8 ms·

Apple is currently holding $181 billion overseas

36 points by LaSombra 10y ago

davidiach 10y ago
What people understand from that article: - Apple makes money in the US and because of various tax loopholes, does not pay corporate taxes for those revenues What happens in reality: - Apple makes money in many different countries and pays corporate taxes in each of them (including the US), but if AFTER paying taxes (for example in an European country) they want to bring back some of that already taxed money to the US, they have to pay an additional ~40% in taxes. Think of it this way, you as an employee go to work for one year in a European country. There you pay all your taxes and after that year you want to return to the US, but now the US decides you need to also pay income taxes in the US for your salary in Belgium.
- byroot 10y ago
  > if AFTER paying taxes (for example in an European country) they want to bring back some of that already taxed money to the US, they have to pay an additional ~40% in taxes. Except this isn't what is happening. In Europe at least they practice the double Irish [0]. So effectively the stash we're talking about haven't been taxed yet. [0] https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement
- meira 10y ago
  Every tax can be fair or unfair, it depends of who is paying. We tend to think that the taxes we pay (or dream of paying some day) are unfair. But Apple would not be Apple if it wasn't an US company. The right time to complain about taxes is before profiting from the system, not after.
- xxs 10y ago
  Actually Apple does utilize loopholes in EU. For example[0] [0]: http://www.out-law.com/en/articles/2014/september/european-commission-agreements-between-apple-and-irish-tax-authorities-may-have-been-illegal-state-aid/ http://www.out-law.com/en/articles/2014/september/european-c...
- Oletros 10y ago
  They don't have to pay an additional 40%,they have to pay the difference until 40%. And please, when Apple (or Google) post losses in Spain and they take fiscal benefits because of this, it is not a totally correct claim the one about Apple and others paying taxes on Europe
- netsharc 10y ago
  > Think of it this way, you as an employee go to work for one year in a European country. There you pay all your taxes and after that year you want to return to the US, but now the US decides you need to also pay income taxes in the US for your salary in Belgium. Actually, the US does tax its citizens income whereever they are on the planet (past a certain threshold earned): http://www.expatinfodesk.com/expat-guide/nationality-specific-information/americans/us-tax-liability/ http://www.expatinfodesk.com/expat-guide/nationality-specifi...
- littletimmy 10y ago
  Wait a second, that is absolutely wrong. It is not the case that Apple has paid a tax on the money it holds abroad. In many cases, with complicated tax arrangements like the double Irish, it has avoided taxes in other countries as well. So a big chunk of this money is effectively untaxed.
ckastner 10y ago
Offer them a partial amnesty: repatriate the funds at a 20% tax rate or so. The goverment wins because 20% of $181bn is way more than 40% of nothing, and Apple wins because they get to use the money within the US. Partial amnesties for repratriation have been been done before, most recently in Greece as far as I know.
- thingylab 10y ago
  Please look up what 'amnesty' means. Apple isn't doing anything wrong or illegal by keeping its cash outside of the US. Also note the the US tax code is the only one (in advanced countries) to try to tax earnings made outside of its jurisdiction (e.g. for earnings made in Japan, and already taxed locally there). Cook is not saying Apple shouldn't pay taxes, he simply says the IRS has no business taking 40% of earnings not made in the US. If you were an expat you would strongly agree with him.
  - ckastner 10y ago
    'Amnesty' was indeed a poor example. Call it a special repatriation tax rebate, or whatever. Otherwise, you're reading far too much into my comment. With the current tax rules as given, I merely suggested a possible compromise. At no point did I argue for/against the rules, and at no point did I agree/disagree with what Cook is saying.
Shugyousha 10y ago
I'm not a fan of Apple or its business practices but that's exactly what Google, Microsoft and all the other bigger IT (and other) companies are doing too. No news here.
OneOneOneOne 10y ago
This article references an interview found in the Washington Post... https://www.washingtonpost.com/classic-apps/stepping-out-of-steve-jobss-shadow-tim-cook-champions-the-promise-of-apple/2016/08/12/fadb6c26-59cd-11e6-831d-0324760ca856_story.html?wpisrc=nl_draw2&wpmm=1 https://www.washingtonpost.com/classic-apps/stepping-out-of-... In that interview Mr. Cook says "We’ve said at 40 percent, we’re not going to bring it back until there’s a fair rate." I wonder what he considers a fair rate?
- jjn2009 10y ago
  It should be close to zero, why are we forcing Apple to pay taxes twice? Let them bring the money back and they will put it to much better use than any government organization. They could hire huge numbers of people and contribute to a massive trade surplus.
  - ubernostrum 10y ago
    why are we forcing Apple to pay taxes twice? We're not. The "Double Irish", "Dutch Sandwich" and other arrangements are about funneling the maximum possible amount of revenue through subsidiaries which can do tax-free or tax-deductible payments and transfers to each other, until finally the money ends up on the books of a company whose tax residency is Bermuda or the Cayman Islands, both of which have no corporate income tax. As of a few years ago, it was reported that Google had gotten so good at this that 99.8% of their revenue outside the US was showing up in a subsidiary with Bermuda tax residency. So that money wouldn't be "taxed twice" if brought into the US -- the whole point of the arrangement is that it hasn't even been taxed once yet.
    - jjn2009 10y ago
      Countries don't need to have a corporate tax, and if they do not have a corporate tax it doesn't mean the US government should get a piece of the pie because no one else decided to take it. Just like a Comcast monopoly in a small rural town the US government without competition would continue to soak up more money and spend it on increasingly useless things.
jjn2009 10y ago
These are profits which are not being made within the US I am guessing? This is something that seems to be glossed over but it's a really important distinction to be made. Apple's actions seem pretty reasonable, if you worked and lived abroad as a US citizen would you be very happy if Uncle Sam reached into your back pocket for a cut of your income after paying into the local tax system? This is essentially what they are asking of Apple.. the US government should get a cut of transactions which never took place in the US.
- xbmcuser 10y ago
  Any american citizen that does not live in the US still has to pay taxes if they have to pay I don't see why apple or other corporations can or should get out of paying it.
  - jjn2009 10y ago
    I doubt any sane person keeps their US citizenship for very long if they are living and working abroad. Apple should move out of the US in my opinion if they are going to get taxed on transactions outside of the US.
    - Oletros 10y ago
      Then they should pay taxes outside US
    - netsharc 10y ago
      I'm of the opinion patriotism and nationalism are not sane, but most people are pretty proud to have those traits: http://www.bbc.com/news/35383435 http://www.bbc.com/news/35383435
sgentle 10y ago
> Wouldn't it be great if you could refuse to pay your taxes until you decided your tax rate was “fair”? If by "refuse to pay your taxes" you mean "refuse to pay tax on the portion of your income that you have the legal ability to not pay tax on", then yes, that is pretty great. I and many others do that on a regular basis. If the tax department wants a company to pay more tax, it has two options: 1. legally require them to, 2. convince them that there is some other reason to. A great way to achieve option 2 is to threaten them with option 1. Right now there's an extended negotiation happening between Apple (and friends) and the government, where both parties sure would like to avoid a whole bunch of new onerous legislation, and it would appear Tim Cook is describing the situation under which Apple would be willing to come to terms. If there's no deal I'm sure the resulting new laws will be a huge nightmare for everyone involved, so both parties have an incentive to negotiate pretty hard without actually backing away from the table. It's an interesting look at what happens when you're a big enough company to negotiate with the government. Not sure what all the bleating in this article is about though. You pay the tax you have to pay and no more. Has the author ever filed a tax return? Does he pay more than his required amount of tax out of a sense of patriotic duty? If not, I find this framing pretty deceptive. Nobody's giving gifts to the tax department.

36 points by LaSombra 10y ago

What people understand from that article: - Apple makes money in the US and because of various tax loopholes, does not pay corporate taxes for those revenues What happens in reality: - Apple makes money in many different countries and pays corporate taxes in each of them (including the US), but if AFTER paying taxes (for example in an European country) they want to bring back some of that already taxed money to the US, they have to pay an additional ~40% in taxes. Think of it this way, you as an employee go to work for one year in a European country. There you pay all your taxes and after that year you want to return to the US, but now the US decides you need to also pay income taxes in the US for your salary in Belgium.

byroot 10y ago
> if AFTER paying taxes (for example in an European country) they want to bring back some of that already taxed money to the US, they have to pay an additional ~40% in taxes. Except this isn't what is happening. In Europe at least they practice the double Irish [0]. So effectively the stash we're talking about haven't been taxed yet. [0] https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement
meira 10y ago
Every tax can be fair or unfair, it depends of who is paying. We tend to think that the taxes we pay (or dream of paying some day) are unfair. But Apple would not be Apple if it wasn't an US company. The right time to complain about taxes is before profiting from the system, not after.
xxs 10y ago
Actually Apple does utilize loopholes in EU. For example[0] [0]: http://www.out-law.com/en/articles/2014/september/european-commission-agreements-between-apple-and-irish-tax-authorities-may-have-been-illegal-state-aid/ http://www.out-law.com/en/articles/2014/september/european-c...
Oletros 10y ago
They don't have to pay an additional 40%,they have to pay the difference until 40%. And please, when Apple (or Google) post losses in Spain and they take fiscal benefits because of this, it is not a totally correct claim the one about Apple and others paying taxes on Europe
netsharc 10y ago
> Think of it this way, you as an employee go to work for one year in a European country. There you pay all your taxes and after that year you want to return to the US, but now the US decides you need to also pay income taxes in the US for your salary in Belgium. Actually, the US does tax its citizens income whereever they are on the planet (past a certain threshold earned): http://www.expatinfodesk.com/expat-guide/nationality-specific-information/americans/us-tax-liability/ http://www.expatinfodesk.com/expat-guide/nationality-specifi...
littletimmy 10y ago
Wait a second, that is absolutely wrong. It is not the case that Apple has paid a tax on the money it holds abroad. In many cases, with complicated tax arrangements like the double Irish, it has avoided taxes in other countries as well. So a big chunk of this money is effectively untaxed.

ckastner 10y ago

Offer them a partial amnesty: repatriate the funds at a 20% tax rate or so. The goverment wins because 20% of $181bn is way more than 40% of nothing, and Apple wins because they get to use the money within the US. Partial amnesties for repratriation have been been done before, most recently in Greece as far as I know.

thingylab 10y ago
Please look up what 'amnesty' means. Apple isn't doing anything wrong or illegal by keeping its cash outside of the US. Also note the the US tax code is the only one (in advanced countries) to try to tax earnings made outside of its jurisdiction (e.g. for earnings made in Japan, and already taxed locally there). Cook is not saying Apple shouldn't pay taxes, he simply says the IRS has no business taking 40% of earnings not made in the US. If you were an expat you would strongly agree with him.
- ckastner 10y ago
  'Amnesty' was indeed a poor example. Call it a special repatriation tax rebate, or whatever. Otherwise, you're reading far too much into my comment. With the current tax rules as given, I merely suggested a possible compromise. At no point did I argue for/against the rules, and at no point did I agree/disagree with what Cook is saying.

Shugyousha 10y ago

I'm not a fan of Apple or its business practices but that's exactly what Google, Microsoft and all the other bigger IT (and other) companies are doing too. No news here.

OneOneOneOne 10y ago

This article references an interview found in the Washington Post... https://www.washingtonpost.com/classic-apps/stepping-out-of-steve-jobss-shadow-tim-cook-champions-the-promise-of-apple/2016/08/12/fadb6c26-59cd-11e6-831d-0324760ca856_story.html?wpisrc=nl_draw2&wpmm=1 https://www.washingtonpost.com/classic-apps/stepping-out-of-... In that interview Mr. Cook says "We’ve said at 40 percent, we’re not going to bring it back until there’s a fair rate." I wonder what he considers a fair rate?

jjn2009 10y ago
It should be close to zero, why are we forcing Apple to pay taxes twice? Let them bring the money back and they will put it to much better use than any government organization. They could hire huge numbers of people and contribute to a massive trade surplus.
- ubernostrum 10y ago
  why are we forcing Apple to pay taxes twice? We're not. The "Double Irish", "Dutch Sandwich" and other arrangements are about funneling the maximum possible amount of revenue through subsidiaries which can do tax-free or tax-deductible payments and transfers to each other, until finally the money ends up on the books of a company whose tax residency is Bermuda or the Cayman Islands, both of which have no corporate income tax. As of a few years ago, it was reported that Google had gotten so good at this that 99.8% of their revenue outside the US was showing up in a subsidiary with Bermuda tax residency. So that money wouldn't be "taxed twice" if brought into the US -- the whole point of the arrangement is that it hasn't even been taxed once yet.
  - jjn2009 10y ago
    Countries don't need to have a corporate tax, and if they do not have a corporate tax it doesn't mean the US government should get a piece of the pie because no one else decided to take it. Just like a Comcast monopoly in a small rural town the US government without competition would continue to soak up more money and spend it on increasingly useless things.

jjn2009 10y ago

These are profits which are not being made within the US I am guessing? This is something that seems to be glossed over but it's a really important distinction to be made. Apple's actions seem pretty reasonable, if you worked and lived abroad as a US citizen would you be very happy if Uncle Sam reached into your back pocket for a cut of your income after paying into the local tax system? This is essentially what they are asking of Apple.. the US government should get a cut of transactions which never took place in the US.

xbmcuser 10y ago
Any american citizen that does not live in the US still has to pay taxes if they have to pay I don't see why apple or other corporations can or should get out of paying it.
- jjn2009 10y ago
  I doubt any sane person keeps their US citizenship for very long if they are living and working abroad. Apple should move out of the US in my opinion if they are going to get taxed on transactions outside of the US.
  - Oletros 10y ago
    Then they should pay taxes outside US
  - netsharc 10y ago
    I'm of the opinion patriotism and nationalism are not sane, but most people are pretty proud to have those traits: http://www.bbc.com/news/35383435 http://www.bbc.com/news/35383435

sgentle 10y ago

> Wouldn't it be great if you could refuse to pay your taxes until you decided your tax rate was “fair”? If by "refuse to pay your taxes" you mean "refuse to pay tax on the portion of your income that you have the legal ability to not pay tax on", then yes, that is pretty great. I and many others do that on a regular basis. If the tax department wants a company to pay more tax, it has two options: 1. legally require them to, 2. convince them that there is some other reason to. A great way to achieve option 2 is to threaten them with option 1. Right now there's an extended negotiation happening between Apple (and friends) and the government, where both parties sure would like to avoid a whole bunch of new onerous legislation, and it would appear Tim Cook is describing the situation under which Apple would be willing to come to terms. If there's no deal I'm sure the resulting new laws will be a huge nightmare for everyone involved, so both parties have an incentive to negotiate pretty hard without actually backing away from the table. It's an interesting look at what happens when you're a big enough company to negotiate with the government. Not sure what all the bleating in this article is about though. You pay the tax you have to pay and no more. Has the author ever filed a tax return? Does he pay more than his required amount of tax out of a sense of patriotic duty? If not, I find this framing pretty deceptive. Nobody's giving gifts to the tax department.