5 ms·

Wait, can we actually choose which taxes we pay? Like maybe I can pay income tax but not VAT? Sound great!

tdubhro1 10y ago
Corporation tax is supposed to be a tax on the profits of a company levied by the government of the country that the company is domiciled in. Apple is not domiciled in the EU. It has to have subsidiaries to employ people in those countries, but I absolutely agree with their position that their profits should be taxed in the US, not in the EU. If the EU wants a bigger slice of the pie, it can impose tariffs. That's what countries did in the past, and that's what they are trying to do now, but they are just claiming it's a legitimate corporation tax, and whipping the austerity-weary locals into a frenzy by pushing stories into the media about all the "profits" the large multinationals make in Europe and claiming they don't pay any tax. This is just not true, nor is there any basis in history for this kind of taxation. If they want to, they should at least be up front and say they want to impose a tariff. I just can't believe the HN crowd, who supposedly are interested in startups and running their own companies, are being drowned out by the lefties on an "evil corp" soapbox.
- jmfayard 10y ago
  > I absolutely agree with their position that their profits should be taxed in the US, not in the EU. That's not their position, that's their words. Or why do they hide the billions since years if they want their profits to be taxed in the US?
  - tdubhro1 10y ago
    US companies holding cash offshore is a separate issue. Not the same. Different. The top 50 companies now hold about $1.5 trillion offshore. This is a US tax loophole that the US govt can decide what it wants to do about it. It does not mean that every country in the world can suddenly decide that they should be able to levy corporation tax on multinationals. I mean, apart from anything else, how they hell would they even do that, given that they don't have the full set of accounts covering all the company's operations, to even know whether the company was profitable or not. You can be profitable in a lot of countries and loss-making in a lot of others - so in the new fantasy land, do we need to pay corporation tax in all the profitable countries and get a paper tax-loss in the unprofitable ones? I can't believe I'm this far into debating such a ridiculously stupid idea.
    - AnAfrican 10y ago
      >how they hell would they even do that, given that they don't have the full set of accounts covering all the company's operations, to even know whether the company was profitable or not. But they have the accounts of the local subsidiary. And that local subsidiary either makes a profit or not. And, the company is taxed in each country of operations, for relevant operations.
      - tdubhro1 10y ago
        Local subsidiaries are not usually resellers, and even if they were, the parent company can set an arbitrary price, so they just say that every iPhone cost $1000 and is sold at $599 locally, so the subsidiary makes a massive loss - there are plenty of other reasons, think it through and you'll see that the subsidiary can't operate like a reseller. The subsidiary will usually have accounts that have costs like salary and premises, and no direct revenues, just a big cash transfer to fund the costs from the parent company.
        AnAfrican 10y ago
        >Local subsidiaries are not usually resellers, and even if they were, the parent company can set an arbitrary price The main reason why subsidiaries are set up is to enter a market and sell stuff. The main reason tax is discussed is because sales/revenue/profit is generated in one place. And they do set up arbitrary prices within the limits of anti-dumping laws. But then again, someone somewhere will tax something. >no direct revenues, just a big cash transfer to fund the costs from the parent company In Apple (and many others' case), the local subsidiary has revenue. They actually bill consumers and collect payments.
        pluma 10y ago
        > so the subsidiary makes a massive loss Sure, and if it did, the parent would make a massive profit they would have to pay taxes on. Someone at some point has to pay taxes on the profits. Apple just pressured Ireland into looking the other way and granting a tax scheme that is not actually valid and the EC has corrected that by pointing out Apple failed to pay taxes it legally owed.
- the_mitsuhiko 10y ago
  > Apple is not domiciled in the EU. That statement is just not correct. When you buy a product of Apple in Europe you buy it in Ireland and not in the US. When you buy a VW in the US you also buy it from a US retailed who bought it at a US subsidiary in the US which pays american corporate tax.
  - tdubhro1 10y ago
    Eh, no, if I buy an Italian suit in Macy's, Macy's has bought it from the manufacturer in Italy. They have imported the suit. They pay the Italian producer. The Italian producer is taxed on their profit in Italy. Macy's is taxed in the US. One or other party may have to pay a tariff on the import. Why do you think the product has to move through a subsidiary domiciled in the local country? When did that become a requirement?
    - AnAfrican 10y ago
      Why do you think Apple set up a subsidiary in Ireland ?
    - the_mitsuhiko 10y ago
      > Why do you think the product has to move through a subsidiary domiciled in the local country? When did that become a requirement? Apple is free to import the products from the US and to then pay import duty, sell it off to local merchants and then to pay american corporate tax on their earnings. Apple did not want to do that.

Corporation tax is supposed to be a tax on the profits of a company levied by the government of the country that the company is domiciled in. Apple is not domiciled in the EU. It has to have subsidiaries to employ people in those countries, but I absolutely agree with their position that their profits should be taxed in the US, not in the EU. If the EU wants a bigger slice of the pie, it can impose tariffs. That's what countries did in the past, and that's what they are trying to do now, but they are just claiming it's a legitimate corporation tax, and whipping the austerity-weary locals into a frenzy by pushing stories into the media about all the "profits" the large multinationals make in Europe and claiming they don't pay any tax. This is just not true, nor is there any basis in history for this kind of taxation. If they want to, they should at least be up front and say they want to impose a tariff. I just can't believe the HN crowd, who supposedly are interested in startups and running their own companies, are being drowned out by the lefties on an "evil corp" soapbox.

jmfayard 10y ago
> I absolutely agree with their position that their profits should be taxed in the US, not in the EU. That's not their position, that's their words. Or why do they hide the billions since years if they want their profits to be taxed in the US?
- tdubhro1 10y ago
  US companies holding cash offshore is a separate issue. Not the same. Different. The top 50 companies now hold about $1.5 trillion offshore. This is a US tax loophole that the US govt can decide what it wants to do about it. It does not mean that every country in the world can suddenly decide that they should be able to levy corporation tax on multinationals. I mean, apart from anything else, how they hell would they even do that, given that they don't have the full set of accounts covering all the company's operations, to even know whether the company was profitable or not. You can be profitable in a lot of countries and loss-making in a lot of others - so in the new fantasy land, do we need to pay corporation tax in all the profitable countries and get a paper tax-loss in the unprofitable ones? I can't believe I'm this far into debating such a ridiculously stupid idea.
  - AnAfrican 10y ago
    >how they hell would they even do that, given that they don't have the full set of accounts covering all the company's operations, to even know whether the company was profitable or not. But they have the accounts of the local subsidiary. And that local subsidiary either makes a profit or not. And, the company is taxed in each country of operations, for relevant operations.
    - tdubhro1 10y ago
      Local subsidiaries are not usually resellers, and even if they were, the parent company can set an arbitrary price, so they just say that every iPhone cost $1000 and is sold at $599 locally, so the subsidiary makes a massive loss - there are plenty of other reasons, think it through and you'll see that the subsidiary can't operate like a reseller. The subsidiary will usually have accounts that have costs like salary and premises, and no direct revenues, just a big cash transfer to fund the costs from the parent company.
      - AnAfrican 10y ago
        >Local subsidiaries are not usually resellers, and even if they were, the parent company can set an arbitrary price The main reason why subsidiaries are set up is to enter a market and sell stuff. The main reason tax is discussed is because sales/revenue/profit is generated in one place. And they do set up arbitrary prices within the limits of anti-dumping laws. But then again, someone somewhere will tax something. >no direct revenues, just a big cash transfer to fund the costs from the parent company In Apple (and many others' case), the local subsidiary has revenue. They actually bill consumers and collect payments.
      - pluma 10y ago
        > so the subsidiary makes a massive loss Sure, and if it did, the parent would make a massive profit they would have to pay taxes on. Someone at some point has to pay taxes on the profits. Apple just pressured Ireland into looking the other way and granting a tax scheme that is not actually valid and the EC has corrected that by pointing out Apple failed to pay taxes it legally owed.
the_mitsuhiko 10y ago
> Apple is not domiciled in the EU. That statement is just not correct. When you buy a product of Apple in Europe you buy it in Ireland and not in the US. When you buy a VW in the US you also buy it from a US retailed who bought it at a US subsidiary in the US which pays american corporate tax.
- tdubhro1 10y ago
  Eh, no, if I buy an Italian suit in Macy's, Macy's has bought it from the manufacturer in Italy. They have imported the suit. They pay the Italian producer. The Italian producer is taxed on their profit in Italy. Macy's is taxed in the US. One or other party may have to pay a tariff on the import. Why do you think the product has to move through a subsidiary domiciled in the local country? When did that become a requirement?
  - AnAfrican 10y ago
    Why do you think Apple set up a subsidiary in Ireland ?
  - the_mitsuhiko 10y ago
    > Why do you think the product has to move through a subsidiary domiciled in the local country? When did that become a requirement? Apple is free to import the products from the US and to then pay import duty, sell it off to local merchants and then to pay american corporate tax on their earnings. Apple did not want to do that.