Except that Apple isn't running its motorcycle across the footpath of a toll bridge. It's been crossing a different bridge that constructed decades ago to enable motorcycles to cross without paying the same egregious tolls. It's all legal, it just that the expensive bridge wants to hike the prices on every bridge that crosses the river so they have no competition.
The bridge was meant to symbolise infrastructure. Everybody uses the same infrastructure of roads, hospitals, police, firemen, lifeguards etc. There isn't a separate, cheaper infrastructure reserved for people who want a lower tax rate, there's just a separate toll and often unintended. It's true that Apple pays something but not near the rates expected. It doesn't matter if it's legal, the governments didn't intend them to set things up the way they did and they can backdate the changes as they've done before:
The 2nd link is about a loophole used by celebrities who are being made to pay what they owed had it not existed. There's following the letter of the law and the spirit or intent of the law. If a company has followed laws in the past but didn't fit with the intent of the law, they can remove the parts in retrospect that didn't fit with the intent and expect people to pay what they were due had the loophole(s) not existed. They aren't changing the rates, they are just closing the loopholes.
And again, this is one tax (on corporate income). Apple and its resellers collects VAT across the EU, collecting far more for local state coffers that those countries ever did back when people were buying $65 Nokia handsets rather than $650 iPhones.
VAT is paid by the buyer but in the absence of an Apple product to buy, it could be argued that the government would get no tax at all and that money would sit in bank accounts. I'd say it would be spent regardless so I don't think VAT would change whether Apple was there or not.
When Apple makes a product, they take core costs and add their profit margin. VAT goes on top of that and when a customer pays, it goes straight to the government. The people who pay VAT have had income tax taken from them at their jobs. Apple's corporation tax is the equivalent and what they've avoided paying.
The real tax artists are companies like MSFT, GOOG. Yet if you ask Android or PC fans who pays taxes and who doesn't, they will froth over about how Apple doesn't pay taxes because they read everyone is the same, without even thinking.
Apple definitely isn't the worst of them in terms of setup, they are just getting the most attention because they make the most money so it's possible they create the largest shortfall.
Like I've said before, if they are made to pay up, it's a small amount relative to their cash balance. They have well over $100b, the amount due will be no more than about $9-12b. Tim Cook spent that in a week on a stock buyback.
No that's a error in thinking. People do good for goodness sake, but nobody does evil for evilness sake.
You really think so?
A far better man than me—a theologian, perhaps—would argue a very strong case to the contrary. Moreover, I don't think that this is an argument that we can fruitfully pursue here, or we'll be here all day. However, I think that you need to examine what you mean by doing good for goodness sake. How do you define good? What is doing good? Acting with love. If there is an absence of love, there is the potential for wickedness to step in.
My experience of life is that evil tends to manifest itself in subtle and pernicious ways. For instance, this thread has dozens of examples of evil in it, not least from me. It goes to the very heart of what makes us who we are.
Apple could easily join with a group of businesses and investors and BUY a country and craft their own no-tax legal structure. That this hasn't yet been done yet is (for me) somewhat surprising.
Or Apple could just move operations to Uruguay.
This is already being done, although Apple isn't a participant. It's called the Untied States.
Apple operates in over 150 countries around the world. In many of these they operate subsidiaries which pay all the sales taxes and corporate taxes that they owe. While their 'cost' calculations are open for debate, they pay corporate taxes as they are owed. The after tax profits are what are sent to their Iirish subsidiary. The after tax profits are sent from Europe and Asia. Similarly, Apple operates subsidiaries in many of the Americas, Canada, for instance. These profits are all taxed in their respective jurisdictions and the after tax profits from the Americas are sent back the the U.S. for further taxation.
The $100 billion or so that is held in Ireland is invested and those investment profits are sent back to the US and are taxed in the US.
Apple makes so much money, they don't need to skirt any taxes in any jurisdiction.
Here is Tim Cook and the financial executives testifying to congress. There are 2 parts - about an hour and a half. Explains the whole financial structure of Apple's worldwide operations. I found it interesting how some of these politicians seem to think that Apple owed them money that was earned and taxed overseas. Also of note was the fact there are IRS employees working at Apple full time.
You have to remember that when Apple setup shop in Ireland, there was Northern Ireland and Ireland Proper.
Today, it's often referenced to as "Ireland" and an integrated society from a geo-political perspective. That said however, there was a time when Ireland needed tangible assets to back it's own currency.
Today, Ireland still has its own central bank, who is responsible for some minting operations, but today, of European Currency.
Now, Apple set up shop in Ireland prior to the existence of the European Union. However, because Ireland's Central Bank is known for minting operations of European Currency in addition to being a country under British Law and Control, it seems that the Central Bank itself functions to something closer to the US equivalent of Boston, Massachusets-based Crane & Co.
The other issue is that during the time of social unrest, the Central Bank was tasked with, and subsequently approved Apple's Corporate Charter in the Country of Ireland; something a regulator, not involved in the business of printing paper wealth, probably should have done.
Most likely, this is why Apple and other companies, in the late 1990s created businesses in Ireland as a safe haven. Investment in Ireland created liquid capital, which UK-based Ireland banks could re-invest, similar to a Checking account. Liquid capital was made available and this financed not only the central bank in Ireland, but also downstream finance; similar to the way venture capital works on Sand Hill in Palo Alto.
A few years prior, the first organization, labeled as "terrorist" emerged. It was the Irish Republican Army. In 1997, Ireland was falling apart at the seams, in 1999, newly identified "terrorist" groups emerged. Ireland as a whole, had unrest, mostly due to the inability to create work. However, Apple placed its overseas business there; likely to recapitalize the country of Ireland. A bank backed by tangible assets is more valuable than a bank who creates paper and currency. That country's bank would be better creating tokens and paper tickets for use in car-wash stalls. And that's why I talked former CFO of Apple, Peter Oppenheimer up to folks I know at Goldman Sachs.
Remember, in the late 1990s, most business articles were about the Y2K "bug" (which never came). Back then, the press stated Y2K's effects included eating your creditcard at ATMs, and powerlines being shut off. Apple created an ad, which aired in the first quarter of 1999 titled "Apple Y2K ad with Hal 9000" The ad was shown for the first time at the opening of Steve Jobs' MacWorld 1999 keynote; circa January 1999. It was very disingenuous for Apple to create an Ad campaign designed to fuel the fire for a bug that never came. But today, Phil Schiller still shares ideas of some land of Milk And Honey in presentations; and of features not yet available. Phil- it's called parenting, and not an Apple presentation. Tell me when you get your son to turn the lights on or put up the garage door because you did your job as a parent.
My guess is that his son Mark stole his credit card.
But Apple plays the hobo shoving most their money into the ever so dodgy 'no fixed abode' status.
Everything sold physically here on German soil, is taxed and itemized as such including MwSt (VAT). No company gets to keep that, and it must be remitted monthly to the tax authority. Other services provided by Apple like iTunes and the App Store is served from Ireland. Regardless of where anyone lives in the EU, when Apple sells them a physical product through their online store, they have to itemize VAT, collect it, and remit it in the country they sold the device... NOT from where it ships from. Which in many cases for years has been Ireland. Back in the 90's we used to even bitch about that fact because the QA was not up to par with devices shipping from the US.
This is really not that much different than in the US, where you're also allowed to purchase across state lines without paying the state sales tax (in some states). One of the ideas behind European monetary union was to ease cross-border commerce, which it has.
Just FYI: translated by Google from the bottom of the German Apple Store page: The prices include the VAT (23%), applicable copyright fees and insurance taxes (where required). Does not include delivery cost, unless otherwise stated. The VAT rate for Electronic Software Downloads (Electronic Software Downloads) or other Apple products classified according to the European VAT law as services is 23%. They are subject to the VAT rate of the country, from the Apple Distribution International supplies such products, here the Republic of Ireland. The payable value added tax rate for the selected product is listed on the order form.
Apple Distribution International is regulated by the Central Bank of Ireland has to offer and authorized their services in certain countries of the EEA (European Economic Area).
For more information on registers.centralbank.ie.
But Apple plays the hobo shoving most their money into the ever so dodgy 'no fixed abode' status.
There's really nothing "dodgy" about it. Apple could have decided to move their operations in the US to say Nevada, and if I'm not mistaken, they have certain operations incorporated there for tax purposes(?).
Wiki citation: "Nevada's tax structure is also a large benefit to incorporation in Nevada. Nevada has no franchise tax. It also has no corporate income tax or personal income tax.[1]"
Here in Europe, Apple sells it's products which includes mark-ups for IP, to it's stores and Authorized Apple Handlers (distributors of which there are only a few left). The difference between purchase and selling price is anywhere from 3-10% mark-up, but not much more than that to cover overhead and fixed costs. This includes paying in full the taxes owed on employee, real estate holdings and other assorted social taxes... which are deductible against their corporate tax bill. Naturally, they juggle their mark-up, so as to have as little left over as possible, thus calculating as close as possible to zero taxable profit as possible. What is left over, if anything is then sent back to Ireland and reinvested from there.
Whether the company is Apple, Dell, Google, Microsoft, Starbucks... etc., it's going to be very difficult for the authorities to determine what is a fair mark-up to charge subsidiaries and franchisees for IP. Obviously, neither the devices, nor code or content, is created or produced in each and every country where these companies do business and sell products or services from. I think it would also be practically impossible to set a certain rate across the board for all industries, products and services.
In Europe, what they're discussing is a possible "Federal Tax" very similar to the US, but even that idea is fraught with traditional problems of inequality and cultural differences of opinion as it relates to business, work, and social reliance on government provided services and benefits. Sovereignty is a BIG word here... and it's the English that wield it like a defensive sword, yet are doing the most bitching about corporate immorality regarding taxes. They only need to look to "The City" for immorality, and leave Ireland completely out of the discussion until they can fix what is literally, right under their noses. Of course, IMHO...:\
Whether it's the US, Europe, Asia... where ever, I think it's going to be very difficult in the future for new tax laws of any kind that will be seen by the public as being "fair to all".
As I stated above and I think everyone knows by now, a product is not wholly designed, manufactured, or coded in only one location as it once was. We are in a global economy and I don't see that as being bad, nor changing any time soon. The US itself has been through this problem, and is still dealing with this problem as it relates to state sales tax (see Amazon).
If the US can't fix this problem in a 200 year old federalist union, how does anyone expect this to be fixed across cultures and countries and oceans of differing social needs, let alone public opinion. I believe there will be more taxes collected from the people tasked to "talk about" this matter, than there ever will be from any solutions they ever come up with in the near future.
This is already being done, although Apple isn't a participant. It's called the Untied States.
I was waiting for someone to post this exact response, because I'm suggesting a REAL corporate-owned country, not just a politically corrupt system of corporatism. A country created solely for the benefit of the stakeholders... something beyond the 'double Irish with a Dutch sandwich'.
However, because Ireland's Central Bank is known for minting operations of European Currency in addition to being a country under British Law and Control, it seems that the Central Bank itself functions to something closer to the US equivalent of Boston, Massachusets-based Crane & Co.
I was waiting for someone to post this exact response, because I'm suggesting a REAL corporate-owned country, not just a politically corrupt system of corporatism. A country created solely for the benefit of the stakeholders... something beyond the 'double Irish with a Dutch sandwich'.
Comments
I agree that it's arbitrary, but I wouldn't call it stupid.
If good exists, then so does evil.
The bridge was meant to symbolise infrastructure. Everybody uses the same infrastructure of roads, hospitals, police, firemen, lifeguards etc. There isn't a separate, cheaper infrastructure reserved for people who want a lower tax rate, there's just a separate toll and often unintended. It's true that Apple pays something but not near the rates expected. It doesn't matter if it's legal, the governments didn't intend them to set things up the way they did and they can backdate the changes as they've done before:
http://www.contractoruk.com/bn66/backdated_tax_law_hits_2_000_freelancers_4445.html
http://www.theguardian.com/commentisfree/2014/may/13/gary-barlow-amazon-no-excuses-tax-avoiders
The 2nd link is about a loophole used by celebrities who are being made to pay what they owed had it not existed. There's following the letter of the law and the spirit or intent of the law. If a company has followed laws in the past but didn't fit with the intent of the law, they can remove the parts in retrospect that didn't fit with the intent and expect people to pay what they were due had the loophole(s) not existed. They aren't changing the rates, they are just closing the loopholes.
VAT is paid by the buyer but in the absence of an Apple product to buy, it could be argued that the government would get no tax at all and that money would sit in bank accounts. I'd say it would be spent regardless so I don't think VAT would change whether Apple was there or not.
When Apple makes a product, they take core costs and add their profit margin. VAT goes on top of that and when a customer pays, it goes straight to the government. The people who pay VAT have had income tax taken from them at their jobs. Apple's corporation tax is the equivalent and what they've avoided paying.
Apple definitely isn't the worst of them in terms of setup, they are just getting the most attention because they make the most money so it's possible they create the largest shortfall.
Like I've said before, if they are made to pay up, it's a small amount relative to their cash balance. They have well over $100b, the amount due will be no more than about $9-12b. Tim Cook spent that in a week on a stock buyback.
No that's a error in thinking. People do good for goodness sake, but nobody does evil for evilness sake.
You really think so?
A far better man than me—a theologian, perhaps—would argue a very strong case to the contrary. Moreover, I don't think that this is an argument that we can fruitfully pursue here, or we'll be here all day. However, I think that you need to examine what you mean by doing good for goodness sake. How do you define good? What is doing good? Acting with love. If there is an absence of love, there is the potential for wickedness to step in.
My experience of life is that evil tends to manifest itself in subtle and pernicious ways. For instance, this thread has dozens of examples of evil in it, not least from me. It goes to the very heart of what makes us who we are.
This is already being done, although Apple isn't a participant. It's called the Untied States.
The $100 billion or so that is held in Ireland is invested and those investment profits are sent back to the US and are taxed in the US.
Apple makes so much money, they don't need to skirt any taxes in any jurisdiction.
Here is Tim Cook and the financial executives testifying to congress. There are 2 parts - about an hour and a half. Explains the whole financial structure of Apple's worldwide operations. I found it interesting how some of these politicians seem to think that Apple owed them money that was earned and taxed overseas. Also of note was the fact there are IRS employees working at Apple full time.
I guess they use velcro.
You have to remember that when Apple setup shop in Ireland, there was Northern Ireland and Ireland Proper.
Today, it's often referenced to as "Ireland" and an integrated society from a geo-political perspective. That said however, there was a time when Ireland needed tangible assets to back it's own currency.
Today, Ireland still has its own central bank, who is responsible for some minting operations, but today, of European Currency.
Now, Apple set up shop in Ireland prior to the existence of the European Union. However, because Ireland's Central Bank is known for minting operations of European Currency in addition to being a country under British Law and Control, it seems that the Central Bank itself functions to something closer to the US equivalent of Boston, Massachusets-based Crane & Co.
The other issue is that during the time of social unrest, the Central Bank was tasked with, and subsequently approved Apple's Corporate Charter in the Country of Ireland; something a regulator, not involved in the business of printing paper wealth, probably should have done.
Most likely, this is why Apple and other companies, in the late 1990s created businesses in Ireland as a safe haven. Investment in Ireland created liquid capital, which UK-based Ireland banks could re-invest, similar to a Checking account. Liquid capital was made available and this financed not only the central bank in Ireland, but also downstream finance; similar to the way venture capital works on Sand Hill in Palo Alto.
A few years prior, the first organization, labeled as "terrorist" emerged. It was the Irish Republican Army. In 1997, Ireland was falling apart at the seams, in 1999, newly identified "terrorist" groups emerged. Ireland as a whole, had unrest, mostly due to the inability to create work. However, Apple placed its overseas business there; likely to recapitalize the country of Ireland. A bank backed by tangible assets is more valuable than a bank who creates paper and currency. That country's bank would be better creating tokens and paper tickets for use in car-wash stalls. And that's why I talked former CFO of Apple, Peter Oppenheimer up to folks I know at Goldman Sachs.
Remember, in the late 1990s, most business articles were about the Y2K "bug" (which never came). Back then, the press stated Y2K's effects included eating your creditcard at ATMs, and powerlines being shut off. Apple created an ad, which aired in the first quarter of 1999 titled "Apple Y2K ad with Hal 9000" The ad was shown for the first time at the opening of Steve Jobs' MacWorld 1999 keynote; circa January 1999. It was very disingenuous for Apple to create an Ad campaign designed to fuel the fire for a bug that never came. But today, Phil Schiller still shares ideas of some land of Milk And Honey in presentations; and of features not yet available. Phil- it's called parenting, and not an Apple presentation. Tell me when you get your son to turn the lights on or put up the garage door because you did your job as a parent.
My guess is that his son Mark stole his credit card.
But Apple plays the hobo shoving most their money into the ever so dodgy 'no fixed abode' status.
Everything sold physically here on German soil, is taxed and itemized as such including MwSt (VAT). No company gets to keep that, and it must be remitted monthly to the tax authority. Other services provided by Apple like iTunes and the App Store is served from Ireland. Regardless of where anyone lives in the EU, when Apple sells them a physical product through their online store, they have to itemize VAT, collect it, and remit it in the country they sold the device... NOT from where it ships from. Which in many cases for years has been Ireland. Back in the 90's we used to even bitch about that fact because the QA was not up to par with devices shipping from the US.
This is really not that much different than in the US, where you're also allowed to purchase across state lines without paying the state sales tax (in some states). One of the ideas behind European monetary union was to ease cross-border commerce, which it has.
Just FYI: translated by Google from the bottom of the German Apple Store page:
The prices include the VAT (23%), applicable copyright fees and insurance taxes (where required). Does not include delivery cost, unless otherwise stated. The VAT rate for Electronic Software Downloads (Electronic Software Downloads) or other Apple products classified according to the European VAT law as services is 23%. They are subject to the VAT rate of the country, from the Apple Distribution International supplies such products, here the Republic of Ireland. The payable value added tax rate for the selected product is listed on the order form.
Apple Distribution International is regulated by the Central Bank of Ireland has to offer and authorized their services in certain countries of the EEA (European Economic Area).
For more information on registers.centralbank.ie.
There's really nothing "dodgy" about it. Apple could have decided to move their operations in the US to say Nevada, and if I'm not mistaken, they have certain operations incorporated there for tax purposes(?).
Wiki citation: "Nevada's tax structure is also a large benefit to incorporation in Nevada. Nevada has no franchise tax. It also has no corporate income tax or personal income tax.[1]"
Here in Europe, Apple sells it's products which includes mark-ups for IP, to it's stores and Authorized Apple Handlers (distributors of which there are only a few left). The difference between purchase and selling price is anywhere from 3-10% mark-up, but not much more than that to cover overhead and fixed costs. This includes paying in full the taxes owed on employee, real estate holdings and other assorted social taxes... which are deductible against their corporate tax bill. Naturally, they juggle their mark-up, so as to have as little left over as possible, thus calculating as close as possible to zero taxable profit as possible. What is left over, if anything is then sent back to Ireland and reinvested from there.
Whether the company is Apple, Dell, Google, Microsoft, Starbucks... etc., it's going to be very difficult for the authorities to determine what is a fair mark-up to charge subsidiaries and franchisees for IP. Obviously, neither the devices, nor code or content, is created or produced in each and every country where these companies do business and sell products or services from. I think it would also be practically impossible to set a certain rate across the board for all industries, products and services.
In Europe, what they're discussing is a possible "Federal Tax" very similar to the US, but even that idea is fraught with traditional problems of inequality and cultural differences of opinion as it relates to business, work, and social reliance on government provided services and benefits. Sovereignty is a BIG word here... and it's the English that wield it like a defensive sword, yet are doing the most bitching about corporate immorality regarding taxes. They only need to look to "The City" for immorality, and leave Ireland completely out of the discussion until they can fix what is literally, right under their noses. Of course, IMHO...:\
Whether it's the US, Europe, Asia... where ever, I think it's going to be very difficult in the future for new tax laws of any kind that will be seen by the public as being "fair to all".
As I stated above and I think everyone knows by now, a product is not wholly designed, manufactured, or coded in only one location as it once was. We are in a global economy and I don't see that as being bad, nor changing any time soon. The US itself has been through this problem, and is still dealing with this problem as it relates to state sales tax (see Amazon).
If the US can't fix this problem in a 200 year old federalist union, how does anyone expect this to be fixed across cultures and countries and oceans of differing social needs, let alone public opinion. I believe there will be more taxes collected from the people tasked to "talk about" this matter, than there ever will be from any solutions they ever come up with in the near future.
I was waiting for someone to post this exact response, because I'm suggesting a REAL corporate-owned country, not just a politically corrupt system of corporatism. A country created solely for the benefit of the stakeholders... something beyond the 'double Irish with a Dutch sandwich'.
Really?
I've just notice that evil is live spelt backwards; how pertinent.
Evil is anti-life.
But evil is also part of life.
I was waiting for someone to post this exact response, because I'm suggesting a REAL corporate-owned country, not just a politically corrupt system of corporatism. A country created solely for the benefit of the stakeholders... something beyond the 'double Irish with a Dutch sandwich'.
Snow Crash by Neil Stephenson.
Sure. The negative of life.