Apple has the best lawyers and the best accountants of any multinational corporation on the face of the Earth. I'm sure everything Apple did was 100% legal.
Suck it, Australia!
Ha ha
You miss the real point here, the tax roundabout doesnt just affect Australia, its the USA who misses out on the tax as well. If you follow the path, its to Ireland, Holland, then the Caymans/Bahama, none of which makes it to the US.
But is Apple doing anything different than, Google, Samsung, Msoft etc Probably not.
By hey you still have the IRS who will nail YOU if you tried something like this....
Corporations all do that. It may be problematic and grant the largest businesses an unfair advantage, but it needs to be dealt with via updated laws. As Frood pointed out, Apple just happens to be big enough to attract attention. I would add that Apple clamors for press attention, so it happens to include negative attention when they engage in something that should be admonished.
I don't see how you're going to 'deal with it' without dismantling the EU. But if we're lucky, then one day the EU will collapse.
So you think that companies pay tax on revenues, not profits and pay that tax on profit in every country they sell to? Just to be clear because "no" isn't much of an answer.
So you think that companies pay tax on revenues, not profits and pay that tax on profit in every country they sell to? Just to be clear because "no" isn't much of an answer.
Your implication is that Apple is taxed in California; that isn't so.
I don't see how you're going to 'deal with it' without dismantling the EU. But if we're lucky, then one day the EU will collapse.
That isn't something I can answer, but your most obvious alternative would involve a drastic shift in business culture. I don't see that happening anytime soon. The negative PR may cost them something, but not enough that it dissuades such practices.
Quote:
Originally Posted by asdasd
So you think that companies pay tax on revenues, not profits and pay that tax on profit in every country they sell to? Just to be clear because "no" isn't much of an answer.
Taxes paid in other countries are credited against US taxes in almost all cases (may be exceptions), as long as the company applied for refunds of overpaid taxes where applicable. That is at least in the US. This is different from operating costs where they aren't taxed on an amount equivalent to the accrual of certain costs, including depreciation of certain things. If you look at the nature of the criticism, it is sometimes warranted. I can't comment on every situation. Look up Starbucks though. They used disingenuous transfer pricing to make subsidiaries appear to be operating at a loss. If this was really the case, they would have closed stores or changed their strategy in the UK.
I am not denying that Apple is not paying taxes and avoiding taxes in Ireland. What I am saying is that revenue is not profit (this report conflates the two) and corporation tax is not paid where items are sold unless there is a physical residence ( in the case of Apple stores there is but the profits there are the difference between retail and wholesale prices minus expenses, and it looks like Apple is paying that).
Starbucks is transfer pricing because they charge the parent company for IP costs for their retail stores, for iPads shipped from Ireland or Holland the profit should be declared in Europe or repatriated to the US, or both. Australia has no claim.
If this continues every country in the world is going to claim corporation tax from every company in the world.
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:
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?
I am not denying that Apple is not paying taxes and avoiding taxes in Ireland. What I am saying is that revenue is not profit (this report conflates the two) and corporation tax is not paid where items are sold unless there is a physical residence ( in the case of Apple stores there is but the profits there are the difference between retail and wholesale prices minus expenses, and it looks like Apple is paying that).
Oh I didn't notice that. I'll re-read the article again later. I'm aware of the issue of physical residence. There are countries where a given company may not own their distribution channels. It could just be Company A --> third party resident company within that country --> retailers. I'm not actually sure how they're set up in Australia. My main point there was to mention that they could claim a credit against taxes paid there, so they would not actually pay that amount a second time on repatriated funds.
Quote:
Starbucks is transfer pricing because they charge the parent company for IP costs for their retail stores, for iPads shipped from Ireland or Holland the profit should be declared in Europe or repatriated to the US, or both. Australia has no claim.
Again that is interesting, but it means I really need to re-read the attached material. I mentioned Starbucks for their abuse of loose regulation on transfer pricing. They own both subsidiaries. One resides in a lower tax country. They charge themselves at a level that would be unsustainable if the money was owed to another company. That's why I find it disingenuous and used that as an example of deserved negative PR.
Quote:
If this continues every country in the world is going to claim corporation tax from every company in the world
It's complicated with big companies. I think most of them regard themselves as essentially sovereign and merely parked in one country or another.
I don't have access to the AFRs analysis or to the records Apple provided ATO.
It is certainly undeniable that Apple has been create in its tax accounting. It uses the "double-Irish-Dutch" scheme and some have said that it invented it. That, however, is beside the point.
A crucial point - almost always overlooked in sensational media releases such as these, is that thirty years ago Apple took a bold step in its development strategy. One that has paid off in this instance. That step was to allocate expenses for development of its intellectual property (the most valuable asset) between the U.S. [maybe North America] and the rest of the world. Each division was charged a portion of the cost in proportion to the share of sales. This started in about 1980 or 1981 - I'm not sure of the exact year but it certainly was before the introduction of Macintosh which was 1984. So "Apple US" paid its share for devices sold in the US [or North America] and "Apple Ireland" paid its share for devices sold in the rest of the world.
So the point is that we don't know - and AFR is probably not interested in finding out - whether or not this profit is just a reasonable return - to Apple Ireland - on the years of development expenditure it has incurred.
I acknowledge the point that Apple has been creative in structuring its corporate organization to minimize its taxes. There's no fault in that. If the Government wants to change it then let it change. Until then it is what it is.
If AFR wants to assert that Apple has acted illegally with use of "transfer pricing" etc. then it should make that claim and let it play out in court. I'll wager that it [AFR] will never do so because it would expose its somewhat shoddy investigative and reporting practices.
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?
No. BUT - Apple Ireland has been paying its share of R&D costs (mostly in California) since 1980. As such, Apple Ireland does have a valid claim to the revenues produced by that investment.
As it is right now, Apple Ireland contributes more to Apple's R&D expenses than Apple US, since their sales are greater.
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.
Bullshit.
See the Australian Tax Office's recent payout of $880 million to News Corp after they lost the case.
You can read all about it in the crap Rupert Murdoch's puppet hacks present as news in his newspapers.
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.
Who really cares about what shareholders think? If they don't want to own shares in a profitable company that behaves ethically in relation to paying taxes, then they can sell their Apple shares and buy shares in a company in the fossil fuel, tobacco or gambling industries which have no scruples about behaving unethically.
The Kerry citation is not an example of selfishness.
Actually it is, if he didn't have a heart attack he probably would never have donated the defibrillators.
As Marvin pointed out if he hadn't avoided (as opposed to evaded) taxes the ambulances may have been equipped at the governments expense, which is something our taxes should be spent on.
Good for Apple. Any company doing there job should minimize there taxes its there job to do that for the shareholders. If Australia wants more tax legislate and close the holes that allowed that money to slip through.
Who really cares about what shareholders think? If they don't want to own shares in a profitable company that behaves ethically in relation to paying taxes, then they can sell their Apple shares and buy shares in a company in the fossil fuel, tobacco or gambling industries which have no scruples about behaving unethically.
Shareholders also have a vote on who sits on their board of directors, they vote on shareholder proposals and other important facets of the company, in addition to owning the stock.
Saddening. Big corporations spirit profits away to phantom holding companies, while developed countries suffer from lack of government revenues and get turned to increasingly right-wing politics as a result. The neo-con destruction of the state is happening everywhere, and the burdens on the people increases every day. And they applaud.
Who really cares about what shareholders think? If they don't want to own shares in a profitable company that behaves ethically in relation to paying taxes, then they can sell their Apple shares and buy shares in a company in the fossil fuel, tobacco or gambling industries which have no scruples about behaving unethically.
Guess that means no Fortune 500 companies or 99.9% of other businesses (or taxpayers for that matter) then. How much in extra taxes do you think corporations should pay that would make sure they are paying their 'fair' share? As a rule companies, corporations and individuals take every deduction they can and do not pay more than that are legally obligated to pay. How many companies do you know of, have paid extra 'voluntary' taxes?
How many companies do you know of have paid extra 'voluntary' taxes?
I'm sure there are companies that could employ offshore schemes to reduce their tax burden and haven't. Hell, Tim Cook has made a point of saying that Apple pays its full allotment of US tax for its US operations, and the numbers bear that out. I bet they could shift some of that offshore if they wanted, but they don't, because of negative PR.
When ethics and law are at cross purposes, one must follow the law. That is good corporate governance. It is a fiduciary responsibility that must be met. It is ethical behavior. And, most importantly, it supports the rule of law. If you don't like that ethics and the law are at odds, change the law to suit your ethical purpose. If you can't do that, accept that others' views of what is ethical are at odds with yours. If that is still unsettling, either change your ethical values or work to change others'.
Sorry I have to correct you. Under Australian law (tested in the courts) fiduciary duty (to shareholders) is not considered preeminent over common ethics and the good of society. If a business can be shown to have acted within the law, but with the intended PURPOSE of contravening the SPIRIT of the law than they may still be found guilty of the crime. The cases may be quiet challenging to prosecute but there is precedent in Australia and our laws are cleverly written to this effect. What you say may be true under US law but respectfully is incorrect under Australian law which you are obviously unfamiliar. It is a contravention of Australian law to knowingly circumvent the spirit of the law for the benefit of shareholders - let's be very clear about that.
Yes - where intent can be proven that they undertook actions purely from intention to circumvent the activities that the law was designed to prohibit.
Comments
Apple has the best lawyers and the best accountants of any multinational corporation on the face of the Earth. I'm sure everything Apple did was 100% legal.
Suck it, Australia!
Ha ha
You miss the real point here, the tax roundabout doesnt just affect Australia, its the USA who misses out on the tax as well. If you follow the path, its to Ireland, Holland, then the Caymans/Bahama, none of which makes it to the US.
But is Apple doing anything different than, Google, Samsung, Msoft etc Probably not.
By hey you still have the IRS who will nail YOU if you tried something like this....
I don't see how you're going to 'deal with it' without dismantling the EU. But if we're lucky, then one day the EU will collapse.
So you think that companies pay tax on revenues, not profits and pay that tax on profit in every country they sell to? Just to be clear because "no" isn't much of an answer.
Your implication is that Apple is taxed in California; that isn't so.
I don't see how you're going to 'deal with it' without dismantling the EU. But if we're lucky, then one day the EU will collapse.
That isn't something I can answer, but your most obvious alternative would involve a drastic shift in business culture. I don't see that happening anytime soon. The negative PR may cost them something, but not enough that it dissuades such practices.
So you think that companies pay tax on revenues, not profits and pay that tax on profit in every country they sell to? Just to be clear because "no" isn't much of an answer.
Taxes paid in other countries are credited against US taxes in almost all cases (may be exceptions), as long as the company applied for refunds of overpaid taxes where applicable. That is at least in the US. This is different from operating costs where they aren't taxed on an amount equivalent to the accrual of certain costs, including depreciation of certain things. If you look at the nature of the criticism, it is sometimes warranted. I can't comment on every situation. Look up Starbucks though. They used disingenuous transfer pricing to make subsidiaries appear to be operating at a loss. If this was really the case, they would have closed stores or changed their strategy in the UK.
Starbucks is transfer pricing because they charge the parent company for IP costs for their retail stores, for iPads shipped from Ireland or Holland the profit should be declared in Europe or repatriated to the US, or both. Australia has no claim.
If this continues every country in the world is going to claim corporation tax from every company in the world.
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?
To your credit, Marvin you are very polite.
I am not denying that Apple is not paying taxes and avoiding taxes in Ireland. What I am saying is that revenue is not profit (this report conflates the two) and corporation tax is not paid where items are sold unless there is a physical residence ( in the case of Apple stores there is but the profits there are the difference between retail and wholesale prices minus expenses, and it looks like Apple is paying that).
Oh I didn't notice that. I'll re-read the article again later. I'm aware of the issue of physical residence. There are countries where a given company may not own their distribution channels. It could just be Company A --> third party resident company within that country --> retailers. I'm not actually sure how they're set up in Australia. My main point there was to mention that they could claim a credit against taxes paid there, so they would not actually pay that amount a second time on repatriated funds.
Again that is interesting, but it means I really need to re-read the attached material. I mentioned Starbucks for their abuse of loose regulation on transfer pricing. They own both subsidiaries. One resides in a lower tax country. They charge themselves at a level that would be unsustainable if the money was owed to another company. That's why I find it disingenuous and used that as an example of deserved negative PR.
Quote:
If this continues every country in the world is going to claim corporation tax from every company in the world
It's complicated with big companies. I think most of them regard themselves as essentially sovereign and merely parked in one country or another.
I don't have access to the AFRs analysis or to the records Apple provided ATO.
It is certainly undeniable that Apple has been create in its tax accounting. It uses the "double-Irish-Dutch" scheme and some have said that it invented it. That, however, is beside the point.
A crucial point - almost always overlooked in sensational media releases such as these, is that thirty years ago Apple took a bold step in its development strategy. One that has paid off in this instance. That step was to allocate expenses for development of its intellectual property (the most valuable asset) between the U.S. [maybe North America] and the rest of the world. Each division was charged a portion of the cost in proportion to the share of sales. This started in about 1980 or 1981 - I'm not sure of the exact year but it certainly was before the introduction of Macintosh which was 1984. So "Apple US" paid its share for devices sold in the US [or North America] and "Apple Ireland" paid its share for devices sold in the rest of the world.
So the point is that we don't know - and AFR is probably not interested in finding out - whether or not this profit is just a reasonable return - to Apple Ireland - on the years of development expenditure it has incurred.
I acknowledge the point that Apple has been creative in structuring its corporate organization to minimize its taxes. There's no fault in that. If the Government wants to change it then let it change. Until then it is what it is.
If AFR wants to assert that Apple has acted illegally with use of "transfer pricing" etc. then it should make that claim and let it play out in court. I'll wager that it [AFR] will never do so because it would expose its somewhat shoddy investigative and reporting practices.
Game on, AFR !
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?
No. BUT - Apple Ireland has been paying its share of R&D costs (mostly in California) since 1980. As such, Apple Ireland does have a valid claim to the revenues produced by that investment.
As it is right now, Apple Ireland contributes more to Apple's R&D expenses than Apple US, since their sales are greater.
So - Is it [OS development] done in Ireland? No.
Is it paid for from Ireland? Yes.
Next question ...
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.
Bullshit.
See the Australian Tax Office's recent payout of $880 million to News Corp after they lost the case.
You can read all about it in the crap Rupert Murdoch's puppet hacks present as news in his newspapers.
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.
Who really cares about what shareholders think? If they don't want to own shares in a profitable company that behaves ethically in relation to paying taxes, then they can sell their Apple shares and buy shares in a company in the fossil fuel, tobacco or gambling industries which have no scruples about behaving unethically.
The Kerry citation is not an example of selfishness.
Actually it is, if he didn't have a heart attack he probably would never have donated the defibrillators.
As Marvin pointed out if he hadn't avoided (as opposed to evaded) taxes the ambulances may have been equipped at the governments expense, which is something our taxes should be spent on.
Good for Apple. Any company doing there job should minimize there taxes its there job to do that for the shareholders. If Australia wants more tax legislate and close the holes that allowed that money to slip through.
Who really cares about what shareholders think? If they don't want to own shares in a profitable company that behaves ethically in relation to paying taxes, then they can sell their Apple shares and buy shares in a company in the fossil fuel, tobacco or gambling industries which have no scruples about behaving unethically.
Shareholders also have a vote on who sits on their board of directors, they vote on shareholder proposals and other important facets of the company, in addition to owning the stock.
Saddening. Big corporations spirit profits away to phantom holding companies, while developed countries suffer from lack of government revenues and get turned to increasingly right-wing politics as a result. The neo-con destruction of the state is happening everywhere, and the burdens on the people increases every day. And they applaud.
Who really cares about what shareholders think? If they don't want to own shares in a profitable company that behaves ethically in relation to paying taxes, then they can sell their Apple shares and buy shares in a company in the fossil fuel, tobacco or gambling industries which have no scruples about behaving unethically.
Guess that means no Fortune 500 companies or 99.9% of other businesses (or taxpayers for that matter) then. How much in extra taxes do you think corporations should pay that would make sure they are paying their 'fair' share? As a rule companies, corporations and individuals take every deduction they can and do not pay more than that are legally obligated to pay. How many companies do you know of, have paid extra 'voluntary' taxes?
How many companies do you know of have paid extra 'voluntary' taxes?
I'm sure there are companies that could employ offshore schemes to reduce their tax burden and haven't. Hell, Tim Cook has made a point of saying that Apple pays its full allotment of US tax for its US operations, and the numbers bear that out. I bet they could shift some of that offshore if they wanted, but they don't, because of negative PR.
Sorry I have to correct you. Under Australian law (tested in the courts) fiduciary duty (to shareholders) is not considered preeminent over common ethics and the good of society. If a business can be shown to have acted within the law, but with the intended PURPOSE of contravening the SPIRIT of the law than they may still be found guilty of the crime. The cases may be quiet challenging to prosecute but there is precedent in Australia and our laws are cleverly written to this effect. What you say may be true under US law but respectfully is incorrect under Australian law which you are obviously unfamiliar. It is a contravention of Australian law to knowingly circumvent the spirit of the law for the benefit of shareholders - let's be very clear about that.
Yes - where intent can be proven that they undertook actions purely from intention to circumvent the activities that the law was designed to prohibit.