Christ almighty, do you people have no appreciation for context? They didn't even TRY to make it seem like that was the effective tax rate; in fact, it's clearly labeled "gross tax rate." God forbid they try to inject some semblance of scale so that people who are used to counting their money in the 100s can understand what $60 million really means.
Who the hell uses gross tax rate. Nobody. That term is used just to mislead the ignorant.
No country on planet earth taxes corporations using a gross tax rate. That's why using that term is stupid and dishonest.
Clearly labeling things is not dishonest. And when Apple publicly submits r
Profits before tax = $208 million Taxes = $85 million Tax rate = 40%
So stupid that this article bases tax rate on gross revenue.
Hardly sounds worth doing business in Australia. Less than a 3% profit margin? I thought Apple's margins were a lot higher than that. Who knew.
That 3% profit margin is based on Australian law on profit calculation. Go change the law. Apple is following the law. If the law is messed up, then change it.
Maybe they are. Maybe they're not. Isn't that what the tax audit is supposed to determine?
Question: Do you think Apple is not only following the law but also the spirit of the law? Sure seems they rely on a whole lotta different countries finer tax tax details and assorted revenue-shifting schemes in each to avoid taxes, which all might be entirely legal but...
Apple uses Irish law to avoid US taxes on Australian profits via Singapore accounts. And by shifting US-created intellectual property to Irish control so that sales in various European countries can be marked up to the point that countries like Germany and France see very little profit or even losses with the IP profits recorded under an Apple subsidiary who has no tax residency anywhere in the world and therefore pays zero taxes to anyone. And that's made possible only by combining loopholes in US law with loopholes in German, French etc law with loopholes in Irish law.... Geesh! Sounds pretty convoluted doesn't it, certainly not in the "spirit of the (corporate) law" IMHO.
And yeah a lot of the fellow techs do similar stuff, tho none even close to the scale of Apple which is why they seem to be in news more. Heck it hardly got mention when Google agreed this week to pay the UK additional taxes on past profits when they were accused of using similar revenue-shifting creativity.
Christ almighty, do you people have no appreciation for context? They didn't even TRY to make it seem like that was the effective tax rate; in fact, it's clearly labeled "gross tax rate." God forbid they try to inject some semblance of scale so that people who are used to counting their money in the 100s can understand what $60 million really means.
Who the hell uses gross tax rate. Nobody. That term is used just to mislead the ignorant.
No country on planet earth taxes corporations using a gross tax rate. That's why using that term is stupid and dishonest.
Clearly labeling things is not dishonest. And when Apple publicly submits reports with a worldwide profit margin in the 20% region, but then within a single country reports a 3% margin, then that warrants further investigation, as it is evidence of a lie to distort the tax obligation, for which the gross tax rate is a very relevant metric for comparative purposes.
I guess you just want higher prices and fewer choices, right? You are proposing that Australia levy a tax that is higher than a company's profit or else mandate that the profit margin be greater than 25%? Does that really make sense to you?
When they are clearly lying about their profit - you betcha.
Great, so you've audited their financial statements. What did you find?
Christ almighty, do you people have no appreciation for context? They didn't even TRY to make it seem like that was the effective tax rate; in fact, it's clearly labeled "gross tax rate." God forbid they try to inject some semblance of scale so that people who are used to counting their money in the 100s can understand what $60 million really means.
Who the hell uses gross tax rate. Nobody. That term is used just to mislead the ignorant.
No country on planet earth taxes corporations using a gross tax rate. That's why using that term is stupid and dishonest.
Nobody working a normal 9-5 filing their 1040EZ with TaxSlayer every year knows what their effective tax rate is, but they damn sure know that they paid for example $5,000 of their $50,000 total salary. Can we please show some respect for the people you call "the ignorant," who have to worry about putting food on their table rather than learning tax law and have a right to have things explained in a straightforward manner that they can easily understand?
When they are clearly lying about their profit - you betcha.
Give me a friken break. The profit calculation is based on Australian tax law. Go fix the tax law if its broken. But don't be blaming Apple for following the law and taking advantage of it.
I agree. Quite frankly, I don't think they are lying about their profit either, but that is a job for the auditor. Apple sells and supports their stuff in Australia. To my knowledge there is not manufacturing or software development going on there. Apple's profits should be to a large extent earned outside of Australia. Apple treats its own stores in the US the same way, they have to be profitable in their own right.
Profits before tax = $208 million Taxes = $85 million Tax rate = 40%
So stupid that this article bases tax rate on gross revenue.
Christ almighty, do you people have no appreciation for context? They didn't even TRY to make it seem like that was the effective tax rate; in fact, it's clearly labeled "gross tax rate." God forbid they try to inject some semblance of scale so that people who are used to counting their money in the 100s can understand what $60 million really means.
Have a little common sense. The reporting puts the figures in a misleading context.
Profits before tax = $208 million Taxes = $85 million Tax rate = 40%
So stupid that this article bases tax rate on gross revenue.
Christ almighty, do you people have no appreciation for context? They didn't even TRY to make it seem like that was the effective tax rate; in fact, it's clearly labeled "gross tax rate." God forbid they try to inject some semblance of scale so that people who are used to counting their money in the 100s can understand what $60 million really means.
Have a little common sense. The reporting puts the figures in a misleading context.
Question: Do you think Apple is not only following the law but also the spirit of the law? Sure seems they rely on a whole lotta different countries finer tax tax details and assorted revenue-shifting schemes in each to avoid taxes
Nobody working a normal 9-5 filing their 1040EZ with TaxSlayer every year knows what their effective tax rate is, but they damn sure know that they paid for example $5,000 of their $50,000 total salary. Can we please show some respect for the people you call "the ignorant," who have to worry about putting food on their table rather than learning tax law and have a right to have things explained in a straightforward manner that they can easily understand?
You are comparing taxes on an individual vs a mega corporation. That's the biggest Apple's to Orange's comparison you can make.
Like I said NO CORPORATION USES GROSS SALES TO CALCULATE TAXES. That's why using that metric is absolutely ridiculous and misleading. In 99.9999% of articles about corporate tax they talk about tax rate on PROFITS.
The whole point is to put in perspective how little Apple is paying relative to its income, which a gross rate does very nicely. If our salary man who thinks he has a 10% rate because he pays $5k of his $50k salary sees a story that says Apple pays a 40% rate, he's not going to understand the issue because "wow, that's 4x what I pay!" Just because a number makes Apple look bad doesn't make it misleading.
For the record, I have no problem with Apple practicing good corporate governance and taking every legal avenue to minimize their tax burden. It's the government's job to make sure the law doesn't allow for wiggle room.
Who the hell uses gross tax rate. Nobody. That term is used just to mislead the ignorant.
No country on planet earth taxes corporations using a gross tax rate. That's why using that term is stupid and dishonest.
Nobody working a normal 9-5 filing their 1040EZ with TaxSlayer every year knows what their effective tax rate is, but they damn sure know that they paid for example $5,000 of their $50,000 total salary. Can we please show some respect for the people you call "the ignorant," who have to worry about putting food on their table rather than learning tax law and have a right to have things explained in a straightforward manner that they can easily understand?
Maybe you need to change tax preparation software. I just checked my 2014 tax return and TurboTax puts my effective tax rate on their cover page of my return. If you're paying 10%, you're paying way too much. You need to look for some deductions, exemptions, and anything else that will lower your taxable income. Maybe filing the regular 1040 long form will help. TurboTax has a free web-based version that asks a lot of questions that could help you LEGALLY reduce your tax liability.
No, I'm not going to tell you my tax rate is but it's not.
Nobody working a normal 9-5 filing their 1040EZ with TaxSlayer every year knows what their effective tax rate is, but they damn sure know that they paid for example $5,000 of their $50,000 total salary. Can we please show some respect for the people you call "the ignorant," who have to worry about putting food on their table rather than learning tax law and have a right to have things explained in a straightforward manner that they can easily understand?
You are comparing taxes on an individual vs a mega corporation. That's the biggest Apple's to Orange's comparison you can make.
Like I said NO CORPORATION USES GROSS SALES TO CALCULATE TAXES. That's why using that metric is absolutely ridiculous and misleading. In 99.9999% of articles about corporate tax they talk about tax rate on PROFITS.
The whole point is to put in perspective how little Apple is paying relative to its income, which a gross rate does very nicely. If our salary man who thinks he has a 10% rate because he pays $5k of his $50k salary sees a story that says Apple pays a 40% rate, he's not going to understand the issue because "wow, that's 4x what I pay!" Just because a number makes Apple look bad doesn't make it misleading.
For the record, I have no problem with Apple practicing good corporate governance and taking every legal avenue to minimize their tax burden. It's the government's job to make sure the law doesn't allow for wiggle room.
Which government? The US? Ireland? Singapore? Germany? Australia? Belgium? Apple relies on bits and pieces of tax law from several different countries, and revenue shifting, transfer pricing, and IP ownership to various others to make the whole tax avoidance strategy work.
This is crazy. Apple needs to make some way with Congress so that they can get all that money safely back into the United States without paying any more taxes on it. It belongs to Apple.
Nobody working a normal 9-5 filing their 1040EZ with TaxSlayer every year knows what their effective tax rate is, but they damn sure know that they paid for example $5,000 of their $50,000 total salary. Can we please show some respect for the people you call "the ignorant," who have to worry about putting food on their table rather than learning tax law and have a right to have things explained in a straightforward manner that they can easily understand?
Maybe you need to change tax preparation software. I just checked my 2014 tax return and TurboTax puts my effective tax rate on their cover page of my return. If you're paying 10%, you're paying way too much. You need to look for some deductions, exemptions, and anything else that will lower your taxable income. Maybe filing the regular 1040 long form will help. TurboTax has a free web-based version that asks a lot of questions that could help you LEGALLY reduce your tax liability.
No, I'm not going to tell you my tax rate is but it's not.
I am not the person in my hypothetical scenario; I'm a U.S. citizen living abroad and thus have a much more ridiculous tax setup, unfortunately. I'm just using that to demonstrate that there's sometimes real value in expressing numbers in non-standard ways when you're trying to communicate a complex concept.
Which government? The US? Ireland? Singapore? Germany? Australia? Belgium? Apple relies on bits and pieces of tax law from several different countries, and revenue shifting, transfer pricing, and IP ownership to various others to make the whole tax avoidance strategy work.
All of them. This is the reality of globalization.
You are comparing taxes on an individual vs a mega corporation. That's the biggest Apple's to Orange's comparison you can make.
Like I said NO CORPORATION USES GROSS SALES TO CALCULATE TAXES. That's why using that metric is absolutely ridiculous and misleading. In 99.9999% of articles about corporate tax they talk about tax rate on PROFITS.
The whole point is to put in perspective how little Apple is paying relative to its income, which a gross rate does very nicely. If our salary man who thinks he has a 10% rate because he pays $5k of his $50k salary sees a story that says Apple pays a 40% rate, he's not going to understand the issue because "wow, that's 4x what I pay!" Just because a number makes Apple look bad doesn't make it misleading.
For the record, I have no problem with Apple practicing good corporate governance and taking every legal avenue to minimize their tax burden. It's the government's job to make sure the law doesn't allow for wiggle room.
The problem here is that income is what is left after you subtract the costs of doing business and producing products from the revenue. A company could run break-even and have no profits whatsoever and pay no tax whatsoever no matter what the revenues are. As for your last paragraph, I agree. The tax laws should be clear and straightforward.
Have a little common sense. The reporting puts the figures in a misleading context.
Question: Do you think Apple is not only following the law but also the spirit of the law? Sure seems they rely on a whole lotta different countries finer tax tax details and assorted revenue-shifting schemes in each to avoid taxes
Gator: quite frankly we would need to better understand what Apple is doing and the "spirit of the law" to properly respond. My guess is that yes, Apple is ,but governments want as much as they can get and how multinational transactions should get treated is arguable.
Consider this hypothetical: You make some sort of thing in the US and that thing has high development costs and relatively low manufacturing costs. Let's say it sells for $100, costs you $40 to build, but the development and support was another $30 per unit. The things are built in China (for $40) and sold in Australia (for $100). At a glance, it looks like you've earned $60 gross profit in Australia. But the fact is that $30/unit in development and other costs was incurred in the US (and elsewhere outside Australia). We've incurred all this expense and most of the effort outside of Australia, does it make sense for all the profit to be earned inside Australia? There are also distribution and support costs in Australia that have to be considered. In the end, you might make $5-$10/unit in Australia.
Consider the alternative: you have no corporate presence in Australia and instead rely on a network of unrelated distributors. You sell your thing to them for $85 and they have $15 for their expenses and profit. Obviously it costs them something to stock, support, and sell your product, so their taxable income is some small part of that $15. Works out about the same.
I can see how a company could allocate expenses to effectively make all the profit in a low-tax jurisdiction and lose money or break even in the high-tax jurisdictions. I am sure companies do this. I also think how Apple does this is probably reasonable.
Have a little common sense. The reporting puts the figures in a misleading context.
Question: Do you think Apple is not only following the law but also the spirit of the law? Sure seems they rely on a whole lotta different countries finer tax tax details and assorted revenue-shifting schemes in each to avoid taxes
Gator: quite frankly we would need to better understand what Apple is doing and the "spirit of the law" to properly respond. My guess is that yes, Apple is ,but governments want as much as they can get and how multinational transactions should get treated is arguable.
Consider this hypothetical: You make some sort of thing in the US and that thing has high development costs and relatively low manufacturing costs. Let's say it sells for $100, costs you $40 to build, but the development and support was another $30 per unit. The things are built in China (for $40) and sold in Australia (for $100).
Does that matter in this event? In Apple's case isn't the development and support already factored into the price? Why would it cost Apple much if anything more to sell a product in Australia than say the UK or even the US?
Comments
Question: Do you think Apple is not only following the law but also the spirit of the law? Sure seems they rely on a whole lotta different countries finer tax tax details and assorted revenue-shifting schemes in each to avoid taxes, which all might be entirely legal but...
Apple uses Irish law to avoid US taxes on Australian profits via Singapore accounts. And by shifting US-created intellectual property to Irish control so that sales in various European countries can be marked up to the point that countries like Germany and France see very little profit or even losses with the IP profits recorded under an Apple subsidiary who has no tax residency anywhere in the world and therefore pays zero taxes to anyone. And that's made possible only by combining loopholes in US law with loopholes in German, French etc law with loopholes in Irish law.... Geesh! Sounds pretty convoluted doesn't it, certainly not in the "spirit of the (corporate) law" IMHO.
And yeah a lot of the fellow techs do similar stuff, tho none even close to the scale of Apple which is why they seem to be in news more. Heck it hardly got mention when Google agreed this week to pay the UK additional taxes on past profits when they were accused of using similar revenue-shifting creativity.
Clearly labeling things is not dishonest. And when Apple publicly submits reports with a worldwide profit margin in the 20% region, but then within a single country reports a 3% margin, then that warrants further investigation, as it is evidence of a lie to distort the tax obligation, for which the gross tax rate is a very relevant metric for comparative purposes.
I agree. Quite frankly, I don't think they are lying about their profit either, but that is a job for the auditor. Apple sells and supports their stuff in Australia. To my knowledge there is not manufacturing or software development going on there. Apple's profits should be to a large extent earned outside of Australia. Apple treats its own stores in the US the same way, they have to be profitable in their own right.
Have a little common sense. The reporting puts the figures in a misleading context.
The whole point is to put in perspective how little Apple is paying relative to its income, which a gross rate does very nicely. If our salary man who thinks he has a 10% rate because he pays $5k of his $50k salary sees a story that says Apple pays a 40% rate, he's not going to understand the issue because "wow, that's 4x what I pay!" Just because a number makes Apple look bad doesn't make it misleading.
For the record, I have no problem with Apple practicing good corporate governance and taking every legal avenue to minimize their tax burden. It's the government's job to make sure the law doesn't allow for wiggle room.
Translation: I got nothing.
No, I'm not going to tell you my tax rate is but it's not.
I am not the person in my hypothetical scenario; I'm a U.S. citizen living abroad and thus have a much more ridiculous tax setup, unfortunately. I'm just using that to demonstrate that there's sometimes real value in expressing numbers in non-standard ways when you're trying to communicate a complex concept.
gatorguy said:
All of them. This is the reality of globalization.
Gator: quite frankly we would need to better understand what Apple is doing and the "spirit of the law" to properly respond. My guess is that yes, Apple is ,but governments want as much as they can get and how multinational transactions should get treated is arguable.
Consider this hypothetical: You make some sort of thing in the US and that thing has high development costs and relatively low manufacturing costs. Let's say it sells for $100, costs you $40 to build, but the development and support was another $30 per unit. The things are built in China (for $40) and sold in Australia (for $100). At a glance, it looks like you've earned $60 gross profit in Australia. But the fact is that $30/unit in development and other costs was incurred in the US (and elsewhere outside Australia). We've incurred all this expense and most of the effort outside of Australia, does it make sense for all the profit to be earned inside Australia? There are also distribution and support costs in Australia that have to be considered. In the end, you might make $5-$10/unit in Australia.
Consider the alternative: you have no corporate presence in Australia and instead rely on a network of unrelated distributors. You sell your thing to them for $85 and they have $15 for their expenses and profit. Obviously it costs them something to stock, support, and sell your product, so their taxable income is some small part of that $15. Works out about the same.
I can see how a company could allocate expenses to effectively make all the profit in a low-tax jurisdiction and lose money or break even in the high-tax jurisdictions. I am sure companies do this. I also think how Apple does this is probably reasonable.