Apple's Irish tax bill close to finalization, "in the ballpark" of $16 billion

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Comments

  • Reply 21 of 27
    asdasd said:
    Apple should tell ‘em they’ll pay half that or they’ll walk.
    you continually fail to understand what is going on in this case, no matter how simply explained. 
    Thanks for your concern, grandpa.  :s
  • Reply 22 of 27
    When a considered progressive corporation as Apple is into playing tax loophole whack a mole I can only imagine what the sleazier corporations are up to. Apple (Pay) your taxes, stop playing games, be an example of a responsible company. 
  • Reply 23 of 27
    misamisa Posts: 827member
    Would be cheaper to buy Ireland and withdraw it from the EU. 
    That won't happen. The Ireland residents want to stay in the EU, they in fact have been appealing to the Northern Ireland residents to break off from the UK and come back to them so they can stay in the EU too.

    But at any rate, Brexit will ultimately be a mistake for the UK.



  • Reply 24 of 27
    MacProMacPro Posts: 18,166member
    macxpress said:
    That's like one days worth of dongle sales... /s
    Not sure you even need the /s.  
    SpamSandwichgatorguy
  • Reply 25 of 27
    misa said:
    Would be cheaper to buy Ireland and withdraw it from the EU. 
    That won't happen. The Ireland residents want to stay in the EU, they in fact have been appealing to the Northern Ireland residents to break off from the UK and come back to them so they can stay in the EU too.

    But at any rate, Brexit will ultimately be a mistake for the UK.



    The Brits sure haven’t themselves any favors. They come off as a bunch of dolts incapable of managing their own affairs without the oversight of the vampiric EU.
  • Reply 26 of 27
    asdasdasdasd Posts: 5,283member
    carnegie said:
    asdasd said:

    carnegie said:
    I am guessing this could mean a real earnings hit for Apple. Under the prior system of worldwide taxation of US corporations, Apple would have simply transferred the $16B from what it would owe the US Treasury for $$ repatriated from abroad*, in the process of paying Ireland. In other words, it could have led to a fight between the the two Treasuries over who should get the $$.

    Under the new, post-Trump, territorial taxation system -- wherein any tax paid abroad is considered "fully paid" -- the US Treasury doesn't care any more.

    *...if/when repatriated from abroad.
    This payment (if it ever happens, rather than just going into escrow) would represent (foreign) income taxes paid for prior tax years. So it would affect what Apple pays the U.S. in accordance with the new deemed-repatriated rules. Those rules require Apple to pay U.S. income taxes on as-yet unremitted foreign earnings (whether those earnings are repatriated or not), but allow Apple a prorated credit for foreign income taxes paid on those earnings. An additional payment of $10 billion in foreign income taxes (on prior foreign earnings) wouldn't result in Apple paying $10 billion less to the U.S., but it would result in Apple paying substantially less to the U.S. - maybe $4 billion or so.

    Even going forward foreign income taxes paid can affect what U.S. companies pay in U.S. income taxes. We aren't going to a strict territorial taxation system. We're going to a territorial-ish taxation system. For instance, there's a new GILTI (global intangible low-taxed income) tax which in effect sets a minimum taxation level for a lot of the foreign earnings of U.S. companies. If they pay very little in foreign income taxes on those earnings, they have to pay some U.S. income taxes on them. 
    The last bit is a good idea. 

    Is it true that Apple has paid the US what it would have owed without this ruling?
    There are two parts to the answer to that question.

    The first is... Apple hasn't repatriated most of the earnings which these new taxes owed to Ireland (i.e. based on the European Commission decision) would be based on. So Apple hasn't paid the U.S. what it would owe on those earnings in the absence of that decision and if it had previously repatriated those earnings. But under the new deemed-repatriated tax, it will have to pay U.S. taxes on those as-yet unremitted foreign earnings. It can, other considerations aside, do that over an 8 year period.

    How will it account for the possibility that it ends up having to pay additional Irish taxes, in accordance with the Commission's decision, when calculating its deemed-repatriated U.S. tax liability? I don't know. My guess would be that initially it will consider it unlikely that it ends up having to pay those Irish taxes and so will calculate U.S. tax liability based on the expectation that it won't have to. But that could change at some point. And Apple likely won't pay all of (or even most of) its new U.S. deemed-repatriated tax liability any time soon. So there's time for the Irish tax situation to play out further and for Apple to have a better idea what the ultimate resolution of it will be.

    The second is... Apple may have already repatriated a small portion of the earnings which the new taxes owed to Ireland would be based on. If that's the case, Apple likely has paid the U.S. what it owed on those earnings (i.e. those which have been repatriated) in the absence of the Commission's decision. So, if Apple ends up having to pay the new Irish taxes, it will likely need to amend older U.S. returns to reflect a larger credit for foreign income taxes paid and thus a smaller U.S. income tax liability. In other words, it will have to tell the U.S. government that it previously overpaid U.S. income taxes and is entitled to some money back (which would likely be applied against new U.S. income tax liability that it would have).
    I liked this anyway, but just to say more directly thanks for the information. 
  • Reply 27 of 27
    asdasd said:
    carnegie said:
    asdasd said:

    carnegie said:
    I am guessing this could mean a real earnings hit for Apple. Under the prior system of worldwide taxation of US corporations, Apple would have simply transferred the $16B from what it would owe the US Treasury for $$ repatriated from abroad*, in the process of paying Ireland. In other words, it could have led to a fight between the the two Treasuries over who should get the $$.

    Under the new, post-Trump, territorial taxation system -- wherein any tax paid abroad is considered "fully paid" -- the US Treasury doesn't care any more.

    *...if/when repatriated from abroad.
    This payment (if it ever happens, rather than just going into escrow) would represent (foreign) income taxes paid for prior tax years. So it would affect what Apple pays the U.S. in accordance with the new deemed-repatriated rules. Those rules require Apple to pay U.S. income taxes on as-yet unremitted foreign earnings (whether those earnings are repatriated or not), but allow Apple a prorated credit for foreign income taxes paid on those earnings. An additional payment of $10 billion in foreign income taxes (on prior foreign earnings) wouldn't result in Apple paying $10 billion less to the U.S., but it would result in Apple paying substantially less to the U.S. - maybe $4 billion or so.

    Even going forward foreign income taxes paid can affect what U.S. companies pay in U.S. income taxes. We aren't going to a strict territorial taxation system. We're going to a territorial-ish taxation system. For instance, there's a new GILTI (global intangible low-taxed income) tax which in effect sets a minimum taxation level for a lot of the foreign earnings of U.S. companies. If they pay very little in foreign income taxes on those earnings, they have to pay some U.S. income taxes on them. 
    The last bit is a good idea. 

    Is it true that Apple has paid the US what it would have owed without this ruling?
    There are two parts to the answer to that question.

    The first is... Apple hasn't repatriated most of the earnings which these new taxes owed to Ireland (i.e. based on the European Commission decision) would be based on. So Apple hasn't paid the U.S. what it would owe on those earnings in the absence of that decision and if it had previously repatriated those earnings. But under the new deemed-repatriated tax, it will have to pay U.S. taxes on those as-yet unremitted foreign earnings. It can, other considerations aside, do that over an 8 year period.

    How will it account for the possibility that it ends up having to pay additional Irish taxes, in accordance with the Commission's decision, when calculating its deemed-repatriated U.S. tax liability? I don't know. My guess would be that initially it will consider it unlikely that it ends up having to pay those Irish taxes and so will calculate U.S. tax liability based on the expectation that it won't have to. But that could change at some point. And Apple likely won't pay all of (or even most of) its new U.S. deemed-repatriated tax liability any time soon. So there's time for the Irish tax situation to play out further and for Apple to have a better idea what the ultimate resolution of it will be.

    The second is... Apple may have already repatriated a small portion of the earnings which the new taxes owed to Ireland would be based on. If that's the case, Apple likely has paid the U.S. what it owed on those earnings (i.e. those which have been repatriated) in the absence of the Commission's decision. So, if Apple ends up having to pay the new Irish taxes, it will likely need to amend older U.S. returns to reflect a larger credit for foreign income taxes paid and thus a smaller U.S. income tax liability. In other words, it will have to tell the U.S. government that it previously overpaid U.S. income taxes and is entitled to some money back (which would likely be applied against new U.S. income tax liability that it would have).
    I liked this anyway, but just to say more directly thanks for the information. 
    You're welcome.
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