Samsung sells products all over the world. When they bring profits from those sales that were already taxed overseas to the US, not only do they not have to pay any taxes on that money, they get tax incentives to invest in selling in america.
Apple sells products all over the world and pays the appropriate taxes all over the world for those sales. If they want to bring that money into the US, they will be slapped with a 35% corporate tax on products manufactured, distributed and sold outside of the US. Apple is in the process of moving full production of a product line to the US. Rather than being able to use their own money as their rival Samsung can do, they have to issue bonds to fund it.
In a global economy, why do American tax laws put American companies ad a disadvantage when competing with foreign companies in America. And why do they want to extend that disadvantage worldwide?
They are wasting tax payer money on these lawsuits, but I guess they have attorneys that need money.
Congress just like to grandstand. They enjoy hauling citizens before their public tribunals. Those people in the capital are moving further away from being representatives of the people every day, and turning themselves into performers and panderers.
I'm sure someone here will educate me , but I don't know why we tax corporations on their profit. It seems to me that the government already taxes these profits when these profits are passed to the individual - either through dividends paid out or through sale of shares.
Each government sets its own tax rates to meet its own needs. Ireland's government is apparently frugal with the money it takes in set its rate too low and brankrupted itself.
Fixed for you. Ireland won the race to the bottom and ran out of money. Well done Ireland.
Apple need answer only one question in this whole affair; did Apple do anything unlawful?
If the answer is "no" the matter should be dismissed..
This is a business issue note a moral issue. Washington, it would seem, is treating the morality of the matter as it might a legal one. Consider they are all wasting our money in federal funds to "investigate" Apples' business practice.
The greedy politicians see $ signs. If doesn't matter how illogical their argument is. The money Apple has "over seas" was money earned over seas. The products weren't even manufactured in the US, let alone sold there. The American government isn't entitled to one penny of it.
And if it's limited to that, I completely agree. I think the implied accusation is (although I don't know if anyone has actual evidence of it) that Apple is funneling profits from US sales offshore in order to avoid paying US taxes on it. One supposed method would be to transfer [some nebulous] intellectual property from Apple US to Apple Ireland. They could do this for free or at a bargain basement price...Apple Ireland pays Apple US some token fee for the IP.
Then Apple Ireland "licenses" the IP back to Apple US, for example $100 per Mac for whatever the IP covers. Apple US can then claim that as a business expense and deduct it from their revenue. So they pay no US taxes on that $100 and Apple Ireland pays the lower Irish tax on the $100 instead.
I'm not saying Apple is doing this. I haven't read enough supposed evidence to make any judgements. And if Congress is suggesting that Apple owes US taxes on overseas sales of actual products, then I completely agree with the above that US should keep it's hands off. But if there is an IP shell game going on, then perhaps it needs to be addressed with new regulations (but I haven't the faintest idea what that might look like).
And this is hardly a new thing and certainly not limited to corporations. How many parent's have transferred ownership of a $10,000 car to their kid for some ridiculously low price like $500 in order to avoid paying the transfer/sales taxes to their state?
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.
But even an 'attractive' amount is double taxation ... given the income was already taxed in the country it resides, wouldn't taxing it again here seem a bit un American, kind of 'Taxation upon Repatriation' or some such catchy phrase?
And if it's limited to that, I completely agree. I think the implied accusation is (although I don't know if anyone has actual evidence of it) that Apple is funneling profits from US sales offshore in order to avoid paying US taxes on it. One supposed method would be to transfer [some nebulous] intellectual property from Apple US to Apple Ireland. They could do this for free or at a bargain basement price...Apple Ireland pays Apple US some token fee for the IP.Then Apple Ireland "licenses" the IP back to Apple US, for example $100 per Mac for whatever the IP covers. Apple US can then claim that as a business expense and deduct it from their revenue. So they pay no US taxes on that $100 and Apple Ireland pays the lower Irish tax on the $100 instead.I'm not saying Apple is doing this. I haven't read enough supposed evidence to make any judgements. And if Congress is suggesting that Apple owes US taxes on overseas sales of actual products, then I completely agree with the above that US should keep it's hands off. But if there is an IP shell game going on, then perhaps it needs to be addressed with new regulations (but I haven't the faintest idea what that might look like).And this is hardly a new thing and certainly not limited to corporations. How many parent's have transferred ownership of a $10,000 car to their kid for some ridiculously low price like $500 in order to avoid paying the transfer/sales taxes to their state?
Taking your last sentence ... or how many members of the US Government have sold a house or a boat to a relative at a fraction of the worth?
Meanwhile I am interested to see if there is any proof Apple moved funds off shore which is almost evasion I'd have thought. I was, perhaps naively, assuming that wasn't the case.
I don't think that's naive, it's what I understand from all these proceedings. And I agree with Sol as well, Apple shouldn't have to be taxed again if they already paid their tax in the countries where they made a sell.
Besides, if they invest in B&M Stores, I'd assume they pay that from their local banks in that country and not have the money first brought back to the US and then pay it from an American bank account.
I am sorry, but it seems to me that the committee is trying to overstep double taxation laws in addition to violating or just outright stomping on tax treaties that have been established.
I also find the attitude of some of the committee members to be hostile and far removed from productive.
But even an 'attractive' amount is double taxation ... given the income was already taxed in the country it resides, wouldn't taxing it again here seem a bit un American, kind of 'Taxation upon Repatriation' or some such catchy phrase?
On the question of double taxation...well, it depends on how they did it I think. Consider the sales tax US states charge. If I live in a state with 7% sales tax and buy something in another state that only charges 5%, in many (most?) states I'd be legally required to report that and pay my home state the additional 2% sales tax. Many people are aware of the push by states to collect sales tax on non-taxed online purchase, but "undertaxed" sales are also subject to the same laws. (Of course, if I buy something in a state that charges 9%, I can't claim a refund!)
I believe, but not sure, that similar rules apply for US individuals who earn money overseas. You have to pay US income tax, but you get a credit for taxes you may have paid to the country where you earned the money.
Just one question. Apple is an American tax resident company. All the profit Apply made through it's subsidiary companies around the world belongs to Apple. Would Apple be required to pay American corporate tax on all profit Apple made (of course after deducting corporate tax paid overseas)?
Just one question. Apple is an American tax resident company. All the profit Apply made through it's subsidiary companies around the world belongs to Apple. Would Apple be required to pay American corporate tax on all profit Apple made (of course after deducting corporate tax paid overseas)?
No that isn't how it works. Each subsidiary company, although owned by Apple inc is a separate legal entity and subject to taxation on any profits that it makes. That taxation is usually due within the jurisdiction that the subsidiary is based. The subsidiary may use IP, services or products from any of the other Apple companies and is obliged to pay the price for them. This generates cash flow back to the company providing the IP, services or products and hopefully a profit.
Most countries have fairly tight legislation about transferring assets such as IP between different companies/jurisdictions meaning that any transfers have to be paid for at a reasonable rate.This is meant to avoid companies just moving assets into a more favourable tax regime whenever they feel liken it to save a bit of tax.
No that isn't how it works. Each subsidiary company, although owned by Apple inc is a separate legal entity and subject to taxation on any profits that it makes. That taxation is usually due within the jurisdiction that the subsidiary is based. The subsidiary may use IP, services or products from any of the other Apple companies and is obliged to pay the price for them. This generates cash flow back to the company providing the IP, services or products and hopefully a profit.
Most countries have fairly tight legislation about transferring assets such as IP between different companies/jurisdictions meaning that any transfers have to be paid for at a reasonable rate.This is meant to avoid companies just moving assets into a more favourable tax regime whenever they feel liken it to save a bit of tax.
Thanks, but your reply does not answer my question.
Thanks, but your reply does not answer my question.
Sorry if it is not clear, but the answer to your question is no.
Apple is not required to bring profits from overseas subsidiaries into the US.
It also does not have to pay tax in the US on monies earned by these subsidiaries and held offshore.
Apple Inc does not get an offset in it's tax rate on money brought back to the US even if tax has already been paid on these profits in the juridiction that it was generated.
Unlike a lot (most countries) the US charges corporate tax at the full rate currently 35% so a number companies object to bringing money back to the US parent company if they can use it elsewhere as they are effectively being charged twice.
Sorry if it is not clear, but the answer to your question is no.
Apple is not required to bring profits from overseas subsidiaries into the US.
It also does not have to pay tax in the US on monies earned by these subsidiaries and held offshore.
Apple Inc does not get an offset in it's tax rate on money brought back to the US even if tax has already been paid on these profits in the juridiction that it was generated.
Unlike a lot (most countries) the US charges corporate tax at the full rate currently 35% so a number companies object to bringing money back to the US parent company if they can use it elsewhere as they are effectively being charged twice.
Thanks for your info.
IMHO, American tax resident companies should include all worldwide business & investment activities, regardless of how they structure overseas operation, in their USA company tax return and pay USA corporate tax on worldwide income. And it is the Government's responsibility to make sure that principle should be kept.
One more question from me. I think that, if American companies include income generated from its subsidiaries in countries where USA has double tax agreement with, they could get credits in its USA corporate tax liability for the corporate tax paid overseas. Am I misunderstood here?
IMHO, American tax resident companies should include all worldwide business & investment activities, regardless of how they structure overseas operation, in their USA company tax return and pay USA corporate tax on worldwide income.
Why? That makes no sense at all. The claimed point and purpose of taxes is to pay for the services provided by the governmental/state entity in which one lives or does business. This plan would essential rob any other country a company does business in, enabling someone like Apple to "free ride" on the backs of the taxpayers in those other countries.
Comments
Samsung sells products all over the world. When they bring profits from those sales that were already taxed overseas to the US, not only do they not have to pay any taxes on that money, they get tax incentives to invest in selling in america.
Apple sells products all over the world and pays the appropriate taxes all over the world for those sales. If they want to bring that money into the US, they will be slapped with a 35% corporate tax on products manufactured, distributed and sold outside of the US. Apple is in the process of moving full production of a product line to the US. Rather than being able to use their own money as their rival Samsung can do, they have to issue bonds to fund it.
In a global economy, why do American tax laws put American companies ad a disadvantage when competing with foreign companies in America. And why do they want to extend that disadvantage worldwide?
Quote:
Originally Posted by drblank
They are wasting tax payer money on these lawsuits, but I guess they have attorneys that need money.
Congress just like to grandstand. They enjoy hauling citizens before their public tribunals. Those people in the capital are moving further away from being representatives of the people every day, and turning themselves into performers and panderers.
I'm sure someone here will educate me , but I don't know why we tax corporations on their profit. It seems to me that the government already taxes these profits when these profits are passed to the individual - either through dividends paid out or through sale of shares.
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 set its rate too low and brankrupted itself.
Fixed for you. Ireland won the race to the bottom and ran out of money. Well done Ireland.
If the answer is "no" the matter should be dismissed..
This is a business issue note a moral issue. Washington, it would seem, is treating the morality of the matter as it might a legal one. Consider they are all wasting our money in federal funds to "investigate" Apples' business practice.
What are they REALLY seeking?
The greedy politicians see $ signs. If doesn't matter how illogical their argument is. The money Apple has "over seas" was money earned over seas. The products weren't even manufactured in the US, let alone sold there. The American government isn't entitled to one penny of it.
And if it's limited to that, I completely agree. I think the implied accusation is (although I don't know if anyone has actual evidence of it) that Apple is funneling profits from US sales offshore in order to avoid paying US taxes on it. One supposed method would be to transfer [some nebulous] intellectual property from Apple US to Apple Ireland. They could do this for free or at a bargain basement price...Apple Ireland pays Apple US some token fee for the IP.Then Apple Ireland "licenses" the IP back to Apple US, for example $100 per Mac for whatever the IP covers. Apple US can then claim that as a business expense and deduct it from their revenue. So they pay no US taxes on that $100 and Apple Ireland pays the lower Irish tax on the $100 instead.
I'm not saying Apple is doing this. I haven't read enough supposed evidence to make any judgements. And if Congress is suggesting that Apple owes US taxes on overseas sales of actual products, then I completely agree with the above that US should keep it's hands off. But if there is an IP shell game going on, then perhaps it needs to be addressed with new regulations (but I haven't the faintest idea what that might look like).
And this is hardly a new thing and certainly not limited to corporations. How many parent's have transferred ownership of a $10,000 car to their kid for some ridiculously low price like $500 in order to avoid paying the transfer/sales taxes to their state?
But even an 'attractive' amount is double taxation ... given the income was already taxed in the country it resides, wouldn't taxing it again here seem a bit un American, kind of 'Taxation upon Repatriation' or some such catchy phrase?
Taking your last sentence ... or how many members of the US Government have sold a house or a boat to a relative at a fraction of the worth?
Meanwhile I am interested to see if there is any proof Apple moved funds off shore which is almost evasion I'd have thought. I was, perhaps naively, assuming that wasn't the case.
Besides, if they invest in B&M Stores, I'd assume they pay that from their local banks in that country and not have the money first brought back to the US and then pay it from an American bank account.
I also find the attitude of some of the committee members to be hostile and far removed from productive.
Quote:
Originally Posted by iPilya
I also find the attitude of some of the committee members to be hostile and far removed from productive.
Isn't that the point of Congress?
But even an 'attractive' amount is double taxation ... given the income was already taxed in the country it resides, wouldn't taxing it again here seem a bit un American, kind of 'Taxation upon Repatriation' or some such catchy phrase?
On the question of double taxation...well, it depends on how they did it I think. Consider the sales tax US states charge. If I live in a state with 7% sales tax and buy something in another state that only charges 5%, in many (most?) states I'd be legally required to report that and pay my home state the additional 2% sales tax. Many people are aware of the push by states to collect sales tax on non-taxed online purchase, but "undertaxed" sales are also subject to the same laws. (Of course, if I buy something in a state that charges 9%, I can't claim a refund!)I believe, but not sure, that similar rules apply for US individuals who earn money overseas. You have to pay US income tax, but you get a credit for taxes you may have paid to the country where you earned the money.
Quote:
Originally Posted by Wiggin
One supposed method would be to transfer [some nebulous] intellectual property from Apple US to Apple Ireland.According to Tim Cook's statement, Apple does not do that.
Impressive performance by Tim Cook.
Just one question. Apple is an American tax resident company. All the profit Apply made through it's subsidiary companies around the world belongs to Apple. Would Apple be required to pay American corporate tax on all profit Apple made (of course after deducting corporate tax paid overseas)?
Quote:
Originally Posted by hjb
Impressive performance by Tim Cook.
Just one question. Apple is an American tax resident company. All the profit Apply made through it's subsidiary companies around the world belongs to Apple. Would Apple be required to pay American corporate tax on all profit Apple made (of course after deducting corporate tax paid overseas)?
No that isn't how it works. Each subsidiary company, although owned by Apple inc is a separate legal entity and subject to taxation on any profits that it makes. That taxation is usually due within the jurisdiction that the subsidiary is based. The subsidiary may use IP, services or products from any of the other Apple companies and is obliged to pay the price for them. This generates cash flow back to the company providing the IP, services or products and hopefully a profit.
Most countries have fairly tight legislation about transferring assets such as IP between different companies/jurisdictions meaning that any transfers have to be paid for at a reasonable rate.This is meant to avoid companies just moving assets into a more favourable tax regime whenever they feel liken it to save a bit of tax.
Quote:
Originally Posted by festerfeet
No that isn't how it works. Each subsidiary company, although owned by Apple inc is a separate legal entity and subject to taxation on any profits that it makes. That taxation is usually due within the jurisdiction that the subsidiary is based. The subsidiary may use IP, services or products from any of the other Apple companies and is obliged to pay the price for them. This generates cash flow back to the company providing the IP, services or products and hopefully a profit.
Most countries have fairly tight legislation about transferring assets such as IP between different companies/jurisdictions meaning that any transfers have to be paid for at a reasonable rate.This is meant to avoid companies just moving assets into a more favourable tax regime whenever they feel liken it to save a bit of tax.
Thanks, but your reply does not answer my question.
Quote:
Originally Posted by hjb
Thanks, but your reply does not answer my question.
Sorry if it is not clear, but the answer to your question is no.
Apple is not required to bring profits from overseas subsidiaries into the US.
It also does not have to pay tax in the US on monies earned by these subsidiaries and held offshore.
Apple Inc does not get an offset in it's tax rate on money brought back to the US even if tax has already been paid on these profits in the juridiction that it was generated.
Unlike a lot (most countries) the US charges corporate tax at the full rate currently 35% so a number companies object to bringing money back to the US parent company if they can use it elsewhere as they are effectively being charged twice.
Quote:
Originally Posted by festerfeet
Sorry if it is not clear, but the answer to your question is no.
Apple is not required to bring profits from overseas subsidiaries into the US.
It also does not have to pay tax in the US on monies earned by these subsidiaries and held offshore.
Apple Inc does not get an offset in it's tax rate on money brought back to the US even if tax has already been paid on these profits in the juridiction that it was generated.
Unlike a lot (most countries) the US charges corporate tax at the full rate currently 35% so a number companies object to bringing money back to the US parent company if they can use it elsewhere as they are effectively being charged twice.
Thanks for your info.
IMHO, American tax resident companies should include all worldwide business & investment activities, regardless of how they structure overseas operation, in their USA company tax return and pay USA corporate tax on worldwide income. And it is the Government's responsibility to make sure that principle should be kept.
One more question from me. I think that, if American companies include income generated from its subsidiaries in countries where USA has double tax agreement with, they could get credits in its USA corporate tax liability for the corporate tax paid overseas. Am I misunderstood here?
Quote:
Originally Posted by hjb
IMHO, American tax resident companies should include all worldwide business & investment activities, regardless of how they structure overseas operation, in their USA company tax return and pay USA corporate tax on worldwide income.
Why? That makes no sense at all. The claimed point and purpose of taxes is to pay for the services provided by the governmental/state entity in which one lives or does business. This plan would essential rob any other country a company does business in, enabling someone like Apple to "free ride" on the backs of the taxpayers in those other countries.