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Due to the way they leverage their foreign subsidiaries, they're able to play accounting games that drastically lower the perceived (and taxable) profit of thos

by cosmie 11y ago

Due to the way they leverage their foreign subsidiaries, they're able to play accounting games that drastically lower the perceived (and taxable) profit of those US sales. Such as this mentioned at [1]: "ASI [an Irish Apple subsidiary] buys Apple products from a Chinese manufacturer, resells them at a “substantial” markup to other Apple affiliates and retains the profits, the report said." [1] http://www.macworld.com/article/2039299/senate-report-apple-claims-subsidiaries-with-no-taxing-jurisdiction.html http://www.macworld.com/article/2039299/senate-report-apple-... Not that they're the only ones to play this game. A FMCG company I'm familiar with does something similar by having billions in raw and finished good materials owned by a Switzerland-based subsidiary for tax purposes.

landryraccoon 11y ago
What you're claiming is that Apple is engaging in Transfer Pricing (https://en.wikipedia.org/wiki/Transfer_pricing https://en.wikipedia.org/wiki/Transfer_pricing) which is blatantly and totally illegal. If that is in fact the case, then no laws need to be changed and everyone at Apple who knew about this should be subject to criminal prosecution. The article you posted however gives no evidence that Apple is actually engaging in such practices, or I assume they would already be under criminal investigation. The closest thing in the article you cited is grandstanding by members of congress. (Who aren't even being serious, Congress could easily fine or stop Apple if they actually wanted to do anything).
- a3camero 11y ago
  Transfer pricing is not illegal. It's often an element of illegal schemes to reduce tax but the act of setting prices between non-arms-length companies is not illegal. It's necessary. The prices just have to be what an arms-length company would pay.
nodamage 11y ago
That article appears to be discussing Apple's avoidance of taxes on non-US sales: "By running nearly all its non-U.S. sales through the Irish subsidiaries, Apple also avoids paying taxes on sales in other countries, including the U.K., Germany and France, the report said." From what I can tell, this 'double Irish' arrangement does not apply to US sales. Edit: Neither the Forbes article nor the Macworld article are discussing US sales, only worldwide sales.

by cosmie 11y ago

landryraccoon 11y ago

What you're claiming is that Apple is engaging in Transfer Pricing (https://en.wikipedia.org/wiki/Transfer_pricing https://en.wikipedia.org/wiki/Transfer_pricing) which is blatantly and totally illegal. If that is in fact the case, then no laws need to be changed and everyone at Apple who knew about this should be subject to criminal prosecution. The article you posted however gives no evidence that Apple is actually engaging in such practices, or I assume they would already be under criminal investigation. The closest thing in the article you cited is grandstanding by members of congress. (Who aren't even being serious, Congress could easily fine or stop Apple if they actually wanted to do anything).

a3camero 11y ago
Transfer pricing is not illegal. It's often an element of illegal schemes to reduce tax but the act of setting prices between non-arms-length companies is not illegal. It's necessary. The prices just have to be what an arms-length company would pay.

nodamage 11y ago

That article appears to be discussing Apple's avoidance of taxes on non-US sales: "By running nearly all its non-U.S. sales through the Irish subsidiaries, Apple also avoids paying taxes on sales in other countries, including the U.K., Germany and France, the report said." From what I can tell, this 'double Irish' arrangement does not apply to US sales. Edit: Neither the Forbes article nor the Macworld article are discussing US sales, only worldwide sales.