People who don't know corporate and tax law should just shut the f* up. Apple is legally obliged to pay the least taxes possible and maximize profits, or else they open themselves up to shareholders law suits.
Has this ever happened?
No, they are not legally obligated to do any such thing. There is no legislation or contractual stipulation that says anything like that, anywhere.
Title is wrong, it would just delay the tax recoup until Apple brings the taxed money back to the US.
Spot on. Otherwise, this will be challenged in court by thousands of US companies (and then government will likely lose, since it would upend the bargain implicit in pretty much everything in the tax code).
The issue will be moot within a year, since Cook has promised to bring a lot of it back. I am guessing that Apple will bring enough back to be able to take a tax credit for any additional amounts paid to the EU. This is a fight between the EU and Ireland (and now between the EU and the US), and Apple, caught in the middle, is simply being unfairly and egregiously maligned.
(Btw, cue the handout-seekers that will inevitable show up in this thread).
I don't believe he's promised to bring back a single penny yet has he? If my reading was correct anything Apple might "bring home", and what Mr. Cook was referring to, is predicated on a corporate tax holiday next year isn't it? No holiday then maybe nothing is repatriated.
"Might"? "Predicated on a tax holiday"? "Maybe nothing is repatriated?" Can you quit making stuff up?
Here's the actual quote (Source: CNBC.com): "We paid 400 (million dollars) to Ireland, we paid 400 to the U.S. and we provisioned several billion dollars for the U.S. for payment as soon as we repatriate it and right now I forecast that repatriation to occur next year," Cook said in comments broadcast by RTE."
Your interpretation on these matters always appears to be tilted to cast Apple in a negative light.
A "forecast" is far from a "promise" and that is not his only quote on it: My post fairly and accurately presented what he had to say as reported by CNBC and others. As Tim Cook has factually SAID they have set aside $xB's in taxes to pay when they repatriate some of their overseas funds, which can happen as soon as next year IF there's a tax holiday passed by Congress as he suspects. He made that stipulation quite clear:
Washington Post interview two weeks earlier: How long are you willing to keep unrepatriated income overseas? "Honestly, I believe the legislature and the administration will agree that it’s in the best interest of the country and the economy to have tax reform. So I don’t think I have to make that decision. I’m optimistic that it will take place next year."
CNBC reporting, according to Mr Cook: "...the company would not bring that money back from abroad unless there was a "fair rate." "There's no debate about that".
So find someplace where Mr Cook can be quoted as promising to bring home billions next year as you claim he did. FACT: He never promised any such thing, and no interpretation of what he said should have lead you to think he did. When you're wrong Anant why would you jump back into the thread to pretend you weren't? I was even politely pointing out your misinterpretation, to which you then reactively pop up and say I made it all up. What would have been wrong with saying "You're right Gator, he didn't promise but I still think they will" or something along those lines?
As for the mention of $30B in UNRECOGNIZED tax liability, could you explain why Apple had not financially planned for taxes on approx $90 billion in profits if it was to be repatriated? What is the difference between the recognized and deferred taxes that Apple typically reports each quarter and the "unrecognized" taxes that Apple mentioned in a footnote (for the first time?) in 2015?
If they had planned to pay US corporate taxes all along on that money as you've oft implied they have why would they not already have stated what the deferred tax obligations are on that $90B (which I believe was even higher before the EU's investigation) in their financial statements? Serious question because I'll readily admit I could have wrongly interpreted it. And please don't trot out the textbook explanation that it was simply temporary and Apple planned all along to bring it all home as you've repeatedly indicated. I know accounting procedures allow for an indefinite "temporary", in this case spanning at least 10 years. Based on Apple's first mention AFAIK in 2015 after the EU investigation became official just the opposite looks to have been true, hardly what is realistically a temporary difference.
People who don't know corporate and tax law should just shut the f* up. Apple is legally obliged to pay the least taxes possible and maximize profits, or else they open themselves up to shareholders law suits.
I keep reading posts saying that but is it true? Honest question because I don't think it is.
EDIT: Nevermind. It is not true. Corporations are not required to maximize profits. Instead they are to operate in the best interests of the shareholders. Look into the business judgment rule (sometimes called doctrine) which pretty much guarantees any shareholder filing a lawsuit over Apple paying taxes would quickly see his lawsuit dismissed as long as Apple's directors weren't doing so for personal gain.
Perhaps you don't know corporate and tax law as clearly as you thought you did.
Googling the "business judgment rule" and then cutting and pasting something doesn't make you an expert on corporate governance. This is a vast subject with tons of nuances, but the OP is essentially correct. It opens up Apple to shareholder lawsuits.
(And no, I am not getting into a discussion on this topic with you.)
Didn't cut and paste anything sir. Actually I encouraged him, and by extension you, to look it up for himself. Perhaps you are an expert yourself on corporate governance and can explain in layman terms why Prof. Lynn Stout at Cornell, who is "an internationally recognized expert in the fields of corporate governance, securities regulation, financial derivatives.. (you may even personally know of her) is wrong as you claim she is: http://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits
Apple negotiated a deal with Ireland. If the Irish were happy with the deal, then no harm, no foul. Besides, the deal was made before Ireland became a member of the EU.
Wrong, Ireland became a member of the EEC in 1973 (the EEC became the EU in 1992 after the signing of the Maastricht treaty). The agreements between Apple and Ireland which were originally agreed in 1991 and redone in 2007 have been ruled against EU rules which have primacy over any "deals" in other words even if Ireland and Apple were happy with the deal (currently pending appeals) they were voided.
Herbivore2 said: The EU is being pretty disingenuous. This is an attempt at a cash grab because Apple has lots of it.
Correct Apple has lots of cash and part of the charge is that they got part of the cash by benefiting from illegal state aid.
The country of Ireland: -Assesses and collect taxes from Apple -Has agreements with the EU
Apple pays what Ireland tells them, they are guilty of nothing.
If there's a tax issue between Ireland and the EU, that's between Ireland and the EU. If this was about some guy named Patrick who paid his taxes according to what Ireland told him, then years later the EU appears telling Patrick that he's been underpaying Ireland, I think Patrick's got a pretty good case to tell the EU to go fuck off. Especially when Ireland itself is backing him.
However the EU is the one making the power grab here, and trying to set establish itself in the minutia of member country tax law. What's interesting is that they are saying this tax penalty would go to the country of Ireland, but Ireland doesn't want it because they don't want to set the precedent for this new level of interference.
The subtext is that the other continental EU member states feel that this island on the edge of the union should be happy with it's rural, agrarian economy, and not try to rival their 'continental' betters in industry. Lost in much US reporting about Europe, is how petty and provincial most of Europe still is toward their nieghbors. Two World Wars in close succession, after centuries of conflict, didn't happen there by accident. These are tiny countries with their own little cultural bubbles and even distinct languages, also with a long history of awful, aristocratic baggage. The EU is far from a benign entity, it's a yoke designed by those invested in keeping the middle class from further threatening old power.
The net result of this action by the EU is that they'll eventually be down another country. This might not be the straw that breaks the camels back, but if they don't relent, Ireland will start looking for the quickest exit. Their next-door neighbor just layed the blueprint for that. Since the top northern end of the of Irish island are still part of the UK, a third of the Irish people are already EU free. It won't take the rest long.
Biting the hand that feeds you. Apple pays a ton of taxes already in the US and the greedy government wants more. Why don't they go after all those 1%'s who find all sorts of loopholes to pay next to nothing? Of wait, it's easier to just go after Apple.
Can you point me to the actual amount of taxes Apple paid Ireland in 2014? I don't want the numbers by the corrupt EU commission, I want Ireland's numbers.
As for state aid, I see every state in the US making various deals with all corporations to locate in their state. Are these forms of legal state aid or just good business?
They don't pay a ton of taxes. Relative to their massive win fall profits they pay the bare minimum the current tax code allows with all its loop-holes. Close the loop-holes and Apple would invest ten fold more domestically than pay those taxes. That would produce far more growth than what is happening. Repeat and rinse to GE and everyone else tax dodging.
Apple paid 25% tax rate company wide in 2015
So STFU about Apple not paying taxes.
So is 25% low?
Well those profits Apple makes goes to shareholders who have to pay anywhere from 15-39% taxes on dividends or capital gains.
So Apple owners end up paying 35-50% tax rates. So STFU.
Comments
No, they are not legally obligated to do any such thing. There is no legislation or contractual stipulation that says anything like that, anywhere.
Washington Post interview two weeks earlier: How long are you willing to keep unrepatriated income overseas? "Honestly, I believe the legislature and the administration will agree that it’s in the best interest of the country and the economy to have tax reform. So I don’t think I have to make that decision. I’m optimistic that it will take place next year."
CNBC reporting, according to Mr Cook: "...the company would not bring that money back from abroad unless there was a "fair rate." "There's no debate about that".
So find someplace where Mr Cook can be quoted as promising to bring home billions next year as you claim he did. FACT: He never promised any such thing, and no interpretation of what he said should have lead you to think he did. When you're wrong Anant why would you jump back into the thread to pretend you weren't? I was even politely pointing out your misinterpretation, to which you then reactively pop up and say I made it all up. What would have been wrong with saying "You're right Gator, he didn't promise but I still think they will" or something along those lines?As for the mention of $30B in UNRECOGNIZED tax liability, could you explain why Apple had not financially planned for taxes on approx $90 billion in profits if it was to be repatriated? What is the difference between the recognized and deferred taxes that Apple typically reports each quarter and the "unrecognized" taxes that Apple mentioned in a footnote (for the first time?) in 2015?
If they had planned to pay US corporate taxes all along on that money as you've oft implied they have why would they not already have stated what the deferred tax obligations are on that $90B (which I believe was even higher before the EU's investigation) in their financial statements? Serious question because I'll readily admit I could have wrongly interpreted it. And please don't trot out the textbook explanation that it was simply temporary and Apple planned all along to bring it all home as you've repeatedly indicated. I know accounting procedures allow for an indefinite "temporary", in this case spanning at least 10 years. Based on Apple's first mention AFAIK in 2015 after the EU investigation became official just the opposite looks to have been true, hardly what is realistically a temporary difference.
http://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits
-Assesses and collect taxes from Apple
-Has agreements with the EU
Apple pays what Ireland tells them, they are guilty of nothing.
If there's a tax issue between Ireland and the EU, that's between Ireland and the EU. If this was about some guy named Patrick who paid his taxes according to what Ireland told him, then years later the EU appears telling Patrick that he's been underpaying Ireland, I think Patrick's got a pretty good case to tell the EU to go fuck off. Especially when Ireland itself is backing him.
However the EU is the one making the power grab here, and trying to set establish itself in the minutia of member country tax law. What's interesting is that they are saying this tax penalty would go to the country of Ireland, but Ireland doesn't want it because they don't want to set the precedent for this new level of interference.
The subtext is that the other continental EU member states feel that this island on the edge of the union should be happy with it's rural, agrarian economy, and not try to rival their 'continental' betters in industry. Lost in much US reporting about Europe, is how petty and provincial most of Europe still is toward their nieghbors. Two World Wars in close succession, after centuries of conflict, didn't happen there by accident. These are tiny countries with their own little cultural bubbles and even distinct languages, also with a long history of awful, aristocratic baggage. The EU is far from a benign entity, it's a yoke designed by those invested in keeping the middle class from further threatening old power.
The net result of this action by the EU is that they'll eventually be down another country. This might not be the straw that breaks the camels back, but if they don't relent, Ireland will start looking for the quickest exit. Their next-door neighbor just layed the blueprint for that. Since the top northern end of the of Irish island are still part of the UK, a third of the Irish people are already EU free. It won't take the rest long.