Sure about that? There's evidence Apple paid less than 2% on the bulk of it, and that's an average. Some of it has never had a penny of income tax paid on it. To be fair Apple isn't the only one but there's nowhere that I see validated claims of Apple paying 20% on average on it's overseas profits. But perhaps you have the citations.
Yes, sure about that.
Don't have the time or the inclination to give you cites, but you can figure it if you want from Apple's income statements.
That's also misleading according to tax analysts who peg it closer to 15%. Apple doesn't report it's overseas profits in the same manner as most companies according to accounting professionals.
First 9 months of FY2015
Profits $42 billion
Taxes PAID $10.6 billion (this is taxes ACTUALLY PAID, this is a cash flow statement)
ETC.
Have a read thru this sir which explains why what you THINK Apple is paying percentage-wise in taxes is not entirely accurate. As an accountant yourself you should have no trouble following it. http://taxprof.typepad.com/files/134tn0777.pdf
For the first 9 months of FY2015 Apple made $42 billion in profit.
They paid over $10.6 billion in taxes.
Thats 25% rate.
Stop making up bullshit.
follow the money. Apple paid $10.6 billion
Read the link. Even easier for you might be read Apple's 10-K's where they note they do provide for tax liabilities on profits that may (but have not to date) be repatriated "aside from undistributed earnings of certain of the company’s foreign subsidiaries that are intended to be indefinitely reinvested in operations outside the US”
In other words those profits held by their foreign subsidiaries are not included in the figures you are citing unless Apple planned to bring them into the US...
which they do not.
The whole online schooling only idea is ridiculous. There're many and many classes that require hands-on interactions. In grad school, I can understand you work mostly alone, but still need to go to the damn lab to perform hands-on experiments especially in science fields. I can understand 60% online. 100% online, you'll NEVER see it happening.
You did not read the linked article, or you read some other article entirely, because that is not what it says.
http://taxprof.typepad.com/files/134tn0777.pdf
"Under generally accepted accounting
principles, U.S. companies do not have to
book tax expense on foreign profits if the company
deems them to be permanently invested overseas.
To lower their reported effective tax rates and boost
their reported after-tax profits, most companies
assume all of their unrepatriated foreign profits are
permanently reinvested offshore. If Apple asserted
that all of its foreign earnings were permanently
invested outside the United States, it would have
booked an estimated $3.6 billion less in tax expense,
and its effective tax rate would be 12.8 percent. (See
the table.) When assessing Apple’s tax situation
relative to that of most other companies, this adjusted
rate is probably more relevant than the
reported 24.2 percent rate.
Why doesn’t Apple maximize reported profit like
most other companies? We can only speculate.
Perhaps because it is breaking all records for profitability
now, it is saving some profits for less
fortunate times in the future. As the Joint Committee
on Taxation recently wrote: ‘‘If the company
accrues the tax expense in the year the profits are
earned, it may later decide that those funds will not
be repatriated after all. At that later time it may then
reverse the tax expense and shift financial statement
income from the prior period into the current
period.’’ (See ‘‘Present Law and Background Relating
to the Interaction of Federal Income Tax Rules
and Financial Accounting Rules,’’ JCX-13-12, Feb. 7,
2012, Doc 2012-2443 or 2012 TNT 26-15.)
Further, at what point did you decide to move the goalposts since Anantksundarum and I were discussing foreign profits and whether Apple was paying closer to 20% or instead closer to 2% income taxes on them. Now you're coming in saying those monies don't matter because they weren't earned here in the good ol' USA.
HUH? :???:
By the way, are you really a professional accountant or was there a misunderstanding?
What about Google? What on earth would that have to do with our discussion of Apple's foreign profits and tax obligations? Nothing. And trying to change the discussion to tax-dodging? Where did that come from? Are you saying Apple is a tax-dodger but Google is a better one? Geesh. . .
Because Google is a company of similiar size and is in tech also.
You have no problem bashing Apple's tax policies yet say nothing about Google.
When in fact Apple is paying MORE TAXES as a percentage of profits than Google.
This is the case even though more of Google's revenue is in the high tax region of the USA ( 43% of Google rev is USA, 29% of Apple )
Bashing Apple for their tax payments?? You're walking on your own planet at the moment IMO. Heck I avoid taxes to \the best of my ability. No idea where you're coming from other than a presumed attempt to discredit facts with ad-homs. "Shoot the messenger" may be time honored but it's typically used by those on the losing side of a discussion.
"There will never be a precise answer as to where profits are created. But if the corporate tax is a tax on income, it is reasonable to [SIZE=36px]place profits where value is created.[/SIZE] In Apple’s case, can there be any doubt that most of its [SIZE=36px]value is created inside the United States?"[/SIZE]
So just because the iPhone was designed and created in the USA than all sales and profits from the iPhone should be taxed in the USA! Thats what the article is saying. Its saying anything designed in the USA should be taxed at USA corp rates even if they are being sold in China, Japan, and Europe. Do you not see how utterly RIDICULOUS THAT IS!
You're not reading to understand IMO. You're attempting to cherry-pick isolated words to make it sound as tho the tax professionals cited are saying something they are not. Nice try tho.
As you say: NEXT!
And once again, are you honestly a professional accountant? Pretty sure I recall you claiming to be but I could be mistaken.
A professional accountant would not need someone to explain it to them IMHO. That's one reason why I've asked you repeatedly if you are one, something you've not-so-deftly dodged answering.
It's not often I consider a discussion here at AI to have no value. This appears to be one of those times tho. Let's not continue.
That article is saying 70% of profits should be taxed in the USA because Apple products were created in the USA. Even though only 30% of sales and profits are from USA sales.
That makes zero sense. I'm a CPA.
Apple can say whatever ever percentage they want is derived from US operations, within reason of course, depending on how they wish to shift assets. It's not a fixed formula. In the article you claim to have read (but perhaps could not understand?) it's explained in pretty simple terms why that 30% they chose to claim is misleading and not an accurate representation.
DONE and OVER. . .
CPA? huh. . . Clients and all who pay you for tax and business structure advice? Nevermind.
Only 31% of Apple's revenue is from the USA. That stupid ass article you posted wants Apple to pay Corporate tax on ALL REVENUE APPLE MAKES in foreign countries. What kind of BS is that.
You don't calculate tax rate by taking US taxes divided by WORLDWIDE REVENUE.
You calculate it by US taxes divided by US revenue.
Thanks or setting him straight. This is typical of the sheer, aggravating, anti-Apple bullshit that this Gatorguy regularly posts on these forums. That's why I did not even bother to reply to the moronic post of his.
He pulls out some asses' blogs describing Apple's tax rate abroad as 2%. If that stupid claim were true, it would mean that Apple paid over 45% of its US income as taxes.
How? Taking 2014's 10K, Apple's overall pretax income was $53.5B, of which $20B was US and $33.5B was abroad. Apple paid cash taxes (i.e., excluding $4B in deferred taxes; I want to be conservative and err against Apple) of $10B, or 19%.
If this guy's idiotic 2% in foreign taxes claim were true, that would imply that Apple would have paid only $0.67B in cash taxes abroad, i.e., it paid $9.33B in cash taxes in the US. Gatorguy's utterly moronic analysis would imply that Apple paid 9.33/20 = 47% in the US.
That article is saying 70% of profits should be taxed in the USA because Apple products were created/designed in the USA. Even though only 30% of sales and profits are from USA sales.
That makes zero sense. I'm a CPA.
Using the same reasoning the article is using if the iPhone was created in China then Apple would not have to pay USA taxes on iPhones sold in the USA. Since it was made in China no taxes in the USA. Utter and TOTALLY STUPID. That goes against everything in the current tax code.
Sales tax applies to sales, and is (mostly) applied wherever the sale takes place. Apple pays sales tax on sales in every country they operate in, where it is levied.
Corporation tax applies to corporations, and is (mostly) applied to where the corporation is headquartered. Apple pays corporation tax on its profits in the USA, but also holds a lot of profit made offshore in holding companies offshore to avoid paying that tax in the USA, despite the fact that they are headquartered in the USA and do the large part of their design work in the USA (and few would deny that Apple product's USP is their design). Corporation tax is not and has never been applied to where the sale takes place, or where the product was manufactured.
The system makes perfect sense conceptually (though that doesn't mean it is perfect), and Apple (and many, many other multinationals) are bucking the system and using their complex organisational structures to create escape loopholes from the way the system was designed to work.
The intention of the U.S. Corporation tax rules is that all foreign profits that are not used for foreign reinvestment will be "brought back" to the U.S. and subject to tax. That they don't have to be brought back/declared is the loophole. It's a loophole you can drive a truck through, but it is nevertheless a loophole that goes against the spirit and intention of the tax law. The fact that Apple went through a bond sale to finance a stock buyback when they easily had enough ready cash is indicative of the financial engineering that is going on to avoid tax rules. Also, let's be clear, a large amount of Apple's "offshore" money is in fact in the U.S., it's just in the name of Apple's foreign subsidiaries. If that isn't an obvious case of financial engineering and tax avoidance then I don't know what is.
Apple also avoids paying foreign taxes and I think what they do there is even worse. I certainly don't want them paying less to foreign governments; why would you think that?
Unitary taxation is a proposition to solve this wealth hoarding issue, and country-by-country reporting is a proposition that aims to solve the problem of misrepresented economic activity.
P.S. Your Forbes article lost me when it claimed there is a strict definition of tax avoidance. There is not. The article only went downhill from that false claim.
Thanks or setting him straight. This is typical of the sheer, aggravating, anti-Apple bullshit that this Gatorguy regularly posts on these forums. That's why I did not even bother to reply to the moronic post of his.
He pulls out some asses' blogs describing Apple's tax rate abroad as 2%.
To say that I would be disappointed if a highly educated and respected educator and writer would be prone to cast ad-homs as a proper response in a discussion between adults would be an understatement. IMHO the best minds are willing to question beliefs, even their own, particularly when presented with evidence that runs counter to it. Obstinance and teaching seem like a mismatched pair. NOT painting you specifically with that brush of course. Just talking in generalities.
Specifically for you tho since a invite to discuss via PM was rejected perhaps blocking my posts would help. Then you can avoid reading at least some of the things that might be written here at AI that don't jive with what you would prefer to believe. I realize that's only a small step good for a single blog but you can always throw out the paper or close a webpage if those same disagreeable facts appear in them which they may if you read much.
You and I have no more to discuss on this particular subject.
Comments
Yes, sure about that.
Don't have the time or the inclination to give you cites, but you can figure it if you want from Apple's income statements.
That's also misleading according to tax analysts who peg it closer to 15%. Apple doesn't report it's overseas profits in the same manner as most companies according to accounting professionals.
http://www.imore.com/apple-paying-less-2-tax-overseas-profits-billions
http://www.tax-news.com/news/Apple_Pays_Less_Than_2_Tax_On_NonUS_Earnings____58140.html
It doesn't make it evil. Tax avoidance is used throughout business all over the world. But facts are facts sir and made up stuff is still made up.
http://taxprof.typepad.com/files/134tn0777.pdf
In other words those profits held by their foreign subsidiaries are not included in the figures you are citing unless Apple planned to bring them into the US...
which they do not.
The whole online schooling only idea is ridiculous. There're many and many classes that require hands-on interactions. In grad school, I can understand you work mostly alone, but still need to go to the damn lab to perform hands-on experiments especially in science fields. I can understand 60% online. 100% online, you'll NEVER see it happening.
You did not read the linked article, or you read some other article entirely, because that is not what it says.
http://taxprof.typepad.com/files/134tn0777.pdf
"Under generally accepted accounting
principles, U.S. companies do not have to
book tax expense on foreign profits if the company
deems them to be permanently invested overseas.
To lower their reported effective tax rates and boost
their reported after-tax profits, most companies
assume all of their unrepatriated foreign profits are
permanently reinvested offshore. If Apple asserted
that all of its foreign earnings were permanently
invested outside the United States, it would have
booked an estimated $3.6 billion less in tax expense,
and its effective tax rate would be 12.8 percent. (See
the table.) When assessing Apple’s tax situation
relative to that of most other companies, this adjusted
rate is probably more relevant than the
reported 24.2 percent rate.
Why doesn’t Apple maximize reported profit like
most other companies? We can only speculate.
Perhaps because it is breaking all records for profitability
now, it is saving some profits for less
fortunate times in the future. As the Joint Committee
on Taxation recently wrote: ‘‘If the company
accrues the tax expense in the year the profits are
earned, it may later decide that those funds will not
be repatriated after all. At that later time it may then
reverse the tax expense and shift financial statement
income from the prior period into the current
period.’’ (See ‘‘Present Law and Background Relating
to the Interaction of Federal Income Tax Rules
and Financial Accounting Rules,’’ JCX-13-12, Feb. 7,
2012, Doc 2012-2443 or 2012 TNT 26-15.)
Further, at what point did you decide to move the goalposts since Anantksundarum and I were discussing foreign profits and whether Apple was paying closer to 20% or instead closer to 2% income taxes on them. Now you're coming in saying those monies don't matter because they weren't earned here in the good ol' USA.
HUH? :???:
By the way, are you really a professional accountant or was there a misunderstanding?
What about Google? What on earth would that have to do with our discussion of Apple's foreign profits and tax obligations? Nothing. And trying to change the discussion to tax-dodging? Where did that come from? Are you saying Apple is a tax-dodger but Google is a better one? Geesh. . .
As you say: NEXT!
And once again, are you honestly a professional accountant? Pretty sure I recall you claiming to be but I could be mistaken.
A professional accountant would not need someone to explain it to them IMHO. That's one reason why I've asked you repeatedly if you are one, something you've not-so-deftly dodged answering.
It's not often I consider a discussion here at AI to have no value. This appears to be one of those times tho. Let's not continue.
DONE and OVER. . .
CPA? huh. . . Clients and all who pay you for tax and business structure advice? Nevermind.
Not again...sit down and have a beer or something. Pages of you 2 back and forth again gets old....
Read the link.
I did.
Thats about USA taxes only
Apple is paying 25% taxes WORLDWIDE.
Google is paying 21% taxes WORLDWIDE.
You are barking up the wrong tree.
Only 31% of Apple's revenue is from the USA. That stupid ass article you posted wants Apple to pay Corporate tax on ALL REVENUE APPLE MAKES in foreign countries. What kind of BS is that.
You don't calculate tax rate by taking US taxes divided by WORLDWIDE REVENUE.
You calculate it by US taxes divided by US revenue.
http://www.statista.com/statistics/263435/non-us-share-of-apples-revenue/
Thanks or setting him straight. This is typical of the sheer, aggravating, anti-Apple bullshit that this Gatorguy regularly posts on these forums. That's why I did not even bother to reply to the moronic post of his.
He pulls out some asses' blogs describing Apple's tax rate abroad as 2%. If that stupid claim were true, it would mean that Apple paid over 45% of its US income as taxes.
How? Taking 2014's 10K, Apple's overall pretax income was $53.5B, of which $20B was US and $33.5B was abroad. Apple paid cash taxes (i.e., excluding $4B in deferred taxes; I want to be conservative and err against Apple) of $10B, or 19%.
If this guy's idiotic 2% in foreign taxes claim were true, that would imply that Apple would have paid only $0.67B in cash taxes abroad, i.e., it paid $9.33B in cash taxes in the US. Gatorguy's utterly moronic analysis would imply that Apple paid 9.33/20 = 47% in the US.
Is anyone forcing you to read it?
Perhaps there are others whore interested.
That article is saying 70% of profits should be taxed in the USA because Apple products were created/designed in the USA. Even though only 30% of sales and profits are from USA sales.
That makes zero sense. I'm a CPA.
Using the same reasoning the article is using if the iPhone was created in China then Apple would not have to pay USA taxes on iPhones sold in the USA. Since it was made in China no taxes in the USA. Utter and TOTALLY STUPID. That goes against everything in the current tax code.
Sales tax applies to sales, and is (mostly) applied wherever the sale takes place. Apple pays sales tax on sales in every country they operate in, where it is levied.
Corporation tax applies to corporations, and is (mostly) applied to where the corporation is headquartered. Apple pays corporation tax on its profits in the USA, but also holds a lot of profit made offshore in holding companies offshore to avoid paying that tax in the USA, despite the fact that they are headquartered in the USA and do the large part of their design work in the USA (and few would deny that Apple product's USP is their design). Corporation tax is not and has never been applied to where the sale takes place, or where the product was manufactured.
The system makes perfect sense conceptually (though that doesn't mean it is perfect), and Apple (and many, many other multinationals) are bucking the system and using their complex organisational structures to create escape loopholes from the way the system was designed to work.
Apple also avoids paying foreign taxes and I think what they do there is even worse. I certainly don't want them paying less to foreign governments; why would you think that?
Unitary taxation is a proposition to solve this wealth hoarding issue, and country-by-country reporting is a proposition that aims to solve the problem of misrepresented economic activity.
P.S. Your Forbes article lost me when it claimed there is a strict definition of tax avoidance. There is not. The article only went downhill from that false claim.
To say that I would be disappointed if a highly educated and respected educator and writer would be prone to cast ad-homs as a proper response in a discussion between adults would be an understatement. IMHO the best minds are willing to question beliefs, even their own, particularly when presented with evidence that runs counter to it. Obstinance and teaching seem like a mismatched pair. NOT painting you specifically with that brush of course. Just talking in generalities.
Specifically for you tho since a invite to discuss via PM was rejected perhaps blocking my posts would help. Then you can avoid reading at least some of the things that might be written here at AI that don't jive with what you would prefer to believe. I realize that's only a small step good for a single blog but you can always throw out the paper or close a webpage if those same disagreeable facts appear in them which they may if you read much.
You and I have no more to discuss on this particular subject.