4 ms·

>> They pay almost NO TAX over their profits unlike 99% of the companies, and that's the problem. What companies that are domiciled outside of the EU pay corpo

>> They pay almost NO TAX over their profits unlike 99% of the companies, and that's the problem. What companies that are domiciled outside of the EU pay corporation tax in the EU? Corp tax is levied by the govt of the country of domicile, always has been. Why is it suddenly up for debate?

AnAfrican 10y ago
Because there is an Apple-owned company in Ireland. And that company makes profits from operations that would be much harder (may be impossible) to setup as a US-based company.
- tdubhro1 10y ago
  Eh, no, not quite, Apple has set up several companies in Ireland. They do some assembly and some customer support, and some sales and administration. Generally, a multinational has to set up a company domiciled in any country that they have direct employees, because governments don't really like when you have employees without a company, because there's no such thing. These companies don't really have a PnL in the same way as the parent company, even though they will have filed statutory accounts in the country of domicile, the fact is that they don't originate the product they are selling. The services they provide could be outsourced to a third party; for example, a US company could design and manufacture a product, and just use Amazon to manage fulfillment globally. Manufacturing of electronic goods is often outsourced as well, so that's not a counter-argument. The EU has correctly pointed out that Apple's arrangement in which the "head office" of Apple Sales International is not actually the US parent company, and it looks like it should be.
  - AnAfrican 10y ago
    >the fact is that they don't originate the product they are selling They are billing locally. They have local accounts in which local payments are made. so no, they have local revenue. Value is created there.
the_mitsuhiko 10y ago
> What companies that are domiciled outside of the EU pay corporation tax in the EU? Corp tax is levied by the govt of the country of domicile, always has been. Why is it suddenly up for debate? Apple is domiciled in the EU for their European operations. What are you suggesting?
- tdubhro1 10y ago
  OK, let me give you a simpler example. BMW is domiciled in Germany. It builds cars there. When it exports a car to the US, it has a US subsidiary company that employs people and helps to sell the car in the US. BMW doesn't sell the car to its subsidiary, it sells it to a dealer (a separate company domiciled in the US, think "Jacks awesome BMWs, Toledo"). The profits that the dealer makes when it sells the car are taxed in the US, because it is a US domiciled company. BMW will probably pay something like sales tax and in some countries there will be import tariffs to pay. But the profit that BMW makes on the sale of the exported car, the difference between the price the US dealer pays them and the cost of all the raw materials, labour, marketing etc, is realised in Germany, and that's where they pay corporation tax. Because, where the hell else could it happen??
  - AnAfrican 10y ago
    That's because BMW sells to a third party. Apple doesn't. (or rarely does). Amazon doesn't. Microsoft does less and less.
  - the_mitsuhiko 10y ago
    > it has a US subsidiary company I doubt that. I'm pretty sure BMW US is a local LLC that might owned by the parent but is fully taxed on their operations in the US.

AnAfrican 10y ago

Because there is an Apple-owned company in Ireland. And that company makes profits from operations that would be much harder (may be impossible) to setup as a US-based company.

tdubhro1 10y ago
Eh, no, not quite, Apple has set up several companies in Ireland. They do some assembly and some customer support, and some sales and administration. Generally, a multinational has to set up a company domiciled in any country that they have direct employees, because governments don't really like when you have employees without a company, because there's no such thing. These companies don't really have a PnL in the same way as the parent company, even though they will have filed statutory accounts in the country of domicile, the fact is that they don't originate the product they are selling. The services they provide could be outsourced to a third party; for example, a US company could design and manufacture a product, and just use Amazon to manage fulfillment globally. Manufacturing of electronic goods is often outsourced as well, so that's not a counter-argument. The EU has correctly pointed out that Apple's arrangement in which the "head office" of Apple Sales International is not actually the US parent company, and it looks like it should be.
- AnAfrican 10y ago
  >the fact is that they don't originate the product they are selling They are billing locally. They have local accounts in which local payments are made. so no, they have local revenue. Value is created there.

the_mitsuhiko 10y ago

> What companies that are domiciled outside of the EU pay corporation tax in the EU? Corp tax is levied by the govt of the country of domicile, always has been. Why is it suddenly up for debate? Apple is domiciled in the EU for their European operations. What are you suggesting?

tdubhro1 10y ago
OK, let me give you a simpler example. BMW is domiciled in Germany. It builds cars there. When it exports a car to the US, it has a US subsidiary company that employs people and helps to sell the car in the US. BMW doesn't sell the car to its subsidiary, it sells it to a dealer (a separate company domiciled in the US, think "Jacks awesome BMWs, Toledo"). The profits that the dealer makes when it sells the car are taxed in the US, because it is a US domiciled company. BMW will probably pay something like sales tax and in some countries there will be import tariffs to pay. But the profit that BMW makes on the sale of the exported car, the difference between the price the US dealer pays them and the cost of all the raw materials, labour, marketing etc, is realised in Germany, and that's where they pay corporation tax. Because, where the hell else could it happen??
- AnAfrican 10y ago
  That's because BMW sells to a third party. Apple doesn't. (or rarely does). Amazon doesn't. Microsoft does less and less.
- the_mitsuhiko 10y ago
  > it has a US subsidiary company I doubt that. I'm pretty sure BMW US is a local LLC that might owned by the parent but is fully taxed on their operations in the US.