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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

#311

Post by nautilus12 »

lucio wrote: post #256
nautilus12 wrote: post #71

Earlier quoted context omitted.

mrguyorama I agree 1000% and most reasonable people should as well. The technical letter of the law should not matter as much as the spirit of the law!

Then you're at the mercy of the judge. That's a very bad scenario. With literal interpretation, the legal system is way more previsible. What if the literal interpretation create unfair loopholes? Then you change the law.

Not in this case. They have created a complex tax haven out of juggling around entities and IP's. We should NOT expect the law to have a specific technical description of this, and they shouldn't be around to get around the law just because they created a new scenario. In this case we should just use the obvious determination that its clearly they are trying to dodge taxes, rather than try to change to law to account for every possible scenario they could come up with.

Specific laws don't preclude the ability to use common sense and judgement, and the law shouldn't be expected to explicate every possible permutation in order to be enforceable.

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

#312

Post by nautilus12 »

tryingagainbro wrote: post #191
nautilus12 wrote: post #183

Earlier quoted context omitted.

So why can't this be a scenario of the state charging Apple with tax evasion and the state proving beyond a reasonable doubt that this was their intention?

It's not evasion. They're paying everything they're legally required to pay. If the state proves that they didn't pay what was required by law, they'll pay it, with penalties.

To the extent of the law as it currently exists, but for the artificial scenario they have created the law is ambiguous and we shouldn't expect the law to be exhaustive of every possible permutation. We should be able to use common sense judgement to say they are clearly creating these complex scenarios to just avoid paying taxes.

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

#313

Post by nautilus12 »

deadmetheny wrote: post #222
nautilus12 wrote: post #8

Earlier quoted context omitted.

So you are saying that rather than taxing the middle class more that we should simply make large corporations like Apple actually follow the existing tax laws? Owing to its source it doesn't sound like this idea is going to be popular on hacker news, in spite of its blatant rationality.

>it doesn't sound like this idea is going to be popular on hacker news, in spite of its blatant rationality An hour later, this statement is proven hilariously accurate given the number of "rules as written having loopholes doesn't mean anyone's breaking the law" replies to this post.

Right?

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

#314

Post by nautilus12 »

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...

You cannot close the loophole, they will just create another one. In cases like this we (meaning the judicial system and society as a whole) should be able to use judgement and just say that its clear they are creating these complex scenarios to avoid paying taxes.

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

#315

Post by mattnewton »

crdoconnor wrote: post #296
mattnewton wrote: post #292

Earlier quoted context omitted.

My argument is that since apple can move the price, if you tax the company they increase the cost of the phone as much as makes sense and eat the rest. If you tax the phone, they leave as much as the increase on the cost to the end user as makes sense and lower the price beyond that, eating it. In neither case are profits or demand going to zero.

>if you tax the company they increase the cost of the phone Raising your prices in response to not making as much profit as you desired is not often a winning move in business.

And a tax on the phone does this, so they either lower the cost and eat it, or suffer the same fall in demand as when the price of the phone increases to protect their margins.

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

#316

Post by MichaelGG »

opo wrote: post #247
MichaelGG wrote: post #230

Earlier quoted context omitted.

Huawei and Samsung seem to be operating in the US just fine.

Oh, would you then also force Samsung to pay US taxes on all profits it made in Korea and elsewhere? The same for Huawei and the profits it makes in China? For obvious reasons, no other developed country in the world has a corporate tax system like the US. We should try to reform it, not make it worse.

Exactly. I honestly do not understand how people think Apple is evading US taxes on overseas sales. Seems like any real way of taxing them on it will be a bad solution and advantage foreign companies.

A lower repatriation rate seems like a good idea to get money back into the US for local spending as well as collecting a bit in taxes.

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

#317

Post by nautilus12 »

vixen99 wrote: post #102
RingwormOne wrote: post #24

Don't fault corporations for exploiting legal loopholes to save money... They optimize what they must optimize as operating businesses, and if we the citizens want to compel them to do something we must pass the laws necessary to do so... Stop moralizing the behavior of companies. They aren't humans. If you choose not to buy apple products in reaction to their behavior, great. If you want to convince your friends to…

Be interesting to have a head count of those who following current tax rules, do not seek to minimize their tax bill. Tax authorities whereever, are certainly vigilant in maximizing it.

Be interested to see a head count of those who's income rivals that of a small country. In fact, id wager that the average middle income individual is held to a greater level of scrutiny and is called out on its attempts to minimize their tax bill than most mega large corporations like Apple due to its ability to hire lobbyists and lawyers to make the problem go away.

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

#318

Post by MarkMc »

DINKDINK wrote: post #31

Point of debate: Why should Apple have the US government lay claim to the revenue/profits that it generates in non US countries? From the article: "This allowed Apple to funnel all its sales outside of the Americas - currently about 55% of its revenue - through Irish subsidiaries that were effectively stateless for taxation purposes, and so incurred hardly any tax." If you support the taxation, do you also support th…

Although most of its sales are outside the US, I believe that in reality Apple generates the vast bulk of its profit in the US - specifically in California.

Let's say an iPhone is sold in the UK, generating a $200 profit. How much of that profit was really generated in the UK and how much in the US? The answer is to consider what would happen if Apple's US and UK operations were two distinct, independent companies: Apple in California would determine almost everything about the way iPhones are sold in the UK - where the Apple stores are located, what the stores look like, what their TV and billboard advertising should look like, what happens when a customer returns a product, etc. Apple US would then take this list of requirements and negotiate with a UK business partner. In that negotiation the UK partner has very little leverage - if the UK partner doesn't like terms Apple US is offering, Apple US can just find another partner. The UK partner then sells phones according to Apple's specification. The result is that the UK partner will have thin margins and almost all profit will flow back to the US.

Now perhaps I'm being hard on Apple's UK employees - maybe they are doing more than simply working to a specification given to them by their California colleagues. In this case it would be fair to say that a somewhat larger portion of that $200 is actually generated in the UK - so the total tax Apples pays on that $200 profit would be a combination of US and UK tax rates. But there is absolutely no reason why Irish tax rules should apply to the allocation of profit on the sale of an iPhone in the UK.

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

#319

Post by davidgay »

alasdair_ wrote: post #215
toomuchtodo wrote: post #205

Earlier quoted context omitted.

> 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.

>At the end of the day, there is no way you as a corporation can entirely subvert a nation state. There are countless examples of this happening, from the East India Company (who essentially ruled India for a century) to the United Fruit Company to present-day Shell Oil.

The relevant link for the "East India Company" would appear to be: https://en.wikipedia.org/wiki/East_India_Company#Regulating_...

The first sentence there ends with "this clearly established Parliament's sovereignty and ultimate control over the company". So not a very convincing example of company independence over its host nation.

[Influence and control over another, relatively weak country is clearly a separate issue, but that's not always clearly separable from the host country's influence]

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

#320

Post by [deleted] »

toomuchtodo wrote: post #218
alasdair_ wrote: post #215

Earlier quoted context omitted.

>At the end of the day, there is no way you as a corporation can entirely subvert a nation state. There are countless examples of this happening, from the East India Company (who essentially ruled India for a century) to the United Fruit Company to present-day Shell Oil.

Can you provide an example present day of a company successfully subverting the US government? To my knowledge, they're even pursuing companies successfully outside of their jurisdiction (Kim Dotcom/MEGA).

[deleted]
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