12 ms·
Apple is a particularly difficult case, because they control every link in the chain of supply from manufacturing to retail and pay less than 1% effective corpo
by exDM69 11y ago
Apple is a particularly difficult case, because they control every link in the chain of supply from manufacturing to retail and pay less than 1% effective corporate tax from their profits. From every step of the supply chain.
It is very difficult, if not impossible, to compete with Apple without having a similar end-to-end control of manufacturing to retail. If a company has to purchase their products from a manufacturer or sell their product to a 3rd party for retail, they are losing to Apple because that flow of money can't be hidden from the tax man.
Europe is currently facing major financial issues and a significant portion of this is that money gets funneled away to the US (or offshore accounts of US corps) without the fair share of taxes of their profits left here.
- jkahn 11y agoIt's certainly not a level playing field when competing against a multinational like Apple. It's also hard for countries to enforce competition rules (e.g. Anti-dumping)..
- guard-of-terra 11y agoApple sells a huge number of physical devices - phones and tablets. They created a new market, and now governments are able to collect VAT and sometimes customs tariffs on all those smartphones. Why not let Apple have what's left?
- coldtea 11y ago>Why not let Apple have what's left? Because other businesses also create products that collect VAT and still pay their taxes. Why should Apple be any different? To promote those that are big enough to avoid taxation to make them even bigger?
- newjersey 11y agoApple pays VAT and all the taxes it is legally obliged to pay. Don't blame Apple. They will pay the least amount they have to pay. Fix the loopholes.
- baldfat 11y ago100% Right fix the laws. This is horrible and the Rich pay round 10% tax rate (They argue they pay so much? They pay a ton in taxes but in terms of percentage they pay less than most people) Th
- kmkemp 11y agoExcept that the reason the loopholes exist is because of the lobbying of companies that take advantage of them.
- caskance 11y agoThe fact that companies are able to create loopholes via lobbying is the problem. When you accept corrupt government as an unchangeable fact of nature, you've already conceded defeat.
- saiya-jin 11y agoor... you might become a realist, and maybe try to come up with solutions applicable in real world, on real people and real situations. I'm not claiming I know what the solutions are. But I am damn sure theoretical solutions for theoretical situations tend to fail spectacularly in reality, no matter what topic they are about.
- marrs 11y agoBut Apple are paying their taxes.
- coldtea 11y agoNo, they use every trick in the book not to, ending up paying less than your local frozen yogurt place (exaggerating a little, but still).
- geodel 11y agoSo the problem is existence of the book of tricks. Apple did not write it.
- throwaway2048 11y agoexcept apple (and companies like it) very much do "write the book" via lobbying.
- saiya-jin 11y agogeneral principle was there before apple. but for sure they do cook a 'book' or two, as one of the most wealthy companies in the world, without any strong sense of morality (not saying lack of it, just usual corporation as many others). If you can invest for example 500 millions USD in bribes to gain 5 billions per year in not paying taxes, that's a damn easy decision for some CEO. And those fictional 500 millions will get you quite far in these times, where lobbyists in capital cities in both EU and US are not even illegal (in my opinion should be shot in sight), but just part of daily life.
- Marazan 11y agoYes they did. they literally negotiated a deal with the Irish government to get the tax structure they wanted for their European operations.
- fredoliveira 11y agoSee but they do pay their taxes. They just use loopholes to pay less taxes.
- adaml_623 11y agoBecause we have quadriplegics who need 24 hour care so they don't die. Just to choose one random example of why we choose to have a government that levies taxes and provides services.
- guard-of-terra 11y agoWhy not finance helping quadriplegics from increased VAT? If it comes to that, why not finance helping quadriplegics from charity?
- bitJericho 11y agoIn the US we already have charities and they're not really taxed and if you donate to those charities, the money you donate is (generally) not taxed.
- JupiterMoon 11y agoWhy not charity? Because then the people donating to charity will (at least try to) impose conditions. So only quadriplegics or a certain faith or with a certain set of circumstances with receive help. (See e.g. the concepts of the deserving/undeserving poor and moral judgements with charities helping the poor in the UK pre-1945.)
- deleted 11y ago[deleted]
- byroot 11y ago> Why not finance helping quadriplegics from increased VAT? Because VAT, beside being a very effective tax (it's the biggest source of income of most countries), is the most unfair one. Say a country have a 20% VAT Low income household need to use the entirety of their income to survive (food, housing, etc). So effectively 20% of their income is collected as VAT. Now a upper class household, let's say they save 25% of their income each month as retirement plans etc, and spend the rest. They've been effectively taxed at 20% of 75% of they income, so their effective VAT rate was 15%. While you often see very high income people advocate for flat rate tax instead of progressive tax, none of them have the nerve to propose a reversed progressive tax like VAT is, where poor people pay proportionally more than rich people.
- speleding 11y agoThe corporate tax rate in the US is actually higher than in many EU countries. The reverse is actually true, US companies choosing to base their "head quarters" in Ireland and the Netherlands.
- pjc50 11y agoIt's worse than that. The "HQ" is in Ireland, but pays "royalties" to an IP holding company in the Cayman Islands, which is where all the profits go, on which no tax is paid. This is the "double Irish" referred to in other comments. Edit: note that you can just go and read the accounts for Facebook UK here: https://beta.companieshouse.gov.uk/company/06331310/filing-history https://beta.companieshouse.gov.uk/company/06331310/filing-h... A very important piece of information is left out of the article: what Facebook UK is paying in "license fees" to other parts of Facebook. The accounts show £131m in "administrative expenses", of which I can account for £86m in staff costs from the same document. £35m of that is a "share based payments charge", which represents the accounting treatment of share options. Of course, the shares handed out are shares of the US parent and not the UK subsidiary. 131-86=£46m which isn't broken down further.
- protomyth 11y agoWasn't Monster Cable pulling some weird licensing arrangement like that? I know Toyota USA pays licensing to Toyota to avoid taxes in the US.
- WildUtah 11y agoAs for Toyota, Japan has the second highest corporate tax rate in the first world, after the USA. And until two years ago, Japan had the highest rates. So I don't think Toyota was running the same schemes we see in tax havens.
- dragonwriter 11y agoIf (and I have no idea of this is true) Japan doesn't tax transfers from foreign subsidiaries to domestic parents, and the US allows transfers from domestic subsidiaries to foreign parents to be expensed, such an arrangement would avoid taxes entirely, making Japan's tax rates irrelevant.