Apple faces higher taxes after G7 agree to global tax rate changes

Posted:
in AAPL Investors edited June 2021
The G7 group of nations has agreed to close tax loopholes that encouraged major multinationals like Apple to move their money across borders, with the core change being a global minimum corporation tax rate.




Major economies have wrestled with the problem of properly taxing big companies, such as Apple and other tech giants, for quite a few years. In a bid to try and stop the shifting of funds to tax-efficient countries, the G7 has agreed to take away some of the benefit gained from the revenue movements.

Agreed on Saturday, finance ministers from G7 economies pledged to enforce a minimum global corporation tax rate of at least 15%, reports Reuters. At the same time, measures will be put in place to make sure that taxes are appropriately paid in the countries where the firms operate.

In effect, the agreement would prevent countries from offering deals with companies to charge very low levels of tax.

The final version of the agreement includes language where the ministers "commit to a global minimum tax of at least 15% on a country by country basis." The group also commits to "reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises."

Ministers also agreed to push companies to declare their environmental impact in a more standard way.

"After years of discussion, G7 finance ministers have reached a historic agreement to reform the global tax system to make it fit for the global digital age," said British finance minister Rishi Sunak.

Once implemented, the measures should prevent situations such as Apple's Irish tax fight with the European Union from ever occurring.

In 2016, the European Commission ordered Apple to pay 13 billion euros ($14.5 billion) in back taxes to Ireland, due to Apple having received supposedly illegally low tax benefits. This included a tax rate of 0.005 percent in 2014, and 1 percent in 2003.

In February, the European Union said it would appeal the July 2020 judgment by the second-highest court in the EU that fell in favor of Apple and Ireland.

Follow all the details of WWDC 2021 with the comprehensive AppleInsider coverage of the whole week-long event from June 7 through June 11, including details of all the new launches and updates.

Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.
«134

Comments

  • Reply 1 of 77
    crowleycrowley Posts: 10,453member
    I wonder how many of those that insisted "Apple never did anything wrong" and that "politicians should focus on closing loopholes rather than going after Apple" are going to be singing the same tune now that politicians have worked together to close loopholes.
    OutdoorAppDeveloperelijahgbaconstangPezayojimbo007beowulfschmidtmuthuk_vanalingam
  • Reply 2 of 77
    rerollreroll Posts: 60member
    Apple should close shop in all those money grabbing countries. That’ll teach them!
    KTR
  • Reply 3 of 77
    crowleycrowley Posts: 10,453member
    reroll said:
    Apple should close shop in all those money grabbing countries. That’ll teach them!
    The G7?!  Lol
    elijahgseanboy81baconstangkestralCloudTalkinapplecoredmuthuk_vanalingam
  • Reply 4 of 77
    dobrojoedobrojoe Posts: 2member
    reroll said:
    Apple should close shop in all those money grabbing countries. That’ll teach them!

    That would be US, UK, France, Germany, Canada, Italy and Japan (G7). That's a lot of market to close shop on!
    napoleon_phoneapartelijahgkestral80s_Apple_Guywatto_cobramuthuk_vanalingam
  • Reply 5 of 77
    Nikon8Nikon8 Posts: 47member
    reroll said:
    Apple should close shop in all those money grabbing countries. That’ll teach them!
    Lol.  Maybe they should just buy a country and work out of there.  
    KTRwatto_cobra
  • Reply 6 of 77
    hexclockhexclock Posts: 1,243member
    Maybe one day we’ll come to find that Apples spaceship campus is an actual spaceship, and will head out to orbit to avoid these Earthbound taxes. 
    [Deleted User]glennhAI_liaswatto_cobra
  • Reply 7 of 77
    crowley said:
    I wonder how many of those that insisted "Apple never did anything wrong" and that "politicians should focus on closing loopholes rather than going after Apple" are going to be singing the same tune now that politicians have worked together to close loopholes.
    This is a nonsensical post.  Apple has always complied with the tax laws of the countries they’ve operated in.  They will continue to do so and if that now means more taxes are paid then they’ll do it.  What was, is and will continue to be unreasonable is trying to force a company to pay more taxes than the law requires.  This is what Apple has fought and won their appeal on in Ireland.
    edited June 2021 mwhitedewmeGRKosturibillcwingravKTRstompyanantksundaramh2pRayz2016
  • Reply 8 of 77
    Is it native of me to see this as similar to the App Store policies? Society has built the structure through which Apple is benefiting from; so to play in this sandbox it is going to cost you 15%. 

    If, in the case of Epic, the judge(s) rule in favour of Epic, could Apple turn around and use that law makers ruling against these lawmakers? I have no clue, just thinking of loud and looking for additions to my thinking. 🤓
    rbelizecroprwatto_cobra
  • Reply 9 of 77
    chadbagchadbag Posts: 1,999member
    It’s funny. When companies do this, it is anti-competitive and restraining trade.  When countries do it it is being fair.  It being conspiring with all the other players for minimum “price” levels and that sort of thing.  

    Also, I don’t see how this would have undermined Ireland and it’s situation.  Ireland is not part of the G7. 
    edited June 2021 h2pwatto_cobra
  • Reply 10 of 77
    rerollreroll Posts: 60member
    crowley said:
    reroll said:
    Apple should close shop in all those money grabbing countries. That’ll teach them!
    The G7?!  Lol
    Just being sarcastic :smile: 
    anantksundaramwatto_cobramuthuk_vanalingam
  • Reply 11 of 77
    crowleycrowley Posts: 10,453member
    crowley said:
    I wonder how many of those that insisted "Apple never did anything wrong" and that "politicians should focus on closing loopholes rather than going after Apple" are going to be singing the same tune now that politicians have worked together to close loopholes.
    This is a nonsensical post.  Apple has always complied with the tax laws of the countries they’ve operated in.  They will continue to do so and if that now means more taxes are paid then they’ll do it.  What was, is and will continue to be unreasonable is trying to force a company to pay more taxes than the law requires.  This is what Apple has fought and won their appeal on in Ireland.
    ?

    Where did I say anything about Apple complying or not complying with any laws?  My post was about fantards on AI, barely anything to do with Apple at all.

    Try to understand what other people are saying before declaring it nonsensical please.
    elijahgbaconstangCloudTalkinpumpkin_kingZeeblermuthuk_vanalingam
  • Reply 12 of 77
    larryjwlarryjw Posts: 1,031member
    Good idea. Not that Apple doesn't pay taxes, already -- it's where the taxes are allocated. The G7 agreed that companies would pay the taxes where the transactions occurred and the minimum is 15%. 

    I doubt whether Apple will see much of an increase. Apple argued in the Irish case, that it didn't matter for them how the case turned out -- it was a case of allocation of tax revenue, not the tax itself. 
    baconstangRayz2016watto_cobra
  • Reply 13 of 77
    seankillseankill Posts: 566member
    Can't believe some of you are complaining about a minimum of 15% tax? Seems almost low for one of the most profitable companies in the world. Local US businesses typically pay 25%, so I think Apple is getting a deal. Its also fair for Apple, the push liberal agendas (right, wrong, or indifferent), its time for them to put THEIR money where THEIR mouth is. Everyone wants these policies until they have to pay for them. Time for Apple to pay up to the tune of a weak 15%. 

    Disclaimer, I don't readily identify with either side of politics; I prefer the viewpoint of a moderate republican and moderate democrat. Both parties need their balls busted.
    elijahgh2papplecoredZeeblermuthuk_vanalingam
  • Reply 14 of 77
    lkrupplkrupp Posts: 10,557member
    crowley said:
    I wonder how many of those that insisted "Apple never did anything wrong" and that "politicians should focus on closing loopholes rather than going after Apple" are going to be singing the same tune now that politicians have worked together to close loopholes.
    Get ready for higher prices for your Apple gear. The end user winds up paying those taxes just like the middle class always winds up paying for every dollar the government spends. That’s how the world works, or didn’t you know that.
    jeffythequickwatto_cobra
  • Reply 15 of 77
    crowleycrowley Posts: 10,453member
    lkrupp said:
    crowley said:
    I wonder how many of those that insisted "Apple never did anything wrong" and that "politicians should focus on closing loopholes rather than going after Apple" are going to be singing the same tune now that politicians have worked together to close loopholes.
    Get ready for higher prices for your Apple gear. The end user winds up paying those taxes just like the middle class always winds up paying for every dollar the government spends. That’s how the world works, or didn’t you know that.
    Maybe I'll buy non-Apple gear then.  Apple need to make a decision on whether to sacrifice some of that tasty profit margin or lose sales.  That's also how the world works, or didn't you know that?

    See, I can oversimplify too!
    elijahggatorguyZeeblermuthuk_vanalingam
  • Reply 16 of 77
    lkrupplkrupp Posts: 10,557member
    crowley said:
    lkrupp said:
    crowley said:
    I wonder how many of those that insisted "Apple never did anything wrong" and that "politicians should focus on closing loopholes rather than going after Apple" are going to be singing the same tune now that politicians have worked together to close loopholes.
    Get ready for higher prices for your Apple gear. The end user winds up paying those taxes just like the middle class always winds up paying for every dollar the government spends. That’s how the world works, or didn’t you know that.
    Maybe I'll buy non-Apple gear then.  Apple need to make a decision on whether to sacrifice some of that tasty profit margin or lose sales.  That's also how the world works, or didn't you know that?

    See, I can oversimplify too!
    No, you likely won’t buy non-Apple gear. You’ll pay the price like the rest of us because you see the value in Apple gear. You know, of course, that the ‘overpriced’ narrative has been around for decades with literally no effect whatsoever on Apple’s continued success.

    Just my oversimplification again.
    watto_cobra
  • Reply 17 of 77
    KuyangkohKuyangkoh Posts: 838member
    reroll said:
    Apple should close shop in all those money grabbing countries. That’ll teach them!
    Why closed? Just add the taxes to the prices and services
  • Reply 18 of 77
    The loopholes that were closed are the same ones that Apple and other big tech companies lobbied to create in the first place. Then they acted all innocent "What? We were only following the law!" Cry me a river.
    elijahgbaconstangPezamuthuk_vanalingam
  • Reply 19 of 77
    crowleycrowley Posts: 10,453member
    Maybe I will, maybe I won't.  But some people definitely won't, they'll go somewhere else, or put off that upgrade another year; Apple aren't immune to price sensitivity.  Price rises will mean Apple loses sales, especially if competitors don't raise prices.

    So while Apple may raise prices, I'd be very surprised if they accommodate the complete tax increase, rather than absorbing some of it into a reduced markup.

    They're not that stupid.
    elijahgGeorgeBMacZeeblermuthuk_vanalingam
  • Reply 20 of 77
    lkrupplkrupp Posts: 10,557member
    crowley said:
    Maybe I will, maybe I won't.  But some people definitely won't, they'll go somewhere else, or put off that upgrade another year; Apple aren't immune to price sensitivity.  Price rises will mean Apple loses sales, especially if competitors don't raise prices.

    So while Apple may raise prices, I'd be very surprised if they accommodate the complete tax increase, rather than absorbing some of it into a reduced markup.

    They're not that stupid.
    Apparently you and others here have been waiting for the ‘overpriced’ rebellion to take hold with people walking away with their wallets.  It hasn’t and there’s not much chance it ever will, especially after 45 years of overpriced Apple gear selling in droves.
    Rayz2016Pezabestkeptsecret
Sign In or Register to comment.