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How Ireland Got Apple's $9 Billion Australian Profit

samzenpus posted about 5 months ago | from the letter-of-the-law dept.

Australia 288

elphie007 writes "An investigation by The Australian Financial Review has discovered how from 2002 to 2013, Apple has shifted approximately $AU8.9 billion of revenue generated in Australia to Ireland, via Singapore. The article states that last year alone, Apple Australia paid only $AU88.5 million in tax, or 0.044% of estimated potential tax liabilities. What's more, the Australian Tax Office has agreed that this arrangement is acceptable under Australian law."

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Don't be so harsh (5, Funny)

hcs_$reboot (1536101) | about 5 months ago | (#46417965)

Apple probably used Apple Maps to locate the tax office.

Ireland got it ? (0)

Anonymous Coward | about 5 months ago | (#46417977)

Was this actually paid to Ireland as tax ? It sounds unlikely.

Re:Ireland got it ? (1)

Anonymous Coward | about 5 months ago | (#46418015)

Quote: Apple Sales International extracts the bulk of Apple’s huge profits on sales outside the United States, which it claims as payments for intellectual property and intangibles. But the Irish-domiciled company has never filed its financial returns with the Companies Registrations Office in Dublin.

It initially filed accounts for its parent company, Apple Operations International, which receives funds only from dividend payments and gives limited visibility into how Apple shifts profits. Since 2003 Apple Sales International has filed no financial reports at all in Ireland.

Nope... money is moved and NO tax is paid....

Re:Ireland got it ? (0, Troll)

Anonymous Coward | about 5 months ago | (#46418051)

Apple are scum.

You should be ashamed if you buy their products.

You should be VERY ashamed if you work for them.

Re:Ireland got it ? (-1)

Anonymous Coward | about 5 months ago | (#46418163)

Why? They may employ what amounts to slave labor to build their products, and skirt the edge of legality to avoid paying taxes on profits, but by God they care for our environment! [cnn.com]

Re:Ireland got it ? (4, Insightful)

jythie (914043) | about 5 months ago | (#46418331)

Be prepared to be ashamed for things you do buy then. Apple tends to get singled out for some reason, but the things it gets criticized for are the norm, any transnational that is not doing them is just hurting itself and becoming less competitive. This is something that can only be fixed if the rules change in a way that effect all the companies, not something that public shaming of individual ones can help.

The norm: we NEED to shame them. (4, Insightful)

Anonymous Coward | about 5 months ago | (#46418811)

Yes, I agree, things do have to change.

BUT people will NOT take notice until you DO start shaming individual companies.

That's how change happens.

Just throwing up your hands and saying, "Oh well, it's the norm. It's got to change." Means nothing to people; which means you are not going to get the political class to do something about it. They'll just keep things the way they are because people won't notice.

People have to get outraged. They have to see INDIVIDUAL companies and INDIVIDUALS who don't pay taxes because of BS like this: see the Forbes 400 for many of the folks who legally dodge taxes because they made up the rules.

So we NEED to shame Apple, Google, GE, HP, IBM, and every other golbal mega corp that shifts profits around the World to avoid taxes. We need people like Warren Buffet to say, "Hey look, my secretary has a higher effective tax rate than I do."

And this bullshit of "well if Buffet doesn't like it, then he can pay more on his own!" doesn't cut it because there are HUNDREDS of other billionaires and centi-millionaires who are getting away it.

We NEED 1950s income taxes again - adjusted for inflation, of course.

Re:Ireland got it ? (2)

StrangeBrew (769203) | about 5 months ago | (#46418769)

Maybe save the shame for the governments that refuse to fix these loopholes. Most refuse to do it because their politicians have direct or indirect ties to companies that would be negatively affected. The big Canadian example was Prime Minister Paul Martin and his family's company Canadian Steamship Lines, that avoided paying Canadian Taxes by running the ships under 'Flags of Convenience'. This wasn't illegal, but that doesn't mean it shouldn't be. And before the biased far left pipes in, I have no doubts Harper also has ties to many companies that wouldn't be happy with him were he to change the tax laws.

Re:Ireland got it ? (4, Insightful)

cheesybagel (670288) | about 5 months ago | (#46418033)

http://en.wikipedia.org/wiki/D... [wikipedia.org]

Ireland uses territorial taxation, and hence does not levy taxes on income booked at subsidiaries of Irish companies that are outside of the state. In the late 1980s, Apple Inc. was among the pioneers in creating this tax structure.

I guess not. They just siphon all the profits using Hollywood accounting over imaginary property to Ireland and stash them in Bermuda.

Apple / Google / etc (0)

mrspoonsi (2955715) | about 5 months ago | (#46417983)

Your tax time cometh, the world has your eye now.

Re:Apple / Google / etc (5, Interesting)

SJHillman (1966756) | about 5 months ago | (#46418085)

I'm not sure that makes any sense. The article is about how this was a perfectly legitimate tax strategy. And if the world has their eye, that means Apple/Google/etc are watching everything... not the other way around.

Re:Apple / Google / etc (2)

Sponge Bath (413667) | about 5 months ago | (#46418301)

...Apple/Google/etc are watching everything

Do you doubt Apple's accountants and lawyers are watching the taxing policies in all countries to minimize their tax burden? iSeeYou.

Re: Apple / Google / etc (0)

Anonymous Coward | about 5 months ago | (#46418607)

You are just getting that. My how tight the binders.

Re:Apple / Google / etc (0, Interesting)

Anonymous Coward | about 5 months ago | (#46418217)

all these companies pay 30% to 40% of their TOTAL PROFITS as taxes around the world. its in their financial statements that they file
the problem with US Tax law and other countries is they want to tax the entire worldwide profits and not just profits in that one country making it very real that a worldwide corporation will have to pay more than 100% of profits as taxes. like in russia

Re:Apple / Google / etc (2)

cheesybagel (670288) | about 5 months ago | (#46418333)

You don't have 'profits' if you had the 'expense' of paying royalties on imaginary property (IP) that is actually 'owned' by an offshore subsidiary of yours. That's what's happening.

Re:Apple / Google / etc (1, Interesting)

CastrTroy (595695) | about 5 months ago | (#46418373)

Why is perhaps why businesses should get taxed on income (aka revenue) like the rest of the tax payers. If I was only taxed on what I couldn't end up spending at the end of the year, I'd have to pay a lot less tax. Actually, I'd make sure that I spent almost all my money (on things that will appreciate in value), which is what businesses end up doing to get around paying taxes.

Re:Apple / Google / etc (-1)

Anonymous Coward | about 5 months ago | (#46418459)

read the article
apple sales int is a paper company. the whole Apple Inc company that owns everything pays 30% taxes on all of its profits around the world to different countries around the world. Same with GE and almost every other company i read about.

yes they shuffle profits, but in the end they pay their fair share. the problem is worldwide tax laws want too much and if you followed the law in every country you operated you would have to pay more in taxes then you have left over after expenses

Re:Apple / Google / etc (2, Informative)

thaylin (555395) | about 5 months ago | (#46418635)

Umm, you should read the article. It does not say 30%, it says 4%. In fact the word, or number 30 is not mentioned in the article at all.

The company is not tax resident in any jurisdiction ... The average tax rate for all jurisdictions in which it operates is approximately 4 per cent.”

But

In its ASIC filings the company reported pre-tax earnings outside the US of $US4 billion in 2009 and calculated that 4 per cent tax would be $US160 million. The accounts show the actual tax paid was only $US3.65 million.

Also

They pay no US tax either because US law disregards where a company is managed and only looks at where a company is legally registered.

Re: Apple / Google / etc (0)

Anonymous Coward | about 5 months ago | (#46418689)

Here is one that don't get it. No they do no pay what a mom and pop local company would pay. A mom and pop pays close to 10% in the states. Any multi national that pays that should find another politician to bribe. They are getting the shaft for what they are paying, and remember you are talking profit,profit comes after taxes and bribes are paid.

Re:Apple / Google / etc (0)

Anonymous Coward | about 5 months ago | (#46418425)

Not quite, but it's a cool thing to imagine.

Good (0)

Anonymous Coward | about 5 months ago | (#46417985)

This is good news, finally a precedent can be set where goods sold in a country is where the taxes will be paid. This could be tricky with e-commerce (internet sales) but this is a very good thing.

Re:Good (3, Insightful)

SJHillman (1966756) | about 5 months ago | (#46418047)

I don't know what summary or article you read, but it concludes that the minimal paying of taxes using this strategy is perfectly legal under both Australian and Irish law. The only precedent is that... business can continue as usual.

Remember Legal != Moral (4, Insightful)

serviscope_minor (664417) | about 5 months ago | (#46417993)

Remember moral != Legal, so just because they were able to cheat, doesn't mean they should. Also, they were under no legal or moral obligation to play silly buggers in order to cheat the Austrailians out of tax.

and yes it's cheating because they get to use all of the resources that Aus provides to allow business to make money the pay for almost none of it. That makes them little more than freeloading scum.

Re:Remember Legal != Moral (1)

Anonymous Coward | about 5 months ago | (#46418031)

The Australian government makes the rules and the tax office implements them.

It seems Apple have complied with the rules.

If a majority of Australians are unhappy with what has happened, the correct response is to change the rules.

Re:Remember Legal != Moral (4, Insightful)

gbjbaanb (229885) | about 5 months ago | (#46418045)

the answer is simply to change the law, stop any tax-sharing agreements with foreign governments that allow super-low rates of tax, or refuse to recognise any "head office" that is little more than a postbox.

I mean, if the government (not just Aus) said "We agree with tax sharing but the tax rate here is 20% (or whatever) then we will recognise the tax paid by Apple Investment Holdings (Bermuda) Ltd at 1%, but we still charge the remaining 19% to the company's revenues made here".

The head office thing can be dealt with just like the EU 1995 directive that was applied to banks after the collapse of the BCCI bank - their HQ has to be in the same place as their registered office. (this is not so they can avoid tax, more that they can be effectively regulated, but I guess it wouldn't hurt WRT tax).

Re:Remember Legal != Moral (4, Insightful)

SJHillman (1966756) | about 5 months ago | (#46418061)

It's not cheating if the ones making the rules (The Aussie government) says it's perfectly legal.

Re:Remember Legal != Moral (5, Insightful)

causality (777677) | about 5 months ago | (#46418131)

It's not cheating if the ones making the rules (The Aussie government) says it's perfectly legal.

It makes me wonder exactly when and how those rules got onto the law books, how they were sponsored, and what relationship the supporting politicians had with the major corporations of that time.

There are lots of ways to cheat that are legally legitimate.

Re:Remember Legal != Moral (1)

locofungus (179280) | about 5 months ago | (#46418399)

The laws are reasonable - they allow costs to be offset when calculating profits.

The problem occurs because
A can sell to B at cost who can sell to C at the price that C finally sells for and the only person making any profit is B.

Perhaps the market is very competitive, A cannot sell above cost. C cannot buy at below the price B will sell at. (obviously in the real world A and C would need to make some profit but it's not inconceivable that A and C are working with margins of less that 5% while B is working with a 40% margin.)

Or perhaps A, B and C are all subsidiary companies of the same parent. It's still possible that A and C are in a very competitive market, or it's possible that the company is artificially moving profits to where they would prefer them to be.

Re:Remember Legal != Moral (1)

thaylin (555395) | about 5 months ago | (#46418683)

except in practice they are going beyond the offsetting costs when calculating profits. An Irish shell company has no costs, its subsidiary has no real cost to license the products, other than an arbitrary number made up for the purpose of making the shell game legitimate. Make it so the costs paid to parent companies, or companies owned by a parent company are not considered costs.

Re:Remember Legal != Moral (3, Insightful)

Alomex (148003) | about 5 months ago | (#46418105)

That makes them little more than freeloading scum.

You are correct. So did MItt Romney when he took advantage of a loophole in the law to move over $100 megabucks to a tax shelter in the Bahamas.

This is all perfectly legal, just like tax breaks and welfare is perfectly legal for people who are poor.

Which of these two did he choose to highlight as immoral? The poor person of course, not Apple's or his own immoral behavior.

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418125)

They have a legal and (I would argue) moral obligation to their shareholders. Now, given Tim's comments this week re ecological initiatives I'd say they're doing a good job of informing their shareholders of what they can expect from Apple stock. Setting up office in Ireland (which is pretty infamous as a tax haven) is another signal to shareholders that Apple intends to increase profits by playing with taxes.

The way they have played with taxes is legal.

If you want to talk about how we got into the situation where ANY company can behave in such an (and I do agree with you here) immoral way then we have to look at the global tax structure, which is a fucking mess.

Re:Remember Legal != Moral (1)

interkin3tic (1469267) | about 5 months ago | (#46418375)

Companies don't have a moral obligation to make every possible cent for their shareholders that they can, nor would a moral obligation to their shareholders trump a moral obligation to society. With morals, there are few absolutes.

I agree that the thing to focus on is the tax structure, but this seems like a good example to illustrate how it is messed up. So we ARE talking about that.

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418463)

"They have a legal and (I would argue) moral obligation to their shareholders."

Repeat after me: there is no legal requirement for companies to maximize shareholder profit. There is no law stating that companies are obligated to maximize profit.

You know, folks trot out that "legal duty to maximize profits!!!" line time and time again, and yet not ONCE have I ever seen the statute given. When asked for a citation, I never get one. Why? Because no such law exists! Stop spouting this nonsense.

captcha: outraged. I'm outraged educated people keep spreading this lie of a legal duty to maximize profits.

Re:Remember Legal != Moral (1)

AmiMoJo (196126) | about 5 months ago | (#46418127)

It's worse because they claim to be a moral organization. Investors were told that environmental considerations come before profit, for example. Just not social considerations, apparently.

Re:Remember Legal != Moral (0)

pla (258480) | about 5 months ago | (#46418603)

It's worse because they claim to be a moral organization. Investors were told that environmental considerations come before profit, for example. Just not social considerations, apparently.

Believe it or not, the rich tend to care more about environmental issues than the poor. It might feel good to say you recycle to "save the planet", but when you can't see a single tree from your 3rd story apartment in downtown slumville, the whole idea amounts to a mere abstraction. When, however, you spend one of your three months of vacation cruising the Caribbean on your private yacht, you very directly and tangibly experience environmental changes caused by human activities.

Rich people don't, however, visit the slums when at all possible, so let the poor eat cake.

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418137)

US law says that the directors have a fiduciary duty to shareholders. So if the directors don't look after Apples money in a way that maximises the return to Apple shareholders then they can be personally liable.

So the way the law if written Apple pretty much have a requirement to behave in this way. The only way you could look at it so they don't, is if the PR consequences leads to lots of people not buying Apple goods, in which case it may be better to pay the tax and avoid the PR disaster. But only because this maximises the return to Apple shareholders.

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418423)

"US law says that the directors have a fiduciary duty to shareholders. So if the directors don't look after Apples money in a way that maximises the return to Apple shareholders then they can be personally liable."

Please cite the relevant law stating that companies are legally required to maximize shareholder profit.

Hint: There is no such law and no such requirement exists.

I really, really wish people would STOP repeating this lie.

Re:Remember Legal != Moral (1)

Lord Lemur (993283) | about 5 months ago | (#46418523)

Further, this initial dispute was over the moral requirement, not any imagined legal requirement. Can we discuss ontopic. I'm really intrested in the rational behind the moral obligation of a corporation to maximize shareholder value above all else.

Re:Remember Legal != Moral (1)

thaylin (555395) | about 5 months ago | (#46418729)

Fiduciary just means they have to take care, not maximize a return.

Re:Remember Legal != Moral (-1)

Anonymous Coward | about 5 months ago | (#46418443)

Of COURSE they should, what the fuck is wrong with you? Nobody "cheats" the state out of taxes because taxes are THEFT. Is it "immoral" to prevent bank robbers from robbing banks? Then why should it be immoral to prevent big government from stealing MY money?

Stop listening to the statist propaganda.

Re:Remember Legal != Moral (1)

Anonymous Coward | about 5 months ago | (#46418569)

Taxes aren't theft. They are a nessacary market ineffiency at worst. Taxes are part of the social contract, things cost money, we all pay for things.

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418739)

I love this angle. Its the most hilarious outlook on taxes ever. I wonder exactly what kind of world they envisage.

Re:Remember Legal != Moral (1)

thaylin (555395) | about 5 months ago | (#46418797)

But I bet you would still want a military to protect you, but without taxes would you like slave labor?

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418567)

> freeloading scum

It's funny how the 1% pay 99% of the taxes but they are the freeloading scum and not the people leeching off the rich to pay for schools, etc.

Re:Remember Legal != Moral (1)

thaylin (555395) | about 5 months ago | (#46418869)

Citation please?

This article shows that they make, as an average, 20% of the income and pay 20% of the taxes, http://www.ctj.org/pdf/taxday2... [ctj.org]

of course that is generally speaking, not specifically speaking. Meaning that those who dodge the taxes in this way are paying lower than that, making them freeloading scum, while the part of the group paying more are making up for their freeloading.

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418661)

You're starting from the presumption that the revenue belongs to government instead of the company. The governments job is set the rules of the tax game. The company's job is to use those rules to play the game the best i can. I'm saying it a bit in-artfully, but Learned Hand explained it well when he wrote:

                      Anyone may arrange his affairs so that his taxes shall be as low as possible;
                      he is not bound to choose that pattern which best pays the treasury. There is
                      not even a patriotic duty to increase one's taxes. Over and over again the Courts
                      have said that there is nothing sinister in so arranging affairs as to keep taxes as
                    low as possible. Everyone does it, rich and poor alike and all do right, for nobody
                    owes any public duty to pay more than the law demands."

I'm not taking issue with the idea that apple should pay tax -- no doubt taxes are "the price we pay for civilized society". But, I've yet to see a government tax code that a reasonable person can comprehend. According to a little CNN money quiz, the 2012 US tax code is "now nearly 74,000 pages long. That's about 185 times longer than it was in 1913, when the code was 400 pages". Over 4 million words (that's 8 copies of War and Peace! I know we're talking about New Zeland and Ireland, but their tax codes are complex as well.

This really seams like a failing on the part of the governments, not Apple.

Re:Remember Legal != Moral (0)

Anonymous Coward | about 5 months ago | (#46418713)

So you voluntarily pay more in taxes than you're required to by law? You don't take advantage of any legal tax deductions when filing your taxes?

You are a special human being.

Nationalism, move over for Corporatism (1, Interesting)

Anonymous Coward | about 5 months ago | (#46418005)

Corporations are simply larger and more powerful than national governments. Their yearly turnover is larger, and they use this financial power to generate more money by bending or just ignoring the rules of governments.

But think of The Economy!

Only Faire! (0)

Anonymous Coward | about 5 months ago | (#46418019)

The prices for Apple gear in Australia are too high so better to move this to Ireland. Come on Ollies! Stop complaining about American gear prices! Faire is faire.

As an Irish person (-1)

Anonymous Coward | about 5 months ago | (#46418041)

I personally welcome our new tax overlords..wait ..what?
All seems like shenanigans to me and I have to wonder what my incompetent government would do with this tax take.

But why wouldn't they? (3, Interesting)

tcopeland (32225) | about 5 months ago | (#46418057)

If you got $500 from writing a tech article, would you rather pay $200 of it in taxes or $2?

Also, doesn't Apple have a duty to shareholders to cough up as little in taxes as legally possible?

Re:But why wouldn't they? (2)

SJHillman (1966756) | about 5 months ago | (#46418107)

I'd rather claim a loss on writing the article and get a $200 refund on top of keeping my $500. But sadly, I don't live in Hollywood so I can't do that.

Re:But why wouldn't they? (0)

Anonymous Coward | about 5 months ago | (#46418193)

If you got $500 from writing a tech article, would you rather pay $200 of it in taxes or $2?

0.044% of $500 is $0.22. No wonder you don't find it immoral if you don't know multiplication.

Math.. (1)

Anonymous Coward | about 5 months ago | (#46418277)

Speaking of being bad at math: If 88.5M = 0.044% then 1% = 2011M, or 2B, and 100% = 200B.

How can Apple be liable for 200B tax on 9B revenue?

Re:Math.. (1)

bondsbw (888959) | about 5 months ago | (#46418317)

Looks about right to me.

--
Verizon account executive

Re:But why wouldn't they? (1)

SJHillman (1966756) | about 5 months ago | (#46418299)

Because math and morality and directly related...

Re:But why wouldn't they? (0)

Anonymous Coward | about 5 months ago | (#46418449)

Not directly related, but they are related via rational thinking.

Re: But why wouldn't they? (4, Insightful)

O('_')O_Bush (1162487) | about 5 months ago | (#46418211)

No, no more than they have a duty to do anything else immoral ( like slave labor in China or dumping waste in some poor country with few environmental regulations ) to boost profits. Their duty to shareholders comes after acting ethically.

And it is unethical. If only those wealthy enough to set up shell corporations and make imaginary tax evasion schemes can participate in evading taxes, but those that can't are forced in the burden of taxation, despite the expectation of the law to be that every company or entity be taxed.

If you accept that there is a duty for all to be subject to the same tax law, which I think we all do (regardless your perspective of tax evasion), then abusing a loophole to keep from paying taxes violates Kant's FUL, and is therefore also logically unethical if you follow Kantian ethics. For Utilitarians, I am sure you could make the argument that the tax evaded dollars serve the evaders far less than the good taxation does for Australia, but I don't follow that regime.

Re: But why wouldn't they? (2)

Alomex (148003) | about 5 months ago | (#46418525)

Actually several legal systems disallow loopholes. That is, when the intent of the law is clear and any normal person could see that the loophole was a missing case in what was meant to be an exhaustive list, then the loophole doesn't apply.

On the other hand one can have a "to the letter" legal system which results in bills 5,000 pages long that still can be abused by anyone employing a sufficiently resourceful lawyer. This seems to be the preferred choice in the USA and several other countries but it doesn't have to be that way.

Re: But why wouldn't they? (0)

Anonymous Coward | about 5 months ago | (#46418657)

Trickle down taxes...

Ethics are not universal (1)

sjbe (173966) | about 5 months ago | (#46418835)

Their duty to shareholders comes after acting ethically.

I agree in principle but the problem with that argument is that it is easy to disagree about what is ethical. Many people see no ethical problem whatsoever with polluting or discrimination or tax avoidance or all sorts of other damaging/problematic behavior. Hell, a lot of people think it is downright heroic to stick it to the tax man. The usual argument for allowing pollution is that it is more ethical to allow pollution than to lose jobs. It might be a poor argument but many people honestly believe that it is the most ethical thing to do. Heck, sometimes there are bigger issues than ethics. I can say all sorts of hateful, wrong and unethical things but my right to free speech is considered more important. Ethics alone (too) often aren't enough of an argument.

Now you and I probably agree that Apple's tax avoidance is probably unethical as far as most of us are concerned and certainly in violation of the spirit of the law if not the letter. On the other hand if the government really wants to collect that revenue they can easily do so with some legislation. The fact that the government allows these loopholes to remain open speaks volumes about the priorities of those in power.

Re:But why wouldn't they? (0)

Anonymous Coward | about 5 months ago | (#46418239)

Profits are not compensation for effort. Profits are what you get owning shares. The equivalent would be if I made 500 $ because YOU wrote the article in Australia. How much value does ownership bring in to the equation? In a world where Jobs is the mega innovator, its all about the share-holders.

Re:But why wouldn't they? (0)

Anonymous Coward | about 5 months ago | (#46418247)

If you got $500 from writing a tech article, would you rather pay $200 of it in taxes or $2?

Also, doesn't Apple have a duty to shareholders to cough up as little in taxes as legally possible?

Is it fair that John Q Taxpayer pays $200 in tax out of $500 that he ears while Corporation X pays $2 because they can hire a bunch of banksters and legal weasels and lobbyists to make themselves effectively exempt from taxes? Is it fair that John Q Taxpayer gets to bail out multinationals and banks while the multinational corporations and banks pay next to no taxes? What these bozos are doing is morally wrong. I know that doesn't mean much to a business oriented person such as yourself, but a lot of people think these corporate assholes deserve to be roasted on a spit for not pulling their weight and I can't say I blame them.

Re:But why wouldn't they? (0)

Anonymous Coward | about 5 months ago | (#46418445)

What I want to know is why isn't Apple liable for US taxes here?

If I leave the country and go work in another one, all money I make is still taxable by the US federal government. Why the fuck should Apple be exempt?

Re:But why wouldn't they? (1)

Anne Thwacks (531696) | about 5 months ago | (#46418493)

Why the fuck should Apple be exempt?

Because they are Apple. No other reason needed.

Re:But why wouldn't they? (1)

smallfries (601545) | about 5 months ago | (#46418505)

Also, doesn't Apple have a duty to shareholders to cough up as little in taxes as legally possible?

You should trying asking that to Tim Cook at a shareholders meeting and see what kind of response you get. Last time he was described as "visibly angry".

Tim Cook is a tax hypocrite (1)

sjbe (173966) | about 5 months ago | (#46418871)

You should trying asking that to Tim Cook at a shareholders meeting and see what kind of response you get. Last time he was described as "visibly angry".

Whatever. This is the same guy that bluntly told congress they were wrong [businessweek.com] to try to collect more tax from Apple. He talks about social responsibility but he only means it if someone else has to pay for it.

Re:But why wouldn't they? (1)

JaredOfEuropa (526365) | about 5 months ago | (#46418645)

Companies are essentially amoral (not the same as immoral!); it's a bit naive to claim that Apple has a moral obligation to pay taxes if they have a legal way to avoid it. You could even argue that they have a duty to their stakeholders (stockholders, employees and customers) to minimize the tax they pay, so they can increase share value, are able to pay higher wages (ha ha...), and lower prices.

The way to fix this is legislation, not a moral appeal. The problem I have with the current tax situation is that these loopholes only get profitable at a certain level because they are not cheap: your $500 and them some will be spent on lawyer and accountant fees if you go for the tax loophole. Large corporations end up paying next to no tax, while small companies pay the full bill. I looked into such a loophole a while ago for a company reporting a yearly profit of around $120k, and the tax benefit did outweigh the costs...but only because this company could make a convincing case for "paying" their holding company for a license on intellectual property. Companies who provide simple goods or services have far fewer options... if my corporate tax ended up at .044% of profits, I'd be a happy man.

Re:But why wouldn't they? (0)

Anonymous Coward | about 5 months ago | (#46418719)

No. Please stop propagating this bullshit "legally must maximize profit". There is no such law. The only thing the Board is legally responsible for is the promotion of the company.

        this supposed imperative to “maximize” a company’s share price has no foundation in history or in law. Nor is there any empirical evidence that it makes the economy or the society better off. What began in the 1970s and ’80s as a useful corrective to self-satisfied managerial mediocrity has become a corrupting, self-interested dogma peddled by finance professors, money managers and over-compensated corporate executives.

And:

        There are no statutes that put the shareholder at the top of the corporate priority list. In most states, corporations can be formed for any lawful purpose. Cornell University law professor Lynn Stout has been looking for years for a corporate charter that even mentions maximizing profits or share price. She hasn’t found one.

        Nor does the law require, as many believe, that executives and directors owe a special fiduciary duty to shareholders. The fiduciary duty, in fact, is owed simply to the corporation, which is owned by no one, just as you and I are owned by no one — we are all “persons” in the eyes of the law. Shareholders, however, have a contractual claim to the “residual value” of the corporation once all its other obligations have been satisfied — and even then directors are given wide latitude to make whatever use of that residual value they choose, as long they’re not stealing it for themselves.

They didn't "cheat". (1, Insightful)

Impy the Impiuos Imp (442658) | about 5 months ago | (#46418063)

Assuming they didn't violate any laws, they aren't "cheating". Go talk to your legislator if you are upset. People enjoy keeping money hey earn.

Also, this type of article should be filed under Slashdot/NPR, as it's about harping on certain political agendas -- let's gather together and reinforce our anger/banding-together memes. AKA politics as intended.

Re:They didn't "cheat". (2)

causality (777677) | about 5 months ago | (#46418149)

let's gather together and reinforce our anger/banding-together memes. AKA politics as intended.

It depends on whether the audience has the maturity to read about an event without automatically getting upset about it. Sadly, most Americans have been conditioned by repeated example to do the opposite. This is highly desirable from the standpoint of the media, because irritated emotions tend to shut down critical thinking.

What about DTAs? (0)

Anonymous Coward | about 5 months ago | (#46418073)

... or 0.044% of estimated potential tax liabilities ...

Double-taxation arrangements mean that a company pays X% tax in Australia and (Z-X)% tax to the foreign country. The idea is that X should be a significant fraction of Z. Otherwise, our politicians have once again given foreigners more rights than voting citizens possess.

With friends like these who needs enemies? (1)

140Mandak262Jamuna (970587) | about 5 months ago | (#46418081)

Australia, Ireland, Singapore etc are supposedly allies of the USA. Two bit countries like Cayman Islands and Lichtenstein help MNCs to shift money around, allow corrupt despots of third world countries to launder their ill gotten money through corruption. They also let MNCs to dodge taxes. Countries like Pakistan and Saudi Arabia are our allies in war against terror.

How long can this go on? Every one from the rich 0.1% of Americans, MNCs, two bit countries, supposed allies are all taking pot shots at America in every which way they can. It is time for the Atlas to shrug. The Atlas is not some super duper individual super achiever. It is the middle class of America that is the only one paying their taxes, and supplying canon fodder.

Re:With friends like these who needs enemies? (1)

Pinky's Brain (1158667) | about 5 months ago | (#46418171)

Australia is the one getting fucked here ... Australia has a trade surplus AND a current account deficit, they're a colony not a country.

At least the USA gets shit for free, you've been running a trade deficit for 4 decades.

Re:With friends like these who needs enemies? (1)

the eric conspiracy (20178) | about 5 months ago | (#46418667)

Free? Have you seen our defense budget? Spent mostly to defend our trading partners.....

Re:With friends like these who needs enemies? (0)

Anonymous Coward | about 5 months ago | (#46418269)

Remember all the Tax Havens are protectorates or territories of the UK, France and the USA. So please stop bitching about how third-world countries suck the poor middle-class USA workers dry and take a bit of introspection. Most of the money laundry operations come from those big names you take pride from (Exxon, Apple, Google, etc). FATF enforces many policies on developing countries, but they deliberately oversee their funding member's dark operations.

Re:With friends like these who needs enemies? (1)

SJHillman (1966756) | about 5 months ago | (#46418315)

I think Ireland would have something to say about being called a territory of the UK.

Happens here in the U.S. too.. (0)

isa-kuruption (317695) | about 5 months ago | (#46418115)

These companies have been doing this for years... Facebook, Apple, Google, etc. There has been news story after news story about this, and yet the same people who complain that the "super rich" and "big" corporations don't pay their fair share of taxes, are the same people who are shifting their tax burden outside of the United States to Ireland or Jamaica or wherever else they can get away with cheaper taxes.

And to make it even more silly, the people who do the biggest complaining about individuals and corporations not paying their fair share are either the Liberal-Progressive CEOs, COOs, and other executives at this big technology firms, or it's the minions that constantly and mindlessly buy their products or use their services which allows them to collect all this money to just shift their tax burden to another country.

Re:Happens here in the U.S. too.. (3, Interesting)

gbjbaanb (229885) | about 5 months ago | (#46418225)

to be fair its a bit more complex than that, the rich do get stung for tax. In the UK you can see the proportion of taxation [hmrc.gov.uk] based on income bands. The top 50% pay 90% of the tax take, the top 5% earners pay 47.9% of the total tax.

Its eye opening how much the wealthier pay towards society compared to the poor. Now I don't mind that so much, except that the super-wealthy tend to have far too much compared to the rest of the population, and the general disparity between income is far to great nowadays, but to criticise the wealthier half of the population because the poor think the rich should pay more is a bit uninformed and a bit selfish.

Still, we need to get rid of these loopholes, make tax simpler, much simpler, and apply it to everyone.

Re:Happens here in the U.S. too.. (4, Insightful)

Electricity Likes Me (1098643) | about 5 months ago | (#46418511)

No the problem is the wealthy are constantly arguing visibly and publicly that the poor are stealing from them, and that they should be allowed to opt out of supporting anyone. For things like food and medicine. Because it the super-wealthy are just so upset at looking at that big tax number on paper (they are not affected in any literal fashion whatsoever - if they were, they'd be middle class...who also are frequently on the list of "people who should pay more" from the super-wealthy).

Take that back! (0)

drainbramage (588291) | about 5 months ago | (#46418267)

I regularly see George Sorros and Warren Buffet at those Obama Soirees.
You know they are only there to help stave off the influence of those tax avoiding small government wackos.

Dual Citizenship (2)

RedEars (1622495) | about 5 months ago | (#46418141)

If I were a dual citizen [Ireland/USA] could I shift all my income earned in the US to my Irish self and pay no taxes? After all, my Irish self needs lots of whiskey money.

Re:Dual Citizenship (2, Insightful)

Anonymous Coward | about 5 months ago | (#46418245)

Actually, the U.S. is one of the few countries who claim the right to tax income of its citizens, no matter in what country it was earned [americansabroad.org] .

Re:Dual Citizenship (1)

SJHillman (1966756) | about 5 months ago | (#46418319)

The US also claims the right to prosecute its citizens for crimes committed in other countries... even if it wasn't a crime in the country it was committed.

Re:Dual Citizenship (0)

Anonymous Coward | about 5 months ago | (#46418321)

With almost a $100,000 tax credit, though.

Get rid of income taxes (0)

Anonymous Coward | about 5 months ago | (#46418161)

The whole idea of taxing income creates this whole issue. If you would stop taxing income, and instead use solely consumption taxes collected at the point of sale (i.e. sales tax) you would eliminate the problem completely.

No need to report income to the government, and in fact, no annual tax income tax forms at all. No rent-seeking behavior of crooks... er.. lobbyists to for special income tax breaks.

Plus, it encourages saving since savings will only be taxes when you spend them.

Re:Get rid of income taxes (1)

Pinky's Brain (1158667) | about 5 months ago | (#46418253)

With the value of labour dropping through the floor due to automation, globalization and peak consumption that would just be a one way ticket to feudalism ... well unless you have some kind of progressive consumption tax.

Sounds Familiar? (0)

Anonymous Coward | about 5 months ago | (#46418165)

Sounds exactly (at least, effectively) like the tax loop-holes in the United States, and, it wouldn't be a surprise, if they were created by the same class of politicians (with similar tax-rates avoided).

Troll Article (-1)

Anonymous Coward | about 5 months ago | (#46418203)

First, how much did Google save in taxes in the same way? Microsoft? Sony? ?

Odd that those numbers aren't discussed.

Second:

What's more, the Australian Tax Office has agreed that this arrangement is acceptable under Australian law.

Translation: "Apple did something entirely legal but the media is going to vilify them because APPLE DRIVES PAGE VIEWS!!!"

*yawn*

The gain for Ireland? (2)

bayankaran (446245) | about 5 months ago | (#46418283)

What's the gain for Ireland?
I am sure they don't see much of the offloaded offshore profits.
So what does Ireland gain - other than may be few employees manning a registered office and may be a miniscule percent of the funds?
Is it a case of something is better than nothing?

Re:The gain for Ireland? (1)

slapout (93640) | about 5 months ago | (#46418323)

Free iPhones for life?

Re:The gain for Ireland? (3, Informative)

rhazz (2853871) | about 5 months ago | (#46418599)

Ireland has corporate taxes, they are just MUCH lower than most other developed countries. So Ireland gains by taxing these corporations. It is extremely lucrative for Ireland because they get billions in tax dollars from the shell company that only has a few employees. The social cost to Ireland is nil compared to the tax revenue, but quite the opposite for Australia.

Re:The gain for Ireland? (0)

Anonymous Coward | about 5 months ago | (#46418677)

Ireland and the Netherlands need to stop doing this shit, they fuck over all the other countries in the EU. When is the EU finally going to take care of this bullshit?

Re:The gain for Ireland? (1)

the eric conspiracy (20178) | about 5 months ago | (#46418605)

> What's the gain for Ireland?

Seems like they get to host $9B. Now consider the mechanics of fractional reserve banking.....

Am I being incredibly stupid here... (1)

Anonymous Coward | about 5 months ago | (#46418289)

because i have been in the past.

"last year alone, Apple Australia paid only $AU88.5 million in tax, or 0.044% of estimated potential tax liabilities"

implying that Apple Australia made $AU200 billion last year?

Re:Am I being incredibly stupid here... (1)

Chrisq (894406) | about 5 months ago | (#46418549)

because i have been in the past.

"last year alone, Apple Australia paid only $AU88.5 million in tax, or 0.044% of estimated potential tax liabilities"

implying that Apple Australia made $AU200 billion last year?

Yes you made a mistake. You correctly calculate (88.5 * 0.044) * 100 million or about 200 billion. What you forget though is that this is the tax liability - not their profit. Since the corporate tax rate in Australia is 30% [ato.gov.au] this means their profit was 200 billion / 30 * 100 or 667 billion odd.

Apple is not a charity (4, Insightful)

MadCow42 (243108) | about 5 months ago | (#46418455)

Apple - nor any corporation - is not a charity. It's not their job to pay more taxes than they legally have to. Their job is specifically the opposite - generate as much value for shareholders as they can.

Any company that pays more than they have to by law should be questioned, or the shareholders should revolt. Actually... I can't think of any example of one that does, intentionally at least.

So - the issue is NOT with Apple - TFS even says that the Australian tax office agrees this is all above board - but the issue is with their tax system. It's structured to allow that, intentionally or not. There are all kinds of tax incentives in the world, and they're all there to encourage the right mix of business development and growth that the region needs. Essentially, tax is used as an incentive to offset the disadvantages that would otherwise naturally be there (labor cost, non-ideal locations, skill levels, etc.).

Don't be mad at Apple... EVERY company does this. Haters be hat'n, I guess. :)

US Patriotism (1)

no-body (127863) | about 5 months ago | (#46418465)

Totally missing on those $-addicts.
Seems to come with their genetics.
Not even sure if the word "patriotism" is the right term here. Maybe patriotism is including to cheat in taxes.
Nevertheless, people hate the taxman because they distrust the receivers - government.
So, it's an ingrained fad to reduce tax payments as much as possible.
Stash it away in Grand Cayman, Switzerland and hope you don't get caught. That's the smaller guys.
The larger whales in this game are doing it legally by feeding part of their stash to "friends" who implement "good rules" for them and don't touch their undertakings.
And there we have it... maximize $$ at any price to the top of the pyramid.

Is the school/university system with all the financial burdens on the future of participants and inequality a consequence of this? Maybe, who knows...

Let's Out-Ireland Ireland (0)

rally2xs (1093023) | about 5 months ago | (#46418517)

Hey, I've got an idea. Lets pass the Fair Tax. The Fair Tax abolishes all income taxes, and replaces it with a consumption tax on new goods for sale, and services. Businesses do not pay the consumption tax. So, all that money flowing into Ireland from the world's tax scams would instead come to the USA, and end up investing in American business, and eradicating things like unemployment and poverty. Yes, we can do this, just pass the Fair Tax. Repeal the 16th Amendment while we're at it, and make federal income taxes impossible forever.

Re:Let's Out-Ireland Ireland (1)

johnsie (1158363) | about 5 months ago | (#46418853)

The US economy requires imports and exports to grow. Keep flipping off other countries and you will very quickly find that your "Fair" Tax only alienates the US economy and causes massive drop in exports. Anti American sentiment around the world is already quite high.
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