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When the income ends up on the books and taxed only in Ireland, after expensing most of it as licensing fees to a shell company in Bermuda, despite none of thos

When the income ends up on the books and taxed only in Ireland, after expensing most of it as licensing fees to a shell company in Bermuda, despite none of those things (design, sourcing, manufacturing, assembly, sales) occurring in either country, it starts looking more like a loophole than legitimate rules around taxing an international business.

harryh 11y ago
None of the profits from selling things in the US goes on the Irish books. Only profits from selling things outside the US. This is done because the US (almost uniquely so) taxes worldwide earnings for companies based in the US.
- dangrossman 11y ago
  What about all the other countries that they have property, employees and sales in? It's a loophole if it lets them pay nothing to any of those nations, despite being as much a corporate citizen of those nations as whatever office is next door to theirs.
  - harryh 11y ago
    It's not a loophole that lets them pay nothing to any of those nations. Apple pays taxes in every country it operates in.
AnthonyMouse 11y ago
> When the income ends up on the books and taxed only in Ireland, after expensing most of it as licensing fees to a shell company in Bermuda, despite none of those things (design, sourcing, manufacturing, assembly, sales) occurring in either country, it starts looking more like a loophole than legitimate rules around taxing an international business. That's because it's a tax on profit, not a tax on design, sourcing, manufacturing, assembly, or sales. Suppose I have an idea for a piece of hardware. So I hire one of these body shops in India to design the hardware. They make hardly any profit. Then I pay a Chinese company to manufacture it. They make hardly any profit. Then I sell the hardware through some retailer in Germany. They make hardly any profit. But the enterprise is very successful for me and I'm sitting at home in my mansion driving my Ferrari because I've made all this profit. And you don't have any idea what country I live in because it doesn't matter -- if I move to a different country because it has lower taxes then the profits are still mine. Which is what international corporations do. Stop trying to tax profits. They have no physical presence which means they just disappear into whichever jurisdiction has the lowest taxes. Tax something that physically exists in your jurisdiction and be done with it.

harryh 11y ago

None of the profits from selling things in the US goes on the Irish books. Only profits from selling things outside the US. This is done because the US (almost uniquely so) taxes worldwide earnings for companies based in the US.

dangrossman 11y ago
What about all the other countries that they have property, employees and sales in? It's a loophole if it lets them pay nothing to any of those nations, despite being as much a corporate citizen of those nations as whatever office is next door to theirs.
- harryh 11y ago
  It's not a loophole that lets them pay nothing to any of those nations. Apple pays taxes in every country it operates in.

AnthonyMouse 11y ago

> When the income ends up on the books and taxed only in Ireland, after expensing most of it as licensing fees to a shell company in Bermuda, despite none of those things (design, sourcing, manufacturing, assembly, sales) occurring in either country, it starts looking more like a loophole than legitimate rules around taxing an international business. That's because it's a tax on profit, not a tax on design, sourcing, manufacturing, assembly, or sales. Suppose I have an idea for a piece of hardware. So I hire one of these body shops in India to design the hardware. They make hardly any profit. Then I pay a Chinese company to manufacture it. They make hardly any profit. Then I sell the hardware through some retailer in Germany. They make hardly any profit. But the enterprise is very successful for me and I'm sitting at home in my mansion driving my Ferrari because I've made all this profit. And you don't have any idea what country I live in because it doesn't matter -- if I move to a different country because it has lower taxes then the profits are still mine. Which is what international corporations do. Stop trying to tax profits. They have no physical presence which means they just disappear into whichever jurisdiction has the lowest taxes. Tax something that physically exists in your jurisdiction and be done with it.