Ireland says it's not responsible for Apple's low international tax rate
With Apple under fire for its low international tax rate thanks to corporate subsidiaries housed in Ireland, the Irish government has spoken out on the matter, saying its laws are not to blame.
Ireland's Deputy Prime Minister Eamon Gilmore issued a statement to broadcaster RTE on Tuesday, defending his country from accusations that it has functioned as a tax haven for Apple. The Irish government is not responsible if Apple's tax rate is too low, he said, according to Reuters.
"They are issues that arise from the taxation systems in other jurisdictions, and that is an issue that has to be addressed first of all in those jurisdictions," Gilmore said.
Apple's presence in Ireland has been scrutinized by a report from the U.S. Senate Permanent Subcommittee on Investigations, which found that subsidiaries owned by Apple were used to purposefully avoid paying billions of dollars in domestic taxes. The report alleges that Apple moved billions of dollars in profits to affiliate corporations such as Apple Operations International in Ireland,w here the effective tax rate is less than 2 percent.
For its part, Apple has argued that it pays the appropriate taxes on every product it sells within the U.S. In a testimony published on Monday, the company said its substantial amount of foreign cash, which now exceeds $100 billion, exists because the majority of the company's products are sold outside of America.
While its international tax practices face scrutiny, Apple has pushed for legislators to consider comprehensive tax reform in ways that might allow the company to return some of its $102 billion in international cash to the U.S. at a reasonable tax rate. The company has argued that the current tax code was written for the "industrial era," and that it is actually harmful to businesses in the modern "digital economy."
Of course, Apple is not the only company that has set up operations in Ireland for its favorable tax laws. Other major U.S. corporations with a presence there include Google, Microsoft, Facebook, and Amazon.
Many of those companies were also under fire last year in the U.K., when a report alleged that Apple paid ?10 million in corporate tax on estimated sales of ?6 billion. Apple and others have a presence in the town of Cork, Ireland, where the local tax rate just 12.5 percent, or about half the 24 percent corporate rate in the U.K.
One analysis of 60 large U.S. corporations conducted earlier this year by The Wall Street Journal found that together they held $166 billion in earnings offshore in 2012. Apple alone accounted for just under a sixth of the analyzed group's total, and that cash sum has only grown in the months since.
Ireland's Deputy Prime Minister Eamon Gilmore issued a statement to broadcaster RTE on Tuesday, defending his country from accusations that it has functioned as a tax haven for Apple. The Irish government is not responsible if Apple's tax rate is too low, he said, according to Reuters.
"They are issues that arise from the taxation systems in other jurisdictions, and that is an issue that has to be addressed first of all in those jurisdictions," Gilmore said.
Apple's presence in Ireland has been scrutinized by a report from the U.S. Senate Permanent Subcommittee on Investigations, which found that subsidiaries owned by Apple were used to purposefully avoid paying billions of dollars in domestic taxes. The report alleges that Apple moved billions of dollars in profits to affiliate corporations such as Apple Operations International in Ireland,w here the effective tax rate is less than 2 percent.
For its part, Apple has argued that it pays the appropriate taxes on every product it sells within the U.S. In a testimony published on Monday, the company said its substantial amount of foreign cash, which now exceeds $100 billion, exists because the majority of the company's products are sold outside of America.
While its international tax practices face scrutiny, Apple has pushed for legislators to consider comprehensive tax reform in ways that might allow the company to return some of its $102 billion in international cash to the U.S. at a reasonable tax rate. The company has argued that the current tax code was written for the "industrial era," and that it is actually harmful to businesses in the modern "digital economy."
Of course, Apple is not the only company that has set up operations in Ireland for its favorable tax laws. Other major U.S. corporations with a presence there include Google, Microsoft, Facebook, and Amazon.
Many of those companies were also under fire last year in the U.K., when a report alleged that Apple paid ?10 million in corporate tax on estimated sales of ?6 billion. Apple and others have a presence in the town of Cork, Ireland, where the local tax rate just 12.5 percent, or about half the 24 percent corporate rate in the U.K.
One analysis of 60 large U.S. corporations conducted earlier this year by The Wall Street Journal found that together they held $166 billion in earnings offshore in 2012. Apple alone accounted for just under a sixth of the analyzed group's total, and that cash sum has only grown in the months since.
Comments
Quote: "They are issues that arise from the taxation systems in other jurisdictions, and that is an issue that has to be addressed first of all in those jurisdictions," Deputy Prime Minister Gilmore said.
Or as the late, great Irish comedian Frank Carson used to say... "It's the way I tell 'em!"
They're just following Rick Perry's example!
I expected Cook's push for corporate tax reform would be well received by at least some senators. The senate's preemptive strike against Apple indicates the ring masters were not sufficiently paid off for Tim's performance at the circus.
I doubt Samsung lobbying here.
I presume this is what they call tongue in cheek humor? Because the US is well served with its 50,000 employees, paying taxes from their / on their income, paid by Apple.
Copied in Korea.
This whole thing is getting ridiculous.
Each government sets its own tax rates to meet its own needs. Ireland's government is apparently frugal with the money it takes in. Why should they raise their rates—and thus, lose a competitive jobs advantage for their country—just because spendthrift governments aren't willing to control their spending? And why should an international company limit themselves to only those countries with exorbitant or even punitive tax rates?
I agree with this. There simply is no reason for an American company to bring earnings it made overseas back to the US if it's going to get a 35% hit. If the US government wants a piece of that growing pie they'll need to make it attractive to bring that cash back to the US.
Quote:
Designed in Ireland. Made in China.
Back in the early 80's it was "Designed in America. Made in Ireland by Apple."
Why should Apple leave a country they've had a presence in for more than 30 years just because our government is greedy?
Quote:
Originally Posted by EWTHeckman
Each government sets its own tax rates to meet its own needs. Ireland's government is apparently frugal with the money it takes in. Why should they raise their rates—and thus, lose a competitive jobs advantage for their country—just because spendthrift governments aren't willing to control their spending? And why should an international company limit themselves to only those countries with exorbitant or even punitive tax rates?
Its not that though. Ireland has a double taxation agreement with Bermuda - which it is forced to do by international agreement - and Bermuda is a tax haven. That is, unlike Ireland, where Apple have had a significant industrial presence since before the Mac was even built and has built the European products until recently - when FoxConn took over - and where it is still the entry point for Apple's products to Europe; Bermuda has no Apple employees, and just a post box. Bermuda is also a non-transparant country in terms of it's laws, and accounting practices.
So if anybody is being screwed it is Ireland in terms of European profits.
However Bermuda is a UK dependency and they can control it.
The way that Apple avoid tax in Ireland is by transferring the IP to Bermuda, and then Apple Bermuda charge for the IP per device built.
This is legit. Most of the value added in a Mac, or an iPhone is the brand, the software, and the design. All IP.
The US could argue, and make international agreements, that IP should be non-transferable to any country except
1) The founding country of the company with the IP, regardless of where the IP is created.
2) Any country where IP is created can keep it, or transfer it back to HQ.
This would probably make all American companies pay more tax in the USA. If they all do, then it becomes moot. Unless the US reduces it's tax though, it would give Samsung et al. a huge advantage.
I would say they aren't being greedy, per say, but merely unreasonable. I'd think the more greedy move would be to maximized the actual taxation. With the current tax laws that means they get 35% of $0 from moving the funds back to the US, as well as $0 from whatever taxation would happen as those funds are then used in the US. To me, the more reasonable move would be to actually be greedy by reducing the tax rate to the highest possible point that will get the maximum amount of funds coming back to the US.
Quote:
Originally Posted by JollyPaul
I expected Cook's push for corporate tax reform would be well received by at least some senators. The senate's preemptive strike against Apple indicates the ring masters were not sufficiently paid off for Tim's performance at the circus.
Or the ringmasters on wall street are truly mastering the ring... to avoid more reforms on banks and financials (who don't make stuff), they are pointing to a company that until a month ago didn't borrow money (the payoff to the ringmasters) yet made money by actually selling something that consumers and business want.
The senators are puppets, waiting for their deferred compensation by corporate/financial leaders here and abroad.
As for Ireland... the fact they allow 'flagless' corporations to exist is a loophole a mile wide, and the 'double irish with a dutch sandwich' usually with a carribbean bank as the transfer agent has existed because Ireland was reeling on insolvency and was inventive in it's corporate tax code to bring in new business in the 80's (this 'scheme' evolved almost 30 years ago, and Apple back then was one of the first to use it, but so were most pharma companies, GE, Microsoft do it as well)
So to that end, JollyPaul is right... Apple didn't pay off the ringmasters, like Google, Microsoft, GE, the Banks, Big Pharma, even Starbucks. Its brutal independence from wall street, from Main stream media has made it the target to distract us from what would really reform tax, banking, and securities policy. But for Senators, who 'next' job is one of 2 things: National Office or Lobbyist, and there are only about 4 'real promotion' jobs every 4 years for the 1st, so, every major hearing is a job interview for a lobbyist position.
[quote]
go4d1
2013/05/21 08:50am
They're just following Rick Perry's example!
[/quote]
My apologies for being so dense, but huh? Can you please elaborate?
Quote:
Originally Posted by SolipsismX
I agree with this. There simply is no reason for an American company to bring earnings it made overseas back to the US if it's going to get a 35% hit. If the US government wants a piece of that growing pie they'll need to make it attractive to bring that cash back to the US.
For some reason, the U.S. thinks that 35% of nothing is better than 12% of something!
They are wasting tax payer money on these lawsuits, but I guess they have attorneys that need money.
Quote:
Originally Posted by EWTHeckman
Back in the early 80's it was "Designed in America. Made in Ireland by Apple."
Why should Apple leave a country they've had a presence in for more than 30 years just because our government is greedy?
I know they had assembly plants in Ireland, they also had one in Fremont, Elk Grove and a few other places to my knowledge.
Obama's lack of leadership represents an opportunity for the Republicans. Why are they silent? Could it be they engineered these loop holes?