Apple ordered to pay $15 billion USD for tax evasion

[DeathReborn]

This is the correct question...

The EU never does things right, hence Brexit. The EU should have told Ireland to collect the tax and pay a fine of equal amount to the EU or face the full extent of the EU's punitive powers. Instead they make some wussy statement that will probably implode in court even though Apple really should pay.

There's been talk for a while that the EU would switch to a taxed on where the product/service is delivered to rather than sold from. This case should further push that idea forward. As for the US "taking measures" or giving a "tax break" to Apple, the EU won't care and will just go after yet more American companies not playing by the EU's bonkers rules.

 

[HumblePie]

Someone correct me if I'm wrong. As I understand it,

Country A (Ireland) - headquarters.
Country B (USA) - the "subsidiary."

The company in country A sells the company in country B a product for $500. The company in country B sells that product to the consumer for $501. Thus, Apple in the USA only made a dollar. Apple in Ireland made all the rest of the profit, without even needing a ton of employees.

That pretty much sums up tax evasion and what is going on. Especially when tax rate in country A is 0.005% and tax rate in country B is 23%.


Now I don't fault any corporation for doing what they can to garner profit to the best of their abilities. But shady shit like this makes me shake my head.

 

[DrPizza]

That pretty much sums up tax evasion and what is going on. Especially when tax rate in country A is 0.005% and tax rate in country B is 23%.


Now I don't fault any corporation for doing what they can to garner profit to the best of their abilities. But shady shit like this makes me shake my head.

It's hard to believe that our Congress cannot come up with legislative means to prevent such abuses. Then again... do they necessarily want to stop their donors from abusing US tax law?

 

[BurnItDwn]

It's hard to believe that our Congress cannot come up with legislative means to prevent such abuses. Then again... do they necessarily want to stop their donors from abusing US tax law?

Of course theydo not want to stop the gravy train. Are you crazy?

 

[Fanatical Meat]

It's hard to believe that our Congress cannot come up with legislative means to prevent such abuses. Then again... do they necessarily want to stop their donors from abusing US tax law?

Exactly. Both Parties too.

If I remember correctly the office in Ireland was a small couple hundred square feet of office with two part time secretaries and one full time accountant. The majority of the time the worked from home too. A few years ago I read about how they were the most dollar productive employee's in history.
They've expanded since then.
Even more irritating when you consider the last big fight over funding Zika prevention. I think Obama wanted 8 billion put aside for it and Congress said no we can't afford that.

 

[HumblePie]

It's hard to believe that our Congress cannot come up with legislative means to prevent such abuses. Then again... do they necessarily want to stop their donors from abusing US tax law?

That is part of the evasion. The other part is that Ireland lets Apple setup a shell company that can exist as an non-entity for tax purposes.Normally Ireland has the minimum tax code percentage on profits earned by companies at 12.5%. Problem is, if they profits are claimed by the "shell" company that Ireland allows, then that isn't taxed. So Apple was being taxed on a few odds and ends instead of the profits they were earning in Ireland.

The second potential double whammy is supposedly Apple was claiming those higher 12.5% rates on their profit in Ireland. This allows them to deduct from their taxable earnings here in the US for foreign taxes paid. Of which they didn't.

 

[master_shake_]

does Greece need another bailout?

 

[MongGrel]

I was unaware that Apple was incorporated in "EU Treaties."

Pull the other one, or you're just being obtuse again.

It's pretty much how they have been raking in cash for a long time now.

 

[DrDoug]

I'm glad to see someone is trying to get an American company to actually pay some taxes somewhere. People like to complain that our middle class is being decimated while ignoring what is causing it. IMO companies like Apple are a big part of what is causing the erosion of the middle class; being stuck with the bill for our country. The middle class, which includes most of our small businesses and owners, are being stuck with more and more of the tax bill to pay for everything our governments (local/county/state/federal) need to keep things running at home. Unlike the middle class, American companies and the wealthy use all kinds of shell games to pay as little as possible, shell games that nobody but they get to play. The people who cheer this tax evasion on are like people cheering someone being hung while they themselves are waiting in a long line to be hung at the same gallows. The wealthy and large corporations have done a great job of screwing over the middle class and pointing the finger at the poor, blaming them for it. For some reason, the middle class fell for the lie and here we are...

This isn't going to change until the middle class realizes that the poor are being screwed over by big businesses in America, just like them, and demand change from our politicians.

That or wait until we run out of a middle class to milk, then it won't matter.

 

[theeedude]

First you say rules, then you say laws. You're so tied up that you can't seem keep the two strait. Assuming you know they are different things?

LOL. You are grasping for straws.
I already posted link to the relevant EU law.

 

[theeedude]

I did some mathing, and I know they made well over 15 billion last year. But lets assume they had a .005% tax on 15 billion that they paid, it comes out to 75 million dollars. Can you honestly tell me that you will ever give the government 75 million in taxes throughout your entire lifetime? Apple does at least that in 1 year. I guess I just dont understand why people are so mad that apple pays hundreds of millions of dollars a year in taxes yet they think it is somehow not enough. I paid like 10K last year, at that rate, it would take me about 75,000 years to reach 75 million in taxes.

Irish corporate tax rate is 12.5%, Apple got 0.005% rate. EU law prohibits favoring specific companies.
Meaning Ireland is free to pass a law that says corporate taxes are capped at $75M for all companies. But it's not free to let just some specific ones like Apple pay a preferential rate.
It's not really that complicated.

 

[agent00f]

Apple is Irelands' largest employer and largest tax payer. They have over 6,000 employees in Ireland.

Has your city never given a tax a break to a large employer?

What was illegal about it under Irish law? Why is Ireland saying there is nothing illegal about it? Why is the U.S. government protesting the action?

Simple, it's a cash grab.

Apple's tax "paying" shell is incorporated in Ireland as Apple Operations Europe. If facts matter to you, consider look up how many employee that company has instead of regurgitating apple press releases.

 

[Atreus21]

It's hard to believe that our Congress cannot come up with legislative means to prevent such abuses. Then again... do they necessarily want to stop their donors from abusing US tax law?

I have a good way via legislative means to prevent such abuses: lower the corporate tax rates.

 

[agent00f]

I have a good way via legislative means to prevent such abuses: lower the corporate tax rates.

To lower than 0.00005 or whatever it was for them?

 

[theeedude]

Except Ireland's corporate tax rate is low, but Apple doesn't even pay that.

 

[R0H1T]

Good thing this is happening, anyway isn't US trying to prevent tax inversions? Also this will teach many other mega corps a lesson who shun their corporate & social responsibility, before anyone jumps in with the usual "but the US corporate tax rates are insane" excuse I'd say this is a worldwide phenomenon & cannot, but more importantly shouldn't be condoned.

 

[JSt0rm]

Still refusing to answer my questions.

What Irish laws were broken?

Has your city never given tax incentives to their largest employer? Was that bad?

he explained it to you. Fucking dumb.

 

[Smoblikat]

Irish corporate tax rate is 12.5%, Apple got 0.005% rate. EU law prohibits favoring specific companies.
Meaning Ireland is free to pass a law that says corporate taxes are capped at $75M for all companies. But it's not free to let just some specific ones like Apple pay a preferential rate.
It's not really that complicated.

I guess the EU laws need to be changed then. Probobly why Britan decided to leave them. FYI, I also have the same opinion on labor unions, I dont like the idea of a bunch of people who arent me deciding what I will and will not do. I see no reason why ireland cant give specific companies tax breaks. I understand what the law says though, I just dont agree with it.

 

[stormkroe]

I did some mathing, and I know they made well over 15 billion last year. But lets assume they had a .005% tax on 15 billion that they paid, it comes out to 75 million dollars. Can you honestly tell me that you will ever give the government 75 million in taxes throughout your entire lifetime? Apple does at least that in 1 year. I guess I just dont understand why people are so mad that apple pays hundreds of millions of dollars a year in taxes yet they think it is somehow not enough. I paid like 10K last year, at that rate, it would take me about 75,000 years to reach 75 million in taxes.

The problem would seem that if my company made about $225k last year, I would owe about $75k in taxes. So why should I pay 100x less taxes than them when I hypothetically make 66,666.67x less than them?

 

[Exterous]

Irish corporate tax rate is 12.5%, Apple got 0.005% rate. EU law prohibits favoring specific companies.
Meaning Ireland is free to pass a law that says corporate taxes are capped at $75M for all companies. But it's not free to let just some specific ones like Apple pay a preferential rate.
It's not really that complicated.

The Irish corporate tax for a traditional corporation is 12.5%. The tax rate for "stateless" corporations is not. Since it's still legal in Ireland for companies to setup 'stateless' entities I'm not really sure it counts as Ireland giving Apple preferential treatment if their competitors also have the ability to setup the same structure. (They closed a lesser used method in 2013 but the more commonly used option still exists as far as I am aware) For example - Google, a pretty big competitor of Apple, enjoys the same classification in Ireland. Dell has been doing this since the mid to late 90s and Microsoft does something similar. The issue is that Ireland\Apple and the EU commission suddenly disagree on how taxes applied to a "head office" not located in the country of Ireland should be handled. Apple has been doing this since the early 90s but its only now an issue? The cynical side of me is skeptical about why the company with the biggest pockets is suddenly in the wrong for something they've done for decades and that others, including their competitors, continue to do. And why go after a single company if the real issue is the country that created the structure you don't like?

Good thing this is happening, anyway isn't US trying to prevent tax inversions? Also this will teach many other mega corps a lesson who shun their corporate & social responsibility, before anyone jumps in with the usual "but the US corporate tax rates are insane" excuse I'd say this is a worldwide phenomenon & cannot, but more importantly shouldn't be condoned.

All it will teach them is, maybe, to go elsewhere for avoidance. I don't think its possible to shut down all the potential tax havens or tax structures in the world. Personally I think there is a rate below the current 35% tax on repatriated money that would make schemes like this not worth the effort and bring some of the $2.6 trillion in cash reserves held overseas back home

 

[theeedude]

EU is going after other companies too, and decision is expected soon, probably a similar one. I am sorry for Apple that EU didn't recognize that their "head office" with no employees is actually responsible for creating most of the value of the products sold in Europe. Maybe they should have come up with better bullshit. I am sure Tim Cook is working on it.

 

[MongGrel]

I guess the EU laws need to be changed then. Probobly why Britan decided to leave them. FYI, I also have the same opinion on labor unions, I dont like the idea of a bunch of people who arent me deciding what I will and will not do. I see no reason why ireland cant give specific companies tax breaks. I understand what the law says though, I just dont agree with it.

You obviously do not know a lot about labor unions to begin with I'd say.

Corporations are still tolerating social service ones like Police, Teachers, Health Care, and have basically been gutting the ones in the US as fast as they can related to manufacturing.

Everyone in a collective bargaining unit has a vote and a say in things in a union, it is a Democracy in its own right to bargain with a corporation with a large bank of lawyers.

It sounds like you have never been in a union to begin with if you say you have no options on what occurs.

 

[blankslate]

.

That or wait until we run out of a middle class to milk, then it won't matter.

Well there are less people in the middle class in the U.S. than in the past.

http://www.cnbc.com/2015/12/10/middle-class-americans-no-longer-majority.html

So who knows...

___________

 

[rumpleforeskin]

Reading the news today and it seems USA is outraged at the EU for wanting the taxes paid, yet from my understanding Apple has for a long time been avoiding its tax responsibilities in the USA too.

Which begs the question why are USA not cracking down harder on the issue of corporate tax avoidance, given the current state of most of the worlds economies you would think the easiest way to generate more wealth in a country would be just to collect the stuff you should already be collecting.

Here is a excerpt from 60mins

CHARLIE ROSE: How do you feel when you go before Congress and they say you’re a tax avoider?

TIM COOK: What I told them, and what I’ll tell you and the folks watching tonight, is: We pay more taxes in this country than anyone.

ROSE: Well, they know that. And you should because of how much money you make. But you also have more money overseas than anyone.

COOK: We do, because as I said before, two-thirds of our business is over there.

ROSE: But why don’t you bring that home, is the question.

COOK: I’d love to bring it home. But it would cost me 40 percent to bring it home, and I don’t think that’s a reasonable thing to do. This is a tax code that was made for the industrial age, not the digital age. It’s backwards. It’s awful for America. It should have been fixed many years ago. It’s past time to get it done.

Well Tim it costs me around 40% in tax to bring my money home too, and I think that IS a reasonable thing to do as its all of our responsibility to finance the infrastructure we benefit from.

 

[mikeymikec]

I'm amazed that some people are arguing that Apple ought not to have to pay those taxes. We all have to pay our share of taxes. Those taxes pay for public services that we are all benefiting from, including Apple.

If Apple really want to argue that they shouldn't have to pay their share of taxes, then IMO they should move their operations to an area with no public services, then once they've spent time and money providing all of those services, perhaps then they'll value the basic things they've been taking for granted.

Another thing that gets my goat is this idea that Apple made a deal with the Irish government, then when Ireland became an EU member, Apple honestly didn't think that it might affect their deal? A multi-billion dollar corporation attempting to hide their earnings honestly didn't consider that? No sensible person could possibly consider this to be a plausible scenario.

That's just aside from the fact that the last I heard, Apple was sitting on top of a $300 billion war chest. $13 billion is a pretty small dent in that, yet Apple have the gall to start banging on about how it might affect jobs in the region. Their spokesperson should have made that claim while driving one of their spare Ferraris into one of their olympic-sized pools filled with cash.