Apple and Irish government collared over tax deal

[paulrockliffe]

Stormfly1985 said:

I agree it all gets very complex with intellectual property rights but again, with Apple, they are just paying themselves, in effect. I don't have an issue with Apple channeling all their EU sales through Ireland, if they paid the set tax rate that everyone else has to. I DO have an issue with Apple creating pretend companies which aren't registered in any country so they can avoid tax.

But they're not just paying themselves, they're all separate legal entities. One legal entity invented a whole heap of very valuable technology, all paid for by the hard work and cash of that entity, which took all of the risk. It's absurd to suggest that the Irish legal entity should have the use of the results of that investment because they have the same ultimate owner.

Just as taking the piss breaks transfer pricing rules in Ireland, giving the IP away to the Irish entity would create tax avoidance in the US and be no different to a UK company off-shoring it's IP to the Channel Islands etc.

The issue with arrangements like this often is the channeling of sales through Ireland when there are legal entities in other EU countries that are capable of making the sale and in fact are making the sale, but invoicing through Ireland.

[Stormfly1985]

They might be separate legal entities but it's all still Apple at the end of the day.

The board of those fake head office legal entities were all full time Apple employees in other parts of the company.

[greygoose]

sidicks said:

Don't forget the money is still subject to Corporation tax when it is repatriated to the US, so higher EU tax simply reduces the tax due in the US, assuming that a double taxation agreement exists?

That's my understanding, happy to be corrected.

Isn't one of the issues with Apple that it just keeps the money offshore to avoid US taxes and then borrows money to pay dividends?

Link

They can easily afford to pay any tax bill but seem to believe that only little people should pay taxes.

[sidicks]

greygoose said:

Isn't one of the issues with Apple that it just keeps the money offshore to avoid US taxes and then borrows money to pay dividends?

Issue for who - if the money isn't repatriated to the US then no tax is due.

greygoose said:

They can easily afford to pay any tax bill but seem to believe that only little people should pay taxes.

Until they repatriate the money to the US there is no tax bill to pay...

[turbobloke]

sidicks said:

greygoose said:

Isn't one of the issues with Apple that it just keeps the money offshore to avoid US taxes and then borrows money to pay dividends?

Issue for who - if the money isn't repatriated to the US then no tax is due.

greygoose said:

They can easily afford to pay any tax bill but seem to believe that only little people should pay taxes.

Until they repatriate the money to the US there is no tax bill to pay...

So far nobody has admitted paying more personal tax than is due, maybe a volunteer will come forward. I have to admit, when faced with corporate and individual tax bills I've always paid the amount due and no more.

[JMGS4]

I find it rather supercilious of Jean-Claude J(DR)uncker to try and force such a "fine" through when the drunken idiot was the main man in organising just such deals when he was Finance Minister of Luxemberg, see LuxLeaks.....
2 faced lying swine and drunkard.....i.e. typical politician trash similar to bLIAR

[Welshbeef]

JMGS4 said:

I find it rather supercilious of Jean-Claude J(DR)uncker to try and force such a "fine" through when the drunken idiot was the main man in organising just such deals when he was Finance Minister of Luxemberg, see LuxLeaks.....
2 faced lying swine and drunkard.....i.e. typical politician trash similar to bLIAR

He is so similar to McDonnell it's scarey.

[RYH64E]

sidicks said:

Don't forget the money is still subject to Corporation tax when it is repatriated to the US, so higher EU tax simply reduces the tax due in the US, assuming that a double taxation agreement exists?

That's my understanding, happy to be corrected.

If the money is repatriated to the US, my understanding is that it isn't.

[sidicks]

RYH64E said:

If the money is repatriated to the US, my understanding is that it isn't.

It isn't currently.

[Mrr T]

ninja-lewis said:

Mrr T said:

hidetheelephants said:

The EU engaging in a fingerwagging exercise over the Irish government's sweetheart tax deal with Apple; the disputed tax could amount to 19bn euros. Does this mean the EU will investigate the likes of Vodafone etc with regard to tax deals in the UK?

Edited by hidetheelephants on Tuesday 30th August 05:35

There is no dodgy deal with Vodaphone to investigate. It’s a myth and legend made up by self-serving left wing politicians and newspapers. Two minutes google will reveal all.

Indeed. There is a certain irony in that the whole reason for no tax being due in the Vodafone case was the European Commission determining that the UK's Controlled Foreign Company rules were incompatible with the EU's freedom of association principle.

Clearly google is not your friend. The decision to drop the claim by HMRC was based on HCJ decision on a similar case. Nothing at all to do with the Commission.

[RYH64E]

turbobloke said:

So far nobody has admitted paying more personal tax than is due, maybe a volunteer will come forward. I have to admit, when faced with corporate and individual tax bills I've always paid the amount due and no more.

I dislike tax in all it's forms and pay as little as I can get away with, but I can think of no good reason why the EU would (or should) allow a situation to develop where particular countries within the EU encourage international companies to locate there by offering very low rates of tax. Nor do I think they'll allow soon to be ex-members to enjoy free access to the single market whilst simultaneously offering preferential tax rates and thereby undermining the basis of the EU corporation tax regime. Why would they do that?

As far as rates of corporation tax are concerned, I pay 20% as do most other UK companies, I also pay employers NI (the most iniquitous tax of all imo) and punitive business rates, whilst I'd like to see all of these taxes cut I wouldn't be happy to see our government offering preferential rates to particular companies without offering the same deal to others. If it's true that a handful of Irish companies pay less than 1% CT that's grossly unfair on the majority who pay (a still low) rate of 12.5%. I understand that the country most likely benefits from a raft of other taxes paid by the companies enjoying preferential rates of CT, but the other companies also pay these taxes on top of their CT.

[greygoose]

sidicks said:

greygoose said:

Isn't one of the issues with Apple that it just keeps the money offshore to avoid US taxes and then borrows money to pay dividends?

Issue for who - if the money isn't repatriated to the US then no tax is due.
..

Carl Icahn, when he was a shareholder, frequently stated that Apple should return money to investors rather than gathering it with seemingly no purpose beyond hoarding a huge sum of money.

[sidicks]

greygoose said:

Carl Icahn, when he was a shareholder, frequently stated that Apple should return money to investors rather than gathering it with seemingly no purpose beyond hoarding a huge sum of money.

I guess it's what the majority of shareholders want that matters?

And they can always sell their shares if they don't like the way the business is run!

[Welshbeef]

sidicks said:

I guess it's what the majority of shareholders want that matters?

And they can always sell their shares if they don't like the way the business is run!

They could really overpay their defined benefit pension especially the Execs to ensure there is no deficit.

[toppstuff]

Contrary to popular opinion, I think this case sucks. The EU are arrogant fools.

They don't go after Luxembourg because that corrupt drunk Juncker is in charge.

They don't go after Airbus for de facto state aid.

They don't go after IKEA.

They don't go after BNP Paribas.

They don't go after Deutsche Bank.

But they do go after the Americans and retrospectively reinterpret laws to do so.

This is politics. Pure and simple. The EU could well regret this.

[Rude-boy]

toppstuff said:

The EU could well regret this.

If TTIP was not dead before this it is now.

Following on from the Brexit Vote I see this as potentially mortal wound No.2.

The way that things are going we will not need to invoke Art.50, just catch as many of the rats as they try to escape the sinking ship.

The only question is does the USA really want to see break up the EU and leave itself to fight China and Russia on it's own?

[bobbylondonuk]

Just wondering.....

could apple base themselves in UK for 15% corp tax and route all non US business through UK? The import tariffs and any other local taxes in various countries would be built into the local sales pricing. So technically all local sales taxes for each unit and any import taxes based on import cost will be fed through to relevant jurisdictions on a per unit basis. The local distributors/subsidiary companies will have revenue coming from Apple UK to cover their costs plus tiny margin. All sales revenue will come to UK. Pay 15% on the profit figure.


Same could apply to any large corporate who wants to get out of the EU nonsense? even with WTO tariffs we are talking less than 5% import costs, but you can get rid of so many other administrative garbage and still come out ok in the long term. And this is for worst case Brexit scenario. Any thing better is more profit and less headache!

[CaptainSlow]

bobbylondonuk said:

Just wondering.....

could apple base themselves in UK for 15% corp tax and route all non US business through UK? The import tariffs and any other local taxes in various countries would be built into the local sales pricing. So technically all local sales taxes for each unit and any import taxes based on import cost will be fed through to relevant jurisdictions on a per unit basis. The local distributors/subsidiary companies will have revenue coming from Apple UK to cover their costs plus tiny margin. All sales revenue will come to UK. Pay 15% on the profit figure.


Same could apply to any large corporate who wants to get out of the EU nonsense? even with WTO tariffs we are talking less than 5% import costs, but you can get rid of so many other administrative garbage and still come out ok in the long term. And this is for worst case Brexit scenario. Any thing better is more profit and less headache!

No the way it would work is that the manufacturing entity would sell to the UK entity. The UK entity would then sell to distributor entities around the world who would in turn sell to local customers. UK entity would pay minimum acceptable levels to the manufacturing entity for the inventory whilst charging maximum acceptable levels to the distributor entities. Distributor entities would make minimal margins.

[bobbylondonuk]

CaptainSlow said:

bobbylondonuk said:

Just wondering.....

could apple base themselves in UK for 15% corp tax and route all non US business through UK? The import tariffs and any other local taxes in various countries would be built into the local sales pricing. So technically all local sales taxes for each unit and any import taxes based on import cost will be fed through to relevant jurisdictions on a per unit basis. The local distributors/subsidiary companies will have revenue coming from Apple UK to cover their costs plus tiny margin. All sales revenue will come to UK. Pay 15% on the profit figure.


Same could apply to any large corporate who wants to get out of the EU nonsense? even with WTO tariffs we are talking less than 5% import costs, but you can get rid of so many other administrative garbage and still come out ok in the long term. And this is for worst case Brexit scenario. Any thing better is more profit and less headache!

No the way it would work is that the manufacturing entity would sell to the UK entity. The UK entity would then sell to distributor entities around the world who would in turn sell to local customers. UK entity would pay minimum acceptable levels to the manufacturing entity for the inventory whilst charging maximum acceptable levels to the distributor entities. Distributor entities would make minimal margins.

yep...same effect. all profits will stay in UK. If I was a multi national, i would choose the UK over any other jurisdiction for 15%. there are smaller tax havens out there, but nothing the size of the UK consumer market plus low rates of taxation.

If only we could lower employer NI as well and it would appear like the red carpet without even talking about it!

[johnfm]

Corporation tax. Paid by shareholders, employees and customers really.

Do away with it, simplify the tax code and make up the shortfall with consumption taxes.