Another one of those beautiful ironic examples that we find in life, where one individual's selfishness benefits the many.
For another example, see 'Steve Jobs'.
And no doubt many others.
Self-interest is the core of human existence. This is not a 'temporary condition' or a 'one time thing' or limited to class, race or position... It describes every human being that has or ever will exist!
How would you account for inventory under such a system? Many companies would have to massively rethink distribution, yet under your suggestion they wouldn't be able to write off those costs. This is a problem with scrapping everything and starting over, not to mention the conceptual problems with your entire theory Mr. Economist. You also ignore why the article was published. If they use a big brand like Apple, it gets attention. Apple is incredible at managing PR and attracting media attention, so some of that that will be negative. The net effect of such attention remains in their favor.
Quote:
Much of the time the issue comes down to how profits are calculated. If allowed companies will mess with transfer pricing so that it appears they made nothing.
I've no idea to what your comment or criticism specifically refers.
I also believe that a single company should not be held responsible for providing the entire R&D of the world, nor it's income either. That's something that should be shared among many.
Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
companies are taxed where they are based not where they sell.
They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.
Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
The journo who wrote this, Chenoworth, has form. He is clearly of the school of thought that all your money belongs to the government and whatever it leaves you you should be grateful.
I agree with Kerry Packer. You should pay as little tax as possible as the government will never spend Other Peoples' Money as well as the Other People that earnt it.
In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.
Paying as little tax as possible doesn't take away what needs to be paid for. How are you going to support yourself once you retire? If you live for 30 years of retirement and have paid off your house and manage to get by on $10k per year (including medical bills), that's still $300k. If you don't plan to retire with that in the bank then that support comes from taxes on the working class. What if you lose your eyesight? Tim Cook made sure that you'll be able to use an iPhone but you won't be able to buy one because that support comes from taxes.
If people think taxes are too high then tackle the cause of them and not the effect of them. The cause is that there are too many old people, too many unemployed, too many kids and too many nutjobs wanting to kill you.
Good old Kerry, when he survived a heart attack he equipped all the ambulances in NSW with defibrillators.
Another one of those beautiful ironic examples that we find in life, where one individual's selfishness benefits the many.
If he'd paid taxes in the first place, maybe there would have been defibrillators in there already. That's why there is such a thing as a governing body that doesn't operate on its own self-interest. It's designed to work in the best interests of the entire population.
It's inefficient and costs too much as a result and it encourages entitlements but it's necessary and there's not a better option. People think there's a better option by making most things private but that's how it was in the past and it creates a class system that spans generations. It restricts opportunity to the offspring of parents who can afford it.
I think those health care costs would be a lot lower if the sellers of health care goods and services knew they were selling to individuals and not the government.
Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.
Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.
Paying as little tax as possible doesn't take away what needs to be paid for. How are you going to support yourself once you retire? If you live for 30 years of retirement and have paid off your house and manage to get by on $10k per year (including medical bills), that's still $300k. If you don't plan to retire with that in the bank then that support comes from taxes on the working class. What if you lose your eyesight? Tim Cook made sure that you'll be able to use an iPhone but you won't be able to buy one because that support comes from taxes.
If people think taxes are too high then tackle the cause of them and not the effect of them. The cause is that there are too many old people, too many unemployed, too many kids and too many nutjobs wanting to kill you.
If he'd paid taxes in the first place, maybe there would have been defibrillators in there already. That's why there is such a thing as a governing body that doesn't operate on its own self-interest. It's designed to work in the best interests of the entire population.
It's inefficient and costs too much as a result and it encourages entitlements but it's necessary and there's not a better option. People think there's a better option by making most things private but that's how it was in the past and it creates a class system that spans generations. It restricts opportunity to the offspring of parents who can afford it.
You don't have to guess at it:
The US drug prices are the result of the supposed free market utopia. They aren't cheaper because they monopolise the supply.
I'm sorry, but we're going to have to agree to disagree.
I see the government as a ship with a rather large hole in the bottom and I don't think Apple paying everybody to row in the same direction will quite cut the mustard.
I have absolutely no reason to believe that Apple did anything illegal in Australia, but what it has done is certainly not ethical. Nor is it good business practice because it risks a consumer and government backlash in many countries, particularly Australia. And Apple really doesn't need to take that sort of risk with its brand.
Apple would be wise to admit that these taxation policies are unethical, and make very significant payments to countries that have been 'diddled' out of taxation revenue by transfer pricing practices. It would be interesting to see how Google and Microsoft responded to this.
And then Apple would get get sued by its' shareholders for making these voluntary yet 'illegal' payments as it would be a breech of the corporation's fiduciary responsibilities to its' shareholders.
Marvin, your ongoing defense of nearly everything 'the government' floats as good and/or necessary I personally find disturbing.
With the many important revelations from Snowden, that even one person could think our tax dollars are not being misspent and used inappropriately at every level of government I find shocking and willfully ignorant of the deep corruption of unchecked power.
I'm sorry, but we're going to have to agree to disagree.
I see the government as a ship with a rather large hole in the bottom and I don't think Apple paying everybody to row in the same direction will quite cut the mustard.
Bring on tax reform!
At the bare minimum, I'm pushing for a flat tax, elimination of write-offs and the shutdown of the IRS. I'm not asking for much, really.
And then Apple would get get sued by its' shareholders for making these voluntary yet 'illegal' payments as it would be a breech of the corporation's fiduciary responsibilities to its' shareholders.
I keep seeing these "breach of fiduciary responsibility" comments. Bogus IMO. Didn't Tim Cook just go off an a group of investors who didn't think Apple should be spending money on environmental issues that decreased net profits??
As an example one of Apple's competitors "wastes" money on lots of public programs that cost the company yet don't contribute a penny to revenues. No investors are suing them for "breach of duty" that I'm aware of, and even if they did do you really think Google would change what they've done since they incorporated.
Heck, Apple donates products, makes various monetary contributions, offers scholarships, etc and doesn't get sued for giving away investors money. IMO that "breach of duty" claim simply serves as FUD to avoid serious discussion of corporate tax policy. Who do you think takes up the slack when some of the wealthiest companies (and people) on the planet get to hold on to all but 50 cents of every $1000 in profit. You and me sir, and I'm getting quite irritated by it. Shocked if you aren't too.
Some good comments here. It's clear Apple is doing what all corporations do, and all smart people do: minimize tax liability. I mean, is anyone honestly shocked or even mildly disappointed here? Apple's responsibility is to its SHAREHOLDERS. Paying more tax is not in the interest of its shareholders, whereas paying less tax (as long as its legal) definitely IS. As macaholic_1948 said...change the law if you don't like it.
The "spirit of the law" when spoken by a politicians to me sounds like "we'll grab every last cent we can get away with"
It may be well know that all corporations do what they can to minimized expenses across the board, not just "tax burden" (ever wonder why the word burden is used?) but I must be traveling in the wrong circles because I have never before seen the phrase "Double Irish with a Dutch Sandwich" before and had someone asked me what that phrase meant corporate tax law would likely have been my first thought.
Odd that you never hear any of these stories about prosecuting companies who followed exactly the same practices but who do NOT have billions of dollars in the bank. It sounds more like the stories of folks who win the lottery who then have every one and their cousin asking them for money or to invest or loan etc etc. Apple's, or any corporation's, SEC filing that lists a cash in the bank value should not be seen as an invitation to governments and others to try to take it away through lawsuits.
I remember going over the Double Irish in business school. This was years ago. Apple was mentioned.
This isn't a new thing. Ignoring ethics, it's also pretty brilliant from a business standpoint. No comment on those ethics, mind you.
Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.
Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.
Its the caterwauling from Australia which makes no sense. Also, and most people get this wrong, if Apple were taxed in Ireland then the US would not - given double taxation agreements - be due any money at all, or much less. As it now stands, the US is owed 35% if money is repatriated, if Ireland charges it 12.5% the US is owned much less ( and Ireland gets a bonanza).
Tim Cook said that he complies with the "spirit" of the law.
These practices don't sound very ethical to me, especially considering it's only large corporations who can afford to set up these mazes.
I hope ASIC and the ATO change the reporting and taxation requirements to clamp down on this, not just for Apple of course.
Economies of Scale: Do you say the same things when large corporations (intel) make chips for pennies and sell them to you for dollars, and small fabs make them for dollars and sell them for $10's of dollars, because only the scale of Intel can get the production price down.
corporate ethics is quite simple: make the largest profit for the least amount of work(ing capital), and follow enough rules so you don't go to jail. There is nothing wrong with reading the rules, engineering a solution that maximizes held profit, putting a pot of money aside for fines and lawyer's fees (Risk Management) and making it happen.
The ethical issue is in gov't. not in corporations. and in fact, it's the global economy that makes this tax arbitrage happen. The tax code in the US would be real simple if they built an ethical tax structure, and if every country did the same, and effectively made the foreign tax tariff reasonable (Ireland was set up to drive commerce and industry into their country... it was supposed to drive jobs there, but the fine print just said 'bring your money here, and if you profit (assume after paying 1000's of jobs and payroll taxes), keep your profits if you send it to a trading partner country'. The flaw in that model is the information and sales industries, which basically set up shell corps... 'make a profit,' pay 10's of people banking wages, and offshore the bounty.
And the problem is... This year it's Ireland and Singapore, and if they change their laws next year it will be Fiji and Morocco. Corporations will find the best suppliers in their money supply chain.
And if it all does get taxed at local market rates... those markets will have a higher priced product. The last thing Apple/Google/Monsanto/GE/Oracle will do is take less substantially less net profit.
Small corporations can do it too, it's that latter part (don't go to jail) that makes it harder to achieve. I've known people who off shored income in similar ways, and the 'Patriot Act' (more like the 'we have a private judge who let's us bypass your constitutional rights') was used by the DoT/IRS/DoJ who said, 'we followed the money, while it appears tax legal, it 'could be' a conspiracy to fund terrorism, and because you don't have friends who pay friends who 'lobby' in Congress, We're taking your offshore profits as tax and penalty, and we've already frozen those assets in those countries, and turned off your passport. The 2 I knew didn't have the legal staff, or the 'onshore' funding buffer to hire legal staff, and had to walk away from those funds. Probably paid for some lobbyist's buddy's micrometer Xray mating sold to the TSA.
I want to let everyone know that is commenting for Australia to "Suck it" and change our laws if we don't like Apple dodging taxes here - WHAT THEY DID IS ILLEGAL UNDER AUSTRALIAN LAW!!!!! In Australia it is illegal to use transfer pricing to move profits from an Australian subsidiary to an offshore enterprise where it is evident the transfer was intended to dodge taxes.
The Australian government (my government) will pursue Apple for this money and there is a very good chance that Apple may have to fork out a multi billion dollar settlement to cover the matter. That money will be used to pay for roads, schools, healthcare and education.. Something Apple should be proud to contribute to.
I see the government as a ship with a rather large hole in the bottom and I don't think Apple paying everybody to row in the same direction will quite cut the mustard.
Ok but is avoiding paying going to fix the problem or make it worse? Will the government being unable to afford to support the elderly, disabled, children, unemployed and so on improve anything?
Marvin, your ongoing defense of nearly everything 'the government' floats as good and/or necessary I personally find disturbing.
I find most anti-government rhetoric to be dishonest and hypocritical. People repeatedly laud the free market system as if it's the solution to everything even after witnessing as many catastrophes to suggest otherwise. The hypocrisy comes from the fact that everyone here has most likely gone through a state-funded education and now uses this education to argue against government spending. Most will look forward to a government supported retirement and will currently rely on state-provided law enforcement and transport infrastructure.
This dogma that government needs to go and taxation should be as close to zero as possible just doesn't hold up to reality.
I don't condone how government spends its funds at all, I just think people should be honest about how much they rely on it. They shake their right fist in condemnation and hold out their left hand for support.
With the many important revelations from Snowden, that even one person could think our tax dollars are not being misspent and used inappropriately at every level of government I find shocking and willfully ignorant of the deep corruption of unchecked power.
What does transparency have to do with cost? Nobody knew what Enron or Lehman was up to either. You can see the breakdown of tax spending and most of it goes to things that are nothing to do with spying:
The entire budget is $3.5 trillion, the spying appears to be in the tens of billions. They aren't going to shut down the intelligence agencies because a few people decide not to pay their taxes.
I'm pushing for a flat tax, elimination of write-offs and the shutdown of the IRS
So you want to eliminate the organisation that checks tax returns while maintaining some form of taxation. Before you suggest this tax checking duty can be performed by a private company, who would check their tax returns and that they aren't being bribed?
Paying more tax is not in the interest of its shareholders
Starbucks decided to change their mind when they saw the reaction from customers over their taxes. Amazon kind of gets a free pass because they don't make enough profit anyway. I don't think Apple will suffer much backlash over it because all their competition does the same thing but it doesn't do much good for their brand. Brand perception is important for the shareholders too over the long term.
That would likely be taxed in Australia but they do their transfer pricing to Ireland so it reports the income made by the Australian subsidiary to be far lower than it really is.
This report and most of the comments are spurious.
1) companies don't owe tax on revenue you owe it on profits.
2) companies are taxed where they are based not where they sell.
A company like Apple has subsidiaries all over the world for practical reasons and to comply with laws in local countries. Apple operates in Australia and has entities incorporated in Australia and it is these entities that trade here, are taxed here and are operating in contravention of the law by dodging taxes through transfer pricing to move money into tax havens.
Apply also collects and pays sales tax in Australia and operates under an Australia ABN (Australian Business Number)... Required for it to operate here.
If you haven't been to Australia and have no first hand knowledge of how Apple operates here how did you think you would be able to make an informed post?
An alternate title for this story might be "Australia law allows companies to legally avoid paying taxes." That is more to the point.
You are wrong. Australia has laws against tax evasion - in particular it prohibits using transfer pricing arrangement to shift profit overseas. Make no mistake - Apple has broken the law and will be pursued by the Australian government.
The government may not be particularly quick at finding and correcting tax fraud but that does not mean that it was not tax fraud (and illegal) in the first place.
Perfectly legal. Shouldn't be. Offshoring has been around and has stunk since long before Apple made it out of the minor leagues. Somehow it never got addressed because the largest offenders always seemed to be the 'big oil' companies who people somehow expect to be evil. The issue never really gained a lot of attention, and lawmakers are always happy to turn a blind eye for a PAC contribution.
When Exxon Mobil was in front they were getting the heat for it. Apple fans didn't notice, mostly because Exxon isn't Apple. Now Apple is the biggest offender and they get the heat.
Apple hasn't done anything wrong, but hopefully enough attention gets drawn to the issue that our politicians fix it. And by fix it I mean fix the laws, not hold hearings pretending it is the evil corporations fault for legally maximizing profits.
Ireland obviously benefits tremendously from this. US corporations, and others, get all the benefits of being US based. They use our roads, our people, are defended by our military, and benefit tremendously from higher education system. When they have an international trade dispute, they clog and congest the US court system, not the Irish one, with appeal after appeal. All those things cost money, and US taxpayers (and I'm sure Aussies, Brits, Germans etc respectively) it stinks when some of the entities benefitting the most from them are percentage wise paying the least.
You say it is legal. It is not. Please do some research into Australia taxation law (which you are obviously unfamiliar with) before posting.
Comments
Self-interest is the core of human existence. This is not a 'temporary condition' or a 'one time thing' or limited to class, race or position... It describes every human being that has or ever will exist!
I've no idea to what your comment or criticism specifically refers.
Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.
Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.
Paying as little tax as possible doesn't take away what needs to be paid for. How are you going to support yourself once you retire? If you live for 30 years of retirement and have paid off your house and manage to get by on $10k per year (including medical bills), that's still $300k. If you don't plan to retire with that in the bank then that support comes from taxes on the working class. What if you lose your eyesight? Tim Cook made sure that you'll be able to use an iPhone but you won't be able to buy one because that support comes from taxes.
If people think taxes are too high then tackle the cause of them and not the effect of them. The cause is that there are too many old people, too many unemployed, too many kids and too many nutjobs wanting to kill you.
If he'd paid taxes in the first place, maybe there would have been defibrillators in there already. That's why there is such a thing as a governing body that doesn't operate on its own self-interest. It's designed to work in the best interests of the entire population.
It's inefficient and costs too much as a result and it encourages entitlements but it's necessary and there's not a better option. People think there's a better option by making most things private but that's how it was in the past and it creates a class system that spans generations. It restricts opportunity to the offspring of parents who can afford it.
You don't have to guess at it:
http://www.theguardian.com/commentisfree/2013/nov/25/america-canada-freedom-of-choice-public-healthcare
The US drug prices are the result of the supposed free market utopia. They aren't cheaper because they monopolise the supply.
I'm sorry, but we're going to have to agree to disagree.
I see the government as a ship with a rather large hole in the bottom and I don't think Apple paying everybody to row in the same direction will quite cut the mustard.
Bring on tax reform!
I have absolutely no reason to believe that Apple did anything illegal in Australia, but what it has done is certainly not ethical. Nor is it good business practice because it risks a consumer and government backlash in many countries, particularly Australia. And Apple really doesn't need to take that sort of risk with its brand.
Apple would be wise to admit that these taxation policies are unethical, and make very significant payments to countries that have been 'diddled' out of taxation revenue by transfer pricing practices. It would be interesting to see how Google and Microsoft responded to this.
And then Apple would get get sued by its' shareholders for making these voluntary yet 'illegal' payments as it would be a breech of the corporation's fiduciary responsibilities to its' shareholders.
With the many important revelations from Snowden, that even one person could think our tax dollars are not being misspent and used inappropriately at every level of government I find shocking and willfully ignorant of the deep corruption of unchecked power.
At the bare minimum, I'm pushing for a flat tax, elimination of write-offs and the shutdown of the IRS. I'm not asking for much, really.
I keep seeing these "breach of fiduciary responsibility" comments. Bogus IMO. Didn't Tim Cook just go off an a group of investors who didn't think Apple should be spending money on environmental issues that decreased net profits??
As an example one of Apple's competitors "wastes" money on lots of public programs that cost the company yet don't contribute a penny to revenues. No investors are suing them for "breach of duty" that I'm aware of, and even if they did do you really think Google would change what they've done since they incorporated.
Heck, Apple donates products, makes various monetary contributions, offers scholarships, etc and doesn't get sued for giving away investors money. IMO that "breach of duty" claim simply serves as FUD to avoid serious discussion of corporate tax policy. Who do you think takes up the slack when some of the wealthiest companies (and people) on the planet get to hold on to all but 50 cents of every $1000 in profit. You and me sir, and I'm getting quite irritated by it. Shocked if you aren't too.
I remember going over the Double Irish in business school. This was years ago. Apple was mentioned.
This isn't a new thing. Ignoring ethics, it's also pretty brilliant from a business standpoint. No comment on those ethics, mind you.
As an aside, has any major development on the OS's ever been performed in Ireland?
Apple shouldn't be singled out but the reason they are is because they generate the most income. If they generate more income than the next 5 tech companies combined then they should pay more taxes than the next 5 combined.
They are taxed on where they are tax resident. Apple is based in the US but their Irish subsidiary is tax resident nowhere.
Because the Irish subsidiaries are incorporated in Ireland, they aren't tax resident in the US but because they are managed and controlled outside of Ireland, they aren't tax resident in Ireland either.
In some ways the money does belong to the government as they make the currency but I don't see how 30% of profits turns into "all your money belongs to the government". They make assessments over typical family life and provide for those needs. They know that there will be an amount of people above retirement age and that amount multiplied by a minimum standard of income and housing is the income needed. They know that there will be an amount of children at a certain age and they need education and the families looking after them need support. They know what resources are required for the military, justice department, transport services, national attractions and so on. Take all that expense, work out the GDP and the needs are funded from a reasonable percentage of production.
Its the caterwauling from Australia which makes no sense. Also, and most people get this wrong, if Apple were taxed in Ireland then the US would not - given double taxation agreements - be due any money at all, or much less. As it now stands, the US is owed 35% if money is repatriated, if Ireland charges it 12.5% the US is owned much less ( and Ireland gets a bonanza).
I cannot see how creating empty companies with huge bank accounts rhymes with abiding to the spirit of the law.
As an aside, has any major development on the OS's ever been performed in Ireland?
Some, back in the day. Cork was mainly a manufacturing centre though.
Tim Cook said that he complies with the "spirit" of the law.
These practices don't sound very ethical to me, especially considering it's only large corporations who can afford to set up these mazes.
I hope ASIC and the ATO change the reporting and taxation requirements to clamp down on this, not just for Apple of course.
Economies of Scale: Do you say the same things when large corporations (intel) make chips for pennies and sell them to you for dollars, and small fabs make them for dollars and sell them for $10's of dollars, because only the scale of Intel can get the production price down.
corporate ethics is quite simple: make the largest profit for the least amount of work(ing capital), and follow enough rules so you don't go to jail. There is nothing wrong with reading the rules, engineering a solution that maximizes held profit, putting a pot of money aside for fines and lawyer's fees (Risk Management) and making it happen.
The ethical issue is in gov't. not in corporations. and in fact, it's the global economy that makes this tax arbitrage happen. The tax code in the US would be real simple if they built an ethical tax structure, and if every country did the same, and effectively made the foreign tax tariff reasonable (Ireland was set up to drive commerce and industry into their country... it was supposed to drive jobs there, but the fine print just said 'bring your money here, and if you profit (assume after paying 1000's of jobs and payroll taxes), keep your profits if you send it to a trading partner country'. The flaw in that model is the information and sales industries, which basically set up shell corps... 'make a profit,' pay 10's of people banking wages, and offshore the bounty.
And the problem is... This year it's Ireland and Singapore, and if they change their laws next year it will be Fiji and Morocco. Corporations will find the best suppliers in their money supply chain.
And if it all does get taxed at local market rates... those markets will have a higher priced product. The last thing Apple/Google/Monsanto/GE/Oracle will do is take less substantially less net profit.
Small corporations can do it too, it's that latter part (don't go to jail) that makes it harder to achieve. I've known people who off shored income in similar ways, and the 'Patriot Act' (more like the 'we have a private judge who let's us bypass your constitutional rights') was used by the DoT/IRS/DoJ who said, 'we followed the money, while it appears tax legal, it 'could be' a conspiracy to fund terrorism, and because you don't have friends who pay friends who 'lobby' in Congress, We're taking your offshore profits as tax and penalty, and we've already frozen those assets in those countries, and turned off your passport. The 2 I knew didn't have the legal staff, or the 'onshore' funding buffer to hire legal staff, and had to walk away from those funds. Probably paid for some lobbyist's buddy's micrometer Xray mating sold to the TSA.
The Australian government (my government) will pursue Apple for this money and there is a very good chance that Apple may have to fork out a multi billion dollar settlement to cover the matter. That money will be used to pay for roads, schools, healthcare and education.. Something Apple should be proud to contribute to.
Ok but is avoiding paying going to fix the problem or make it worse? Will the government being unable to afford to support the elderly, disabled, children, unemployed and so on improve anything?
I find most anti-government rhetoric to be dishonest and hypocritical. People repeatedly laud the free market system as if it's the solution to everything even after witnessing as many catastrophes to suggest otherwise. The hypocrisy comes from the fact that everyone here has most likely gone through a state-funded education and now uses this education to argue against government spending. Most will look forward to a government supported retirement and will currently rely on state-provided law enforcement and transport infrastructure.
This dogma that government needs to go and taxation should be as close to zero as possible just doesn't hold up to reality.
I don't condone how government spends its funds at all, I just think people should be honest about how much they rely on it. They shake their right fist in condemnation and hold out their left hand for support.
What does transparency have to do with cost? Nobody knew what Enron or Lehman was up to either. You can see the breakdown of tax spending and most of it goes to things that are nothing to do with spying:
http://www.usfederalbudget.us/federal_budget_estimate_vs_actual_2013
http://www.theinquirer.net/inquirer/news/2291739/snowden-leaks-cia-and-nsa-black-budget
The entire budget is $3.5 trillion, the spying appears to be in the tens of billions. They aren't going to shut down the intelligence agencies because a few people decide not to pay their taxes.
So you want to eliminate the organisation that checks tax returns while maintaining some form of taxation. Before you suggest this tax checking duty can be performed by a private company, who would check their tax returns and that they aren't being bribed?
Starbucks decided to change their mind when they saw the reaction from customers over their taxes. Amazon kind of gets a free pass because they don't make enough profit anyway. I don't think Apple will suffer much backlash over it because all their competition does the same thing but it doesn't do much good for their brand. Brand perception is important for the shareholders too over the long term.
It might be because they have a subsidiary to manage the operations in Australia:
http://www.yellowpages.com.au/nsw/sydney/apple-pty-ltd-13387772-listing.html
That would likely be taxed in Australia but they do their transfer pricing to Ireland so it reports the income made by the Australian subsidiary to be far lower than it really is.
A company like Apple has subsidiaries all over the world for practical reasons and to comply with laws in local countries. Apple operates in Australia and has entities incorporated in Australia and it is these entities that trade here, are taxed here and are operating in contravention of the law by dodging taxes through transfer pricing to move money into tax havens.
Apply also collects and pays sales tax in Australia and operates under an Australia ABN (Australian Business Number)... Required for it to operate here.
If you haven't been to Australia and have no first hand knowledge of how Apple operates here how did you think you would be able to make an informed post?
You are wrong. Australia has laws against tax evasion - in particular it prohibits using transfer pricing arrangement to shift profit overseas. Make no mistake - Apple has broken the law and will be pursued by the Australian government.
The government may not be particularly quick at finding and correcting tax fraud but that does not mean that it was not tax fraud (and illegal) in the first place.
You say it is legal. It is not. Please do some research into Australia taxation law (which you are obviously unfamiliar with) before posting.