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A reply to European(mostly German) decision to try to tax Apple... US Government went furious with UE decision because they consider Apple more than 200 billio

by pipio21 10y ago

A reply to European(mostly German) decision to try to tax Apple... US Government went furious with UE decision because they consider Apple more than 200 billion dollars outside America their own. As all governments around the world become progressively more and more broke they need money and companies money abroad is the easy (temporal)solution. I know US officials were considering a tax break soon in order to repatriate all the money from US companies. The Europeans taxing Apple was considered a threat by US of taking all this money before the US does. I have friends in EU council and chairs had literally be thrown in the air in the last days. Never forget the US is a military power that believes it is the king of the world.

heisenbit 10y ago
The decision was not about Apple's 200B globally but about the profit Apple has generated within the EU in a time period limited by legal statues of limitation. Without the de-facto only for tax purposes existing legal entity in the Irland Apple would have had to pay these taxes in the past. In any legal regime when one does intra-company transactions just for tax labeling cosmetics one runs a severe risk that whatever one did is ruled irrelevant and one is taxed as if the distorting transactions never happened. Apple could have generated a lot of profit in the US and would have paid taxes in the US on it and at the same time minimized their profit in the EU. Alternatively Apple could have made the profit in the EU and less in the US and paid taxes there. What they came up with - with the Irish Government looking deliberately the other way - was allocating the profit to a fictional vacuum and not paying taxes anywhere. People should happy that this scheme ends. It is a slap on the wrists of the Irish(!) government and primarily that. I believe intention goes beyond Apple and Ireland - there are a lot of odd constructs out there also in the pharma space involving other EU countries. Besides the taxman in the EU and also the US the other main beneficiary of this decision will be all the big tax accounting firms like PWC, EY etc. scrambling now to review their past advice, cautioning less aggressiveness and trying to find more robust holes. Stopping this nonsense is good for everyone. Having large pools of untaxed money in regular companies is ultimately distorting the business focus, reporting and capital allocation. People may believe Tim Cook is not an innovator worthy leading Apple or exactly the right guy moving the company along a stable growth path. Nobody thinks he is a good investment banker and nor should he need to be one. Good governance is about having sensible rules and enforcing them fairly. When rules get broken systemically for a longer period for whatever reason righting the ship gets messy. Is it fair to go back 10 years in case of Irland/Apple? Are 14B enough for the DB case? Is VW paying enough? Is Wells Fargo? They all get slapped on the wrist. Looking closer it seems with a feather - me doing the same I suspect it would be handcuffs. I guess I'm not systemically important enough.

by pipio21 10y ago

heisenbit 10y ago

The decision was not about Apple's 200B globally but about the profit Apple has generated within the EU in a time period limited by legal statues of limitation. Without the de-facto only for tax purposes existing legal entity in the Irland Apple would have had to pay these taxes in the past. In any legal regime when one does intra-company transactions just for tax labeling cosmetics one runs a severe risk that whatever one did is ruled irrelevant and one is taxed as if the distorting transactions never happened. Apple could have generated a lot of profit in the US and would have paid taxes in the US on it and at the same time minimized their profit in the EU. Alternatively Apple could have made the profit in the EU and less in the US and paid taxes there. What they came up with - with the Irish Government looking deliberately the other way - was allocating the profit to a fictional vacuum and not paying taxes anywhere. People should happy that this scheme ends. It is a slap on the wrists of the Irish(!) government and primarily that. I believe intention goes beyond Apple and Ireland - there are a lot of odd constructs out there also in the pharma space involving other EU countries. Besides the taxman in the EU and also the US the other main beneficiary of this decision will be all the big tax accounting firms like PWC, EY etc. scrambling now to review their past advice, cautioning less aggressiveness and trying to find more robust holes. Stopping this nonsense is good for everyone. Having large pools of untaxed money in regular companies is ultimately distorting the business focus, reporting and capital allocation. People may believe Tim Cook is not an innovator worthy leading Apple or exactly the right guy moving the company along a stable growth path. Nobody thinks he is a good investment banker and nor should he need to be one. Good governance is about having sensible rules and enforcing them fairly. When rules get broken systemically for a longer period for whatever reason righting the ship gets messy. Is it fair to go back 10 years in case of Irland/Apple? Are 14B enough for the DB case? Is VW paying enough? Is Wells Fargo? They all get slapped on the wrist. Looking closer it seems with a feather - me doing the same I suspect it would be handcuffs. I guess I'm not systemically important enough.