EU-imposed Apple Irish tax bill could exceed $21.2B if appeal process fails

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  • Reply 61 of 63
    adm1 said:

    ppietra
    said:
    Apple could never owe that much money to other European countries because no one would ever be able to demonstrate that Apple’s creation of value, that comes from intellectual property, is created or is resident solely in those countries, they would only be able to tax the profits generated from distribution and part of the services.
    Ireland is the only european country where Apple could be taxed that much money, but it seems they don’t agree with that because of their laws.

    just because Tim Cook said you should be taxed where you "create value", doesn't mean that's the law. That's just his opinion. Current law states you pay tax where you operate and sell products, nothing to do with where your R&D offices are. If that was the case, everyone would open an R&D office in the Cayman Islands or Panama and stick a local in there to staff it - boom, zero tax.
    I am talking about laws applying to multinationals and the amount that Apple would owe over what it already paid in those countries.
    Current laws state you pay taxes over the profits you declare in the country. If a country doesn’t believe the company is reporting the correct profit, it will have to demonstrate that the economic activity in the country creates more value than what the a company declares.
    Since the company exports finished products no one can argue that it has to pay in the country of destiny tax over all the profit it makes for that device, because it makes no economic sense to export with a price for just the production cost and logistics. If Apple sells to a third party reseller it would be for all the profits it can negotiate. That third party profits can only be the difference between the price of sale and the cost of buying from Apple. The same logic applies if it is an Apple subsidiary in another country.
    The only other argument that could be made to pay $21.2B is to say that Apple developed all of the product in Europe and because of that it should attribute all the profits to the local branch, [EDIT] which of course is not true. The conclusion is that Apple could never be made to pay $21.2B in other EU countries, only a small fraction of that.
    edited September 2016
  • Reply 62 of 63
    h2ph2p Posts: 268member
    gatorguy said:
    The money is overseas on the books, but in reality it'll be held in banks all over, and probably a large amount of it will be New York.  You have to pay repatriation tax to transfer the money to the home corporation, but not to move the actual money around.

    Not wrong at all.
    I wasn't going to bother for that particular poster, but for those interested in knowing facts...
    https://www.americanprogress.org/issues/tax-reform/report/2014/01/09/81681/offshore-corporate-profits-the-only-thing-trapped-is-tax-revenue/

    It's so much better when someone politely asks for more information, or courteously disagrees. They look just plain silly ridiculing other members when it turns out they themselves were wrong. 
    I ask that you read the excellent piece posted by Gatorguy from AmericanProgress that the made it very clear to me the deferral tax policy that is at the root of US corps (not) repatriating profits (https://www.americanprogress.org/issues/tax-reform/report/2014/01/09/81681/offshore-corporate-profits-the-only-thing-trapped-is-tax-revenue/). I had to keep reading, even when my question-meter was ringing.

    I do wonder what the banking rules are that allow US Banks & their foreign subsidiaries to move "foreign money/profits" into the US lending market. Is it as simple as the bank has cash freed up to lend "here at home"? Is it that a US bank can lend to anyone, world wide, as their foreign subsidiaries can lend world wide? Regardless, it is an enlightening article.
  • Reply 63 of 63
    avon b7avon b7 Posts: 4,202member
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