Apple 'among largest tax avoiders in US'

calico_pie · 22-05-2013, 18:29

Quote:

Well I'd be pretty certain that Apple were borrowing a shedload too!

So was that the straw that broke the camel's back?
It certainly raised more than a few eyebrows.

I don't really see the relevance.

On the subject of the US Senate questioning if Apple, could you clarify what exactly your criticism of Apple is?

Because I'm a bit confused on that score.

alanwarwic · 22-05-2013, 18:46

Quote:

Originally Posted by calico_pie

I don't really see the relevance....
Because I'm a bit confused on that score.

They saved how many billion dollars in US tax by taking out that loan?

calico_pie · 22-05-2013, 19:04

Quote:

Originally Posted by alanwarwic

They saved how many billion dollars in US tax by taking out that loan?

1. They were perfectly entitled to do that. That was not tax avoidance, because they were under no obligation to use money generated overseas to pay for that.

Its like saying that I avoided VAT today, because I didn't buy anything.

2. That's not what the US Senate case is about.

3. Any company from any country other than the US would be able to repatriate money generated overseas, but not be faced with paying corporation tax twice. (Once in the country of origin, and again in the country of repatriation.

So I'm still unclear what your criticism is [b]in relation to the US Senate case. Could you clarify please?

alanwarwic · 22-05-2013, 19:14

Quote:

Originally Posted by calico_pie

No-one is defending Apple either.

What's it about then? Both Google and Apple are scammy as far as I am concerned.

kidspud · 22-05-2013, 19:38

Quote:

Originally Posted by alanwarwic

They saved how many billion dollars in US tax by taking out that loan?

You mean the didn't pay tax they were not required to pay.

Assuming you have a pension pot, each time you need to borrow money do you expect to take it from your pension pot (and lose the tax advantage) or do you get a low interest line from the bank?

It is as though you don't understand what they did.

calico_pie · 22-05-2013, 19:55

Quote:

Originally Posted by alanwarwic

What's it about then? Both Google and Apple are scammy as far as I am concerned.

I don't think I can explain it any better than I already have:

The US senate's case against Apple is quite different to any case against Starbucks, Google or Amazon here in the UK.

IRS: "I see you have $100bn in a bank account in Ireland".
Apple: "We do indeed".
IRS: "If you move that money to the USA you'll have to pay 35% taxes".
Apple: "We know".
IRS: "So why aren't you moving the money to the USA?"
Apple: "As you said, 35% taxes".

Basically, their issue is that Apple have avoided US corporation tax by not repatriating revenue / profit generated outside to the US back to the US.

That isn't so much a loophole, as just not doing something that no US company operating globally would do anyway, because the US is the only western country that taxes that money. (Pretty much every other country sees corporation tax as territorial, i.e. is paid in the country the money is generated.)

Countries like the UK have a case against Apple on the grounds that Apple are avoiding UK corporation tax by virtue of being based in Ireland.

But the US doesn't seem to have the same case at all, because the Senate's current argument against Apple seems to be that they should either:

1. Pay corporation tax twice - once in the country of origin, and again in the US.

2. Only pay corporation tax in the US.

So the number of jobs created in the US isn't a substitute for the corporation tax, because they are not really liable for that corporation tax unless they repatriate it. And they are under no legal obligation to do so.

All that the Senate are really arguing is that Apple are not paying enough non US corporation tax. But if they were, the beneficiary would be countries like the UK, not the US.

The long and the short of it is that the guilty party in all of this isn't Apple, its the US tax code which places such a heavy penalty on US companies repatriating money earned abroad to invest in the US.

Suppose you were a UK company who sold stuff in the both the UK and the US. Under UK tax law, you would be liable for US corporation tax on profits earned in the US, and UK corporation tax on profits earned in the UK.

You would be free to repatriate profits made in the US (minus US corporation tax) back to the UK without that money then being subject to UK corporation tax, because UK tax law accepts that the revenue was generated in the US, and tax paid in the US.

However, if you were a US company who sold stuff in both the UK and US, under US tax law, you would be liable for US corporation tax on profits earned in the US, and UK corporation tax on profits earned in the UK.

But here's the rub. If you were to then repatriate the UK profit (minus the UK corporation tax) you would then be subject to US corporation tax on that money. Meaning you would be taxed twice - UK corporation tax initially, and US corporation tax if you returned that money to the US.

My understanding is that the US is unique in this (at least in the western world), and that is the real issue that needs to be reformed in the US tax system.

All the stuff about Ireland is a red herring as far as the US is concerned. If those loopholes were closed, the beneficiaries would be countries like the UK, not the US.

calico_pie · 22-05-2013, 19:57

Can I just check that you do realise that they do pay US corporation tax on all profits generated in the US?

But the Senate is trying to argue (wrongly IMO) that they should be obligated to return profits from every non US country and that money be subject to US corporation tax instead of, or in addition to, any corporation tax they pay outside the US.

alanwarwic · 22-05-2013, 19:59

Quote:

Originally Posted by kidspud

You mean the didn't pay tax they were not required to pay. ....It is as though you don't understand what they did.

They were already on a collision course with the US government over untaxed foreign income.

My major concern is that much of it is UK profits with us being top Apple buyers. The fact is that if they had paid UK taxes then there would be less US tax on repatriated money.

Stiggles · 22-05-2013, 19:59

Quote:

Originally Posted by calico_pie

Can I just check that you do realise that they do pay US corporation tax on all profits generated in the US?

But the Senate is trying to argue (wrongly IMO) that they should be obligated to return profits from every non US country and that money be subject to US corporation tax instead of, or in addition to, any corporation tax they pay outside the US.

With your apparent wealth of knowledge on the subjects of all things apple, you should really apply to them for a job since you think you are always correct and everyone else is wrong...

calico_pie · 22-05-2013, 20:02

Let me ask you this Alan.

If you were a UK based company, would you think it fair to sell products in the US, pay US corporation tax, and then be subject to UK corporation tax on any money repatriated to the UK?

Yes or no?

And further, if you were under no legal obligation to return that money to the UK, would you consider that to be a tax avoidance scam, or just good business sense?

Yes or no?

calico_pie · 22-05-2013, 20:05

Quote:

Originally Posted by Stiggles

With your apparent wealth of knowledge on the subjects of all things apple, you should really apply to them for a job since you think you are always correct and everyone else is wrong...

With your apparent inability to post constructively, you should really apply for that Snake Oil Salesman job.

The subject here isn't Apple, its the US tax system.

Same questions as above to you.

(Not that either of you will answer them though.)

Alternatively, if you disagree with anything I've said that you think is wrong, how about explaining what you think is wrong, why it is wrong, and tell us all what you think is right....

(Its a big ask, I know...)

alanwarwic · 22-05-2013, 20:08

Quote:

Originally Posted by calico_pie

Let me ask you this Alan.
If you were a UK based company, would you think it fair to sell products in the US, pay US corporation tax, and then be subject to UK corporation tax on any money repatriated to the UK?
Yes or no?

Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair.

Rules are rules and that is what the US required. You simply can't have companies deciding fairness.

calico_pie · 22-05-2013, 20:22

Quote:

Originally Posted by alanwarwic

Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair.

Rules are rules and that is what the US required. You simply can't have companies deciding fairness.

Sorry Alan, but you are so not understanding this.

Companies are not required to pay 35% in total, between different countries.

They are required to pay tax on the profits made where products are sold.

If you pay US corporation tax on profits generated in the US, you are free to repatriate any remaining profits to the UK without HMRC taxing you again.

alanwarwic · 22-05-2013, 20:28

Quote:

Originally Posted by calico_pie

Companies are not required to pay 35% in total, between different countries.

They are required to pay tax on the profits made where products are sold.

That seems to be US law. No doubt designed to stop dodgy money filtering in via Bermuda etc.

I'm the one trying to understand, not defend.

kidspud · 22-05-2013, 20:29

Quote:

Originally Posted by alanwarwic

Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair.

Rules are rules and that is what the US required. You simply can't have companies deciding fairness.

So do you think you should be forced to repatriate the money, or only do it if you want to?

calico_pie · 22-05-2013, 20:31

Quote:

Originally Posted by alanwarwic

That seems to be US law. No doubt designed to stop dodgy money filtering in via Bermuda etc.

It is the law in the US that any repatriated money gets taxed.

But it is not the law in the US that companies have to repatriate the money.

Could you clarify if you think US companies should be obligated to repatriate all their profits from other countries?

alanwarwic · 22-05-2013, 20:44

Quote:

Originally Posted by calico_pie

Could you clarify if you think US companies should be obligated to repatriate all their profits from other countries?

They can do any crap they want.

The world still takes note.

calico_pie · 22-05-2013, 21:01

You're starting to sound a little hysterical Alan.

Who can do what they want?

Before this gets any more confused could you say:

1. What exactly it is that US companies are required to do by US tax law?

2. What Apple are doing that the US Senate thinks they should not be doing?

alanwarwic · 22-05-2013, 21:14

Quote:

Originally Posted by calico_pie

Before this gets any more confused...

Confusion is your game, not mine.

Roush · 22-05-2013, 21:23

Quote:

Originally Posted by alanwarwic

Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair.

Rules are rules and that is what the US required. You simply can't have companies deciding fairness.

Except that the core issue at the centre of all these corporate tax issues at the moment is that UK law DOES NOT require those amounts to be paid.

There are basic rates of corporation tax, and then a complex structure of allowances, discounts, deferrals, etc.

Plus, there's the fact that it's perfectly legal and operationally acceptable in Europe to account for all business activity throughout the EEA through a single office.

alanwarwic · 22-05-2013, 21:34

Quote:

Originally Posted by Roush

Except that the core issue at the centre of all these corporate tax issues at the moment is that UK law ...

It was US repatriation.
The UK was the confusing hypothetical question.

From news it seems to be US law that that difference is made up to give a grand total of 35%. The US corporation tax rate.

Did claim calico know that when switching his question around to the UK?
We will never know

alan1302 · 22-05-2013, 21:39

Quote:

Originally Posted by alanwarwic

Confusion is your game, not mine.

You don't know the answer so you are pretending not to know

calico_pie · 22-05-2013, 21:44

Quote:

Originally Posted by alanwarwic

Confusion is your game, not mine.

Any confusion is caused by you misinterpreting things and not answering straight questions to help clarify things.

Questions like these:

1. What exactly it is that US companies are required to do by US tax law?

2. What Apple are doing that the US Senate thinks they should not be doing?

alan1302 · 22-05-2013, 21:49

Quote:

Originally Posted by calico_pie

Any confusion is caused by you misinterpreting things and not answering straight questions to help clarify things.

Questions like these:

1. What exactly it is that US companies are required to do by US tax law?

2. What Apple are doing that the US Senate thinks they should not be doing?

It's because he does not know or does not understand. He often waffles on about stuff he seems to have no grasp about and tries to make out the other person is in the wrong.

calico_pie · 22-05-2013, 21:50

Quote:

Originally Posted by alanwarwic

It was US repatriation.
The UK was the confusing hypothetical question.

From news it seems to be US law that that difference is made up to give a grand total of 35%. The US corporation tax rate.

Did claim calico know that when switching his question around to the UK?
We will never know

I switched them round on purpose to highlight how absurd US tax law is.

re: BIB - you've either made that up or misunderstood something.

If a US company repatriated overseas profits, it is required to pay US corporation tax on that money.

However US companies are not required to repatriate that money, no matter how much the US Senate would like Apple to do so.

22-05-2013, 18:29	#51
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by alanwarwic Well I'd be pretty certain that Apple were borrowing a shedload too! So was that the straw that broke the camel's back? It certainly raised more than a few eyebrows. I don't really see the relevance. On the subject of the US Senate questioning if Apple, could you clarify what exactly your criticism of Apple is? Because I'm a bit confused on that score.

22-05-2013, 18:46	#52
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by calico_pie I don't really see the relevance.... Because I'm a bit confused on that score. They saved how many billion dollars in US tax by taking out that loan?

22-05-2013, 19:04	#53
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by alanwarwic They saved how many billion dollars in US tax by taking out that loan? 1. They were perfectly entitled to do that. That was not tax avoidance, because they were under no obligation to use money generated overseas to pay for that. Its like saying that I avoided VAT today, because I didn't buy anything. 2. That's not what the US Senate case is about. 3. Any company from any country other than the US would be able to repatriate money generated overseas, but not be faced with paying corporation tax twice. (Once in the country of origin, and again in the country of repatriation. So I'm still unclear what your criticism is [b]in relation to the US Senate case. Could you clarify please?

22-05-2013, 19:14	#54
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by calico_pie No-one is defending Apple either. What's it about then? Both Google and Apple are scammy as far as I am concerned.

22-05-2013, 19:38	#55
kidspud Forum Member Join Date: May 2010 Posts: 11,501	Quote: Originally Posted by alanwarwic They saved how many billion dollars in US tax by taking out that loan? You mean the didn't pay tax they were not required to pay. Assuming you have a pension pot, each time you need to borrow money do you expect to take it from your pension pot (and lose the tax advantage) or do you get a low interest line from the bank? It is as though you don't understand what they did.

22-05-2013, 19:55	#56
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by alanwarwic What's it about then? Both Google and Apple are scammy as far as I am concerned. I don't think I can explain it any better than I already have: The US senate's case against Apple is quite different to any case against Starbucks, Google or Amazon here in the UK. IRS: "I see you have $100bn in a bank account in Ireland". Apple: "We do indeed". IRS: "If you move that money to the USA you'll have to pay 35% taxes". Apple: "We know". IRS: "So why aren't you moving the money to the USA?" Apple: "As you said, 35% taxes". Basically, their issue is that Apple have avoided US corporation tax by not repatriating revenue / profit generated outside to the US back to the US. That isn't so much a loophole, as just not doing something that no US company operating globally would do anyway, because the US is the only western country that taxes that money. (Pretty much every other country sees corporation tax as territorial, i.e. is paid in the country the money is generated.) Countries like the UK have a case against Apple on the grounds that Apple are avoiding UK corporation tax by virtue of being based in Ireland. But the US doesn't seem to have the same case at all, because the Senate's current argument against Apple seems to be that they should either: 1. Pay corporation tax twice - once in the country of origin, and again in the US. 2. Only pay corporation tax in the US. So the number of jobs created in the US isn't a substitute for the corporation tax, because they are not really liable for that corporation tax unless they repatriate it. And they are under no legal obligation to do so. All that the Senate are really arguing is that Apple are not paying enough non US corporation tax. But if they were, the beneficiary would be countries like the UK, not the US. The long and the short of it is that the guilty party in all of this isn't Apple, its the US tax code which places such a heavy penalty on US companies repatriating money earned abroad to invest in the US. Suppose you were a UK company who sold stuff in the both the UK and the US. Under UK tax law, you would be liable for US corporation tax on profits earned in the US, and UK corporation tax on profits earned in the UK. You would be free to repatriate profits made in the US (minus US corporation tax) back to the UK without that money then being subject to UK corporation tax, because UK tax law accepts that the revenue was generated in the US, and tax paid in the US. However, if you were a US company who sold stuff in both the UK and US, under US tax law, you would be liable for US corporation tax on profits earned in the US, and UK corporation tax on profits earned in the UK. But here's the rub. If you were to then repatriate the UK profit (minus the UK corporation tax) you would then be subject to US corporation tax on that money. Meaning you would be taxed twice - UK corporation tax initially, and US corporation tax if you returned that money to the US. My understanding is that the US is unique in this (at least in the western world), and that is the real issue that needs to be reformed in the US tax system. All the stuff about Ireland is a red herring as far as the US is concerned. If those loopholes were closed, the beneficiaries would be countries like the UK, not the US.

22-05-2013, 19:57	#57
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Can I just check that you do realise that they do pay US corporation tax on all profits generated in the US? But the Senate is trying to argue (wrongly IMO) that they should be obligated to return profits from every non US country and that money be subject to US corporation tax instead of, or in addition to, any corporation tax they pay outside the US.

22-05-2013, 19:59	#58
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by kidspud You mean the didn't pay tax they were not required to pay. ....It is as though you don't understand what they did. They were already on a collision course with the US government over untaxed foreign income. My major concern is that much of it is UK profits with us being top Apple buyers. The fact is that if they had paid UK taxes then there would be less US tax on repatriated money.

22-05-2013, 19:59	#59
Stiggles Forum Member Join Date: Jan 2011 Location: Dundee, Scotland Posts: 9,293	Quote: Originally Posted by calico_pie Can I just check that you do realise that they do pay US corporation tax on all profits generated in the US? But the Senate is trying to argue (wrongly IMO) that they should be obligated to return profits from every non US country and that money be subject to US corporation tax instead of, or in addition to, any corporation tax they pay outside the US. With your apparent wealth of knowledge on the subjects of all things apple, you should really apply to them for a job since you think you are always correct and everyone else is wrong...

22-05-2013, 20:02	#60
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Let me ask you this Alan. If you were a UK based company, would you think it fair to sell products in the US, pay US corporation tax, and then be subject to UK corporation tax on any money repatriated to the UK? Yes or no? And further, if you were under no legal obligation to return that money to the UK, would you consider that to be a tax avoidance scam, or just good business sense? Yes or no?

22-05-2013, 20:05	#61
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by Stiggles With your apparent wealth of knowledge on the subjects of all things apple, you should really apply to them for a job since you think you are always correct and everyone else is wrong... With your apparent inability to post constructively, you should really apply for that Snake Oil Salesman job. The subject here isn't Apple, its the US tax system. Same questions as above to you. (Not that either of you will answer them though.) Alternatively, if you disagree with anything I've said that you think is wrong, how about explaining what you think is wrong, why it is wrong, and tell us all what you think is right.... (Its a big ask, I know...)

22-05-2013, 20:08	#62
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by calico_pie Let me ask you this Alan. If you were a UK based company, would you think it fair to sell products in the US, pay US corporation tax, and then be subject to UK corporation tax on any money repatriated to the UK? Yes or no? Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair. Rules are rules and that is what the US required. You simply can't have companies deciding fairness.

22-05-2013, 20:22	#63
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by alanwarwic Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair. Rules are rules and that is what the US required. You simply can't have companies deciding fairness. Sorry Alan, but you are so not understanding this. Companies are not required to pay 35% in total, between different countries. They are required to pay tax on the profits made where products are sold. If you pay US corporation tax on profits generated in the US, you are free to repatriate any remaining profits to the UK without HMRC taxing you again.

22-05-2013, 20:28	#64
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by calico_pie Companies are not required to pay 35% in total, between different countries. They are required to pay tax on the profits made where products are sold. That seems to be US law. No doubt designed to stop dodgy money filtering in via Bermuda etc. I'm the one trying to understand, not defend.

22-05-2013, 20:29	#65
kidspud Forum Member Join Date: May 2010 Posts: 11,501	Quote: Originally Posted by alanwarwic Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair. Rules are rules and that is what the US required. You simply can't have companies deciding fairness. So do you think you should be forced to repatriate the money, or only do it if you want to?

22-05-2013, 20:31	#66
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by alanwarwic That seems to be US law. No doubt designed to stop dodgy money filtering in via Bermuda etc. It is the law in the US that any repatriated money gets taxed. But it is not the law in the US that companies have to repatriate the money. Could you clarify if you think US companies should be obligated to repatriate all their profits from other countries?

22-05-2013, 20:44	#67
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by calico_pie Could you clarify if you think US companies should be obligated to repatriate all their profits from other countries? They can do any crap they want. The world still takes note.

22-05-2013, 21:01	#68
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	You're starting to sound a little hysterical Alan. Who can do what they want? Before this gets any more confused could you say: 1. What exactly it is that US companies are required to do by US tax law? 2. What Apple are doing that the US Senate thinks they should not be doing?

22-05-2013, 21:14	#69
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by calico_pie Before this gets any more confused... Confusion is your game, not mine.

22-05-2013, 21:23	#70
Roush Forum Member Join Date: Mar 2011 Location: Hertfordshire Posts: 2,938	Quote: Originally Posted by alanwarwic Yes. If I had paid only 2% and UK law requires 35% then the 33% difference is fair. Rules are rules and that is what the US required. You simply can't have companies deciding fairness. Except that the core issue at the centre of all these corporate tax issues at the moment is that UK law DOES NOT require those amounts to be paid. There are basic rates of corporation tax, and then a complex structure of allowances, discounts, deferrals, etc. Plus, there's the fact that it's perfectly legal and operationally acceptable in Europe to account for all business activity throughout the EEA through a single office.

22-05-2013, 21:34	#71
alanwarwic Forum Member Join Date: Oct 2003 Location: the wild world web Posts: 28,132	Quote: Originally Posted by Roush Except that the core issue at the centre of all these corporate tax issues at the moment is that UK law ... It was US repatriation. The UK was the confusing hypothetical question. From news it seems to be US law that that difference is made up to give a grand total of 35%. The US corporation tax rate. Did claim calico know that when switching his question around to the UK? We will never know

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Apple 'among largest tax avoiders in US'

22-05-2013, 21:39	#72
alan1302 Forum Member Join Date: Jul 2008 Location: West Yorks Posts: 6,180	Quote: Originally Posted by alanwarwic Confusion is your game, not mine. You don't know the answer so you are pretending not to know

22-05-2013, 21:44	#73
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by alanwarwic Confusion is your game, not mine. Any confusion is caused by you misinterpreting things and not answering straight questions to help clarify things. Questions like these: 1. What exactly it is that US companies are required to do by US tax law? 2. What Apple are doing that the US Senate thinks they should not be doing?

22-05-2013, 21:49	#74
alan1302 Forum Member Join Date: Jul 2008 Location: West Yorks Posts: 6,180	Quote: Originally Posted by calico_pie Any confusion is caused by you misinterpreting things and not answering straight questions to help clarify things. Questions like these: 1. What exactly it is that US companies are required to do by US tax law? 2. What Apple are doing that the US Senate thinks they should not be doing? It's because he does not know or does not understand. He often waffles on about stuff he seems to have no grasp about and tries to make out the other person is in the wrong.

22-05-2013, 21:50	#75
calico_pie Forum Member Join Date: Oct 2012 Posts: 9,428	Quote: Originally Posted by alanwarwic It was US repatriation. The UK was the confusing hypothetical question. From news it seems to be US law that that difference is made up to give a grand total of 35%. The US corporation tax rate. Did claim calico know that when switching his question around to the UK? We will never know I switched them round on purpose to highlight how absurd US tax law is. re: BIB - you've either made that up or misunderstood something. If a US company repatriated overseas profits, it is required to pay US corporation tax on that money. However US companies are not required to repatriate that money, no matter how much the US Senate would like Apple to do so.