carnegie

gatorguy said:

carnegie said:

avon b7 said:

lkrupp said:

ireland said:

The blue collar worker pays their due taxes, and so should the biggest corporations.

Typical simplistic response. Apple DOES pay its taxes, just not enough in the opinion of some. It’s the tired old argument about “fair share”. Apple negotiated a tax agreement with Ireland for example, but the EU wants Ireland to back out of it to get more money out of Apple. When’s the last time you voluntarily sent some extra money to your government just because you wanted to be fair?

Well, to be absolutely fair, according to a three year investigation by the EU into the Irish agreement, Apple not only decided how much it would make available for taxation but when it did, it paid less than 1%.

We'll see how things play out but you should at least see that doesn't look very fair at all.

No, that's not what happened - even according to the European Commission. That's a misleading characterization of what happened that was offered and meant to obscure the reality of the situation.

This has been discussed at length elsewhere, so I'll try not to get lost in the weeds here (though I'm willing to dive back into the details of the situation). But Apple didn't just decide how much profit would be taxable in Ireland. It applied a method for determining what was properly taxable in Ireland - i.e. which was properly attributable to the Irish branches of the corporations at issue - which Ireland decided was acceptable under its tax policies. That method wasn't akin to - just pick a number you like. It was a reasonable method that is sometimes used between unrelated parties. In other words, it is in accordance with an arms-length principle even though Ireland is under no obligation to require the application of an arms-length principle in such regards. (Again, we can get into what that method was if some are interested.)

Then, having determined what amounts of profit were taxable (in Ireland), the regular Irish tax rate - not less than 1% - was applied to those amounts. That's how tax determination works. You first have to figure out what is taxable - e.g., after acceptable expenses are accounted for, and applicable deductions or exemptions are accounted for. Then you apply the appropriate rate. Essentially no one pays the statutory rate on all money that comes into them. Determining how much of it is actually properly taxable is the most important part of the process, and that's what was in dispute in the Ireland-Apple European Commission case. The rate that was applied to what was taxable wasn't in dispute. The European Commission doesn't think that the method - which Apple used and Ireland approved - for determining profit allocation between different branches of Irish companies was proper.

Niggling possible correction Carnegie. According to original docs and notes from the time Apple offered to make up to $200M taxable (for each of the next 10 years? Not certain) but admitted to it being an arbitrary number instead of methodology IIRC, which as you note the Irish tax representative accepted. I can go back and find it if you can't. Always possible I'm remembering wrong.

I'm not sure where you're getting the $200 million from, as that's not the number reported by the European Commission in its decision (though there are numbers in that ballpark which refer to things other than what you're talking about, there are lots of numbers in the Commission's decision).

But, yes, when Apple and Ireland originally discussed acceptable methods for determining profit allocation, Apple referred to a number for an Irish branch which it thought was appropriate based on what that branch did (i.e. manufacturing only). But the method which Ireland approved (as being consistent with Irish tax policy) wasn't something like - just pick a number. It was a reasonable method for determining how much profit was fairly attributable to different branches. It's much the same method that unrelated parties sometimes use to determine how much one will pay the other for services which they provide.

This is what has to happen when businesses are figuring out where profits are taxable and how much profit is taxable where. The disagreement is about the method which Apple used, which Ireland decided was acceptable based on its own tax policies. The real issue that the Commission and others have with the situation is an intentional oddity of Irish tax law which made profits of Irish corporations which weren't attributable to Irish branches not taxable by Ireland. But the Commission knew that it couldn't do anything about that Irish tax policy, as much as it didn't like it. So it pretended that the issue was with the profit allocation method that was used, even though that method was reasonable. (And, to be clear, it didn't even need to be reasonable as long as it was allowed by Irish tax policy in general.) To the extent something was unreasonable, it was the general state of Irish tax law - profits of non-Irish branches not being taxable in Ireland.

avon b7 said:

lkrupp said:

ireland said:

The blue collar worker pays their due taxes, and so should the biggest corporations.

Typical simplistic response. Apple DOES pay its taxes, just not enough in the opinion of some. It’s the tired old argument about “fair share”. Apple negotiated a tax agreement with Ireland for example, but the EU wants Ireland to back out of it to get more money out of Apple. When’s the last time you voluntarily sent some extra money to your government just because you wanted to be fair?

Well, to be absolutely fair, according to a three year investigation by the EU into the Irish agreement, Apple not only decided how much it would make available for taxation but when it did, it paid less than 1%.

We'll see how things play out but you should at least see that doesn't look very fair at all.

No, that's not what happened - even according to the European Commission. That's a misleading characterization of what happened that was offered and meant to obscure the reality of the situation.

This has been discussed at length elsewhere, so I'll try not to get lost in the weeds here (though I'm willing to dive back into the details of the situation). But Apple didn't just decide how much profit would be taxable in Ireland. It applied a method for determining what was properly taxable in Ireland - i.e. which was properly attributable to the Irish branches of the corporations at issue - which Ireland decided was acceptable under its tax policies. That method wasn't akin to - just pick a number you like. It was a reasonable method that is sometimes used between unrelated parties. In other words, it is in accordance with an arms-length principle even though Ireland is under no obligation to require the application of an arms-length principle in such regards. (Again, we can get into what that method was if some are interested.)

Then, having determined what amounts of profit were taxable (in Ireland), the regular Irish tax rate - not less than 1% - was applied to those amounts. That's how tax determination works. You first have to figure out what is taxable - e.g., after acceptable expenses are accounted for, and applicable deductions or exemptions are accounted for. Then you apply the appropriate rate. Essentially no one pays the statutory rate on all money that comes into them. Determining how much of it is actually properly taxable is the most important part of the process, and that's what was in dispute in the Ireland-Apple European Commission case. The rate that was applied to what was taxable wasn't in dispute. The European Commission doesn't think that the method - which Apple used and Ireland approved - for determining profit allocation between different branches of Irish companies was proper.

avon b7 said:

tmay said:

avon b7 said:

tmay said:

avon b7 said:

tmay said:

avon b7 said:

tmay said:

spheric said:

Huawei? 

These guys? 
https://www.bloomberg.com/news/features/2019-02-04/huawei-sting-offers-rare-glimpse-of-u-s-targeting-chinese-giant

These here?
https://arstechnica.com/tech-policy/2019/01/us-indicts-huawei-for-stealing-t-mobile-robot-selling-us-tech-to-iran/

Oh, okay. 

Values, huh. 

That first link looks to provide enough evidence to keep Huawei out of any commerce at all in the U.S.

From that first link:

"Huawei has denied the charges"

From that first link:

"Khan was more surprised when the U.S. Federal Bureau of Investigation drafted him and Akhan’s chief operations officer, Carl Shurboff, as participants in its investigation of Huawei"

In another news piece (supplied by Bloomberg, no less) it was Akhan himself that contacted the authorities.

It was Akhan himself that agreed to send Huawei the sample knowing full well all the accusations surrounding Huawei. Strange.

He was surprised it got destroyed? Why? It had to be tested which necessarily would mean taking the sample to breaking point. Strange.

Bloomberg speaks of a 'sting' but other reports claim the FBI didn't get anything from the tapped conversations. Strange.

It seems a little like Keystone Cops at this point.

Now back to Apple's tax problems.

Your reading comprehension of the article in the link is poor; same as it ever was. Consider reading it for substance.


"By then, they’d succeeded in getting Huawei representatives to admit, on tape, to breaking the contract with Akhan and, evidently, to violating U.S. export-control laws."

Seems like solid evidence obtained legally. Huawei is fucked.

Again, just tax liabilities, and for a company that generated $265 B in 2018, it isn't the "tax problem" that you keep attempting to make it out to be.

"Seems like solid evidence..."

Here we go again. Whatever you say. I suggested waiting for formal accusation/defence but you are already jumping the gun.

Again, from the article:

"Prosecutors also could decide that what happened to Akhan isn’t serious enough to seek charges. If that’s so, it raises a question about the broader U.S. crackdown on Huawei: Is it based on hard evidence of wrongdoing or driven by a desperation to catch the Chinese company doing something—anything—bad"

Whatever comes out, reserve judgement for what we eventually know. Your eagerness to accuse does you no favours. Speculate all you want but don't paint a picture until you have some facts on the table.

Try as they might, nothing in the article points to the "sting" the FBI wanted. Huawei even claimed that ITAR was not applicable to the sample. As for the damage and missing shards, nothing came of that either. Contracts? Have you seen what was agreed to? No. I thought not.

Open another thread if you want to discuss this further.

Sure, Huawei needed to send it to China to have a 100,000 watt laser fired at it as a test of suitability for a phone.

Even a casual reader would see an ITAR violation.

But, sure, I'm done making my case for comparative values between Apple and Huawei.

You mean you are done with your whataboutism. Great.

You need to read up on ITAR and its application.

As for lasers, I suggest you wait to hear what Huawei has to say. FBI forensics could you know, be wrong.

You are lapping up just one side of the story and reaching premature conclusions. Where is your critical thinking!? ;-)

You simply ignored the counterpoints that were present in the article as if they were not there. It is true that the piece itself is written 'to sell' (tints of the SuperMicro story?) and that, combined with your own zealous 'want to believe' attitude did you no favours. Think about it. A sting with no real sting. Media invited to cover the whole story. Timing (same month as MWC). Doesn't this begin to look strange? Tappy? The US wants to open a closed case. Are they truly that short on real meat? Really?

I'll wait until I hear both sides of the story before drawing my own conclusions but based on the article itself, there are a lot questions that didn't get the replies the FBI wanted. 

Comparing Apple's and Huawei's values in the first place was the wrong way to approach this.

You would have been far better off not jumping into this or just admitting that TC should have kept his mouth closed.

As would you have for bringing that up TC's statement in the first place. It's just a tax liability, one of many that Apple has had to work out with the EU, which has, as well, a byzantine tax system that is difficult to navigate, not to mention those tax laws of individual countries. It has nothing to do with "values", which is what you attempted to portray this as.

I love how you always give Huawei PR such authority, but these incidents and the associated pattern of bad behavior are yet more leverage against Western Democracies incorporating Huawei 5G hardware into their critical telecom infrastructure. Looks to be yet another forced error on Huawei's part.

https://www.scmp.com/news/china/diplomacy/article/2185055/china-and-norway-face-over-ridiculous-claims-beijing-using

More and more countries are concerned about the risk of Huawei 5G infrastructure, and that momentum is building.

Just two points:

1. "It has nothing to do with values" ? Have you already forgotten that it was TC who brought that into the debate - and deliberately. That is PR.

2. I give Huawei PR such authority? Did you read the letter I linked to right here? It was a letter to the UK parliament from a high ranking Huawei executive answering questions from a member of parliament. That is as far as it gets from PR and as I said, further up, straight from the horse's mouth.

But what does this tax situation have to do with Mr. Cook's or Apple's values? Are you suggesting that it somehow demonstrates a lack of values?

Having outstanding unresolved tax disputes is normal course of business for large companies which operate globally. Tax policies can't spell out how they would apply to every situation which might exist. Figuring out how they might apply to every situation isn't black and white. Companies interpret them and apply them as they think is appropriate. Then tax jurisdictions audit what companies have done and, often, find points of disagreement. Sometimes those points of disagreement persist for many years before being ultimately resolved. If you read enough companies' financials you'll find that they have open tax audits from various jurisdictions going back 5 or even 10 years. Eventually the audits get closed out, sometimes through settlements between the companies and tax jurisdictions. That's just how it works because tax policies can be complicated, companies would generally like policies to be interpreted in ways which decrease tax liability, and jurisdictions would generally like them to be interpreted in ways which increase liability.

None of that demonstrates a lack of values on the part of a company. It isn't open defiance of laws (generally speaking, though in some particular cases it can be), it's an effort to figure out how laws might apply to given circumstances. There often isn't a right answer, just what ultimately gets agreed to.

https://www.apple.com/newsroom/2019/02/apple-names-deirdre-obrien-senior-vice-president-of-retail-and-people/

I guess it makes sense that Ms. Ahrendts would leave in April. She has about 105,000 time-based RSUs due to vest on April 1st.

But she's also giving up a lot of unvested RSUs. She has another 200,000 or so unvested time-based RSUs and perhaps 350,000 unvested performance-based RSUs.

anantksundaram said:

I am sorry, but I am not seeing the "$60 billion" number quoted anywhere in the text of the article? Who said it, where, when? Cite?

Also, while I am not belittling the massive addition of jobs in the US, it is important to note that most of Apple's job creation here is in retail, which are low-skill, low-paying jobs.

It's from Apple's press release issued today.

I'd also note that, even with many of its 132,000 employees (as of the end of its FY2018) being retail employees, Apple's median employee total compensation was over $55,000 in FY2018. That's median, not mean, so the number isn't inflated by very-highly compensated employees at the top.