When was the last time a major corporation went bankrupt for failing to pay its taxes?
Well even if MS are found to be liable for this tax bill, MS has in the region of $100 billion "Cash on hand" so I doubt that they will go bankrupt over this.
Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
171–180 of 334 posts
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#172Earlier quoted context omitted.
You're suggesting that their EU sales shouldn't pay EU income at all, rather US income taxes instead? Usually the criticism of this is the opposite direction, that sales in Germany should pay taxes in Germany.
> You're suggesting that their EU sales shouldn't pay EU income at all, Well, since this is Ireland tax rates we're talking about, this is almost the same thing…
That used to be true, but is no longer. Currently Apple et al pay 12.5% corporation tax in the Republic of Ireland, unlike the past where this rate existed but was notional as most of the revenue was ultimately booked to a real tax haven like Bermuda et al.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#173Earlier quoted context omitted.
Never, because "insider information" is a legal concept that doesn't correspond with what people intuit it means. People wrongly think insider trading is when one party unfairly profits from having important information other investors don't have. Also, sharing "insider information" isn't illegal. In some narrow cases profiting off of "insider information" is illegal, but in most cases it's not.
In which cases is it legal?
Pretty much all cases?
If you're an institutional investor you can just call the CEO or investor relations and ask them tough questions about their business. Sometimes you can figure out within minutes that the CEO is a bozo.
You can visit their offices and talk to the employees. Are they smart and passionate and hard-working, or demoralized and looking to jump ship?
You can also derive material information for instance through freedom of information requests. Is a business being investigated by the SEC? If you write the right letter you can find out based on the kind of form letter you get in response. This information is clearly material (would move the stock if made public) and non-public (the SEC hasn't disclosed its investigation yet) and yet you're free to trade on this information because you derived it and because any investor would have gotten the same response if they had known exactly which magic words to use in their letter to the SEC.
If the CFO leaks the numbers of the quarter and you trade based on that you risk jail time. If you watch the company parking lot and notice that the finance department and CFO stay at work until 11pm in the week leading up to their earnings report you are free to short the stock based on this info.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#174Earlier quoted context omitted.
> "a ton of tax at the relatively high income tax rates there" Firstly, that's not Apple paying income tax, that's their employees. Secondly, they don't pay much in the way of corporation or other taxes that usually apply because of a sweetheart deal (Google also has one IIRC), which is why much of the EU is up in arms about the Irish government's behaviour here, that effectively allows these multinationals to operat…
"Sweetheart deals" are not allowed in the EU, and whether or not there was one in this case is a matter of controversy[0]. In fact the EU courts have decided that there was no breach of law by Apple, though a further appeal maybe yet be made. It's easy to sling around accusations like this, but it's important to check the facts at the same time. [0] https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute
I don't think you've successfully checked any facts.
The GP correctly and idiomatically described a tax deal between RoI and Apple as a 'sweetheart' deal. This is not a legal term of art. The fact that Ireland won its court case and is facing an appeal does not change the fact that something took place which exactly meets the commonly understood definition of a sweetheart deal.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#175The infraction happened in 2004-2013. So that would be over three billion dollars per year. Microsoft’s operating income in fiscal year 2005 was about $15B and in 2013 almost $27B. So you can kind see where the IRS is getting this number: if they believe that Microsoft evaded tax worth about 10-15% of its earnings before taxes, that’s how it would add up to this whopping sum. It seems like Microsoft believes they can…
> The stock price doesn’t seem to be hurting pre-market at all. Big investors will have eyes and ears inside the IRS, so will have known for years about this already.
I think a lot of the market is people pointing at other people as if they had done the due diligence that they couldn't be bothered with, and those people pointing back.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#176Yea hello it’s Mr Smith here from the tax department. I’ve just been reviewing your file and it seems that you are a little short in your tax payments by…… let’s seeeee ……. ummmm …… yes, $29,000,000,000. Can you pay it now please?
"We take credit cards. Now now, Mr. Nardella, no need to get... You say we should ask Mr. Ballmer instead? I'm afraid it doesn't really... Yes, credit cards, cheques, bank transfers. My son does everything with his app, these days, maybe you have one...? I see. So when should I call back? Never, you say? Oh."
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#177Earlier quoted context omitted.
Never, because "insider information" is a legal concept that doesn't correspond with what people intuit it means. People wrongly think insider trading is when one party unfairly profits from having important information other investors don't have. Also, sharing "insider information" isn't illegal. In some narrow cases profiting off of "insider information" is illegal, but in most cases it's not.
> unfairly profits from having important information other investors don't have. It all depends how you come to know the thing, no? If you can infer something from public information others haven't, then bully for you. I'm pretty sure that if that information is not public, then you're liable. IANAL though so I may be wrong.
That's totally wrong.
If you make inferences from non-public information (e.g. talking to the CEO) you can freely trade on that, provided the CEO hasn't shared MNPI with you directly.
Every public company has an Investor Relations department that talks to institutional investors every day. Investors wouldn't bother talking to IR if they could get the same information somewhere else. And these communications are not made public and shared with other investors.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#178Earlier quoted context omitted.
> You're suggesting that their EU sales shouldn't pay EU income at all, Well, since this is Ireland tax rates we're talking about, this is almost the same thing…
That used to be true, but is no longer. Currently Apple et al pay 12.5% corporation tax in the Republic of Ireland, unlike the past where this rate existed but was notional as most of the revenue was ultimately booked to a real tax haven like Bermuda et al.
Glad it changed. It's still a 50% discount compared to most of EU though…
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#179Earlier quoted context omitted.
LOL, like they would ever do that! They will make MS customers pay for it, if they can't convince the IRS to lower the bill significantly, which they probably can.
"if they can't convince the IRS to lower the bill significantly" Why would IRS agree to this? Would the IRS agree to lower your taxes if you pretty-pleased them? Microsoft should not be an exception.
If MS come up with significant technicalities or challenges to the amount due, the IRS will have to choose between litigating each one of them, which both costs them money and involves the risk of losing in court, or coming to an out-of-court agreement with MS.
Obviously if MS don't have anything that won't get laughed out of court, they shouldn't get much of a reduction. If your challenge to your tax bill doesn't involve anything where the rules are hard to interpret and precedent has not been set, you also won't. (If it does, your tax affairs are probably much more complicated than the average citizen. Which is obviously true for Microsoft.)
Worth bearing in mind too that the number might be an optimistic headline figure which has been rounded up in various ways by the IRS, to make themselves look tough, and to encourage MS to settle.
Re: Microsoft SEC 8-K: IRS is seeking an additional tax payment of $29B
#180Earlier quoted context omitted.
Never, because "insider information" is a legal concept that doesn't correspond with what people intuit it means. People wrongly think insider trading is when one party unfairly profits from having important information other investors don't have. Also, sharing "insider information" isn't illegal. In some narrow cases profiting off of "insider information" is illegal, but in most cases it's not.
> unfairly profits from having important information other investors don't have. It all depends how you come to know the thing, no? If you can infer something from public information others haven't, then bully for you. I'm pretty sure that if that information is not public, then you're liable. IANAL though so I may be wrong.
Unfortunately it’s generally more complex than that, at least in US law - simply having material nonpublic information isn’t enough. It really matters how you got the information.
For example, when Hindenburg Research did a ton of research and discovered that Nikola was basically totally fraudulent, they traded extremely relevant information that wasn’t publicly available. Not insider trading.
Similarly, if Warren Buffet invests in a company, he knows that its stock is very likely to go up (just as a result of the halo effect around him). He doesn’t have to disclose that he plans to buy, though.