Apple CEO Tim Cook calls EU tax ruling 'total political crap,' cites potential anti-US sentiment

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  • Reply 61 of 201
    gatorguygatorguy Posts: 23,321member
    gatorguy said:
    Um, I was taking about the retained earnings abroad, and the fact that it will be brought back. 

    It'll simply be be returned to shareholders instead of being invested in real assets. 
     
    Oh. When you said "They will never see the counterfactual of the trillions that don't get invested there in the future by US corporations" it sounded as tho you were talking about something other than retained earnings.

    So those $Trillions in retained earnings are invested in the EU now? As an example didn't reports awhile back say Apple was mostly buying US Treasury's and other very safe but low-return (1%?) securities with those "overseas" funds, keeping their money safely within the US borders? Remember the Braeburn story a few months ago? If accurate those foreign funds are invested in the US more so than the EU aren't they? I suspect Google's cash, MS cash, and others are handled similarly, placed in low-risk investments like US Treasury certificates IMHO. 
    Read in the context of post #42... 
    The key point is, it hasn't been returned to shareholders. 
    And you're saying $200B+ will be repatriated and returned to shareholders if the tax appeals are filed but fail? I'm sorry but you not being entirely clear on what point you are trying to make.

    Anyway, on a related note if the money for the most part is not being invested in Europe anyway then what is the EU loss if Apple were to move their no-tax/low-tax subsidiaries to some other region? You yourself agree they aren't going to stop selling Apple products to European buyers, and a sales structure and data centers are still needed in Europe to serve those Apple customers. 
    edited September 2016
  • Reply 62 of 201

    It is sad to see Tim Cook taking this line. Most of the people on this forum will stay with Apple to the bitter end but vast swathes of the unconverted may just look at this situation and decide to go for Samsung for their next phone.
    LOL. Have you looked up how much Samsung pays in taxes in the EU? Can you produce any figures to show that it is at a higher rate than Apple does?
    The point I am making is that it is Apple that is getting all the bad publicity, made worse by Tim Cook's response. Unless Samsung get the same bad PR it won't affect them regardless of what they pay.
    logic2.6
  • Reply 63 of 201
    gadgetdon said:
    I don't think that's a good argument for Tim Cook to make, that this is a grab for US taxes, because Apple doesn't PAY US Taxes on those profits and keeps it offshore to avoid paying US Taxes. 
    That's because the "repatriation tax" is 35%.  Thirty-five percent!!!  That's like saying, "GadgetDon, you're doing such a great job at making money in a country other than your home, we'll just take over a third of it if you decide to bring it back into the United States!"  That's money that, to Apple, just goes into the ether, never to be seen again. 

    This is is why I'm a supporter of the National Sales Tax, with a pre-rebate to protect the poor.  

    www.fairtax.org

    --Lex
    SpamSandwichtoddzrx
  • Reply 64 of 201
    jkichlinejkichline Posts: 1,359member
    You can bet that Apple made sure their ducks were in a row in regard to the history of this tax position with Ireland. They are claiming that they did everything right and legal based on the laws of Ireland. If the EU has problems with those arrangements, then they need to go after after Ireland. Period.  It is then up to Ireland to determine what to do about any decrepencies the EU found. If they did then go after Apple, Ireland could do that with the full backing of the EU.

    Otherwise, you are not treating Ireland as a sovereign state. Now if state aid was found, the bill should be on Ireland to pay. They could then decide, based on their laws, if they should go acquire back taxes.

    Right now it appears that the U.S., Apple and Ireland are against this commission's ruling so there seems to be something fishy going on here.

    Apple stands on principle. It's what they do. No, going up against the FBI was probably not great PR, but there is no other way to approach it according to Apple. The same goes here. They did what they were told to do based on the law, and now someone wants to change the game after it's been played. They are fighting that on the simply playground philosophy of not changing the rules.
    edited September 2016 jony0equality72521toddzrxmonstrosity
  • Reply 65 of 201
    krawall said:
    I'm so ashamed of being European right now and thank goodness I don't live there anymore. It's one thing of slapping the hands of Ireland who offered this deal to Apple and to discontinue this practice which I'm all for. But it's another thing with demanding money for something that has happened in the past that was in full accordance with the law. 

    The point is, it was not in accordance with the law. Just because a tax bill was in the past doesn't mean you are absolved from it.
  • Reply 66 of 201
    Its not allowed within the EU to negotiate special tax arrangements for companies. This rule is simply to ensure fair competition. Its not allowed to do speculate on transfer pricing - meaning moving profits to low tax areas. And still Apple (and many other companies which are also targeted (dont forget that)) have 0 profits in most EU countries. So basically Tim Cook is deliberately circumventing laws and applying a unethical and illegal methods to maximize profits...so how can he be surprised that Apple is a target when they have "their fingers in the cookie jar". ...and for those who are outraged about the amount, please note that this is taxes from the period 2003-2014 and not a "fine", so Apple has just weaseled their way out of paying 13bill EUR tax
    big brother 84sensisingularityrune66
  • Reply 67 of 201
    radarthekatradarthekat Posts: 3,425moderator
    flabber said:
    Cook also agreed with comments made by U.S. Secretary of Treasury Jack Lew, who said the tax ruling is a blatant grab at taxes owed to the U.S. government. "I think that's exactly what it is," Cook said. "I think it's a desire to reallocate taxes that should be paid in the U.S. to the EU."

    The above part is complete and utter BS. Yes, Apple and Ireland made agreements on the amount of tax that Apple would have to pay if they'd choose to use Ireland as their Eu-base of operations. But in no way is that tax owed to the US government. Technically it's not owed to anyone since there's an agreement. But even íf there's tax owed to anyone, then Ireland and Apple need to specify what amount of profit/income was made based on EU-sales. Because there's no way that áll of the taxes made in Ireland, are owed to the US government.

    Having said that: I despise the EU for charging outrageous taxes like that. Ireland made a deal with Apple to improve Ireland's economy. That was done befóre the EU made a vow to stop tax-deals in the EU. If the EU implements these plans after Ireland's deal with Apple, they need to take it up with Ireland. Apple shouldn't be involved or punished for political turbulence (in the EU in this case).

    I despise the EU, even more so because of how they try to punish companies for deals made with countries. But I think Apple is completely missing the point here. Just because you paid 400mil in taxes doesn't mean you're paying a proper amount. 0,005% is still 0,005%, and not the norm for most other companies in Ireland. And the US government certainly doesn't have any right to taxes made by products sold to EU citizens.
    It's called the foreign tax credit.  It exists to ensure that businesses and individual aren't taxed twice.

    Here's how it works.  U.S. has a higher tax rate than a foreign country, in this case about 35% versus 12%, or, through perfectly legal means, the 2.5% average Apple paid Ireland.  So, if that $14.5 billion is equal to the other 10%, and the EU, through a backdoor of twisting it's Competition Committee rules, forces Apple to pay that extra 10%, totaling $14.5 billion, even thought that would be a retroactive clawback that goes against the legality of Apple's tax structure in Ireland, Apple would simple claim that as a foreign tax credit when repatriating those profits upon which tax is owed back to the U.S.  And therefore, the $14.5 billion, that Apple would have paid regardless (as the U.S. is extremely unlikely to lower its tax rate below 20%, much less 12.5%) will be shifted from eventually being paid to the U.S. Treasury to Ireland.  

    So, indeed, "yes way" sir, that tax and more will certainly be owed to the U.S. government if not grabbed by the EU's illegal and retroactive maneuver.

    And people wonder why Apple and other companies defer repatriating foreign-earned profits.  What do you think would happen if Aplle had already repatriated those profits, paid about 35% to the U.S. Treasury, and then this whole issue came to the conclusion it did?  Apple might well end up paying that additional 10% though this EU grab, and then have to go begging to the U.S. IRS for a retroactive foreign tax credit.  With $14.5 billion at stake, already with the Treasury, how sympathetic do you think the U.S. government would then be to Apple's plight?  
    edited September 2016 jony0
  • Reply 68 of 201
    gatorguygatorguy Posts: 23,321member
    gadgetdon said:
    I don't think that's a good argument for Tim Cook to make, that this is a grab for US taxes, because Apple doesn't PAY US Taxes on those profits and keeps it offshore to avoid paying US Taxes. It's reasonable to argue the ex post facto aspect of this ruling, question the authority - but I think going forward the really sweet deal for taxes is toast. Negotiate a shorter timespan for the back taxes (which means much less money owed) and declare victory.
    Apple does not avoid paying taxes, any more than anyone who has a 401(K) account avoids paying taxes.  It's called deferring taxes, and there's a huge difference between that and avoiding taxes.  Let's just get that straight.
    I believe financial reports have indicated that upwards of $100B+ in Apple cash does not have an allowance for deferred taxes. It's considered permanently invested overseas with no expectation of ever paying US taxes on it. If other regions where Apple bases operations also did not collect corporate taxes on the profits then hasn't Apple successfully avoided paying taxes, not even an allowance for deferred taxes? That was why Apple made mention in a previous 10K of potential material impact to Apple's finances from this investigation. No tax on the profits in two largest Irish units profits was previously allowed for either there or in the US. 

    Apple had zero plans to ever 'bring it on home". Taxes on it were not deferred. 
    edited September 2016
  • Reply 69 of 201

    It is sad to see Tim Cook taking this line. Most of the people on this forum will stay with Apple to the bitter end but vast swathes of the unconverted may just look at this situation and decide to go for Samsung for their next phone.
    LOL. Have you looked up how much Samsung pays in taxes in the EU? Can you produce any figures to show that it is at a higher rate than Apple does?
    The point I am making is that it is Apple that is getting all the bad publicity, made worse by Tim Cook's response. Unless Samsung get the same bad PR it won't affect them regardless of what they pay.
    Apple is not getting 'bad publicity' everywhere, only in certain segments of the EU. If the Europeans are content then to switch to Samsung -- a third-rate, thieving company to begin with, that for all you know, may be paying no more in taxes than Apple does -- then all I'll say is that they would be a bunch of hypocrites. Knock yourselves out. 

    In any event, I don't think it'll happen. But my speculation on that is as good as yours. 
    jony0
  • Reply 70 of 201
    sensisensi Posts: 346member
    C[r]ook making a fool of himself, blabbering ludicrous and slandering garbage while crying wolf with nationalistic tremolos. That's turning pathetic.
  • Reply 71 of 201
    alexis said:
    gadgetdon said:
    I don't think that's a good argument for Tim Cook to make, that this is a grab for US taxes, because Apple doesn't PAY US Taxes on those profits and keeps it offshore to avoid paying US Taxes. 
    That's because the "repatriation tax" is 35%.  Thirty-five percent!!!  
    Nonsense. It is not 35%. It is only the difference between the rate paid abroad and the 35%. I personally think (and have said so in this forum many times in the past year) that Apple should swallow its pride, pay the extra, and bring it back to the US. Repay the debt, pay the rest back to shareholders. Borrow in the future if/as/when needed. Get rid of all this tax-related crap. 
    edited September 2016 gatorguy
  • Reply 72 of 201
    Cook is making the wrong argument here and his response was just painful to read.
    Not sure why.. He's claiming that the EU Commission's .005% is an outright lie. That they paid over 400 million in 2014 (about 12%, which is what it's supposed to be at in Ireland). Thats a big discrepancy and I'd like to know why its so big; whats the deal with the EU's numbers? I'm reserving my opinion until we find out why ...
    edited September 2016 sricejony0
  • Reply 73 of 201
    jkichline said:
    You can bet that Apple made sure their ducks were in a row in regard to the history of this tax position with Ireland. They are claiming that they did everything right and legal based on the laws of Ireland. If the EU has problems with those arrangements, then they need to go after after Ireland. Period.  It is then up to Ireland to determine what to do about any decrepencies the EU found. If they did then go after Apple, Ireland could do that with the full backing of the EU.

    Otherwise, you are not treating Ireland as a sovereign state. Now if state aid was found, the bill should be on Ireland to pay. They could then decide, based on their laws, if they should go acquire back taxes.

    Right now it appears that the U.S., Apple and Ireland are against this commission's ruling so there seems to be something fishy going on here.

    Apple stands on principle. It's what they do. No, going up against the FBI was probably not great PR, but there is no other way to approach it according to Apple. The same goes here. They did what they were told to do based on the law, and now someone wants to change the game after it's been played. They are fighting that on the simply playground philosophy of not changing the rules.
    Apple stands on principle. 

    I guess it depends on whether that principle is to be legal.
    Or whether that principle is to be ethical, moral and fair.

  • Reply 74 of 201
    gatorguy said:

    Apple had zero plans to ever 'bring it on home". Taxes on it were not deferred. 
    You are quite wrong about that. Cook is already suggesting that Apple will bring a lot of it back to the US in 2017. You can look it up, if you wish. 
    srice
  • Reply 75 of 201

    It is sad to see Tim Cook taking this line. Most of the people on this forum will stay with Apple to the bitter end but vast swathes of the unconverted may just look at this situation and decide to go for Samsung for their next phone.
    LOL. Have you looked up how much Samsung pays in taxes in the EU? Can you produce any figures to show that it is at a higher rate than Apple does?
    The point I am making is that it is Apple that is getting all the bad publicity, made worse by Tim Cook's response. Unless Samsung get the same bad PR it won't affect them regardless of what they pay.
    If you think that switching to a thieving company like Samsung -- who, for all you know, could be paying less in taxes than Apple -- is the solution, knock yourself out! I personally don't think it will happen. My guess is as good as yours. 
    edited September 2016
  • Reply 76 of 201
    gatorguy said:
    gatorguy said:
    Um, I was taking about the retained earnings abroad, and the fact that it will be brought back. 

    It'll simply be be returned to shareholders instead of being invested in real assets. 
     
    Oh. When you said "They will never see the counterfactual of the trillions that don't get invested there in the future by US corporations" it sounded as tho you were talking about something other than retained earnings.

    So those $Trillions in retained earnings are invested in the EU now? As an example didn't reports awhile back say Apple was mostly buying US Treasury's and other very safe but low-return (1%?) securities with those "overseas" funds, keeping their money safely within the US borders? Remember the Braeburn story a few months ago? If accurate those foreign funds are invested in the US more so than the EU aren't they? I suspect Google's cash, MS cash, and others are handled similarly, placed in low-risk investments like US Treasury certificates IMHO. 
    Read in the context of post #42... 
    The key point is, it hasn't been returned to shareholders. 
    And you're saying $200B+ will be repatriated and returned to shareholders if the tax appeals are filed but fail? I'm sorry but you not being entirely clear on what point you are trying to make.

    Anyway, on a related note if the money for the most part is not being invested in Europe anyway then what is the EU loss if Apple were to move their no-tax/low-tax subsidiaries to some other region? You yourself agree they aren't going to stop selling Apple products to European buyers, and a sales structure and data centers are still needed in Europe to serve those Apple customers. 
    At some point, I can't connect every single dot for you. Sorry. 
  • Reply 77 of 201
    krawall said:
    I'm so ashamed of being European right now and thank goodness I don't live there anymore. It's one thing of slapping the hands of Ireland who offered this deal to Apple and to discontinue this practice which I'm all for. But it's another thing with demanding money for something that has happened in the past that was in full accordance with the law. 

    The point is, it was not in accordance with the law. Just because a tax bill was in the past doesn't mean you are absolved from it.
    Just because someone says "it's not in accordance with the law" doesn't make it in non-accordance with the law. Surely you must know that!?
    equality72521monstrosity
  • Reply 78 of 201
    radarthekatradarthekat Posts: 3,425moderator
    redefiler said:
    Ireland has made deals like this since the mid 20th century with the airline industry.  It's an overwhelmingly agrarian based economy, as an incentive to attract more diverse industries, they offer tax incentives.  

    For the slower witted who find Cook's comments confusing or outrageous, this is because y'all ignorant of the finer details, and go shooting your fool mouths off like moralizing Puritan zealots, before learning a single thing past your lizard brain reflex.

    This is Irish tax law, and Apple has fully complyied with it.  This is also a long standing practice, and the EU hasn't said a peep about this since the mid 1980s?  Fishy, considering Tim Cook has been meeting with both Democrats and Republicans, while talking about finding a way toward patriating those foreign earnings.  

    Translation for the still confused, angry and dim:  US tax code is broken, and foreign revenue is essentially taxed twice, the second at an outrageous level.  Apple's been working to reform that and get foreign assets home to the US, so pretty obvious Cook thinks the EU timing is suspicious (psssst... its been over 30 years).  Apparently the Secretary of the US Treasury said all this first.  Hardly controversial, unless of course you've replaced rational thought with poorly thought out, collectivist dogma. 
    Everything you said is spot on. Many people clearly don't know anything about what they speak, and so are quick to condemn based upon their innate, but highly ignorant, sense of fair play.  

    To them I say, how's this for fair play.  To all those who think the EU is in the right here, how would you like it if you made a decision, many years ago, based upon an agreement you came to with your government, but then, years later, your government revokes and makes null and void that agreement, telling you that you now owe the government a great deal of money? You'd think, hell, I would have gone a different route all those years ago, wouldn't I? You'd feel you were conned. This is exactly what's happening here. The EU is rewriting history in its favor, without allowing Apple to go back 20+ years and make a different decision about what it would have done had it known the rules would be changed and then applied retroactively to demand a huge amount of their cash.
  • Reply 79 of 201
    gatorguygatorguy Posts: 23,321member
    gatorguy said:

    Apple had zero plans to ever 'bring it on home". Taxes on it were not deferred. 
    You are quite wrong about that. Cook is already suggesting that Apple will bring a lot of it back to the US in 2017. You can look it up, if you wish. 
    Some of it had taxes deferred. Those are the funds they expect to someday "bring home". At least $100B of it as of 2012, which at the time was the majority of Apple's cash holdings, was considered permanently invested overseas with no allowance for future US taxes. You can look it up for yourself if you're so certain I'm wrong. I think you find you are the one mistaken.  

    And no Mr Cook did not suggest "Apple will bring a lot of it back to the US in 2017". You should read what was actually stated. "Might" doesn't mean will and "some" doesn't mean a lot. 
    edited September 2016
  • Reply 80 of 201
    dacloodacloo Posts: 890member
    Pay taxes like anyone else, Tim Cook, and shut up.
    Glad you're creating jobs, but so is anyone else and they have to pay double digit taxes, not less than 1%.

    What an arrogant attitude. 
    big brother 84rune66
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