Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

forbes.com

Post reply on HN
Print view View original

131–140 of 181 posts

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#131

Post by cmurf »

bpodgursky wrote: post #8

It's great how we're living in a world where tax codes are so idiotic and complex that it takes long lawsuits to figure out what tax is actually due. It's not about following the letter of the law; it's about following the letter of the law, avoiding the court of public opinion, and coughing up whatever is necessary to stop the complaints when some politician wants to distract people from their incompetence and whip…

Corporate profits have to be taxed, either the tax is paid by shareholders (annual pass through like S) or by the corporation (C corporation). Just doing it on cap gains doesn't work because there is no tax unless the asset is sold, and the asset doesn't even have to be sold, it can be borrowed against cheaply and make even more money that isn't taxed at the same rate as earned income.

There's a reason why it's stupid and complicated, it's a political and economic compromise. Compromise is exactly why it's ugly. There is no possible meritocracy here. It won't ever happen, it's politically untenable.

Also, corporations have fought to be recognized as persons when it comes to political free speech, so tough noogies they can pay tax like a person too.

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#132

Post by meanduck »

beatpanda wrote: post #45
iofj wrote: post #29

Earlier quoted context omitted.

We all know the answer. Because all governments feel they should spend that money instead of Apple. And they can take it, so they should. And the more left-leaning part of the aisle has this idea that they will get to decide what that money will be spent on. So they support this. (I'm not rightist, in fact I'm probably extreme left by American standards, but I just don't believe the government is on the people's side…

Yeah, or, Apple benefits handsomely from money spent on their behalf by the federal and local governments (e.g. the roads and public transit infrastructure serving their headquarters, the funding for the public universities and subsidized loans for private universities from which they draw their employees), but apparently doesn't feel any obligation for funding those benefits. It's not about "feeling that they can sp…

> the roads and public transit infrastructure serving their headquarters, the funding for the public universities and subsidized loans for private universities from which they draw their employees

Citizens pay taxes. Citizens get infrastuctures and subsidies.

> it's that government already spent the money, and Apple (and other companies) benefited from it, and now they need to pay their share.

It does not work like that. It has to be explicitly agreed by both parties.

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#134

Post by asuffield »

jph wrote: post #10
bpodgursky wrote: post #8

It's great how we're living in a world where tax codes are so idiotic and complex that it takes long lawsuits to figure out what tax is actually due. It's not about following the letter of the law; it's about following the letter of the law, avoiding the court of public opinion, and coughing up whatever is necessary to stop the complaints when some politician wants to distract people from their incompetence and whip…

What Apple owes is clear to me: pay the standard U.S. corporate tax on the standard U.S. profits. Do the same for all countries. The Apple problem is that its lawyers are deliberately avoiding using current tax codes, and instead essentially claiming that Apple is based in Ireland, then playing shell games with what counts as U.S. sales, U.S. profits, and also U.S. property. Apple ends up paying ~10% U.S. tax, rather…

> Do the same for all countries.

So here's the specific reason why this is difficult in the case under discussion:

The EU runs as a "single market". It is intended to function such that you do business "in the EU" rather than "individually in every country that is part of the EU". There are no tariffs on moving goods between countries in the EU. Having imported something into the EU, you don't then have to pay more tax to sell it in a different EU country.

Except... the tax rates are not fixed across all EU countries. That was a bridge too far for the politicians when this was being set up. So under the rules as written, it's entirely legitimate - and intentional - to pick which EU country you want to operate in and pay your taxes there. This worked fine until some EU countries realised that they could compete against the other ones to offer more favourable tax regimes and attract businesses to themselves.

This isn't really a fight between companies and governments. The companies are the ball being played. This is a fight between governments over who gets to collect how much of the tax (to call it Germany versus Ireland would be unfair but not entirely imprecise). I do not see a way for it to be settled other than agreeing on tax rates being set by the EU, but that is politically challenging at the moment.

> Tim Cook and Apple have an opportunity and moral responsibility to help close these tax loopholes

I strongly disagree. I do not think that US corporations should be trying to settle arguments between EU governments. That is a level of political involvement which seems grossly inappropriate.

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#135

Post by Dylan16807 »

lvillani wrote: post #5
rjayatilleka wrote: post #2

Forbes doesn't even work with an adblocker for the last couple weeks. If you want to hear about the actual settlement, here's a ReCode article: http://recode.net/2015/12/30/apple-to-pay-348-million-to-set... Not sure if the article brings up the same discussion and conclusions as the Forbes one though.

I'm using uBlock Origin and it works just fine.

Same here. Perhaps the fact that I'm blocking almost all third party requests is breaking the anti-ad-blocker feature.

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#136

Post by 1stop »

bpodgursky wrote: post #11
jph wrote: post #10

Earlier quoted context omitted.

What Apple owes is clear to me: pay the standard U.S. corporate tax on the standard U.S. profits. Do the same for all countries. The Apple problem is that its lawyers are deliberately avoiding using current tax codes, and instead essentially claiming that Apple is based in Ireland, then playing shell games with what counts as U.S. sales, U.S. profits, and also U.S. property. Apple ends up paying ~10% U.S. tax, rather…

No! No! No! What you legally owe in taxes, in a reasonable tax structure, has NOTHING to do with your moral compass. You should be able to plug numbers into a spreadsheet and get it. I'm not saying that taxes are bad. We need tax revenue. I get that. But there should NEVER, EVER, be two legally correct answers to how much you owe. The fact that you had to spend paragraphs making your case, makes mine -- when you reso…

Tax is 100% a moral issue. Just as all laws are. There can be multiple legally correct answers because there are different circumstances, that's why we have courts, and not Judge Dredd.

You are preaching utopian idealism, but a high school ethics assignment of "stealing medicine to save your mum" undoes your "one set of rules to apply to everything" point.

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#137

Post by 1stop »

ksec wrote: post #104
junto wrote: post #24

Earlier quoted context omitted.

OK, I'll add another 'no' to you both. If a company is operating in a certain country offering goods and services to the population of that country then that country has the right to levy taxes upon the sales of those goods, and upon the operating profits of that company operating within that country. Global corporations fiddle this by moving money around so it appears that they don't make a corporate profit in that…

But you need to take into account how much some countries are charging for cooperate tax. A stupid insanely huge amount! You have sales tax, then this company invest into the country and hire people, paying rental for stores, advertising and spending. Once you take away all that, the country has to take 35% of your profits? The case for Apple isn't as convincing as they are the most profitable company in the world. W…

No it doesn't need to be fair or reasonable, if you want access to the market - pay the tax. Simple. If you don't think it's fair or reasonable, don't enter the market.

Kind of like saying "I'll only play monopoly if I don't have to pay anyone elses rent, but you pay mine".

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#138

Post by 1stop »

benzoate wrote: post #56
junto wrote: post #44

Earlier quoted context omitted.

Goods and services. In terms of their core business, the money they charge British companies to advertise on the Google network should be taxed and paid to the UK government. I don't understand the problem?

Because corporation tax is a tax on profit. Profit is roughly revenue - expenses. How do you ever reliably calculate Google's expenses for the UK? It's basically always going to be a pseudo made up number between total world wide expenses and 0, and shockingly they declare the highest number they think they can get away with.

No, if there are no expenses in the UK, then their UK revenue IS ALL profit.

If their US company is wearing all the expenses then they get a tax saving there.

They are trying to have their cake and eat it, and declare expenses in high tax regions and profit in low tax regions. Hence Ireland being popular.

It's not complicated unless you actively start trying to move money around to avoid tax, which is what they all do.

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#139

Post by [deleted] »

benzoate wrote: post #56
junto wrote: post #44

Earlier quoted context omitted.

Goods and services. In terms of their core business, the money they charge British companies to advertise on the Google network should be taxed and paid to the UK government. I don't understand the problem?

Because corporation tax is a tax on profit. Profit is roughly revenue - expenses. How do you ever reliably calculate Google's expenses for the UK? It's basically always going to be a pseudo made up number between total world wide expenses and 0, and shockingly they declare the highest number they think they can get away with.

[deleted]

Re: Apple's $348M Tax Settlement In Italy Bodes Ill For Google, Facebook, Microsoft

#140

Post by 1stop »

gozur88 wrote: post #111
luckydude wrote: post #108

Earlier quoted context omitted.

I get the spreadsheet. I get that there should not be two answers. What I'd ask you is where is your moral compass? Where do you think the taxes should be?

Taxes and morality have nothing to do with each other. Individuals and corporations have a legal duty to pay duly constituted taxes. Nothing more.

If taxes and morality have nothing to do with each other, then the answer is simple: Everybody should avoid paying taxes.

But if we borrow a lesson from moral philosophy just to help us with that thought – Descartes universality principle might help us: If everybody (corps, and individuals) avoided tax, would our system still work? Would it be a system that encourages growth (a requirement for capitalist enterprise)? Would our governments revenue system completely dissolve? Thus our governments completely dissolve? Is "Taxes aren't a moral issue" equivalent to "I want pure free market anarchy"?

Great business idea: Create a corporation that represents employees, with offices in every country. It then signs your employment contract, pays you in a 0 income tax territory and does all the same funny money games Apple et al do.

Post reply on HN