No you are confusing apple with Google or Amazon maybe. Possibly Starbucks. Apple doesn't licence any patents to Italian companies because all it does in Italy is sell stuff. You don't need to transfer IP to sell.
As for the 2% that's a matter of how the US and Ireland tax companies. The Irish tax 12.5% on sales if you are based and registered in Ireland. But only on Irish sales if you are based in the US, or outside the country but register in Ireland. The US taxes companies registered for tax and based there but doesn't tax companies based in the US but not registered there. One or the other should change but neither were set up to be a tax haven.
I think he means Apple US transfers IP to the Irish subsidiary to use in a Double-Irish tax avoidance plan. Apparently Apple confirmed some of the details during Senate hearings.
"The memorandum issued by the US Senate permanent subcommittee on investigations yesterday details how Apple transferred certain rights, including IP rights, to three Irish companies; Apple Sales International (ASI), Apple Operations Europe (AOE), and Apple Operations International (ASI), all of which have registered addresses in Cork but hold their board meetings in the US.
ASI buys finished product from a Chinese manufacturer and resells it at a profit to other Apple companies in jurisdictions outside the Americas without ever taking physical possession of the product. The resulting profit flow to Ireland in the 2009 to 2012 period was a phenomenal $74 billion. Because ASI is not managed and controlled in Ireland, it is not tax resident here. In fact, it is not tax resident anywhere. :err:
This is because the US taxes companies on the basis of where they are registered as against where they are managed from." http://www.irishtimes.com/business/sectors/financial-services/intellectual-property-rights-at-the-core-of-apple-s-irish-subsidiaries-1.1401739
I took a look. It's what I explained earlier, about how Apple is using Irish laws on "resident" companies to avoid tax in Ireland. What it is not saying is that Apple charges IP to sellers. That would be meaningless ( Starbucks are pushing it by claiming coffee is "manufactured" in stores. )
I think he means Apple US transfers IP to the Irish subsidiary to use in a Double-Irish tax avoidance plan. Apparently Apple confirmed some of the details during Senate hearings.
"The memorandum issued by the US Senate permanent subcommittee on investigations yesterday details how Apple transferred certain rights, including IP rights, to three Irish companies; Apple Sales International (ASI), Apple Operations Europe (AOE), and Apple Operations International (ASI), all of which have registered addresses in Cork but hold their board meetings in the US.
ASI buys finished product from a Chinese manufacturer and resells it at a profit to other Apple companies in jurisdictions outside the Americas without ever taking physical possession of the product. The resulting profit flow to Ireland in the 2009 to 2012 period was a phenomenal $74 billion. Because ASI is not managed and controlled in Ireland, it is not tax resident here. In fact, it is not tax resident anywhere. :err:
This is because the US taxes companies on the basis of where they are registered as against where they are managed from." http://www.irishtimes.com/business/sectors/financial-services/intellectual-property-rights-at-the-core-of-apple-s-irish-subsidiaries-1.1401739
Yes that's it. I am not denying Apple avoids tax and I would prefer it paid ( albeit lower) taxes in the US. But the Italian job is a shake down.
They are not avoiding Irish taxes. The way the Irish tax law is structured is that if the companies are owned by a foreign entity they are not required to pay the normal corporate rate but instead a very low 1-2% rate.
The way some people have described the tax avoidance is like this: Apple registers certain intellectual property and design patents to an Irish based company such as Apple Operations International, which they own, and then licenses them to the Italian company, which they own, for enormous fees. In turn the Italian company can write off the expense of the fees and sends the cost of that licensing to the Irish company. In this way the Italian company show almost no profit. And, since Ireland has such a friendly tax structure the Irish company owned by a foreign entity pays no taxes there either.
Apparently they've avoided everyone's taxes on a big chunk'a'money. It's reported three of the Apple subsidiaries based in Ireland and holding upwards of $70Billion don't answer to any taxing authority. None whatsoever.
I took a look. It's what I explained earlier, about how Apple is using Irish laws on "resident" companies to avoid tax in Ireland. What it is not saying is that Apple charges IP to sellers. That would be meaningless
Quote: from the article
According to Stanford professor Gio Wiederhold’s 2011 paper, Apple transfers a portion of its capital (its software and designs) to something called a “controlled foreign holding company.” The holding company buys the rights to Apple’s intellectual property. The holding company then licenses the rights to a third company, also owned by Apple. This third company handles the actual selling of the product, and it receives all the revenues. It also pays the holding company licensing fees or royalties as a cost of generating income off of the intellectual property. If the cost of the licensing fees is high enough, the amount of taxable profit dwindles. All the real revenue flows to the holding company in the form of licensing fees.
Meaningless? Avoiding billions of taxes owed in many foreign countries is not exactly meaningless.
Apparently they've avoided everyone's taxes on a big chunk'a'money. It's reported three of the Apple subsidiaries based in Ireland and holding upwards of $70Billion don't answer to any taxing authority. None whatsoever.
And that's fair game, as everyone knows, including Italy.
I fail to see how they will justify such stupid action once Apple flexes their muscles out of this. However, it was a really low-blow.
Even if Apple quickly wins the process or if the whole thing is thrown away for "lack of evidence", the people's court already decided: Apple is guilty. They trick costumers and steal money! /s
And this is where Apple needs a ruthless guy like Bezos: Just buy media outlets and force your opinion and POV. Competitors will fear you. No one will mess with you.
Legal or not, the corporations extracting billions of dollars of profit are going to have to start sharing, lest they want the system they profit from be dismantled in its entirety.
Well, it doesn't make sense. Someone just needs money and/or attention, it seems. However, I still can't understand how Apple gets away with 1 year guaranty when they are forced by law to give at least 2.
They give the two. They sell better coverage with Applecare than they are required to offer by law. So they can still upsell the coverage. That seems hard for Italy to understand as well.
"Apple pays every dollar and euro it owes in taxes and we are continuously audited by governments around the world," the company said in a statement. "The Italian tax authorities already audited Apple Italy in 2007, 2008 and 2009 and confirmed that we were in full compliance with the OECD documentation and transparency requirements. We are confident the current review will reach the same conclusion."
I have no doubt that Apple is guilty of tax avoidance but that isn't illegal. On the otherhand, any tax accountant worth his salt is always pushing the boundaries between legal and illegal.
@adsdad: actually, the way companies can avoid paying taxes by hiding in tax havens, such as Ireland, is the real joke.
While I sadly agree with you Italy is probably doing this in a... let's say not-so-clearly-honest way, the fact three european countries now question the system's failures, not only for US-based Apple but also European oil companies and Telcos surely is a sign that it's not exclusively Apple-hate.
This has been going on for decades among multinational corporations, no matter where they come from.
There is no law against legally minimising taxes.
If the laws change, so will the ways that tax is minimised.
This is the way it has been and the way it always will be, as long as is cheaper to lobby or buy off the legislators than it is to pay a fair share of tax.
They are not avoiding Irish taxes. The way the Irish tax law is structured is that if the companies are owned by a foreign entity they are not required to pay the normal corporate rate but instead a very low 1-2% rate.
Can you please provide some documentation to show this 1-2% you claim is correct?
Comments
I think he means Apple US transfers IP to the Irish subsidiary to use in a Double-Irish tax avoidance plan. Apparently Apple confirmed some of the details during Senate hearings.
"The memorandum issued by the US Senate permanent subcommittee on investigations yesterday details how Apple transferred certain rights, including IP rights, to three Irish companies; Apple Sales International (ASI), Apple Operations Europe (AOE), and Apple Operations International (ASI), all of which have registered addresses in Cork but hold their board meetings in the US.
ASI buys finished product from a Chinese manufacturer and resells it at a profit to other Apple companies in jurisdictions outside the Americas without ever taking physical possession of the product. The resulting profit flow to Ireland in the 2009 to 2012 period was a phenomenal $74 billion. Because ASI is not managed and controlled in Ireland, it is not tax resident here. In fact, it is not tax resident anywhere. :err:
This is because the US taxes companies on the basis of where they are registered as against where they are managed from."
http://www.irishtimes.com/business/sectors/financial-services/intellectual-property-rights-at-the-core-of-apple-s-irish-subsidiaries-1.1401739
Take a look here:
http://motherboard.vice.com/blog/how-apple-and-the-rest-of-the-tech-giants-avoid-billions-in-taxes--2
I took a look. It's what I explained earlier, about how Apple is using Irish laws on "resident" companies to avoid tax in Ireland. What it is not saying is that Apple charges IP to sellers. That would be meaningless ( Starbucks are pushing it by claiming coffee is "manufactured" in stores. )
Yes that's it. I am not denying Apple avoids tax and I would prefer it paid ( albeit lower) taxes in the US. But the Italian job is a shake down.
Apparently they've avoided everyone's taxes on a big chunk'a'money. It's reported three of the Apple subsidiaries based in Ireland and holding upwards of $70Billion don't answer to any taxing authority. None whatsoever.
Take a look here:
http://motherboard.vice.com/blog/how-apple-and-the-rest-of-the-tech-giants-avoid-billions-in-taxes--2
I took a look. It's what I explained earlier, about how Apple is using Irish laws on "resident" companies to avoid tax in Ireland. What it is not saying is that Apple charges IP to sellers. That would be meaningless
Quote: from the article
Meaningless? Avoiding billions of taxes owed in many foreign countries is not exactly meaningless.
Apparently they've avoided everyone's taxes on a big chunk'a'money. It's reported three of the Apple subsidiaries based in Ireland and holding upwards of $70Billion don't answer to any taxing authority. None whatsoever.
And that's fair game, as everyone knows, including Italy.
I fail to see how they will justify such stupid action once Apple flexes their muscles out of this. However, it was a really low-blow.
Even if Apple quickly wins the process or if the whole thing is thrown away for "lack of evidence", the people's court already decided: Apple is guilty. They trick costumers and steal money! /s
And this is where Apple needs a ruthless guy like Bezos: Just buy media outlets and force your opinion and POV. Competitors will fear you. No one will mess with you.
The Italians are simply CRAZY.
They even prosecute innocent women for murder when there is no proof.
Probably Samsung paid the Italians off in order to do this raid.
Well, it doesn't make sense. Someone just needs money and/or attention, it seems. However, I still can't understand how Apple gets away with 1 year guaranty when they are forced by law to give at least 2.
They give the two. They sell better coverage with Applecare than they are required to offer by law. So they can still upsell the coverage. That seems hard for Italy to understand as well.
Apple's response is pretty clear...
Is funny to see how some cowboys talk about something then don't know even a bit…
Stop eating hamburgers because the fat in it is ruining your brain…
"Let's boycott all Italian wines and sports car. I think Apple didnt greased the Italian's authorities' hands."
Tell this to Apple's executives and managers… ;-)
@adsdad: actually, the way companies can avoid paying taxes by hiding in tax havens, such as Ireland, is the real joke.
While I sadly agree with you Italy is probably doing this in a... let's say not-so-clearly-honest way, the fact three european countries now question the system's failures, not only for US-based Apple but also European oil companies and Telcos surely is a sign that it's not exclusively Apple-hate.
This has been going on for decades among multinational corporations, no matter where they come from.
There is no law against legally minimising taxes.
If the laws change, so will the ways that tax is minimised.
This is the way it has been and the way it always will be, as long as is cheaper to lobby or buy off the legislators than it is to pay a fair share of tax.
This is the way it has been for Millennia.
Appela, she isa so doomeda!
Can you please provide some documentation to show this 1-2% you claim is correct?
Shut down all the Italian Apple Stores and only let importers buy and sell Apple products locally. Take that, corrupt government!