there shouldn't be any tax on the profit realized by the seller. I guess that's what Hill60 is getting at. VAT isn't a tax the company pays at all, they simply collect it like I do with Sales Tax here and that's the end of their tax obligation. Did I get that right?
Like in the Australian example posted before $6 Billion in sales would have generated $600,000,000 in GST added to the price paid in store.
Plenty of new EU member are dying to get Apple over there.
VAT is not company revenue, it's never reported top line. It's also charged to customers at the rate if the country the online service is located. Hence Luxembourg.
http://www.thebookseller.com/news/eu-aims-close-amazon-luxembourg-vat-dodge.html
They do, it's called VAT, sales tax, GST or whatever various governments want to call a tax on buying stuff.
The VAT then pays for National Health Services, University Education costs, etc.
Well do you live in EU? I do and from my business dealing with other EU state (Spain, France etc) the idea of EU law is as laughable as united state try to do a gun control. Each of the member all got their own agenda - and in practice they still running their own country. I am sure as hell they don't want the German to dictate what they do.
At least in UK - nobody gives a sh*t what the EU said.
Over what period of time though? Corporation tax is only charged if this event doesn't take place within a financial year. If they did freely put all their yearly profits into the pockets of shareholders and employees, they wouldn't have to pay any corporation tax. The shareholders and employees would then be taxed on earnings in their financial year so single taxation.
Corporation tax exists because incorporated companies are considered separate entities ( http://en.wikipedia.org/wiki/Incorporation_(business) ). If they hold onto their profits and don't spend them, they are taxed once in that fiscal year just like a person would be. If they pay the money out later on, it does get taxed again in the form of income tax but that's because it's a different fiscal year. Some dividends have a 0% tax rate because of this:
http://en.wikipedia.org/wiki/Qualified_dividend
Corporation tax is easier on corporations than income tax is on people. People get taxed before they receive their salary and then use the remainder to buy goods that have sales tax on top. Corporation tax is considered after a company buys products (as long as they are for business use) and after any sales taxes are paid. Salaried employees should be able to claim back the amount of income tax paid in sales tax.
This doesn't happen though because it is easier for tax authorities to collect money from individuals that don't have the resources to avoid paying tax and this keeps the poor poorer and reduces upward mobility.
This is why corporation tax can't be eliminated because business owners would simply pay for items they use personally and it would reduce their taxable income.
I wouldn't necessarily agree that the bulk should go to the US but certainly not to Ireland where they don't even have a store apparently. Why pay tax on the bulk of European profits to a country that has little to no part in generating them?
I think morally, the tax on such a large amount of profit should be paid to the country it is generated in because the corporation has a presence in the country in much the same way an employee does.
Apple says they want to be able to bring the taxes to the US. They say they are currently paying 26% on US profits:
"The Company’s effective tax rates for all periods differ from the statutory federal income tax rate of 35% due primarily to certain undistributed foreign earnings, a substantial portion of which was generated by subsidiaries organized in Ireland, for which no U.S. taxes are provided because such earnings are intended to be indefinitely reinvested outside the U.S."
The subcommittee noted that this 26% tax allowance Apple put in the filings was also not what they actually paid.
This tax setup with Apple in Ireland has been setup since the 80s and they've been paying significant US corporation taxes. As their international operations have expanded over the years, especially with the iOS products, it has created a situation where they've tried to avoid taxes in non-US countries and avoid repatriation tax so profits get left overseas, even though the actual cash (digital money) is held in US financial institutions so only overseas legally.
Tax laws need to be rewritten to work better for international business and I feel that sales tax should not exist but only tax on profits or income and this tax should be paid where it is generated.
This is what I was replying to:-
The consumer does pay on every penny of profit a company makes when selling something in any particular country that collects these taxes, the money collected at point of sale is paid to the government.
This is incorrect.None of the taxes collected at point of sale has anything to do with company profit. It is a simply a tax paid by the consumer based on the amount of purchase.
This is in addition to any corporate tax paid (the story of this article) on the profit made by the seller.