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Irish Government May Close Apple's Biggest Tax Loophole

Soulskill posted 1 year,14 days | from the all-about-the-benjamins dept.

Government 292

DavidGilbert99 writes "Ireland and its tax system came under some extreme scrutiny earlier this year when it was revealed that Apple funneled billions of dollars of revenue though three subsidiaries based in the country. Thanks to a loophole, none of these subsidiaries were tax-resident in Ireland, meaning they didn't even have to pay Ireland's relatively low 12.5% corporation tax rate. Worryingly for Apple, Ireland's finance minister may now shut this loophole. A measure within a new budget bill (PDF) would disallow Apple's status as a 'stateless' corporate entity for tax purposes. Apple will still be able to select a country like Bermuda as its tax residence, but it's a step in the right direction."

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Because Apple (5, Funny)

kommakazi (610098) | 1 year,14 days | (#45136673)

I'm sure no other companies use this.

Re:Because Apple (5, Funny)

Anonymous Coward | 1 year,14 days | (#45136781)

Well, currently, no other "most valuable company in the world" does. You know, because like Highlander, there can be only one.

Re:Because Apple (4, Informative)

Xicor (2738029) | 1 year,14 days | (#45136813)

actually most fortune 500 companies do something like this. they find loopholes in the american taxes by funneling money through other countries, but the other countries have loopholes going the opposite direction so they dont have to pay taxes there either. facebook last year only had to pay 5% in taxes or something.

Re:Because Apple (1)

alexander_686 (957440) | 1 year,14 days | (#45137107)

Which they kind of have to.

When a company does business in two different countries you often have overlapping and contradictory tax rules. Think of it as a compatibility problem. I have seen cases where tax rates go over 100%. In order to fix this broken system a set of kludges are put in place. Which leads to exploitable situations.

Re:Because Apple (0)

Anonymous Coward | 1 year,14 days | (#45137323)

Wish they could tie taxes to the country the services or products are being provided to, somehow. Sell to the U.S., pay U.S. tax; sell to Ireland, pay Ireland tax, and so on. Guess I just reinvented the tariff. But really, even U.S. companies importing their own product manufactured offshore should have to pay it. Instead... we're expanding free trade.

Re:Because Apple (0)

Anonymous Coward | 1 year,14 days | (#45137435)

It is roughly impossible, since taxes are based on profit, not revenue.

So companies simply need to funnel the profits to regions with a low tax rate, and unfortunately, it is essentially impossible to prevent this funnelling. E.g. Assign all of your IP to an Irish company and license it back at a significant royalty rate.

Re:Because Apple (1)

ExploHD (888637) | 1 year,14 days | (#45137445)

When a company does business in two different countries you often have overlapping and contradictory tax rules. Think of it as a compatibility problem. I have seen cases where tax rates go over 100%.

Not quite, since taxes paid on income earned overseas is deductible for a business and individual, but they must take the proper credits/deductions. For example, say you earned $30,000 in Somewhereakstan and the income tax rate is 10%, that means you will pay $3,000 in taxes to Somewhereakstan, leaving you with $27,000. You would then pay the taxes on that $27,000; since the US marginal tax rate is 15%, you would be paying $3604 in taxes to the US government*.

*your rates may vary

Re:Because Apple (0, Troll)

Anonymous Coward | 1 year,14 days | (#45136983)

Apple pays way more tax than Google. And Google also uses way more tax loopholes. But you won't see that on slashdot because timothy and Soulskill will delete it.

And then people wonder why /. is dying and why it's become a joke and why HN and reddit and Techmeme are growing while /. is dead.

Hell, even CmdrTaco doesn't read /. anymore and reads only HN.

This incredible bias and horrible editors is one of the major reasons why /. is so irrelevant today.

Re:Because Apple (5, Informative)

djnanite (1979686) | 1 year,14 days | (#45137085)

Actually, it's the awful commenters that are turning people away. For example, you only had to do a search in the Slashdot Search bar for 'Google Tax' to see half a dozen published stories about Google's tax exploits.

Re:Because Apple (2, Informative)

UnknowingFool (672806) | 1 year,14 days | (#45137005)

Exxon-Mobil, the former most valuable company, does even worse than this. According to Exxon-Mobil, they are a Swiss company (for tax purposes) even though they didn't have offices or personnel in Switzerland. In Apple's case, they are an American company; however, their overseas revenue is recognized in Ireland. Under this loophole, they paid no taxes. What isn't shocking is they've done this for decades and no one has complained until this year.

Re:Because Apple (5, Informative)

Anonymous Coward | 1 year,14 days | (#45137067)

Saudi Aramco, the actual current most valuable company, doesn't pay shit because they basically own the Saudi government, which is a pretty sweet gig if you can get it.

(But no, let's keep pretending that a cellphone manufacturer is the most valuable company in the world because they have the highest market capitalization when you sort everybody on Google Finance.)

Re:Because Apple (1)

Anonymous Coward | 1 year,14 days | (#45137149)

I'm sure apple can do no wrong in your world.

Re:Because Apple (1)

Ryanrule (1657199) | 1 year,14 days | (#45137231)

Apple was the first.

Re:Because Apple (1)

Anonymous Coward | 1 year,14 days | (#45137469)

Apple was the first.

Oh, silly fanboy. I'm sure they just stole the idea from Xerox or something.

Re:Because Apple (4, Interesting)

Charliemopps (1157495) | 1 year,14 days | (#45137361)

Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.

http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=0 [nytimes.com]

Apple literally invented the technique.
Others followed to compete.

Personally, I support any and all means of tax avoidance, so I don't count it against them. But I love bursting Apple Fanboys bubbles.

FFPTBS (-1, Flamebait)

Hognoxious (631665) | 1 year,14 days | (#45136675)

First feckin' post, to be sure!

Re:FFPTBS (0)

Anonymous Coward | 1 year,14 days | (#45136733)

Wrong!

Re:FFPTBS (1)

kommakazi (610098) | 1 year,14 days | (#45136783)

First post after my first post.

Re:FFPTBS (2)

Valdrax (32670) | 1 year,14 days | (#45137307)

Few things sadder than someone who proudly declares that they have nothing important to say and yet who fails to even deliver that simple of a message on time.

Tax Avoidance (5, Insightful)

Anonymous Coward | 1 year,14 days | (#45136679)

I will not speak out about this practice that hurts me indirectly because I am deluded into thinking that any day now I'll be rich enough to make use of it myself.

  - Joe Sixpack Americano

Re:Tax Avoidance (3, Insightful)

PPH (736903) | 1 year,14 days | (#45136827)

I own Apple shares. So in a small way, I already benefit from this practice.

Re:Tax Avoidance (3, Interesting)

MickyTheIdiot (1032226) | 1 year,14 days | (#45136993)

My family owns Apple shares and I think it's wrong.

Re:Tax Avoidance (-1, Troll)

kimvette (919543) | 1 year,14 days | (#45137039)

I am an American and I support Apple's moves on this. If America collected outrageous tax rates on Apple's revenue, our politicians would increase spending by 4-5x that amount. By supporting the "punish $people_who_work_for_a_living" mantra, we are enabling addicts (congress and the white house) to continue their habits (frivilous spending - if the portions of government we shut down are so nonessential, why the fuck did we spend money on them in the first place?).

Re:Tax Avoidance (4, Insightful)

dgatwood (11270) | 1 year,14 days | (#45137075)

Many jobs are nonessential up until they aren't. For example, you don't need the people who inspect aircraft repairs or nuclear power plant repairs to be there every minute of every day, but if they don't do their jobs for a long enough period of time, you get consequences.

Re:Tax Avoidance (1)

ebno-10db (1459097) | 1 year,14 days | (#45137123)

Didn't you get the latest TPM? You're supposed to tone it down a little.

Re:Tax Avoidance (2, Informative)

Valdrax (32670) | 1 year,14 days | (#45137367)

[I]f the portions of government we shut down are so nonessential, why the fuck did we spend money on them in the first place?

What do you do for a living? Could your company survive without you doing your job for a few days? How about a week or a month? Be realistic here -- are you the kind of person who can take vacation without someone else having to do your job to keep everything from falling apart? If not, then do you know people like that?

That's what "non-essential" means. It doesn't mean that the work doesn't ever need to be done. It just means that we can go without it for a short time, like skipping a meal to make sure you can pay rent. Which a lot of furloughed workers may be doing right now, considering how little most civil servants are paid compared to equivalent private sector jobs.

Thousands of shares. (2, Insightful)

Anonymous Coward | 1 year,14 days | (#45137125)

I own Apple shares. So in a small way, I already benefit from this practice.

Unless you own millions of dollars worth of shares, I assure you that the net benefit between your gains on that stock and what you personally have to chip into the US coffers because of companies like this is a negative for you.

If companies like this repatriated the profits that they are stashing overseas, much of our government budget problems would be solved. As it is, you and I are stuck with the bill - contrary to the propaganda on Fox News and Talk Radio.

Yes, the US tax system is THE worst in the World and needs to be reformed (like eliminating the loopholes that allow the very rich to pull shit like this) so that companies don't have to nor feel the need to do this shit. And we need to bring back Eisenhower (Republican) era Income Tax rates. Remember, those were the best times for the US economy so saying that taxes kill prosperity is not true - if anything, it increases it because it stops this obscene disparity of wealth.

Folks, we are currently headed to a Third World economy: very rich and us peons who have no hope to get anywhere. That wasn't true back when the top income tax bracket was over 90%.

3 iFag devices!! (-1)

Anonymous Coward | 1 year,14 days | (#45136697)

Hey guys i'm posting from my iFagPhone 5s while riding Saint Steve's rotting cock. LOL!!

job killing regulations (3, Interesting)

Joe_Dragon (2206452) | 1 year,14 days | (#45136729)

apple will just move to the next free zone

Re:job killing regulations (1)

Desler (1608317) | 1 year,14 days | (#45136751)

How exactly is closing this loophole "job killing"?

Re:job killing regulations (2)

kthreadd (1558445) | 1 year,14 days | (#45136843)

Apple employs a lot of people in Cork, Ireland. They might slow down their presence in Ireland if it doesn't benefit them anymore.

Re:job killing regulations (2)

alexander_686 (957440) | 1 year,14 days | (#45137173)

I don't think so. The tax loophole being closed was for “stateless” profit being generated by intangibles. Its purpose was to lower Apple’s taxes worldwide. So it going to affect some accountants and lawyers but it will not affect “real workers” doing “real work”

The reason is that higher taxes - all things being equal - results in lower investment and thus fewer jobs. Of course not all things are equal. Corporations want high quality government services, such as infrastructure, a education workforce, etc. So it is more of a value thing and a absolute ting. (Still, a consumption tax would be more efficient and kill less jobs then income and corporate taxes.)

Re:job killing regulations (1)

icebike (68054) | 1 year,14 days | (#45136885)

How exactly is closing this loophole "job killing"?

Sometimes reading past the title of the post is helpful. The GP answered your question before you asked it.

Re:job killing regulations (1)

Desler (1608317) | 1 year,14 days | (#45136999)

No he didn't. He merely made an assertion. And Apple will not leave Ireland or kill jobs since the subsidiaries they used weren't even in the country to begin with.

Re:job killing regulations (1)

0123456 (636235) | 1 year,14 days | (#45137089)

And Apple will not leave Ireland or kill jobs since the subsidiaries they used weren't even in the country to begin with.

If they 'weren't even in the country to begin with', why should they be paying tax there?

Re:job killing regulations (0)

Anonymous Coward | 1 year,14 days | (#45137157)

They shouldn't; they should be paying tax in the United States.

Re:job killing regulations (0)

Anonymous Coward | 1 year,14 days | (#45137167)

Having a bullshit satellite office that only employs a dozen people on the corporate side doesn't necessarily count as job creation. The whole Ireland operation is a fucking scam and everyone knows it.

Re:job killing regulations (0)

Anonymous Coward | 1 year,14 days | (#45137101)

And Apple will not leave Ireland or kill jobs since the subsidiaries they used weren't even in the country to begin with.

The people who work at the Apple offices in Cork will be surprised to hear that.

"Job creating" == broken windows (2)

Valdrax (32670) | 1 year,14 days | (#45137417)

Sometimes reading past the title of the post is helpful. The GP answered your question before you asked it.

And then once they move to the next lowest rung on the race to the bottom, what -- are they gonna set up robots there or something?

I tend to find that if the only thing someone can offer in defense of a policy is that it's "job creating," then they damn it with faint praise. Many extremely negative behaviors "create jobs." Pimps create jobs. Drug lords create jobs. People who dump toxic waste create all kinds of jobs in the cleanup. Heck, bureaucratic redtape creates jobs to deal with it all!

Saying something "creates jobs" is nothing more than a prettier version of the broken window fallacy.

They'll just pack up and leave (2, Insightful)

Anonymous Coward | 1 year,14 days | (#45136737)

If you start charing us tax, you'll lose even the tax we're paying you now, because we'll move somewhere else. Err... right, we're not paying any. Oh, oh, I know! Job, if you charge us tax we'll have to fire the two people that earn minimum wage for us in your country! You anti-capitalistic pigs are destroying jobs!

Captcha: avarice - I can haz source code and database of this captcha? I really likez.

Re:They'll just pack up and leave (1)

kommakazi (610098) | 1 year,14 days | (#45136817)

Job, if you charge us tax we'll have to fire the two people that earn minimum wage for us in your country!

Except Apple has a rather large presence in Ireland, not two people earning minimum wage.

Re:They'll just pack up and leave (2)

Desler (1608317) | 1 year,14 days | (#45136835)

The point is that the subsidiaries they are using are not.

Thanks to a loophole, none of these subsidiaries were tax-resident in Ireland,

Linkbait (3, Informative)

Lysol (11150) | 1 year,14 days | (#45136739)

Apple is not the only company doing this. Google does it was well.

Re:Linkbait (1)

MightyYar (622222) | 1 year,14 days | (#45136859)

I think we ought to get rid of corporate tax to end this pointless charade. Tax dividends and capital gains as income and move on with life. It's not all that much revenue, and could easily be made up. As a bonus, if other countries don't follow suit, companies might shift their headquarters to the US.

Re:Linkbait (2, Insightful)

Anonymous Coward | 1 year,14 days | (#45137083)

I think we ought to get rid of corporate tax to end this pointless charade. Tax dividends and capital gains as income and move on with life. It's not all that much revenue, and could easily be made up. As a bonus, if other countries don't follow suit, companies might shift their headquarters to the US.

I do so very much enjoy the primitive thinking that if we just increase the amount of sacrifices and offerings we give to the volcano gods, they'll cast down their blessings on us and save us from our increasing lack of sacrifices and offerings to give to the volcano gods.

Re:Linkbait (0)

Anonymous Coward | 1 year,14 days | (#45137185)

This is the most brilliant and spot on analogy ever used.

Re:Linkbait (1)

MightyYar (622222) | 1 year,14 days | (#45137379)

What in the world is so primitive about taxing the people instead of the pretend economic entity? Are you honestly happy with the current situation?

Re:Linkbait (1)

ShanghaiBill (739463) | 1 year,14 days | (#45136881)

Apple is not the only company doing this. Google does it was well.

Most big companies do this. Why not? It is completely legal. If America wants more tax from companies that employ people in America, they should just raise payroll taxes. That would have the same effect.

Re:Linkbait (4, Insightful)

MickyTheIdiot (1032226) | 1 year,14 days | (#45137033)

This is bullshit. The link between huge corporations and jobs has been use to justify all types of abuses and it's time to move on. The Internet has killed that link. We are shoveling more an order of magnitude more money (at least) towards corporate welfare than we do towards "real" welfare based on that theory. The small business is the only that is going to save he economy of the U.S. because those are the only jobs that are based in communities. The race to the bottom has made many multi-national employees no better off than slave labor. It's time to STOP shoveling money towards he biggest multinationals and taking care of the people that are doing the REAL capitalism, and that's small business owners.

Re:Linkbait (0)

Anonymous Coward | 1 year,14 days | (#45137145)

Ah, but if you raise payroll taxes, then you tax people. If you raise corporate taxes, you only end up costing the magical corporate fairies more money, and no one cares about them!

It's the same basic problem that people have with cutting government spending. If you ask people if the government should spend less, then they almost always agree. If you ask them if a certain program should be cut (or reduced in scope), people almost always disagree. Similarly, if you ask someone if someone else should pay more taxes, they'll almost always agree--especially if you can make the person paying more faceless. If you ask them if they should pay more, they'll almost always disagree.

Re:Linkbait (2)

ak3ldama (554026) | 1 year,14 days | (#45137207)

It goes beyond that. [nytimes.com] Some complaints are legitimate, but things like this are just gaming the system:

Finally, multinationals that invert have an easier time achieving “earnings stripping,” a tax maneuver in which an American subsidiary is loaded up with debt to offset domestic earnings, lowering the effective tax rate paid on sales in the United States.

Most people do not know any of the details of these kinds of operations and so we all must just trust our benevolent job creators. As long as Obama has GE sitting at the table when he calls businesses in to talk about tax reform it'll never go anywhere significantly better for us the little men.

Re:Linkbait (0)

Anonymous Coward | 1 year,14 days | (#45136929)

Apple is not the only company doing this. Google does it was well.

No it doesn't you evil heretic, Google isn't evil.

Re:Linkbait (0)

Anonymous Coward | 1 year,14 days | (#45137241)

Tuppe666 told me it wasn't. That dude is always being modded up, he must be right!

Tax everywhere (4, Insightful)

prestonmichaelh (773400) | 1 year,14 days | (#45136741)

I don't understand why countries like Ireland or Bermuda or wherever don't all just charge a small tax of some kind (like say 5%) that keeps the companies coming there, but gets them tons of money. What does Bermuda get out of having Apple "based" in Bermuda if they don't get any tax revenue? They get no additional jobs or property taxes (except maybe a mailbox rental).

Re: Tax everywhere (1)

Chris (3398759) | 1 year,14 days | (#45136791)

Cartels always break down. Think about it.

Re: Tax everywhere (0)

Anonymous Coward | 1 year,14 days | (#45137437)

Tell it to De Beers

Re:Tax everywhere (4, Informative)

cheesybagel (670288) | 1 year,14 days | (#45136833)

Different countries have different ways of appropriating revenue. Take Russia with their relatively low flat tax. It was made possible in a large part because of the State is being funded by oil tax revenues. In the case of Bermuda they have these low taxes for corporation and individual income but the kick is that land taxes are extremely high and they live on tourism revenues so you get taxed for snorkling, renting a hotel, etc. Monaco has the casino profits. Etc.

Re:Tax everywhere (3, Interesting)

ShanghaiBill (739463) | 1 year,14 days | (#45136841)

I don't understand why countries like Ireland or Bermuda or wherever don't all just charge a small tax of some kind (like say 5%) that keeps the companies coming there, but gets them tons of money.

Because that would quickly turn into a race to the bottom. If Ireland charged 5%, then Bermuda would charge 4%, so Ireland would lower theirs to 3% .... The only Nash Equilibrium [wikipedia.org] is zero.

What does Bermuda get out of having Apple "based" in Bermuda if they don't get any tax revenue?

They get corporate registration fees, and jobs for a few lawyers and administrators. That is better than nothing.

Re:Tax everywhere (1)

icebike (68054) | 1 year,14 days | (#45136989)

There are more than a few jobs. By last year 2,800 staff in Cork [irishtimes.com] alone.

The money brought in by that level of employment may be worth more than some minor tax they might earn if
Ireland changed the tax loophole.

Because Apple need do nothing more than change a couple lines their US tax return to cut that revenue stream
out from under Ireland. So you can bet there will be some small increase in taxes but that increase will be very
small as long as there is a large employment component in Ireland.

Re:Tax everywhere (0)

Anonymous Coward | 1 year,14 days | (#45137337)

They get corporate registration fees, and jobs for a few lawyers and administrators. That is better than nothing.

They can also get extra credit. "Designed by Apple in California. Made in China. Sheltered in Bermuda."

Re:Tax everywhere (0)

Anonymous Coward | 1 year,14 days | (#45137003)

Bermuda has a tiny population, in relation to Ireland,. Ireland couldn't compete, while still running as anything vaguely recognizable as being Ireland.

Bermuda gets plenty of money from servicing overseas companies, which really isn't possible in Ireland as it stands. Apple, as an example, has thousands of employees in Ireland and is running real facilities there. Bermuda in this context is largely a money box being serviced by a relatively small group of professionals. The economics of Bermuda can't scale without serious social repercussions. Remand would be pilloried in the EU if corporate tax dropped to 5%. That's not to say it can't work, with income tax and consumption taxes filling the gap. It'd be difficult to even attempt it. Economically and politically it would be tough. Remember you're comparing a country of 4-5 billion people to a country whose population is less than half of HP's worldwide head count.

Re:Tax everywhere (0)

Anonymous Coward | 1 year,14 days | (#45137261)

I don't understand why countries like Ireland or Bermuda or wherever don't all just charge a small tax of some kind (like say 5%) that keeps the companies coming there, but gets them tons of money.

They do. But the Irish law allows for something called the double Irish Dutch sandwich: http://en.wikipedia.org/wiki/Double_Irish_arrangement [wikipedia.org]

Irish law allows for the creation of a company that is tax resident NOWHERE, because paying 12.5% Irish corp. tax is just TOO DAMN HIGH.

Good (4, Insightful)

msobkow (48369) | 1 year,14 days | (#45136743)

It's about time the multinational thieves got lynched and paid their fair share.

Re:Good (1)

intermodal (534361) | 1 year,14 days | (#45136927)

How, exactly, is direct taxation fair?

Re:Good (0)

Anonymous Coward | 1 year,14 days | (#45137055)

The "double taxation" is an idiotic complaint. Most transactions are taxed along the way in commerce, so why are your precious corporate earnings any different?

Re:Good (1)

intermodal (534361) | 1 year,14 days | (#45137133)

I'm not convinced you read my post before responding.

Re:Good (1)

houghi (78078) | 1 year,14 days | (#45137211)

Please reverse the order. I would love to the the sadness on their faces when they see their families live in poverty right before they hang them.

Re:Good (0)

Anonymous Coward | 1 year,14 days | (#45137475)

It's about time the multinational thieves got lynched and paid their fair share.

Yeah, because governments use the revenue for useful things like NSA spying on their own citizens.

Sorry, no. The government does not NEED any more revenue

More anti-Apple news from /. What about Google? (-1)

Anonymous Coward | 1 year,14 days | (#45136757)

Since /. staff, we're talking about timothy and Soulskill who seem to be working for Google and not /., don't want to cover objectively, here's some real news.

SEC clears Apple's tax strategy... all that "Holy grail of tax avoidance" talk was bullshit and lies.

Apple's tax strategy passes SEC inspection: The technology giant brushed off claims it had the "Holy Grail of tax avoidance" by senior US politicians. Now the US Securities and Exchange Commission has the company's back. [cnet.com]

Let's look at who the real evil company is:

‘Dutch sandwich’ grows as Google shifts €8.8bn to Bermuda [ft.com]

Ahh, so that's where the money is.

Concern about Irish tax reflects disquiet about Google [irishtimes.com]

or this:

Google's UK division paid £12m in corporation tax in 2012 - Google paid only £11.6m in corporation tax in the UK in 2012, despite revenues of £506m, it can be disclosed. [telegraph.co.uk]

But you won't see this on /. because timothy and Soulskill won't get checks from Google if they post about the real evil.

Re:More anti-Apple news from /. What about Google? (0)

Anonymous Coward | 1 year,14 days | (#45137179)

Geez, BasilBrush, why don't you just post under your real account?

What about Microsoft, gOOgle, and fuckface? (0)

Anonymous Coward | 1 year,14 days | (#45136761)

Finally, something is making sense in this world.

worringly? (1)

micahraleigh (2600457) | 1 year,14 days | (#45136771)

Worry implies a person who is worrying.

I hate it when people talk about worry like it's a nebulous, amorphous thing that just sort of sneaks up on this.

Re:worringly? (1)

Zaelath (2588189) | 1 year,14 days | (#45137535)

Corporations are people, my friend!

What an obnoxious and biased write up (-1)

Arker (91948) | 1 year,14 days | (#45136777)

"Apple will still be able to select a country like Bermuda as its tax residence,"

Good.

"but it's a step in the right direction."

What? No it's not.

Now you are free to think it is and make an argument for it if you want, but simply asserting it as if it needed no defense? Please. Corporate taxation is a fraud, it's just extra overhead and expenses paid for by consumers anyway.

A step in the right direction would be expanding tax shelters so that us little people can use them too, not just the big boys.

Re:What an obnoxious and biased write up (1, Insightful)

cheesybagel (670288) | 1 year,14 days | (#45136889)

The fact is corporations need to be taxed because otherwise you would just shift all your assets into a corporation with you as the sole proprietor and pay no tax at all. In fact this is more or less what those CEOs you hear "only take minimum wage" do. They get their income from either bonuses or stocks which are taxed differently. Were they taxed more heavily this would not happen. Meanwhile us chumps can't enter this little shell game. BTW this is one of the arguments for the so called flat tax systems.

Re:What an obnoxious and biased write up (1)

Anonymous Coward | 1 year,14 days | (#45137193)

The people that you're referring to are being paid with stock in the company. If they hold it for more than a specific amount of time before they sell it, it is taxed as capital gains instead of income. Warren Buffet who often proclaims that his secretary pays a higher income tax rate than he does, could easily change that by cashing out his stock based compensation before the capital gains cutoff date. Of course, he doesn't because he doesn't want to pay more in tax.

Re:What an obnoxious and biased write up (1, Interesting)

Anonymous Coward | 1 year,14 days | (#45136907)

A step in the right direction would be expanding tax shelters so that us little people can use them too, not just the big boys.

To draw a parallel, we should just let stateless people wander around and do whatever they please like Apple, rather than confine them to an airport.

Re:What an obnoxious and biased write up (0)

intermodal (534361) | 1 year,14 days | (#45136987)

Amen and amen. You, sir, have a bit of common sense in that head of yours.

Re:What an obnoxious and biased write up (0)

Anonymous Coward | 1 year,14 days | (#45137259)

I'm Irish and have ranted for years about our idiotic corporation non-tax regime. This announcement doesn't close either of the loopholes used by a large number of corporations to choose how much corporation tax they pay here. As your quote directly attests, you will still be able to have an Irish company which is not tax resident in Ireland. It also doesn't change our transfer pricing rules so that the Irish company "paying taxes" in the Cayman's can still always happen to charge the Irish company whatever it wants to to make their Irish corporation tax liability whatever they want. In 2012 Google banked €15.5B in Ireland and decided to increase the amount they payed in corporation tax to €17M. It "boosted its gross profit by 22 per cent to more than €11 billion. Its administrative expenses also jumped by €2 billion, however, wiping out most of the gains in operating profit." Those "administrative expenses" are where they hide the "IP" payments to the subsidiaries who "pay tax" in the 0% tax haven.

All that might change in 2015 (they had to agree to give the accountants enough time to make sure they could re-arrange their tax evasion arrangements) is that Apple might no longer be able to use Ireland as part of its scheme to make itself not pay tax anywhere (i.e. instead it will have to pay 0% somewhere). I'm not really sure anyway what Apple's aim was with this twist anyway, as they could already legally pay nothing on the money it could legally route through it's irish (and dutch) network of companies to its 0% haven of choice, so who cares.

Lets fix our tax code (0)

Anonymous Coward | 1 year,14 days | (#45136831)

If we fixed our tax codes maybe companies and privileged individuals wouldn't constantly be jumping though the loopholes.

Re:Lets fix our tax code (2)

MickyTheIdiot (1032226) | 1 year,14 days | (#45137065)

Tax reform would be fine, but ONLY if we get rid of the corporate loopholes.

Not a Loophole! (4, Insightful)

mythosaz (572040) | 1 year,14 days | (#45137031)

A loophole is unintended.

If anyone thinks that the tax code and the ability to do exactly what Apple (and others) are doing isn't completely intention is an idiot.

Not a US company - Can't lobby (5, Insightful)

Leuf (918654) | 1 year,14 days | (#45137043)

I have no problem with corporations taking advantage of whatever the law allows them to do but there should be consequences. If the government is going to consider a corporation to be like a person with 1st amendment rights and money to be speech, well they are declaring their corporate personhood to not be a citizen, only a resident. Residents don't get to vote, only citizens. If you don't have a vote then you shouldn't have any right to contribute anything to the election process. If you want a voice in the government then pay taxes.

Or maybe, just maybe we quit taxing (1)

MikeDataLink (536925) | 1 year,14 days | (#45137109)

Or maybe, just maybe, we quit taxing the hell out of everything and let everyone keep their money.

Re:Or maybe, just maybe we quit taxing (0)

Anonymous Coward | 1 year,14 days | (#45137183)

.. And then who's going to pay for the roads, sanitation.. aqueducts?

Re:Or maybe, just maybe we quit taxing (1)

WillgasM (1646719) | 1 year,14 days | (#45137223)

Tolls, fee income, etc. I realize it'll never happen, and if it did, it'd probably be just as full of corruption as the current system. But, it works well on paper.

Re:Or maybe, just maybe we quit taxing (1)

tranquilidad (1994300) | 1 year,14 days | (#45137391)

Certainly this varies from country to country, but, in the U.S. roads, sanitation, aqueducts, etc. are paid by local taxes (states, counties and municipalities) and fees.

We (the U.S.) ended up with a corrupt system where the national government takes a lot of revenue from the individual states and then funnels it right back to those states for some of those projects.

The majority of national-level taxes collected and debt incurred in the U.S. go to income redistribution via one program or another.

No such thing as a corporation tax (2)

JoeyRox (2711699) | 1 year,14 days | (#45137111)

The mere semantics of governments calling it a "corporate tax" is disingenuous. A corporation is not an inanimate object separate from humans. An income tax on corporations is really an income tax on people, which include its shareholders, employees, and many times its customers as reflected in the price of products. And since shareholders/employees already pay income tax on their earnings and customers sales tax on their purchases, a corporate tax is really just double taxation. If governments want to have an honest debate about corporate tax they should first be honest about what it really is and who actually pays it. When that happens I suspect there will be less lynching of corporations by the uninformed citizenry.

Re:No such thing as a corporation tax (1)

timeOday (582209) | 1 year,14 days | (#45137359)

There's also no such thing as a corporation. It's just a legal contrivance, just like corporate taxes, and I hate being disingenuous like that. If "corporations are people, my friend!" then why this why this fictitious entity, with its tax liability one one hand, and incredible powers of scapegoating on the other? Just hold the shareholders and executives (i.e. the people who actually receive corporate profits) personally liable for the debts and criminal actions of corporations. I'm sure they'll jump right on board with that plan.

Pay American taxes, or lose American support (3, Interesting)

swb (14022) | 1 year,14 days | (#45137169)

Why does Apple get to lobby the government or expect the support of the government when they won't pay for it?

Maybe the next time Apple has a patent dispute, the Chinese authorities embargo their product at the docks, or the EU starts making demands the US government should tell them to sit down and take a number.

I love how corporations and the rich hate the government and won't pay for it until they need it to do their bidding.

Re:Pay American taxes, or lose American support (1)

Anubis IV (1279820) | 1 year,14 days | (#45137385)

Apple's spending on lobbying is actually one of the lowest among the big tech players, if not the lowest. Quite a bit of speculation on why Washington is putting this pressure on them centers around the idea that it's a form of punishment aimed at Apple for not playing ball with them. Tim Cook seems to be waking up to that fact, since I seem to recall hearing some quotes recently suggesting that he intends to increase Apple's presence in Washington.

And it's not as if Apple is the only one employing this particular tax trick. Google was using it years before Apple. Microsoft too, if memory serves. Go down the list of tech titans, and they're all employing it. The trick has been highly-publicized for several years now. That it's only just now getting attention from Washington is a sure sign that politics are being played for their own ends, rather than Congresscritters looking out for the best interests of their constituents, which would have been better served by addressing this issue years ago when it first became known.

Re:Pay American taxes, or lose American support (1)

ISoldat53 (977164) | 1 year,14 days | (#45137511)

Apple's lobbying cost are so low because Cali politicians are so cheap.

Re:Pay American taxes, or lose American support (0)

Anonymous Coward | 1 year,14 days | (#45137425)

Why does Apple get to lobby the government or expect the support of the government when they won't pay for it?

Apple certainly pays for it. Apple is one of the top corporate income taxpayers in the country, if not the largest. Apple paid $6Billon in US taxes in 2012, which is "1 out of every 40 dollars of corporate taxes the US collected that year." [nytimes.com]

Even if the Irish tax law changes, it will not increase the US tax revenue it collects from Apple. The US does not collect tax revenue from overseas corporate profits unless it is brought into the US. At that time, if and when it comes, the US will tax it, and Apple will pay this second tax on the money (the first tax has been paid in the country in which the profits originate).

Re:Pay American taxes, or lose American support (1)

trackedvehicle (1972844) | 1 year,14 days | (#45137555)

Why does Apple get to lobby the government or expect the support of the government when they won't pay for it?

There is a profound misconception, shared even by intelligent and otherwise well-informed people, and it is that the ultra-rich and powerful people are, somehow, bound by nationality like the rest of us. That's not the case: the powerful US politicians have no allegiance to the US any more than they have to any other country, and would switch places with a prince in Bahrain in the blink of an eye, if they only spoke Arabic. And the bribes they take aren't from US companies only - far from it! International interests are regularly the lobbyists/bribers. Indeed the US armed forces do not protect the interest of the American people as much as they protect the interests of wealthy and powerful people of ANY nationality that has something to win from a war or conflict. All those wars to suppress the "red devil", they clearly weren't in the interest of the American people - they were in the interest of the entrenched international financial elite - as well as anyone who makes profit from arms sales.

Time to: (0)

Anonymous Coward | 1 year,14 days | (#45137189)

DUMP THE STOCK!

But what about community reinvestment? (1)

plopez (54068) | 1 year,14 days | (#45137257)

Didn't we just read a story about that?

Double Irish and Dutch sandwich (0)

Anonymous Coward | 1 year,14 days | (#45137273)

I'll just leave this here

http://www.youtube.com/watch?v=d4o13isDdfY

Corporate tax versus sales tax (1)

scamper_22 (1073470) | 1 year,14 days | (#45137455)

Corporate tax in the global world is very complex.

On the one hand, you have global companies who create products/services in lots of countries.

So where do they 'book' their profits? The ability to choose a place to book profits is something that has to be done.

Now, this of course has resulted in companies doing little/no work in certain countries, yet picking it as the country to 'book' their profits due to the low rate.

This is not a complete game. For example, Apple pays US corporate taxes on the income it gains inside the US. The issue is generally, what does Apple do with the profits it earns outside the US.

Nonetheless, let's say Apple does almost all it's work in the US. Yet, it sells iphones in say India.
I can bet you there are a bunch of Indians who would then see Apple taking their country's money overseas, So they of course think, they should get a slice of Apple's corporate taxes as well

There's no real moral absolute to say that Apple should book it's foreign income earned in India to the US so the US government benefits.

Quite frankly it's a giant game. And almost every loophole probably has a legitimate use case somewhere.

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