As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries. With most EU countries in the 20%-30% tax range it would be a significant cost if the law were put into effect.
In the worst case, they will just pass it along to the consumers. I mean, who they are fooling? EU will tax their own citizens at the end.
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
...Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries....
This is the frickin' law. They follow the law. Unless it is proved otherwise.
Get used to the fact that companies are not charities.
Who is claiming Apple broke the law? That's not what this is about, and you knew that.
You ignored the second para.
What second part? Surely you can't mean the "mister obvious" statement that corporations aren't charities as tho that has anything to do with the Irish tax issue. It doesn't. Well I suppose it does in the sense that corporations are expected to pay corporate income taxes unless they are registered as charities, but I suspect that is not what you meant. Did I miss something you previously said perhaps?
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
...Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries....
This is the frickin' law. They follow the law. Unless it is proved otherwise.
Get used to the fact that companies are not charities.
Who is claiming Apple broke the law? That's not what this is about, and you knew that.
You ignored the second para.
What second part? Surely you can't mean the "mister obvious" statement that corporations aren't charities as tho that has anything to do with the Irish tax issue. It doesn't. Well I suppose it does in the sense that corporations are expected to pay corporate income taxes unless they are registered as charities, but I suspect that is not what you meant. Did I miss something you previously said perhaps?
If they're not charities or not the government, let me ask the same question I asked the other guy: "WTF does 'fair' mean"?
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
...Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries....
This is the frickin' law. They follow the law. Unless it is proved otherwise.
Get used to the fact that companies are not charities.
Who is claiming Apple broke the law? That's not what this is about, and you knew that.
You ignored the second para.
What second part? Surely you can't mean the "mister obvious" statement that corporations aren't charities as tho that has anything to do with the Irish tax issue. It doesn't. Well I suppose it does in the sense that corporations are expected to pay corporate income taxes unless they are registered as charities, but I suspect that is not what you meant. Did I miss something you previously said perhaps?
If they're not charities or not the government, let me ask the same question I asked the other guy: "WTF does 'fair' mean"?
I'd think it only "fair" for you to tell me what YOU think it means first. I myself never mentioned fair.
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
I believe that would be one of the issues they might discuss. Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries. With most EU countries in the 20%-30% tax range it would be a significant cost if the law were put into effect.
Your first statement is incorrect. There is no transfer of IP. It is just the standard difference between wholesale and retail profits. I think some American companies are transferring IP, but Apple is not accused of it, except by people who dont understand how corporate law works, and the only way it could work.
There are two scenarios when Apple Ireland sells an iPhone to Germany in a physical shop. It is either an Apple store or not an Apple store.
1) Apple Ireland ( or sales international) sells to a non-Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple sales is $500. No Apple tax is paid in Germany and if Apple had no stores there this wouldnt be an issue. The $500 is what is taxed because it is the revenue to Apple even if the retail price is $700. 2) Apple Ireland ( or sales international) sells to an Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple Worldwide is also $500. No Apple tax is paid in Germany on that $500 revenue as it is a cost to the Apple store in Germany. The $500 booked by Apple on the sale is what is taxed in Ireland. In Germany ,though, the German Apple store is making revenue of $200 by selling the iPhone to customers at $700. The profit from that revenue after deductions etc. is taxed in Germany.
These Apple stores can then remit any revenue left to the HQ, but thats after the Germany tax. If Ireland taxed higher than germany more taxes would be due on that, but they dont.
Paying corporate taxes where companies sell would be a mess. First it would benefit large countries disproportionally. Secondly it would mean every company in the world would have to submit corporate taxes to every country in the world it trades in and cause massive accountancy headaches. Thirdly there is no benefit to a productive country from these taxes, and every benefit to a non-productive country -- the tax benefit would be to countries with deficits, not surpluses, countries with no IP over those with IP.
Those consumer countries can already get money on consumer items - a sales or VAT tax. That in many cases is probably more than the corporate tax they could hope to gather on that item.
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
I believe that would be one of the issues they might discuss. Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries. With most EU countries in the 20%-30% tax range it would be a significant cost if the law were put into effect.
Your first statement is incorrect. There is no transfer of IP. It is just the standard difference between wholesale and retail profits. I think some American companies are transferring IP, but Apple is not accused of it, except by people who dont understand how corporate law works, and the only way it could work.
There are two scenarios when Apple Ireland sells an iPhone to Germany in a physical shop. It is either an Apple store or not an Apple store.
1) Apple Ireland ( or sales international) sells to a non-Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple sales is $500. No Apple tax is paid in Germany and if Apple had no stores there this wouldnt be an issue. The $500 is what is taxed because it is the revenue to Apple even if the retail price is $700. 2) Apple Ireland ( or sales international) sells to an Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple Worldwide is also $500. No Apple tax is paid in Germany on that $500 revenue as it is a cost to the Apple store in Germany. The $500 booked by Apple on the sale is what is taxed in Ireland. In Germany ,though, the German Apple store is making revenue of $200 by selling the iPhone to customers at $700. The profit from that revenue after deductions etc. is taxed in Germany.
These Apple stores can then remit any revenue left to the HQ, but thats after the Germany tax. If Ireland taxed higher than germany more taxes would be due on that, but they dont.
Paying corporate taxes where companies sell would be a mess. First it would benefit large countries disproportionally. Secondly it would mean every company in the world would have to submit corporate taxes to every country in the world it trades in and cause massive accountancy headaches. Thirdly there is no benefit to a productive country from these taxes, and every benefit to a non-productive country -- the tax benefit would be to countries with deficits, not surpluses, countries with no IP over those with IP.
Those consumer countries can already get money on consumer items - a sales or VAT tax. That in many cases is probably more than the corporate tax they could hope to gather on that item.
But it is certainly possible that Apple simply transferred the worldwide licensing rights to the Irish subsidiary, who then tacks that on as an additional cost of an iProduct. The end result is the same, is it not? The revenue from an iPhone sale in Germany is reduced by the fee for licensing the intellectual property that passes thru to the Irish subsidiary.
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
I believe that would be one of the issues they might discuss. Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries. With most EU countries in the 20%-30% tax range it would be a significant cost if the law were put into effect.
Your first statement is incorrect. There is no transfer of IP. It is just the standard difference between wholesale and retail profits. I think some American companies are transferring IP, but Apple is not accused of it, except by people who dont understand how corporate law works, and the only way it could work.
There are two scenarios when Apple Ireland sells an iPhone to Germany in a physical shop. It is either an Apple store or not an Apple store.
1) Apple Ireland ( or sales international) sells to a non-Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple sales is $500. No Apple tax is paid in Germany and if Apple had no stores there this wouldnt be an issue. The $500 is what is taxed because it is the revenue to Apple even if the retail price is $700. 2) Apple Ireland ( or sales international) sells to an Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple Worldwide is also $500. No Apple tax is paid in Germany on that $500 revenue as it is a cost to the Apple store in Germany. The $500 booked by Apple on the sale is what is taxed in Ireland. In Germany ,though, the German Apple store is making revenue of $200 by selling the iPhone to customers at $700. The profit from that revenue after deductions etc. is taxed in Germany.
These Apple stores can then remit any revenue left to the HQ, but thats after the Germany tax. If Ireland taxed higher than germany more taxes would be due on that, but they dont.
Paying corporate taxes where companies sell would be a mess. First it would benefit large countries disproportionally. Secondly it would mean every company in the world would have to submit corporate taxes to every country in the world it trades in and cause massive accountancy headaches. Thirdly there is no benefit to a productive country from these taxes, and every benefit to a non-productive country -- the tax benefit would be to countries with deficits, not surpluses, countries with no IP over those with IP.
Those consumer countries can already get money on consumer items - a sales or VAT tax. That in many cases is probably more than the corporate tax they could hope to gather on that item.
But it is certainly possible that Apple simply transferred the worldwide licensing rights to the Irish subsidiary, who then tacks that on as an additional cost of an iProduct. The end result is the same, is it not? The revenue from an iPhone sale in Germany is reduced by the fee for licensing the intellectual property that passes thru to the Irish subsidiary.
No. Let me put it this way, lets say that IP could not be transferred outside the US.
That would mean that all of Apple's revenues would revert to the US, and Cork would be a cost - licensed to manufature whatever is left there and to do the helpdesk stuff.
This wouldnt change the situation for Germany. They can tax the profits of Apple retail stores in Germany but not the profits from the wholesale revenue that goes to Apple HQ. This is the way that corporate taxes work, and the only way they could work.
BTW I think Apple should pay the full Irish rate of tax, and that it should pay the rest when repatriated to the US. I am merely arguing against the insane Idea that all corporate profits should be where something is sold.
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
I believe that would be one of the issues they might discuss. Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries. With most EU countries in the 20%-30% tax range it would be a significant cost if the law were put into effect.
Your first statement is incorrect. There is no transfer of IP. It is just the standard difference between wholesale and retail profits. I think some American companies are transferring IP, but Apple is not accused of it, except by people who dont understand how corporate law works, and the only way it could work.
There are two scenarios when Apple Ireland sells an iPhone to Germany in a physical shop. It is either an Apple store or not an Apple store.
1) Apple Ireland ( or sales international) sells to a non-Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple sales is $500. No Apple tax is paid in Germany and if Apple had no stores there this wouldnt be an issue. The $500 is what is taxed because it is the revenue to Apple even if the retail price is $700. 2) Apple Ireland ( or sales international) sells to an Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple Worldwide is also $500. No Apple tax is paid in Germany on that $500 revenue as it is a cost to the Apple store in Germany. The $500 booked by Apple on the sale is what is taxed in Ireland. In Germany ,though, the German Apple store is making revenue of $200 by selling the iPhone to customers at $700. The profit from that revenue after deductions etc. is taxed in Germany.
These Apple stores can then remit any revenue left to the HQ, but thats after the Germany tax. If Ireland taxed higher than germany more taxes would be due on that, but they dont.
Paying corporate taxes where companies sell would be a mess. First it would benefit large countries disproportionally. Secondly it would mean every company in the world would have to submit corporate taxes to every country in the world it trades in and cause massive accountancy headaches. Thirdly there is no benefit to a productive country from these taxes, and every benefit to a non-productive country -- the tax benefit would be to countries with deficits, not surpluses, countries with no IP over those with IP.
Those consumer countries can already get money on consumer items - a sales or VAT tax. That in many cases is probably more than the corporate tax they could hope to gather on that item.
But it is certainly possible that Apple simply transferred the worldwide licensing rights to the Irish subsidiary, who then tacks that on as an additional cost of an iProduct. The end result is the same, is it not? The revenue from an iPhone sale in Germany is reduced by the fee for licensing the intellectual property that passes thru to the Irish subsidiary.
No. Let me put it this way, lets say that IP could not be transferred outside the US.
That would mean that all of Apple's revenues would revert to the US, and Cork would be a cost - licensed to manufature whatever is left there and to do the helpdesk stuff.
This wouldnt change the situation for Germany. They can tax the profits of Apple retail stores in Germany but not the profits from the wholesale revenue that goes to Apple HQ. This is the way that corporate taxes work, and the only way they could work.
If that were strictly true how would you explain Apple paying only paying about 5M Euros in German corporate taxes in one recent year, and actually booking a loss on operations in another?
I do actually agree with you that booking sales and paying taxes in the country where the sale took place would be an accounting nightmare, and result in large countries benefiting over small ones. But as it stands NONE of them are really benefiting from the corporate taxes Apple pays in the EU because for the most part they pay essentially none at all if reports are accurate.
This chart shows what Apple has paid worldwide for corporate taxes on sales that occur outside the US. This isn't just the EU. Note the sudden jump starting with 2011 after the Senate opened their tax investigations of US techs.
Wtf is 'fair'? And what makes you think Apple is isn't paying that?
C'mon, be specific.
Fair is what the government permits them to keep. Let's start with they pay 50% tax on gross profit in the country the item is sold. Corps that make less gross profit per item would naturally pay less of a % in tax all the way down to 0% in tax or if the company is deemed noble or worthy by the Government. If fact, corporations which lose money should be subsidized by the uber profitable with direct cash infusions through the tax system.
Wtf is 'fair'? And what makes you think Apple is isn't paying that?
C'mon, be specific.
Fair is what the government permits them to keep. Let's start with they pay 50% tax on gross profit in the country the item is sold. Corps that make less gross profit per item would naturally pay less of a % in tax all the way down to 0% in tax or if the company is deemed noble or worthy by the Government. If fact, corporations which lose money should be subsidized by the uber profitable with direct cash infusions through the tax system.
I couldn't be more glad that I don't share the same planet that you inhabit.
Btw, do you know what the term 'gross profit' even means?It would mean that Apple pays ZERO taxes wherever it incurs zero cost of goods sold. Which raises the question, do you know what 'cost of.......
Wtf is 'fair'? And what makes you think Apple is isn't paying that?
C'mon, be specific.
Fair is what the government permits them to keep. Let's start with they pay 50% tax on gross profit in the country the item is sold. Corps that make less gross profit per item would naturally pay less of a % in tax all the way down to 0% in tax or if the company is deemed noble or worthy by the Government. If fact, corporations which lose money should be subsidized by the uber profitable with direct cash infusions through the tax system.
I couldn't be more glad that I don't share the same planet that you inhabit.
Btw, do you know what the term 'gross profit' even means?It would mean that Apple pays ZERO taxes wherever it incurs zero cost of goods sold. Which raises the question, do you know what 'cost of.......
Oh, screw it. What's the point.
Oh, I was just comparing that to personal income tax in the US. I added an extra 10% to the personal income tax I pay on my gross profit to see if fair meant just. Thanks for biting.
Edit: Yes, I know what gross profit margin is. Apple would pay 50% profit on anything above the cost of designing, manufacturing, marketing, distributing, selling the product in that country. Again, “FAIR” is what the government says it is.
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
I believe that would be one of the issues they might discuss. Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries. With most EU countries in the 20%-30% tax range it would be a significant cost if the law were put into effect.
Your first statement is incorrect. There is no transfer of IP. It is just the standard difference between wholesale and retail profits. I think some American companies are transferring IP, but Apple is not accused of it, except by people who dont understand how corporate law works, and the only way it could work.
There are two scenarios when Apple Ireland sells an iPhone to Germany in a physical shop. It is either an Apple store or not an Apple store.
1) Apple Ireland ( or sales international) sells to a non-Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple sales is $500. No Apple tax is paid in Germany and if Apple had no stores there this wouldnt be an issue. The $500 is what is taxed because it is the revenue to Apple even if the retail price is $700. 2) Apple Ireland ( or sales international) sells to an Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple Worldwide is also $500. No Apple tax is paid in Germany on that $500 revenue as it is a cost to the Apple store in Germany. The $500 booked by Apple on the sale is what is taxed in Ireland. In Germany ,though, the German Apple store is making revenue of $200 by selling the iPhone to customers at $700. The profit from that revenue after deductions etc. is taxed in Germany.
These Apple stores can then remit any revenue left to the HQ, but thats after the Germany tax. If Ireland taxed higher than germany more taxes would be due on that, but they dont.
Paying corporate taxes where companies sell would be a mess. First it would benefit large countries disproportionally. Secondly it would mean every company in the world would have to submit corporate taxes to every country in the world it trades in and cause massive accountancy headaches. Thirdly there is no benefit to a productive country from these taxes, and every benefit to a non-productive country -- the tax benefit would be to countries with deficits, not surpluses, countries with no IP over those with IP.
Those consumer countries can already get money on consumer items - a sales or VAT tax. That in many cases is probably more than the corporate tax they could hope to gather on that item.
But it is certainly possible that Apple simply transferred the worldwide licensing rights to the Irish subsidiary, who then tacks that on as an additional cost of an iProduct. The end result is the same, is it not? The revenue from an iPhone sale in Germany is reduced by the fee for licensing the intellectual property that passes thru to the Irish subsidiary.
No. Let me put it this way, lets say that IP could not be transferred outside the US.
That would mean that all of Apple's revenues would revert to the US, and Cork would be a cost - licensed to manufature whatever is left there and to do the helpdesk stuff.
This wouldnt change the situation for Germany. They can tax the profits of Apple retail stores in Germany but not the profits from the wholesale revenue that goes to Apple HQ. This is the way that corporate taxes work, and the only way they could work.
If that were strictly true how would you explain Apple paying only paying about 5M Euros in German corporate taxes in one recent year, and actually booking a loss on operations in another?
I do actually agree with you that booking sales and paying taxes in the country where the sale took place would be an accounting nightmare, and result in large countries benefiting over small ones. But as it stands NONE of them are really benefiting from the corporate taxes Apple pays in the EU because for the most part they pay essentially none at all if reports are accurate.
This chart shows what Apple has paid worldwide for corporate taxes on sales that occur outside the US. This isn't just the EU. Note the sudden jump starting with 2011 after the Senate opened their tax investigations of US techs.
The Japan company isn't a store. As it happens I believe that if Apple Ireland created some software ( for internal use) thats legit.
As for the increase it is because of Ireland's sweet deal ending probably. Around that time Ireland's GDP grew by 16% as American companies stopped taking money out of the economy to other tax havens. I have never disputed that Apple owes money somewhere, but that it doesn't owe it to countries where it sells. Most of Apples corporate tax goes to Ireland, the rest is local tax on their local shops, which are the ones that make revenue.
Lets take the $5M. What does Apple have in Germany? Apple stores only, probably The average German corporate tax is 30%. Which means Apple makes net profits (not revenues) of $15M to get taxed at $5M. Gross profit is generally 30% in retail. Thats implies revenue of $45M. Taxes are, however on net profits, which means the revenue is higher.
You dont seem to get that revenue in an Apple store isnt the sum of all items sold but the difference between the retail cost of the iDevices and the wholesale cost. And that that is true of all retailers. And Apple isnt the only or primary seller of iPhones in germany. Most people buy elsewhere in fact ( I have never bought an iPhone in an Apple Store, as I get it on contract).
So saying that Apple paid $5M on $300M revenues is misleading. The $300M is the sale of all iDevices in that year. If there were no Apple stores in Germany, Apple wouldnt owe a cent.
Yes, Apple is paying no taxes to IReland ( or it wasnt) but those taxes were never due to Germany anyway. And those countries can get revenue from VAT, which is at 23% fairly significant.
As corpoate law now stand Apple owes France nothing, except tax due on net profit from retail stores. Corporate tax generated from wholesale profits made outside the US is either owed in Ireland or the US ( if repatriated). If it isnt paid in Ireland, it is due in the US when repatriated. If it is paid in Ireland, double taxation laws will mean the US gets less when repatriated but not nothing as the tax rate is higher in the US.
Either way, France isnt, as it now stands, due any corporate tax.
I believe that would be one of the issues they might discuss. Apple has been able to actually book paper losses in some of the EU countries where they operate stores in part by charging IP royalty payments due to Apple Sales International(I think that's the proper subsidiary), topped off with brand and copyright licensing to skim off much if not all the profits that would typically be realized when a French or German citizen purchases an iDevice from their respective local Apple Store.
What Apple and Google and Amazon and other big techs wish to avoid is the current EU proposal that revenues be subject to corporate taxation in the countries where the sale was made or the service rendered, neutering the use of IP and other transfer pricing strategies to shift profits to very low or even 100% non-taxable subsidiaries. With most EU countries in the 20%-30% tax range it would be a significant cost if the law were put into effect.
Your first statement is incorrect. There is no transfer of IP. It is just the standard difference between wholesale and retail profits. I think some American companies are transferring IP, but Apple is not accused of it, except by people who dont understand how corporate law works, and the only way it could work.
There are two scenarios when Apple Ireland sells an iPhone to Germany in a physical shop. It is either an Apple store or not an Apple store.
1) Apple Ireland ( or sales international) sells to a non-Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple sales is $500. No Apple tax is paid in Germany and if Apple had no stores there this wouldnt be an issue. The $500 is what is taxed because it is the revenue to Apple even if the retail price is $700. 2) Apple Ireland ( or sales international) sells to an Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple Worldwide is also $500. No Apple tax is paid in Germany on that $500 revenue as it is a cost to the Apple store in Germany. The $500 booked by Apple on the sale is what is taxed in Ireland. In Germany ,though, the German Apple store is making revenue of $200 by selling the iPhone to customers at $700. The profit from that revenue after deductions etc. is taxed in Germany.
These Apple stores can then remit any revenue left to the HQ, but thats after the Germany tax. If Ireland taxed higher than germany more taxes would be due on that, but they dont.
Paying corporate taxes where companies sell would be a mess. First it would benefit large countries disproportionally. Secondly it would mean every company in the world would have to submit corporate taxes to every country in the world it trades in and cause massive accountancy headaches. Thirdly there is no benefit to a productive country from these taxes, and every benefit to a non-productive country -- the tax benefit would be to countries with deficits, not surpluses, countries with no IP over those with IP.
Those consumer countries can already get money on consumer items - a sales or VAT tax. That in many cases is probably more than the corporate tax they could hope to gather on that item.
But it is certainly possible that Apple simply transferred the worldwide licensing rights to the Irish subsidiary, who then tacks that on as an additional cost of an iProduct. The end result is the same, is it not? The revenue from an iPhone sale in Germany is reduced by the fee for licensing the intellectual property that passes thru to the Irish subsidiary.
No. Let me put it this way, lets say that IP could not be transferred outside the US.
That would mean that all of Apple's revenues would revert to the US, and Cork would be a cost - licensed to manufature whatever is left there and to do the helpdesk stuff.
This wouldnt change the situation for Germany. They can tax the profits of Apple retail stores in Germany but not the profits from the wholesale revenue that goes to Apple HQ. This is the way that corporate taxes work, and the only way they could work.
If that were strictly true how would you explain Apple paying only paying about 5M Euros in German corporate taxes in one recent year, and actually booking a loss on operations in another?
I do actually agree with you that booking sales and paying taxes in the country where the sale took place would be an accounting nightmare, and result in large countries benefiting over small ones. But as it stands NONE of them are really benefiting from the corporate taxes Apple pays in the EU because for the most part they pay essentially none at all if reports are accurate.
This chart shows what Apple has paid worldwide for corporate taxes on sales that occur outside the US. This isn't just the EU. Note the sudden jump starting with 2011 after the Senate opened their tax investigations of US techs.
The Japan company isn't a store. As it happens I believe that if Apple Ireland created some software ( for internal use) thats legit.
As for the increase it is because of Ireland's sweet deal ending probably. Around that time Ireland's GDP grew by 16% as American companies stopped taking money out of the economy to other tax havens. I have never disputed that Apple owes money somewhere, but that it doesn't owe it to countries where it sells. Most of Apples corporate tax goes to Ireland, the rest is local tax on their local shops, which are the ones that make revenue.
Lets take the $5M. What does Apple have in Germany? Apple stores only, probably The average German corporate tax is 30%. Which means Apple makes net profits (not revenues) of $15M to get taxed at $5M. Gross profit is generally 30% in retail. Thats implies revenue of $45M. Taxes are, however on net profits, which means the revenue is higher.
You dont seem to get that revenue in an Apple store isnt the sum of all items sold but the difference between the retail cost of the iDevices and the wholesale cost. And that that is true of all retailers. And Apple isnt the only or primary seller of iPhones in germany. Most people buy elsewhere in fact ( I have never bought an iPhone in an Apple Store, as I get it on contract).
So saying that Apple paid $5M on $300M revenues is misleading. The $300M is the sale of all iDevices in that year. If there were no Apple stores in Germany, Apple wouldnt owe a cent.
Yes, Apple is paying no taxes to IReland ( or it wasnt) but those taxes were never due to Germany anyway. And those countries can get revenue from VAT, which is at 23% fairly significant.
Having run several businesses of my own (and still do) I "get" how corporate taxes are determined. ...and yes I would not argue with it if the government would allow me to write off the sales tax /VAT I collect for them against my corporate tax bill. But I'm not paying it and neither is Apple, it's a consumer tax, so the tax folks won't let me do it.
But as you are properly focusing on Apple Stores (totally agree that where Apple corporate taxes are owed) there are 15 of them in Germany according to my count. Apple claims the average one brings in $50M US per year. 50x15=$750M in gross revenues. For Apple Store sales alone that's double your guess of $300M from all Apple sales from all sources country wide. Yet only $15M in net taxable profits in total between all of them, a 3% profit margin or thereabouts from Apple Store operations. Does that sound reasonable to you considering it's reported that Apple Stores are among the most profitable retailers per square foot in the world?
So yes, you are missing part of the story IMO. It is not as you think it is. Where did the Apple Store profits go? I believe it's is just as I originally said: Apple Ireland is charging Apple Stores in Germany and elsewhere for branding, copyright, design and other intellectual property licensing, effectively making product sales in Apple retail outlets barely profitable. Comment considering these figures which are substantially different from what you were assuming?
You might also be interested in getting up to speed with Ireland's latest continuing efforts to make the country a preferred base of operations for big tech like Apple and Google. Referred to as "knowledge development boxes" aka "patent boxes", they are IP enclaves with tax rates capped at 6.25%. The perfect place to license and monetize copyright, design, branding and other intellectual property et al, using it to move profits from retail sales operations throughout the world under it's umbrella. The rest of Europe (and Australia and Japan and...) may not agree with the profits from sales to their citizens continuing to being sent to Ireland. And with a 6.25% tax-rate what would be the incentive for big US techs to "bring all 'dem profits home" even at a 10% repatriation rate, which in reality will more likely be 15% if it passes at all?
@asdasd ; Well here's a turnabout: Mr Cook has apparently accepted that Apple may have to begin paying taxes in the country where the sale or service occurred. " Bloomberg reports that Cook appears to no longer be interested in fighting this battle.Macron’s office said the two didn’t discuss past tax disputes, but Cook accepted that fiscal laws worldwide are shifting toward making companies pay tax where money is actually earned."
The special 6.25% IP rate offered by Ireland I mentioned earlier may help in that regard as licensing fees for various bits of intellectual property (Apple brand, design royalties, copyrights) tacked on top of the device costs may be the way to keep those taxes low. Dunno but at some point we'll see how's it's played on the field.
Comments
There are two scenarios when Apple Ireland sells an iPhone to Germany in a physical shop. It is either an Apple store or not an Apple store.
1) Apple Ireland ( or sales international) sells to a non-Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple sales is $500. No Apple tax is paid in Germany and if Apple had no stores there this wouldnt be an issue. The $500 is what is taxed because it is the revenue to Apple even if the retail price is $700.
2) Apple Ireland ( or sales international) sells to an Apple store an iPhone in Germany at wholesale prices. Lets say that is $500. The revenue to Apple Worldwide is also $500. No Apple tax is paid in Germany on that $500 revenue as it is a cost to the Apple store in Germany. The $500 booked by Apple on the sale is what is taxed in Ireland. In Germany ,though, the German Apple store is making revenue of $200 by selling the iPhone to customers at $700. The profit from that revenue after deductions etc. is taxed in Germany.
These Apple stores can then remit any revenue left to the HQ, but thats after the Germany tax. If Ireland taxed higher than germany more taxes would be due on that, but they dont.
Paying corporate taxes where companies sell would be a mess. First it would benefit large countries disproportionally. Secondly it would mean every company in the world would have to submit corporate taxes to every country in the world it trades in and cause massive accountancy headaches. Thirdly there is no benefit to a productive country from these taxes, and every benefit to a non-productive country -- the tax benefit would be to countries with deficits, not surpluses, countries with no IP over those with IP.
Those consumer countries can already get money on consumer items - a sales or VAT tax. That in many cases is probably more than the corporate tax they could hope to gather on that item.
and
https://www.irishtimes.com/business/financial-services/intellectual-property-rights-at-the-core-of-apple-s-irish-subsidiaries-1.1401739
But it is certainly possible that Apple simply transferred the worldwide licensing rights to the Irish subsidiary, who then tacks that on as an additional cost of an iProduct. The end result is the same, is it not? The revenue from an iPhone sale in Germany is reduced by the fee for licensing the intellectual property that passes thru to the Irish subsidiary.
That would mean that all of Apple's revenues would revert to the US, and Cork would be a cost - licensed to manufature whatever is left there and to do the helpdesk stuff.
This wouldnt change the situation for Germany. They can tax the profits of Apple retail stores in Germany but not the profits from the wholesale revenue that goes to Apple HQ. This is the way that corporate taxes work, and the only way they could work.
It seems like you're missing part of the story.
https://www.ft.com/content/cc58c190-6ec3-11e6-a0c9-1365ce54b926
http://www.zeit.de/wirtschaft/unternehmen/2015-10/apple-iphone-taxes-europe
Surely you haven't forgotten Apple agreeing with Italy that they might have missed paying some tax there
https://www.reuters.com/article/us-italy-apple-tax/apple-to-pay-italy-318-million-euros-sign-tax-deal-source-idUSKBN0UD13K20160101
https://www.reuters.com/article/us-italy-apple-taxes/italy-judge-agrees-tax-probe-settlement-with-head-of-apples-irish-unit-source-idUSKCN12R10I
...and since this AI article involves France specifically:
http://www.idownloadblog.com/2016/11/24/france-fines-apple-422-million-over-its-controversial-tax-practices/
As odd as it may seem on the surface even Apple Japan pays Apple Sales Ireland licensing fees for intellectual property.
https://www.reuters.com/article/us-apple-japan-tax/apple-japan-unit-ordered-to-pay-118-million-tax-for-underreporting-income-media-idUSKCN11M09O
I do actually agree with you that booking sales and paying taxes in the country where the sale took place would be an accounting nightmare, and result in large countries benefiting over small ones. But as it stands NONE of them are really benefiting from the corporate taxes Apple pays in the EU because for the most part they pay essentially none at all if reports are accurate.
This chart shows what Apple has paid worldwide for corporate taxes on sales that occur outside the US. This isn't just the EU. Note the sudden jump starting with 2011 after the Senate opened their tax investigations of US techs.
Btw, do you know what the term 'gross profit' even means?It would mean that Apple pays ZERO taxes wherever it incurs zero cost of goods sold. Which raises the question, do you know what 'cost of.......
Oh, screw it. What's the point.
Edit: Yes, I know what gross profit margin is. Apple would pay 50% profit on anything above the cost of designing, manufacturing, marketing, distributing, selling the product in that country. Again, “FAIR” is what the government says it is.
As for the increase it is because of Ireland's sweet deal ending probably. Around that time Ireland's GDP grew by 16% as American companies stopped taking money out of the economy to other tax havens. I have never disputed that Apple owes money somewhere, but that it doesn't owe it to countries where it sells. Most of Apples corporate tax goes to Ireland, the rest is local tax on their local shops, which are the ones that make revenue.
Lets take the $5M. What does Apple have in Germany? Apple stores only, probably The average German corporate tax is 30%. Which means Apple makes net profits (not revenues) of $15M to get taxed at $5M. Gross profit is generally 30% in retail. Thats implies revenue of $45M. Taxes are, however on net profits, which means the revenue is higher.
You dont seem to get that revenue in an Apple store isnt the sum of all items sold but the difference between the retail cost of the iDevices and the wholesale cost. And that that is true of all retailers. And Apple isnt the only or primary seller of iPhones in germany. Most people buy elsewhere in fact ( I have never bought an iPhone in an Apple Store, as I get it on contract).
So saying that Apple paid $5M on $300M revenues is misleading. The $300M is the sale of all iDevices in that year. If there were no Apple stores in Germany, Apple wouldnt owe a cent.
Yes, Apple is paying no taxes to IReland ( or it wasnt) but those taxes were never due to Germany anyway. And those countries can get revenue from VAT, which is at 23% fairly significant.
...and yes I would not argue with it if the government would allow me to write off the sales tax /VAT I collect for them against my corporate tax bill. But I'm not paying it and neither is Apple, it's a consumer tax, so the tax folks won't let me do it.
But as you are properly focusing on Apple Stores (totally agree that where Apple corporate taxes are owed) there are 15 of them in Germany according to my count. Apple claims the average one brings in $50M US per year. 50x15=$750M in gross revenues. For Apple Store sales alone that's double your guess of $300M from all Apple sales from all sources country wide. Yet only $15M in net taxable profits in total between all of them, a 3% profit margin or thereabouts from Apple Store operations.
Does that sound reasonable to you considering it's reported that Apple Stores are among the most profitable retailers per square foot in the world?
So yes, you are missing part of the story IMO. It is not as you think it is. Where did the Apple Store profits go? I believe it's is just as I originally said: Apple Ireland is charging Apple Stores in Germany and elsewhere for branding, copyright, design and other intellectual property licensing, effectively making product sales in Apple retail outlets barely profitable. Comment considering these figures which are substantially different from what you were assuming?
You might also be interested in getting up to speed with Ireland's latest continuing efforts to make the country a preferred base of operations for big tech like Apple and Google. Referred to as "knowledge development boxes" aka "patent boxes", they are IP enclaves with tax rates capped at 6.25%. The perfect place to license and monetize copyright, design, branding and other intellectual property et al, using it to move profits from retail sales operations throughout the world under it's umbrella. The rest of Europe (and Australia and Japan and...) may not agree with the profits from sales to their citizens continuing to being sent to Ireland. And with a 6.25% tax-rate what would be the incentive for big US techs to "bring all 'dem profits home" even at a 10% repatriation rate, which in reality will more likely be 15% if it passes at all?
Well here's a turnabout: Mr Cook has apparently accepted that Apple may have to begin paying taxes in the country where the sale or service occurred.
" Bloomberg reports that Cook appears to no longer be interested in fighting this battle.Macron’s office said the two didn’t discuss past tax disputes, but Cook accepted that fiscal laws worldwide are shifting toward making companies pay tax where money is actually earned."
The special 6.25% IP rate offered by Ireland I mentioned earlier may help in that regard as licensing fees for various bits of intellectual property (Apple brand, design royalties, copyrights) tacked on top of the device costs may be the way to keep those taxes low. Dunno but at some point we'll see how's it's played on the field.