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Wow, thanks for your incredibly condescending reply. Let's look at the actual Wikipedia page for the Double Irish arrangement: "The offshore company continues

Wow, thanks for your incredibly condescending reply. Let's look at the actual Wikipedia page for the Double Irish arrangement: "The offshore company continues to receive all of the profits from exploitation of the rights outside the US, but without paying US tax on the profits unless and until they are remitted to the US." https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement "However, tax experts say that strategies like the Double Irish help explain how Apple has managed to keep its international taxes to 3.2 percent of foreign profits last year, to 2.2 percent in 2010, and in the single digits for the last half-decade, according to the company’s corporate filings." http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html http://www.nytimes.com/2012/04/29/business/apples-tax-strate... "Under a typical “Double Irish” structure, a U.S. parent company (USCo) forms two Irish subsidiaries, IrishCo1 and IrishCo2. IrishCo1 is a first-tier Irish subsidiary organized under Irish law but managed and controlled in a low-tax jurisdiction (e.g., Bermuda or the British Virgin Islands). While U.S. rules determine tax residency of a corporation based on its place of incorporation, Irish law often determines tax residency based on the country where the company is managed and controlled. Accordingly, IrishCo1 will be treated for U.S. tax purposes as an Irish corporation, but for Irish tax purposes generally will be structured so as to be treated as a nonresident of Ireland resident in, for example, Bermuda. USCo will retain all US rights in the relevant IP and will license to IrishCo1 the rights to develop and exploit the IP outside the US. IrishCo1 will then sublicense these IP rights to IrishCo2, which in turn will use the IP to manufacture/produce IP products and then sell those products to customers outside the U.S." http://www.taxeswithoutbordersblog.com/2014/10/death-of-the-double-irish-dutch-sandwich-not-so-fast/ http://www.taxeswithoutbordersblog.com/2014/10/death-of-the-... You clearly do not understand how the double Irish arrangement actually works or what taxes it is supposed to reduce. Hint: if Apple could wipe out their US income tax obligations so easily using this arrangement, they probably wouldn't have bothered to pay that $14 billion in corporate income tax last year.

gozur88 11y ago
You're missing the implications. How much foreign business did Apple do in the 1980s? Look here: http://graphics8.nytimes.com/packages/pdf/business/MemoOnOffshoreProfitShiftingAndApple.pdf http://graphics8.nytimes.com/packages/pdf/business/MemoOnOff... >The Apple case study examines how Apple Inc., a U.S. corporation, has used a variety of offshore structures, arrangements, and transactions to shift billions of dollars in profits away from the United States and into Ireland, where Apple has negotiated a special corporate tax rate of less than 2%. One of Apple’s more unusual tactics has been to establish and direct substantial funds to offshore entities that are not declared tax residents of any jurisdiction. In 1980, Apple created Apple Operations International, which acts as its primary offshore holding company but has not declared tax residency in any jurisdiction. Despite reporting net income of $30 billion over the four-year period 2009 to 2012, Apple Operations International paid no corporate income taxes to any national government during that period. Similarly, Apple Sales International, a second Irish affiliate, is the repository for Apple’s offshore intellectual property rights and the recipient of substantial income related to Apple worldwide sales, yet claims to be a tax resident nowhere and may be causing that income to go untaxed. That's not some guy in his pajamas, there. It's a Senate report. For most US companies the whole point of the lowered Irish tax rate is to pay that on profits you've moved offshore. And while most of Apple's profit would probably still come from other markets if it weren't playing these kinds of offset pricing games, Apple has moved billions of dollars in profits out of the US to avoid taxes. It's not just Apple, either. This is why the effective US tax rate for corporations is 12.6% even as the statutory rate is 35%. I suspect that figure would be a lot lower, too, if only multinationals were considered. This is the elephant in the tax tent: The IRS has wide latitude when determining what's reasonable for companies to charge subsidiaries for goods and services (and vice versa). But it's easy to arbitrarily complicate these kinds of arrangements. And it's pretty subjective to start with - how much should Apple pay Apple Sales International to use a patent that nobody else is licensing? How would you even determine the fair market value? There are rules, of course, but even assuming there's no undue influence by corporations (and you can't assume that), imagine writing a set of rules that covers every conceivable business arrangement between multinationals that doesn't leave any grey area. Can't be done.
- nodamage 11y ago
  I’m only defending my statement that the double Irish arrangement doesn’t work for US sales, and that Apple (US) continues to pay corporate income taxes on the goods they sell to US customers. That Apple uses various tax arrangements to wipe out profits from its international sales is not in question. However, these are sales made by Apple’s foreign subsidiaries to foreign customers. They weren’t moved offshore, they were offshore to begin with.
  - gozur88 11y ago
    Except that isn't actually true. Irish subsidiary revenues include payments from the parent that subtract from recognized US profits of sales made in the US. They're moving profits from US sales to Ireland.
    - nodamage 11y ago
      Again, please cite a source for this. Nothing I've read, including the above memo, indicates that sales of Apple products to US customers get transferred to Ireland. The memo specifically indicates that Apple Inc. retains the marketing and distribution rights in the US, whereas ASI gets the distribution rights for the rest of the world. I can see how Apple (Italy) and Apple (Germany) end up transferring their profits over to Apple (Ireland). I don't see any mechanism for how this could apply to Apple (US).
      - gozur88 11y ago
        Never mind - you guys are right. I got them confused with another company.
    - zepto 11y ago
      No they aren't - this is a false claim which is not substantiated by any of the citations.
      - gozur88 11y ago

gozur88 11y ago

You're missing the implications. How much foreign business did Apple do in the 1980s? Look here: http://graphics8.nytimes.com/packages/pdf/business/MemoOnOffshoreProfitShiftingAndApple.pdf http://graphics8.nytimes.com/packages/pdf/business/MemoOnOff... >The Apple case study examines how Apple Inc., a U.S. corporation, has used a variety of offshore structures, arrangements, and transactions to shift billions of dollars in profits away from the United States and into Ireland, where Apple has negotiated a special corporate tax rate of less than 2%. One of Apple’s more unusual tactics has been to establish and direct substantial funds to offshore entities that are not declared tax residents of any jurisdiction. In 1980, Apple created Apple Operations International, which acts as its primary offshore holding company but has not declared tax residency in any jurisdiction. Despite reporting net income of $30 billion over the four-year period 2009 to 2012, Apple Operations International paid no corporate income taxes to any national government during that period. Similarly, Apple Sales International, a second Irish affiliate, is the repository for Apple’s offshore intellectual property rights and the recipient of substantial income related to Apple worldwide sales, yet claims to be a tax resident nowhere and may be causing that income to go untaxed. That's not some guy in his pajamas, there. It's a Senate report. For most US companies the whole point of the lowered Irish tax rate is to pay that on profits you've moved offshore. And while most of Apple's profit would probably still come from other markets if it weren't playing these kinds of offset pricing games, Apple has moved billions of dollars in profits out of the US to avoid taxes. It's not just Apple, either. This is why the effective US tax rate for corporations is 12.6% even as the statutory rate is 35%. I suspect that figure would be a lot lower, too, if only multinationals were considered. This is the elephant in the tax tent: The IRS has wide latitude when determining what's reasonable for companies to charge subsidiaries for goods and services (and vice versa). But it's easy to arbitrarily complicate these kinds of arrangements. And it's pretty subjective to start with - how much should Apple pay Apple Sales International to use a patent that nobody else is licensing? How would you even determine the fair market value? There are rules, of course, but even assuming there's no undue influence by corporations (and you can't assume that), imagine writing a set of rules that covers every conceivable business arrangement between multinationals that doesn't leave any grey area. Can't be done.

nodamage 11y ago
I’m only defending my statement that the double Irish arrangement doesn’t work for US sales, and that Apple (US) continues to pay corporate income taxes on the goods they sell to US customers. That Apple uses various tax arrangements to wipe out profits from its international sales is not in question. However, these are sales made by Apple’s foreign subsidiaries to foreign customers. They weren’t moved offshore, they were offshore to begin with.
- gozur88 11y ago
  Except that isn't actually true. Irish subsidiary revenues include payments from the parent that subtract from recognized US profits of sales made in the US. They're moving profits from US sales to Ireland.
  - nodamage 11y ago
    Again, please cite a source for this. Nothing I've read, including the above memo, indicates that sales of Apple products to US customers get transferred to Ireland. The memo specifically indicates that Apple Inc. retains the marketing and distribution rights in the US, whereas ASI gets the distribution rights for the rest of the world. I can see how Apple (Italy) and Apple (Germany) end up transferring their profits over to Apple (Ireland). I don't see any mechanism for how this could apply to Apple (US).
    - gozur88 11y ago
      Never mind - you guys are right. I got them confused with another company.
  - zepto 11y ago
    No they aren't - this is a false claim which is not substantiated by any of the citations.
    - gozur88 11y ago