Apple might be 'named and shamed' in Australia for avoiding taxes

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Comments

  • Reply 21 of 96
    doggonedoggone Posts: 396member
    Tax codes in most countries are littered with loopholes that benefit corporations. How did they get there in the first place? Primarily through self-interested groups lobbying politicians to provide tax incentives. Those lobbyists ensure that campaigns get funded and politicians get great jobs after their careers end in politics.

    Politicians are crying foul now that their tax revenues are drying up. But there is not one politician who is willing to change the loopholes because they know it is political suicide. So the best they can do is make a lot of noise, point some fingers at well known multinationals and perhaps issue some token fines. Makes them look good but continues the status quo.

    The reality is this is how business and government works. There are a lot of freedoms in democratic countries but the large proportion of wealth in still controlled by a minority.

    Personally I think that Apple and other multinationals show pay the appropriate taxes on revenue within each country. The use of tax friendly regions to avoid those taxes is not correct. However it is up to each country to legislate to block these practices. I cannot see it happening since the politicians are on a short leash and will be told to behave if they get too bold.
  • Reply 22 of 96
    All of the "named" companies should join together and pull out of Australia at the same time. This would put the attention back on the anti-business idiot politician who is pointing fingers. Screw 'em!
  • Reply 23 of 96
    Quote:

    Originally Posted by NostraThomas View Post





    True. That cash on the balance sheet is more of a liability than the equivalent amount of debt.



    Very true.

    A company with say $1B in cash and a book value of say $3B is a takeover target. The purchaser (i.e. asset stripper) will only have to borrow/steal $2B to fund the purchase. They's use the $1B cash as surety for a $1B short term loan while the deal is going through.

    This model has been used many times in the past.

  • Reply 24 of 96
    I don't know Australian law, but if it's evasion, then that's bad on Apple. If it's avoidance, then it just means Apple is smart and/or Australia has some badly written laws. Don't blame Apple for being smarter than you are, law-makers!
  • Reply 25 of 96
    revenantrevenant Posts: 621member
    I wonder how many of these politicians use the tax loopholes like the hypocritical U.S. politicians do.
    Whaaa- we left loopholes for ourselves and now other people are using it to avoid taxes just like we do. Let's publicly make an outcry and hope no one opens our closets.
  • Reply 26 of 96
    crowleycrowley Posts: 10,453member
    It's great how many people there are here who are experts on Australian tax policy and how to avoid loopholes. Who knew it was so easy? You guys could make a lot of money seeking your services to governments around the world.
  • Reply 27 of 96
    steveausteveau Posts: 302member
    Can anyone on this site read English? "An Australian Senate committee investigating corporate tax avoidance is set to present transparency proposals on Monday." In other words this is the Australian parliament proposing to improve the australian tax system so that big multinationals pay the same company tax, etc. as everyone else in the country.
    Also "... in 2012 charged Apple with $28.5 million in back taxes.", meaning that Apple did break the existing rules then, and might have since.
    I love Apple, but that doesn't mean I love every tax accountant that works for them, that would be way too much love!
  • Reply 28 of 96
    Quote:
    Originally Posted by anantksundaram View Post





    Ah, the irony.



    Meanwhile, where is News Corp headquartered, and I wonder, how much do they pay in taxes in Australia?



    News Corp Australia has its home office in Sydney, but is a wholly-owned subsidiary of News Corp which was relocated to the US by Murdoch about ten years ago. Good question re: taxes; given their huge influence in Australia media and politics, it comes as no surprise that they are also suspected of the same tax avoidance measures:

    Quote:

     



     


    Over the past five financial years, News Corp Australia, which employs close to 9,000 Australians, had an accounting profit before tax of $815.9m, and paid $417.3m in Australian taxes. During this same period, News Corp Australia paid an additional $900m in Australian goods and services, fringe benefit and payroll taxes.


     


    ...


     



    The Sydney Morning Herald on 6 April 2015 reported:


     


    According to calculations by University of NSW accounting academic, Jeffrey Knapp, over the past 10 years, Mr Murdoch's companies here have paid income tax equivalent to a rate of 4.8 per cent on $6.8 billion in operating cash flows, or just 10 per cent of operating profits. 

     



    source here.

     

    So, it will be interesting if Newscorp Australia or its parent company are included on that register. I still think Sky News and the rest of the Murdoch-Australia media will spin the story as I indicated above.

  • Reply 29 of 96
    Quote:

    Originally Posted by Steveau View Post



    Can anyone on this site read English? "An Australian Senate committee investigating corporate tax avoidance is set to present transparency proposals on Monday." In other words this is the Australian parliament proposing to improve the australian tax system so that big multinationals pay the same company tax, etc. as everyone else in the country.

    Also "... in 2012 charged Apple with $28.5 million in back taxes.", meaning that Apple did break the existing rules then, and might have since.

    I love Apple, but that doesn't mean I love every tax accountant that works for them, that would be way too much love!

     

    If you have ever lived in Australia, you would understand why tax avoidance is a major issue here. Australia has some of the highest taxes in the world, in addition to a 10% GST.  This report is being sold as a benign, feel-good story about fixing broken tax laws so hard-working Aussies can catch a break, but the political and economic motivations are surreptitious.

  • Reply 30 of 96
    asciiascii Posts: 5,936member

    SHAME

     

    *ding ding*

     

    SHAME

     

    *ding ding*

     

    SHAME

     

    *ding ding*

  • Reply 31 of 96
    thepixeldocthepixeldoc Posts: 2,257member
    Australia or any other country contemplating closing specifically the loop-hole that Apple uses, are going to have a tough time.

    Main reason is that Apple distribution from country X (in this case located in Singapore) charges Apple Australia almost the full retail price of the devices they sell in that country.

    This is also how it was/is done here in Germany when there were Authorized Apple Retailers/Handlers. We used to get "maybe" a 3% rebate when purchasing for our clients versus them purchasing direct through the online Apple store. AFAIK this is how Apple sells to their very own stores now, and most (all?) online orders go through Luxembourg.

    As far as I can guess, the only way for a country to try and get around this and to change their tax laws, is to take Apple's quarterly reports and whatever Apple is declaring within a region as net profit, take a percentage of that for taxes.

    I'm not an accountant... but there are some here on these forums who are (calling [@]sog35[/@]) that might try to (PLEASE!) objectively guesstimate what could be changed to make this fair for all. Meaning the countries, their consumers, and Apple as probably one of the more stable taxpayers in the country with a future.

    Edited: spelling
  • Reply 32 of 96
    crowleycrowley Posts: 10,453member
    ^ profit shifting is a difficult avoidance to address, but transparency, with country-by-country reporting is a good start. General anti-avoidance rules are nice and fluffy but difficult to pass muster and problematic to implement/enforce. Unitary taxation will also help in the corporation's home country, but there isn't really an analogue for the foreign operations. Sales tax is the obvious solution, but it's a crude and non-progressive tool.

    This stuff is complicated, which is why saying that politicians "just" need to close the loopholes are not helpful.
  • Reply 33 of 96

    Shame on Apple for using smart accounting.  It is the job of any company leadership to maximize the value of the corporation.  They are not doing anything illegal.  The only ones that have an issue with this are those with a personal agenda (primarily politicians) and people who know nothing about successfully running a company.

  • Reply 34 of 96
    richlrichl Posts: 2,213member

    Everyone else's job looks so simple from a distance. Closing loopholes and fixing tax codes isn't a simple job. You've got a lot of smart people constantly trying to break your system.

  • Reply 35 of 96

    This is so old. 

     

    It's literally happening because officials in several governments have no idea how their own tax systems work. 

     

    I'm Irish. We get the finger pointed at us a lot so I've went to the trouble of figuring out the whole mess. 

     

    First: Apple pays taxes in every country it sells products in. Sales tax, payroll tax, income tax, all of that good stuff. There's literally no way you can evade that and there is absolutely no evidence Apple does. These countries have their knickers in a twist because of what Apple does with all of that money it makes internationally after it's taxed in each of those countries. It brings it back to Ireland where, like in any other country in the world, it is treated essentially as CAPITAL GAINS. Capital Gains tax generally gets taxed at far lower levels than income tax, which is why Apple only taxed at around 2% for that money. So it's held by this separate company called Apple Operations and it just sits there. 

     

    HOWEVER, Apple's IRISH income is taxed at Ireland's normal rate of 12.5%. What all of these countries (UK, Australia, France, EU Commission) are demanding is that Ireland treat Apple's already taxed international income as Irish income and therefore charge Apple 12.5% on its $130 or so billion that it has in Ireland. Can nobody else see how bonkers that would be? Ireland has 4.6 million people in it. It's estimated that if the EU Commission rules that Apple has to pay the Irish Government back for every year since it established its headquarters there it would amount to about €30 billion, which would be about €6500 for every man, woman and child in the country. Absolutely ludicrous. And that's the reason why the Irish government is fighting so hard against the ruling. It's completely politically motivated.

     

    So I don't know exactly what Australia would like. Whether Apple's international earnings are taxed again at its headquarters will be of no benefit to Australia or any other country apart from Ireland. The US government is the only one that even has the slightest case against Apple. That's because potentially they could change the law so that it demands international corporate income is forcibly returned to the United States and taxed (which we can debate endlessly) but all these other countries are off their fecking rockers. Their officials know it's something the public and 99% of journalists don't understand so they launch these "investigations" repeatedly in order to appeal to populism but it's just silly at this point. 

  • Reply 36 of 96



    Even if they were doing anything illegal, it still wouldn't be Australia's money! It's getting hilarious at this stage. Australia is essentially asking for Apple's cash pile (that has already been taxed in each country it operates in) to be taxed again at its HQ in Ireland and then have the money sent back to Australia. That's literally what they're indirectly asking for. It's nuts. Like in this case it's not even smart accounting. It's just...accounting! 

     

    I suggest Mr Abbott go back to trying to fix the economy and society he's destroyed before pointing fingers about things he clearly doesn't understand. 

  • Reply 37 of 96
    cnocbuicnocbui Posts: 3,613member

    Where a company purports to be 'purchasing' what it's selling from a foreign division of itself,  tax turnover.

  • Reply 38 of 96
    cnocbuicnocbui Posts: 3,613member
    Quote:
    Originally Posted by Red Rogers View Post

     

     

    If you have ever lived in Australia, you would understand why tax avoidance is a major issue here. Australia has some of the highest taxes in the world, in addition to a 10% GST.  This report is being sold as a benign, feel-good story about fixing broken tax laws so hard-working Aussies can catch a break, but the political and economic motivations are surreptitious.




    Having lived in Australia, I'll swap my taxes for Australia's, any day of the week.  10% GST, try 23%.

  • Reply 39 of 96
    SpamSandwichSpamSandwich Posts: 33,407member
    cnocbui wrote: »

    Having lived in Australia, I'll swap my taxes for Australia's, any day of the week.  10% GST, try 23%.

    Where do you live now?
  • Reply 40 of 96
    asciiascii Posts: 5,936member
    Quote:

    Originally Posted by Red Rogers View Post

     

     

    If you have ever lived in Australia, you would understand why tax avoidance is a major issue here. Australia has some of the highest taxes in the world, in addition to a 10% GST.  This report is being sold as a benign, feel-good story about fixing broken tax laws so hard-working Aussies can catch a break, but the political and economic motivations are surreptitious.


    I don't think so. Multinational companies have enjoyed a window where tax laws (which were drafted in an age when most companies were national only) have not caught up with them and the additional tricks available to them as multinationals. Just as media pirates enjoyed a brief window before the law caught up with torrents and the global nature of the Internet. 

     

    The law moves slowly but it does move, and these windows are coming to a close. Soon multinationals will have to pay the same tax as nationals, and they will have to decide, given the new arrangements, whether it's still worthwhile operating in all the countries they currently operate in.

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