Apple forks over another $184M to UK tax authorities after 'extensive audit'

Posted:
in General Discussion
The world's most valuable company now has a bit less in the bank after Apple was forced to settle up with Her Majesty's Revenue and Customs to the tune of $184 million in additional taxes.




HMRC extracted the extra payment from Apple Europe after what the department called an "extensive audit" of the company's pre-2015 tax filings, according to the Financial Times. Apple Europe is a London-based subsidiary of Apple which, among other activities, handles European marketing operations.

The audit is believed to have found that Apple Europe was not paid fair value for the services it provided to other Apple subsidiaries, leading to artificially lower taxable revenue.

"We know the important role that tax payments play in society. Apple pays all that we owe according to tax laws and local customs in the countries where we operate," Apple said in response.

"As a multinational business and the largest taxpayer in the world, Apple is regularly audited by tax authorities around the world. HMRC recently concluded a multiyear audit of our UK accounts and the settlement we reached with HMRC is reflected in our recently filed accounts."

Apple has been among a number of other large multinationals put under the microscope in recent years over international tax arrangements. Various governments around the world - most notably in Europe - have wrested billions of dollars in extra payments from the company, including a record $15.4 billion settlement in Ireland that Apple will begin paying this year.
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Comments

  • Reply 1 of 22
    JFC_PAJFC_PA Posts: 157member
    Yep. Every audit I’ve been subject to has resulted in my paying more. Means my accountants are as aggressive as I want them to be. Not overpaying means sometimes underpaying and having to correct that when audited. 
    radarthekatSolimuthuk_vanalingamjony0
  • Reply 2 of 22
    So much for Tim Cook’s repeated claims that Apple was paying every cent due in taxes. Is this just a case of differing opinions among tax attorneys or is Apple just being overly aggressive with deductions and now being called to task?

    mike54muthuk_vanalingamadm1
  • Reply 3 of 22
    I hope Apple fights this nonsense from the socialists tooth & nail.
  • Reply 4 of 22
    jbdragonjbdragon Posts: 1,700member
    More money that will quickly disappear into the government waste. Why do people think Apple, let alone any other company pays taxes? No YOU the customer pay the taxes in the form of higher prices which pay for the taxes. You're really only taxing yourself yet again, over and over and over. You don't realize how much money the government is stealing from you, if you sat down and started adding it all up. Apple pays more, YOU pay more.
    mike54radarthekatRayz2016SpamSandwichwatto_cobra
  • Reply 5 of 22
    analogjackanalogjack Posts: 1,008member
    Good to see Apple keeping the auditors honest.
  • Reply 6 of 22
    mike54mike54 Posts: 183member
    No problem. Tim's got some change that's fallen and stuck in the couch. Good excuse to get some cleaning done.
  • Reply 7 of 22
    radarthekatradarthekat Posts: 2,297moderator
    In the time it took to write and post this story...
    SpamSandwich
  • Reply 8 of 22
    SoliSoli Posts: 7,026member
    felix01 said:
    So much for Tim Cook’s repeated claims that Apple was paying every cent due in taxes. 
    Are you suggesting Cook was lying?
    watto_cobra
  • Reply 9 of 22
    sflocalsflocal Posts: 4,069member
    felix01 said:
    So much for Tim Cook’s repeated claims that Apple was paying every cent due in taxes. Is this just a case of differing opinions among tax attorneys or is Apple just being overly aggressive with deductions and now being called to task?

    Considering the BILLIONS of dollars Apple pays every year in taxes all over the world, $184m is a rounding error.  Nothing more.  It just shows that Apple (and its accountants) were about as close as they could get.

    There's nothing to read here.  Just click-bait as the headline is implying that there's something shady going on which there isn't.

    SpamSandwichwatto_cobrabadmonkjony0
  • Reply 10 of 22
    Rayz2016Rayz2016 Posts: 3,506member
    JFC_PA said:
    Yep. Every audit I’ve been subject to has resulted in my paying more. Means my accountants are as aggressive as I want them to be. Not overpaying means sometimes underpaying and having to correct that when audited. 
    Absolutely. 

    Note that there was no fine or accusation of wrongdoing. All that happened here is that Apple’s accountant’s  interpretation of a fair amount was different than HMRCs. This is very common when you’re dealing with internal charging structures and with depreciation of assets. This is especially annoying because Apple kit is lumped into the same category as PC kit, even though a Mac doesn’t lose its value anywhere near as fast. 

    This won’t have been the first time this has happened. 
    watto_cobrajony0
  • Reply 11 of 22
    Rayz2016Rayz2016 Posts: 3,506member

    I hope Apple fights this nonsense from the socialists tooth & nail.
    It’s not worth the effort or bad publicity for what is essentially loose change. 
    watto_cobra
  • Reply 12 of 22
    Rayz2016Rayz2016 Posts: 3,506member

    felix01 said:
    So much for Tim Cook’s repeated claims that Apple was paying every cent due in taxes. Is this just a case of differing opinions among tax attorneys or is Apple just being overly aggressive with deductions and now being called to task?

    It’s a differing opinion, and Apple’s accountants will still think they’re right. 

    Oh, and Apple’s claim that they pay every cent owed has just been proved. They found they owed more, and they coughed up. They didn’t drag our impoverished government through court, which they’re entitled to do. 
    watto_cobra
  • Reply 13 of 22
    xbitxbit Posts: 190member
    Rayz2016 said:

    Oh, and Apple’s claim that they pay every cent owed has just been proved. They found they owed more, and they coughed up. They didn’t drag our impoverished government through court, which they’re entitled to do. 
    HMRC has a history of letting corporations off billions in tax to avoid going through the courts. It’s likely that $184 million was on the low side of what was actually owed.
  • Reply 14 of 22
    avon b7avon b7 Posts: 2,102member
    xbit said:
    Rayz2016 said:

    Oh, and Apple’s claim that they pay every cent owed has just been proved. They found they owed more, and they coughed up. They didn’t drag our impoverished government through court, which they’re entitled to do. 
    HMRC has a history of letting corporations off billions in tax to avoid going through the courts. It’s likely that $184 million was on the low side of what was actually owed.
    Things have changed since I was at the Inland Revenue then. I managed some huge cases and we had to dig deep on all cases where the amount owed was substantial. Court action was never a concern to recover any amount legally due.

    While I was there they even implemented the rule of sending all cheques over 1 million pounds directly to the bank of England by courier to avoid paying them into local accounts and losing interest on those amounts while the cheques cleared.

    Of course, times have changed and attitudes might be different now. It's not even called the Inland Revenue now.




    muthuk_vanalingam
  • Reply 15 of 22
    adm1adm1 Posts: 756member
    felix01 said:
    So much for Tim Cook’s repeated claims that Apple was paying every cent due in taxes. Is this just a case of differing opinions among tax attorneys or is Apple just being overly aggressive with deductions and now being called to task?

    technically this is pounds and pennies so he wasn't wrong referring to the "cents" owed ;)
  • Reply 16 of 22
    lukeilukei Posts: 308member
    Rayz2016 said:

    I hope Apple fights this nonsense from the socialists tooth & nail.
    It’s not worth the effort or bad publicity for what is essentially loose change. 
    We also don’t have a socialist Government in the UK. HMRC is generally large business friendly. 
    GeorgeBMac
  • Reply 17 of 22
    croprcropr Posts: 753member
    jbdragon said:
    More money that will quickly disappear into the government waste. Why do people think Apple, let alone any other company pays taxes? No YOU the customer pay the taxes in the form of higher prices which pay for the taxes. You're really only taxing yourself yet again, over and over and over. You don't realize how much money the government is stealing from you, if you sat down and started adding it all up. Apple pays more, YOU pay more.
    You'd better stop smoking these weird substances. 

    How on earth can I be paying more if a government taxes the profits, a company makes in some country?   Apple will not change its investments or product strategy because it has to pay taxes on the profits it makes.

    Taxes on profits are calculated on the total profit figures a company makes  and are charged typically charged more than 1 year after the sale of a product. Apple, as any other company cannot come to me one year after I bought my Mac saying: hey you have to pay another 3% because we received a tax bill.

    Nor can Apple anticipate the tax by an increase of selling price, because the profit is calculated on the total of all products, acquisition, financial earnings, ....  One can calculate the margin on individual items like a iPhone, an Mac or an Apple Music subscription, but one cannot calculated the profit of individual items; the revenue of other items influence the profit positively or negatively.  One can assume that the margin on Apple Music subscriptions is lower than on iPhones, so it impacts negatively the average profit percentage of Apple.   If Apple buys a company, it is a deductible expense for the taxes on profits, and Apple does not know 1 year upfront the conditions of a potential acquisition.
      
    Besides there is a market that plays; Apple cannot increase its prices without impacting the market.
    edited January 10 GeorgeBMac
  • Reply 18 of 22
    radarthekatradarthekat Posts: 2,297moderator
    cropr said:
    jbdragon said:
    More money that will quickly disappear into the government waste. Why do people think Apple, let alone any other company pays taxes? No YOU the customer pay the taxes in the form of higher prices which pay for the taxes. You're really only taxing yourself yet again, over and over and over. You don't realize how much money the government is stealing from you, if you sat down and started adding it all up. Apple pays more, YOU pay more.
    You'd better stop smoking these weird substances. 

    How on earth can I be paying more if a government taxes the profits, a company makes in some country?   Apple will not change its investments or product strategy because it has to pay taxes on the profits it makes.

    Taxes on profits are calculated on the total profit figures a company makes  and are charged typically charged more than 1 year after the sale of a product. Apple, as any other company cannot come to me one year after I bought my Mac saying: hey you have to pay another 3% because we received a tax bill.

    Nor can Apple anticipate the tax by an increase of selling price, because the profit is calculated on the total of all products, acquisition, financial earnings, ....  One can calculate the margin on individual items like a iPhone, an Mac or an Apple Music subscription, but one cannot calculated the profit of individual items; the revenue of other items influence the profit positively or negatively.  One can assume that the margin on Apple Music subscriptions is lower than on iPhones, so it impacts negatively the average profit percentage of Apple.   If Apple buys a company, it is a deductible expense for the taxes on profits, and Apple does not know 1 year upfront the conditions of a potential acquisition.
      
    Besides there is a market that plays; Apple cannot increase its prices without impacting the market.
    Oops, missed the point.  Way back when the prices of products are set, the company that produces the product factors in all costs of doing business, to attempt to ensure a profit after everything is paid.  And since new products are developed and introduced on a constant basis, you can be certain that this year’s changes in tax expenses are folded into this year’s and next year’s product prices.  Since this has been going on since.. taxes... you can be sure that all the products you’ve ever bought had taxes factored into their prices.  That’s how on earth. 
    watto_cobra
  • Reply 19 of 22
    dewmedewme Posts: 1,270member
    That'll pay for a lot of holy hand grenades!
    SpamSandwichwatto_cobra
  • Reply 20 of 22
    larryalarrya Posts: 485member
    cropr said:
    jbdragon said:
    More money that will quickly disappear into the government waste. Why do people think Apple, let alone any other company pays taxes? No YOU the customer pay the taxes in the form of higher prices which pay for the taxes. You're really only taxing yourself yet again, over and over and over. You don't realize how much money the government is stealing from you, if you sat down and started adding it all up. Apple pays more, YOU pay more.
    You'd better stop smoking these weird substances. 

    How on earth can I be paying more if a government taxes the profits, a company makes in some country?   Apple will not change its investments or product strategy because it has to pay taxes on the profits it makes.

    Taxes on profits are calculated on the total profit figures a company makes  and are charged typically charged more than 1 year after the sale of a product. Apple, as any other company cannot come to me one year after I bought my Mac saying: hey you have to pay another 3% because we received a tax bill.

    Nor can Apple anticipate the tax by an increase of selling price, because the profit is calculated on the total of all products, acquisition, financial earnings, ....  One can calculate the margin on individual items like a iPhone, an Mac or an Apple Music subscription, but one cannot calculated the profit of individual items; the revenue of other items influence the profit positively or negatively.  One can assume that the margin on Apple Music subscriptions is lower than on iPhones, so it impacts negatively the average profit percentage of Apple.   If Apple buys a company, it is a deductible expense for the taxes on profits, and Apple does not know 1 year upfront the conditions of a potential acquisition.
      
    Besides there is a market that plays; Apple cannot increase its prices without impacting the market.
    Oops, missed the point.  Way back when the prices of products are set, the company that produces the product factors in all costs of doing business, to attempt to ensure a profit after everything is paid.  And since new products are developed and introduced on a constant basis, you can be certain that this year’s changes in tax expenses are folded into this year’s and next year’s product prices.  Since this has been going on since.. taxes... you can be sure that all the products you’ve ever bought had taxes factored into their prices.  That’s how on earth. 
    Enjoy paying higher personal taxes so your phone doesn’t cost a few pennies more. 
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