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

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  • Reply 161 of 201
    srice said:
    No value is added in the EU, they are just a consumer.  So the taxes should rightfully be applied upstream - either to the US, where the product was designed and developed, or in China where the product was built. (or Ireland where the R&D is performed *cough*). 
    Whether 'value' is added or not is simply irrelevant. This is just what Apple want you to believe to support their argument.

    Taxes are charged where profit is made. If Apple makes $XXB profit from their sales in Europe they should pay the appropriate rate of corporation tax on those profits ($XXB x 12.5% for example).

    It really is as simple as that.
    It isn't so simple. Where is the profit made? Take this scenario:
    - Apple Ireland pays Foxconn €500 for each iPad FC manufactures
    - Apple IE then supplies the iPad to Apple Germany at €700  
    - Apple DE then sells the iPad from an Apple Store in Munchen for €800

    How much profit has Apple made on this iPad? Where did it make the profit?

    Bear in mind there are all sorts of additional costs incurred in multiple jurisdictions for R&D, marketing, shipping, retail store rents, retail staff employees, technical & warranty support, etc. 
    revolution
  • Reply 162 of 201
    gatorguy said:
    "The Company’s (Apple) effective tax rates (some of which is deferred) for all years differ from the statutory federal income tax rate of 35% due primarily to certain undistributed foreign earnings, a substantial portion of which was generated by subsidiaries organized in Ireland, for which no U.S. taxes are provided because such earnings are intended to be indefinitely reinvested outside the U.S."

    EDIT: And a more recent one, 2015
    Substantially all of the Company’s undistributed international earnings intended to be indefinitely reinvested in operations outside the U.S. were generated by subsidiaries organized in Ireland, which has a statutory tax rate of 12.5%. As of September 26, 2015, U.S. income taxes have not been provided on a cumulative total of $91.5 billion of such earnings. The amount of unrecognized deferred tax liability related to these temporary differences is estimated to be $30.0 billion.

    I know this specific footnote to which you refer.

    I think I am finally beginning to understand your confusion. I will try once more, and after that I will probably have exhausted my abilities to do so. First, you are conflating the word "indefinitely" with the word "forever". Second, you are conflating this issue with the EU-Ireland-Apple-US spat. In relation to the first, 'indefinitely reinvested' simply means that, "at this point, we have no plans to bring it back." All multinationals do it all the time. In relation to the second, this has nothing whatsoever to do with the total taxes that Apple would owe at home+abroad (assuming there is no tax holiday or tax deal in the US, which we don't currently have anyway, so let's stipulate to what we currently know is the situation). It does however, have a lot to do with what could end up being a major EU-US spat.

    When a firm does not pay taxes because of differences between when income is earned and taxes paid, then, under either IFRS or US GAAP, firms are required to create a deferred tax liability for the difference between the taxes paid and the taxes owed, unless in the case of foreign income the firm intends to "indefinitely postpone" repatriation of the income. This is called a temporary difference.

    While the statutory tax rate is 12.5% in Ireland, the effective tax rate that Apple has paid taxes at the rate of about 2.2% in Ireland, which is consistent with the very low rates noted in recent press reports. Given the cumulative earnings of $91.5 B noted in Apple’s financial statements and the U.S corporate statutory tax rate of 35% (and booked through Ireland), Apple should raise a deferred tax liability of $91.5 B x (35% – 2.2%) = $30.012, which is roughly equivalent to the deferred tax liability Apple estimates of $30.0 B. It simply says that, if all that $91.5B were repatriated to the US today, at the current US tax rates, Apple would owe the US government $30B. They can decide to do this any time, any portion of the $91.5B, for any reason (in fact, Cook is suggesting that they might).

    So, note a number of things: (i) Nothing in there says the money can't be brought back; (ii) Nothing in there says anything about whether the appropriate tax rate from the standpoint of the Irish authorities is 2.2% or 12.5%, or whether Apple got some special deal from the Irish government (as the EU claims); (iii) Nothing in there says that has done anything different than any other US company; (iv) Nothing in there says that Apple hasn't paid its 'fair share' in the EU (whatever the heck that means); (v) Nothing in there says that Apple doesn't currently owe $30B to the US government -- in fact, that's the company's estimate of what it would owe in the absence of a special deal. (Btw, any decent equity analyst should factor that into his/her valuation of Apple, by estimating the probability and the timing of that happening -- I am guessing that's what the good ones do).

    But most importantly, note that, if EU takes $15B, Apple will still owe no more than $30B in the aggregate: it's just that the US Treasury will now only get $15B. It's no skin off Apple's back, it's only a question of to whom they should send, or how they should split, that $30B check. In fact the same logic would apply if Apple (and others) got a tax holiday, or special low tax rate from the US government: if, for example, the US said, "we'll let you bring it in at a special rate of 10%", Apple would owe $7B to the US; if the EU took $15B before Apple sent it to the US, Apple will ask for, and get, a $8B credit from the US government. Either way, no big deal for Apple.

    In addition to all this, there are the issues of: (i) Fingering one company; (ii) Fingering one country; (iii) Making it retroactive.

    I'll stop there.
    Very clearly put!
  • Reply 163 of 201
    He's right. But what I find interesting is that Tim Cook supports political candidates here in the US that would support imposing high taxes on Apple and other companies. I like Tim Cook a lot, but he needs to seriously take a look at his conflicting opinions.
    SpamSandwich
  • Reply 164 of 201
    blitz1 said:
    BTW: the EU has been at peace for over 70 years, thanks to the EC/EU. That's a record.
    By all means, this fact alone has made the world a far better place.
    Correction: Europe has had the longest stretch of peace in its history since 1945 (over 70 years), thanks to the United States of America.  We occupied after WW2 and it's been at peace (not counting terrorism) ever since.
    apple ][
  • Reply 165 of 201
    All arguments presuppose taxation as such is moral, of course.
    Excellent point!  And sorely ignored in this debate.  Note how many "tax apologists" come out of the woodwork in discussions like these, without ever considering the morality of taxes themselves.  Governments, of course, assume they are.
    designrSpamSandwich
  • Reply 166 of 201
    jpolster said:
    srice said:
    dacloo said:
    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. 
    This is probably a good time to repeat myself:

    The EU has a VAT - value added tax system, where the taxes are allocated based on where the value to the product was added. 

    They do not have a sales tax based system.

    No value is added in the EU, they are just a consumer.  So the taxes should rightfully be applied upstream - either to the US, where the product was designed and developed, or in China where the product was built. (or Ireland where the R&D is performed *cough*). 
    actually sales tax is exactly the same as VAT, just a different name. 
    Groan.... one can't compete with this level of ignorance and arrogance.
    actually it is the same really. In the US they differentiate a bit as VAT is a superset of sales tax and can only be collected by . But the effect the end user and the government is essentially the same. Yes there are some differences as VAT is a system that is funneled through the channel  but in the end its the same idea and for sake of this discussion its similar
  • Reply 167 of 201
    crowley said:

    "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."
    Wow, that's rich. Set up a corporation with the express intention of avoiding paying taxes in the US or EU, then try and play them off against each other when you get caught.

    Sorry Tim, your hands are slick with red stuff.
    Get caught abiding by Irish tax laws in Ireland?
    The EU is not ready for the global economy and should be dissolved.
    What the fuck do they think this is?  A Socialist World?
    That's what they would like it to be. Damn EU. 
  • Reply 168 of 201
    crowley said:
    This ludicrous politically motivated and invasive ruling is why Brexit no longer has any opposition in Great Britain.
    ???

    There is a huge amount of opposition to exit from the EU in Great Britain, so much so that the Prime Minister is shying away from a Parliamentary vote (which has raised constitutional issues), likely because a motion to invoke Article 50 won't pass.  

    Where did you pull this from?
    Bullshit, she has been very clear that Brexit means Brexit. Stop reading The Guardian.
    apple ][
  • Reply 169 of 201
    jpolster said:
    jpolster said:
    srice said:
    dacloo said:
    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. 
    This is probably a good time to repeat myself:

    The EU has a VAT - value added tax system, where the taxes are allocated based on where the value to the product was added. 

    They do not have a sales tax based system.

    No value is added in the EU, they are just a consumer.  So the taxes should rightfully be applied upstream - either to the US, where the product was designed and developed, or in China where the product was built. (or Ireland where the R&D is performed *cough*). 
    actually sales tax is exactly the same as VAT, just a different name. 
    Groan.... one can't compete with this level of ignorance and arrogance.
    actually it is the same really. In the US they differentiate a bit as VAT is a superset of sales tax and can only be collected by . But the effect the end user and the government is essentially the same. Yes there are some differences as VAT is a system that is funneled through the channel  but in the end its the same idea and for sake of this discussion its similar
    Vacuity piled on top of ignorance. I don't know what else to say.
  • Reply 170 of 201

    He's right. But what I find interesting is that Tim Cook supports political candidates here in the US that would support imposing high taxes on Apple and other companies. I like Tim Cook a lot, but he needs to seriously take a look at his conflicting opinions.
    When and where has Tim Cook ever said Apple will not pay the taxes that it is required to?
    SpamSandwich
  • Reply 171 of 201
    alexis said:

    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
    Dude: you made my day; another FairTax proponent!!!!
    SpamSandwich
  • Reply 172 of 201
    toddzrx said:
    blitz1 said:
    BTW: the EU has been at peace for over 70 years, thanks to the EC/EU. That's a record.
    By all means, this fact alone has made the world a far better place.
    Correction: Europe has had the longest stretch of peace in its history since 1945 (over 70 years), thanks to the United States of America.  We occupied after WW2 and it's been at peace (not counting terrorism) ever since.
    Correction: The USA military were there chiefly to stop Russian aggression (for which we are all very grateful BTW). The EC/EU is there to help stop European countries fighting each other. 
  • Reply 173 of 201
    apple ][apple ][ Posts: 9,233member
    All US troops should be pulled out of EU countries.

    Let them fend for themselves. 

    Screw 'em.




    designrSpamSandwich
  • Reply 174 of 201
    If I'm honest, I wish the US would just nuke the EU and be done with it.
  • Reply 175 of 201
    apple ][apple ][ Posts: 9,233member
    If I'm honest, I wish the US would just nuke the EU and be done with it.
    We can just sit back and watch them collapse, as they are currently doing, and enjoy it, like I am doing!

    They are in so much trouble, and it's all their own doing. What a bunch of socialist dumbasses. :#


    designr
  • Reply 176 of 201
    Very interesting article by the former European Commissioner in The Guardian, saying publicly that the EU tax ruling is "fundamentally unfair" and that "EU member states have a sovereign right to determine their own tax laws, and state aid cannot be used to rewrite those rules. The current state-aid investigations into tax rulings appear to do exactly that."  https://www.theguardian.com/technology/2016/sep/01/eu-state-aid-tax-avoidance-apple

    As might be expected, its readers are going berserk... :D
    edited September 2016 SpamSandwich
  • Reply 177 of 201
    apple ][ said:
    If I'm honest, I wish the US would just nuke the EU and be done with it.
    We can just sit back and watch them collapse, as they are currently doing, and enjoy it, like I am doing!

    They are in so much trouble, and it's all their own doing. What a bunch of socialist dumbasses. :#


    Your comments are simply juvenile. Who would you sell all your crappy McDonald's and Starbucks to if they weren't there?
  • Reply 178 of 201
    apple ][apple ][ Posts: 9,233member
    Your comments are simply juvenile. Who would you sell all your crappy McDonald's and Starbucks to if they weren't there?
    My comments are spot on and have time and time again proven to be correct more often than not.

    Socialists, globalists and SJWs might hate me and my comments, but I do not care about those losers. They can expect only one thing, and that is to get crushed. 
    edited September 2016
  • Reply 179 of 201
    apple ][ said:
    All US troops should be pulled out of EU countries.

    Let them fend for themselves. 

    Screw 'em.




    Yeah I'm sure the US wants to give up its military bases in stable, friendly countries. Are you 12 years old?
    big brother 84cnocbui
  • Reply 180 of 201
    apple ][apple ][ Posts: 9,233member
    Yeah I'm sure the US wants to give up its military bases in stable, friendly countries. Are you 12 years old?

    Some are not so stable, and some of them are not so friendly.

    Age is irrelevant, facts are relevant, reality is relevant.
    SpamSandwich
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