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How Apple sidestepped a 2013 crackdown on its Irish tax practices

bbc.co.uk

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Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#201

Post by charlesdm »

nautilus12 wrote: post #38
JumpCrisscross wrote: post #19

Earlier quoted context omitted.

> we should simply make large corporations like Apple actually follow the existing tax laws Apple is in compliance with our tax laws. The laws, not Apple, are the underlying problem.

No, the spirit of the law is effectively being broken. Sidestepping the law does not constitute following it in my opinion. Laws are meant to be guidelines and legal precedent defines its true extent, you cannot make laws extensive enough to cover every scenario. If they make it illegal to offshore money then apple will simply find a way to establish a corporation on the moon. Its clearly demonstrable that they are g…

it's hard enough to interpret the letter of the law sometimes (i.e. ambiguous situations). You might as well have random or no laws then if you have to reflect about the fact whether you're breaking the "spirit of the law". This would mean different things to different people, and things are complex enough as they are.

Also, the spirit of the law argument seems more like a pass to politicians for doing crappy legislative work. If you make proper laws, this shouldn't be an issue.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#202

Post by enraged_camel »

neil_s wrote: post #87
enraged_camel wrote: post #73

Earlier quoted context omitted.

>>Consolidated money is power. The only way that capitalism can work long term is if there are rules actively countering/fighting using that power to change the rules. Yes. This is why I'm in favor of term limits, as well as a rule that outlaws "revolving doors"[1]. https://en.wikipedia.org/wiki/Revolving_door_(politics)

@shhkmo, are you proposing choosing random people off the street to be our elected officials for short terms? That is such an interesting idea!

Right? It would be like jury duty, but with a salary and amazing benefits! Brilliant!

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#203

Post by cortesoft »

aaron-lebo wrote: post #26
colemannugent wrote: post #13

Earlier quoted context omitted.

I see your point about the bad side of capitalism, but consider that this kind of abuse is only possible because the governments allow it. No economic system can live up to its design when corrupt governments interfere with it.

governments allow it corrupt governments interfere with it Are those not in opposition? Another solution is a better breed of business that doesn't see $ as the most important thing in the world, but not sure how you change that. Capitalism can and should be a conduit for innovation without outright greed.

They are in opposition in the same way 'we need to drink water to live' and 'don't drown' are in opposition.

Just because something is bad at the extremes doesn't mean it is always bad. We need a government that steps in to address the well known issues with unfettered capitalism (externalities, tragedy of the commons, etc).

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#204

Post by sliverstorm »

koenigdavidmj wrote: post #88
mrguyorama wrote: post #66

Earlier quoted context omitted.

That depends if you believe tax law should be about checkboxes or about keeping to the spirit of giving back to the community that made you

Yes, I prefer a law where I can take a possible action and judge by the text whether that action is legal or not, rather than always trying to avoid pissing off a fickle public, like trying to avoid waking a husband who drinks too much so you don't get a black eye.

Except tax law is not always capable of being totally black and white. Have you ever had to work through small business or rental deductions on your taxes? Grey areas, grey areas everywhere, at least if you want to take all the deductions & credits you are entitled to. Nobody including the IRS can give you a black and white answer. (Repairs vs improvements, which are deducted differently, is a good toy example)

Part of this I think may actually be intentional, to prevent the accidental creation of technically-legal-but-obviously-exploitative loophole tax strategies. If it's fuzzy, you have to weight your risk of audit, your ability to justify your choice, and so on.

Anyway, in the corporate case there are also fundamentally difficult-to-define areas. For example:

Company A transfers its global IP portfolio to Subsidiary B. B is incorporated in Ireland, but is controlled and managed by directors based in a low corporate tax jurisdiction such as Bermuda, the Cayman Islands or Andorra; crucially, under Irish law, this characteristic renders B tax resident in these havens and therefore subject to their relevant tax legislation. Subsequently, B grants licences to exploit the IP portfolio to Subsidiary C which is incorporated and tax resident in Ireland; it is this link between two Irish subsidiaries which yielded the name “Double Irish”. C is the actual operative unit of the Company A: it owns real estate, it employs workers, it exploits the IP portfolio, it sells advertising and collects payments, ultimately generating earnings. Nevertheless, C does not make profits, as it has to pay royalties to B for the IP licences; crucially, B pays very little corporate taxes because it is based in a tax haven. Thus this structure allows A to shift all profits emerging from its IP portfolio to a jurisdiction where they will not be subject to a significant rate of taxation.

This scheme depends in part upon the ability of the company to set royalties and IP transfer costs at whatever they like, independent of the real value of the IP. Clearly this is not quite right, but what is the real value? Who determines it?

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#205

Post by toomuchtodo »

osteele wrote: post #121
vidarh wrote: post #28

Earlier quoted context omitted.

The thing, though, is that their main "loophole" currently consists of "play chicken with the government until someone passes a tax holiday". If you make it clear there will never be a tax holiday, but that you will instead keep adjusting the rules to go after earnings withheld abroad, at some point the rational choice for them will be to bite the bullet and repatriate the income. As it is, the most rational choice f…

> If you make it clear there will never be a tax holiday, but that you will instead keep adjusting the rules to go after earnings withheld abroad, at some point the rational choice for them will be to bite the bullet and repatriate the income. Another rational choice is to relocate the company, a la Burger King's move to Canada [1,2]. Then the government can counter with tariffs [3,4]. It's a balancing act, though. […

> It's a balancing act, though.

At the end of the day, there is no way you as a corporation can entirely subvert a nation state. I find it odd even that rational individuals think its possible against an adversary (typically with effectively unlimited resources) that can tariff you, dissolve your organization, and even jail you.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#206

Post by charlesdm »

canuckintime wrote: post #4
rrggrr wrote: post #2

If passed, and for a brief period of time, Trump's dollar repatriation tax scheme brings home some of the +2 trillion dollars sequestered abroad - including some of the billions Apple has parked offshore. http://www.businessinsider.com/trump-gop-tax-reform-plan-bil... There's something to be said for Apple's efforts to level the playing field against the favorable tax & public policies under which Samsung and Huawei…

Or the US Congress could just change the law, close the loophole and require corporations to bring the money home anyway without any tax holidays...

Or Apple could reincorporate abroad?

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#207

Post by charlesdm »

_0ffh wrote: post #189
DigitalJack wrote: post #94

Earlier quoted context omitted.

In this case it's not a loophole in American laws. It's a problem with European and Carribean laws. This money was earned abroad. Blame the Irish, and now whatever this Jersey Island place is. The EU made a move to close the loophole, apple found another. I suppose there are loopholes with them selling IP assets to subsidiaries. But that's a different loophole than the one with them floating money around different co…

It's a British crown dependency, and afaik not the only tax haven under British rule. And it seems like there's no much the EU will be able to do about those.

Perhaps this might change after brexit though.

Re: How Apple sidestepped a 2013 crackdown on its Irish tax practices

#208

Post by delinka »

oh_sigh wrote: post #32
rrggrr wrote: post #2

If passed, and for a brief period of time, Trump's dollar repatriation tax scheme brings home some of the +2 trillion dollars sequestered abroad - including some of the billions Apple has parked offshore. http://www.businessinsider.com/trump-gop-tax-reform-plan-bil... There's something to be said for Apple's efforts to level the playing field against the favorable tax & public policies under which Samsung and Huawei…

What exactly is that money doing right now? What would the ramifications be of transferring that money back into the US economy?

If you mean "back into the US," then indeed there is the potential to continue sitting on that money and maybe it won't enter the US economy.

If, however, you do mean to ask "...back into the US economy," then ... jobs. How they choose to place the money into the economy is definitely a question, but ultimately any use should indeed support employment of the labor force. Loan the money out? The borrower puts someone to work. Use it for R&D? Hire humans to perform the research.

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