4 ms·

> a few billion in secret stash tax havens. Fyi, Apple's stash of billions in foreign corporate structures is not "secret".[1] The IRS, the California State g

by jasode 10y ago

> a few billion in secret stash tax havens. Fyi, Apple's stash of billions in foreign corporate structures is not "secret".[1] The IRS, the California State government, and all the Wall Street analysts know the money is over there in Ireland. In any case, Apple is complying with the law and paying the relevant foreign taxes (which are lower than the USA rates). Since their revenue shuffling is not illegal, the more accurate criticism is if Apple is abusing legal loopholes. A lot of people feel they are. [1]https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement

justincormack 10y ago
The money is not in Ireland. It goes to Bermuda. The shuffling was illegal, that is why they are going to be made to repay billions. It was illegal for the Irish to not charge them the standard rate, not illegal for Apple to try to do a deal.
- nodamage 10y ago
  Bermuda? Can you provide a reputable source for this? As far as I am aware, Apple does not have any subsidiaries in the Caribbean.
  - jasode 10y ago
    The Bermuda connection is explained in the wiki link I cited.
    - nodamage 10y ago
      That Wikipedia article describes the general strategy of the "double Irish arrangement" as employed by many multinational corporations, but does not actually describe Apple's international corporate structure specifically, and to the extent that it mentions Apple, is actually rather misleading. I'm just going to go ahead and state, as a matter of fact, that Apple does not have any subsidiaries in Bermuda or any other Caribbean country, and anyone who believes otherwise is mistaken. Apple's international tax structure was thoroughly documented when they were called up to testify before the Senate, which you can read about in the Senate Subcommittee Memo on Offshore Profit Shifting and Apple[1], and while they do have several Irish subsidiaries, they do not have any subsidiaries in the Caribbean or move any money into the Caribbean. This is further reinforced in Apple's testimony before the Senate[2]: > Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US in order to avoid US tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands. Apple has substantial foreign cash because it sells the majority of its products outside the US. International operations accounted for 61% of Apple’s revenue last year and two-thirds of its revenue last quarter. These foreign earnings are taxed in the jurisdiction where they are earned (“foreign, post-tax income”). [1] http://www.hsgac.senate.gov/download/?id=CDE3652B-DA4E-4EE1-B841-AEAD48177DC4 http://www.hsgac.senate.gov/download/?id=CDE3652B-DA4E-4EE1-... [2] https://www.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf https://www.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf
  - justincormack 10y ago
    Apologies, the British Virgin Islands, not Bermuda. "Apple has assigned partial ownership of its Irish subsidiaries to Baldwin Holdings Unlimited in the British Virgin Islands, a tax haven, according to documents filed there and in Ireland. Baldwin Holdings has no listed offices or telephone number, and its only listed director is Peter Oppenheimer, Apple’s chief financial officer, who lives and works in Cupertino. Baldwin apples are known for their hardiness while traveling." http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=0 http://www.nytimes.com/2012/04/29/business/apples-tax-strate...
    - nodamage 10y ago
      Baldwin Holdings Unlimited appears to be a shareholder, not a subsidiary, with one share of ownership (amounting to .01%) of Apple Operations International and one share of ownership in a few other of Apple's Irish subsidiaries. Aside from holding one nominal share in each of the Irish subsidiaries, this company does not appear to be materially significant to Apple's international operations, and I can find no evidence that Apple's international profits have been transferred to this company. From what I can tell, Apple's money remains in Ireland, where they already enjoy an extremely low tax rate, and therefore have no reason to move it out. (Of course, this is why the EU is going after them now.)
peteretep 10y ago
> Apple is abusing legal > loopholes Which they have a legal obligation to do, or be sued by shareholders, right?
- jasode 10y ago
  I don't know if shareholders would take the drastic route of sueing Apple rather than pressuring them to fire the CFO that didn't use every tax loophole and replace him with one who does. The big holders[1] of stock like Vanguard, Blackrock, etc could influence other shareholders to vote a certain way and elect a new Board of Directors... the directors then fire the CFO and hire one who channels revenue through Ireland so they can save billions of dollars. That way, they can compete with the other companies[2] like Microsoft/Google/Oracle/etc using the aggressive tax avoidance strategies to save billions. [1]https://finance.yahoo.com/quote/AAPL/holders?p=AAPL https://finance.yahoo.com/quote/AAPL/holders?p=AAPL [2]https://en.wikipedia.org/wiki/Double_Irish_arrangement#Companies_using_the_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement#Compa...
- Marazan 10y ago
  No they do not. There is explicitly Delaware case law where shareholders sued company for not exploiting tax loophole. Shareholders lost, company won. There is no legal obligation for directors to maximise profit.
  - peteretep 10y ago
    That's relevant to this case? Citation, please

by jasode 10y ago

justincormack 10y ago

The money is not in Ireland. It goes to Bermuda. The shuffling was illegal, that is why they are going to be made to repay billions. It was illegal for the Irish to not charge them the standard rate, not illegal for Apple to try to do a deal.

nodamage 10y ago
Bermuda? Can you provide a reputable source for this? As far as I am aware, Apple does not have any subsidiaries in the Caribbean.
- jasode 10y ago
  The Bermuda connection is explained in the wiki link I cited.
  - nodamage 10y ago
    That Wikipedia article describes the general strategy of the "double Irish arrangement" as employed by many multinational corporations, but does not actually describe Apple's international corporate structure specifically, and to the extent that it mentions Apple, is actually rather misleading. I'm just going to go ahead and state, as a matter of fact, that Apple does not have any subsidiaries in Bermuda or any other Caribbean country, and anyone who believes otherwise is mistaken. Apple's international tax structure was thoroughly documented when they were called up to testify before the Senate, which you can read about in the Senate Subcommittee Memo on Offshore Profit Shifting and Apple[1], and while they do have several Irish subsidiaries, they do not have any subsidiaries in the Caribbean or move any money into the Caribbean. This is further reinforced in Apple's testimony before the Senate[2]: > Apple does not move its intellectual property into offshore tax havens and use it to sell products back into the US in order to avoid US tax; it does not use revolving loans from foreign subsidiaries to fund its domestic operations; it does not hold money on a Caribbean island; and it does not have a bank account in the Cayman Islands. Apple has substantial foreign cash because it sells the majority of its products outside the US. International operations accounted for 61% of Apple’s revenue last year and two-thirds of its revenue last quarter. These foreign earnings are taxed in the jurisdiction where they are earned (“foreign, post-tax income”). [1] http://www.hsgac.senate.gov/download/?id=CDE3652B-DA4E-4EE1-B841-AEAD48177DC4 http://www.hsgac.senate.gov/download/?id=CDE3652B-DA4E-4EE1-... [2] https://www.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf https://www.apple.com/pr/pdf/Apple_Testimony_to_PSI.pdf
- justincormack 10y ago
  Apologies, the British Virgin Islands, not Bermuda. "Apple has assigned partial ownership of its Irish subsidiaries to Baldwin Holdings Unlimited in the British Virgin Islands, a tax haven, according to documents filed there and in Ireland. Baldwin Holdings has no listed offices or telephone number, and its only listed director is Peter Oppenheimer, Apple’s chief financial officer, who lives and works in Cupertino. Baldwin apples are known for their hardiness while traveling." http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=0 http://www.nytimes.com/2012/04/29/business/apples-tax-strate...
  - nodamage 10y ago
    Baldwin Holdings Unlimited appears to be a shareholder, not a subsidiary, with one share of ownership (amounting to .01%) of Apple Operations International and one share of ownership in a few other of Apple's Irish subsidiaries. Aside from holding one nominal share in each of the Irish subsidiaries, this company does not appear to be materially significant to Apple's international operations, and I can find no evidence that Apple's international profits have been transferred to this company. From what I can tell, Apple's money remains in Ireland, where they already enjoy an extremely low tax rate, and therefore have no reason to move it out. (Of course, this is why the EU is going after them now.)

peteretep 10y ago

> Apple is abusing legal > loopholes Which they have a legal obligation to do, or be sued by shareholders, right?

jasode 10y ago
I don't know if shareholders would take the drastic route of sueing Apple rather than pressuring them to fire the CFO that didn't use every tax loophole and replace him with one who does. The big holders[1] of stock like Vanguard, Blackrock, etc could influence other shareholders to vote a certain way and elect a new Board of Directors... the directors then fire the CFO and hire one who channels revenue through Ireland so they can save billions of dollars. That way, they can compete with the other companies[2] like Microsoft/Google/Oracle/etc using the aggressive tax avoidance strategies to save billions. [1]https://finance.yahoo.com/quote/AAPL/holders?p=AAPL https://finance.yahoo.com/quote/AAPL/holders?p=AAPL [2]https://en.wikipedia.org/wiki/Double_Irish_arrangement#Companies_using_the_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement#Compa...
Marazan 10y ago
No they do not. There is explicitly Delaware case law where shareholders sued company for not exploiting tax loophole. Shareholders lost, company won. There is no legal obligation for directors to maximise profit.
- peteretep 10y ago
  That's relevant to this case? Citation, please