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Apple might be able to get away here for now, but laws will continue to be adjusted in order to make it harder and harder to arbitrarily move profits around. Th
by Hermel 10y ago
Apple might be able to get away here for now, but laws will continue to be adjusted in order to make it harder and harder to arbitrarily move profits around. This is an ongoing process that has started years ago. These legal adjustments are all aimed towards making sure that profits are taxed in the country in which they are actually generated. In the worst case, this will end up as a cat-and-mouse game between governments and corporations and lead to a bureaucratic nightmare, which would be entirely avoidable if companies like Apple were more honest to begin with. And don't tell me that companies have a "fiduciary duty" to avoid as much taxes as possible in order to maximize profits. That's a myth. Shareholders are completely free to define the purpose of a company in its articles. And in fact, the articles usually don't say "maximize profits at all cost", but are kept general enough to allow for paying taxes as it was intended by the law.
- lambdasquirrel 10y agoWhen an iPad is sold in Germany, does Apple pay VAT in Germany or in Ireland? (Serious question. I don't live in the EU.)
- dageshi 10y agoIf it's sold by anyone inside the EU either physically or online Germany receives VAT at the German VAT rate.
- raverbashing 10y agoGermany
- tankenmate 10y agoI'm fairly certain this is a case about corporate income tax (tax on profits) not VAT (tax on sales).
- matt4077 10y agoIt depends. If they sell it to a business they don't pay VAT at all. For sales to consumers they would now pay the customer's country , I believe that just changed about a year ago. Amazon and Luxembourg may or may not have been responsible for that change :)
- occamrazor 10y agoTo be precise, the Luxembourg loophole was in force only for digital goods.
- matt4077 10y agoReally? I seem to remember that they paid VAT to Luxembourg, but had made a pretty good deal with the authorities that reduced their effective VAT rate to below 1%.
- occamrazor 10y agoI think it applied only to Prime and to mp3's, at least after 2008 or so. This was also the reason why Skype, eBay and others had their European HQ in Luxembourg. OTOH books had reduced VAT in most countries.
- jusssi 10y agoOthers have answered your question correctly. I'd like to add that Apple doesn't pay VAT, the consumer does. It's just Apple's responsibility to collect the VAT from the consumer and forward it to the tax authority.
- doikor 10y agoApple doesn't pay the VAT the consumer does. That is why Apple products costs roughly 30% (24% VAT + some extra due to fucking up the dollar to euro conversion) more in Finland when compared to US even though they ship directly from a factory in China.
- jdmichal 10y agoYes, the consumer technically pays the tax. However, Apple acts as the collector of the tax from the consumer, and is responsible for "passing it on" to the appropriate tax authority. So, the reform the asked question: What tax authority does Apple report and pay the taxes to? And the answer is that the EU regulations state that VAT taxes are to be paid in the country in which the transaction takes place. If the transaction is online (and potentially therefore spanning multiple countries), the customer's location is used as the place of transaction.
- Retric 10y agoSure, there is a separate line item on the bill, but if Apple collects the wrong amount they are on the hook to pay the correct amount not the consumer.
- marcoperaza 10y agoForget about 'fiduciary duty'; it's just plain dumb to pay more taxes than what you minimally owe according to the letter of the law. It's literally giving away your money.
- tankenmate 10y agoGiving away your money for the common good.
- marcoperaza 10y agoIf I'm voluntarily giving money away, I can think of many ways to better serve the common good than to give it to the government.
- tankenmate 10y agoof the people, by the people, for the people
- deleted 10y ago[deleted]
- geodel 10y agoThe question why there were flaws in current law in first place. I think they were there because politicians like to strut around with CEOs who bring employment opportunities(however dubious) in those areas which help them win votes. Governments sign MOUs and preferential treatment agreements to bring companies in their areas. Instead of Apple if governments were more honest they would have told locals that companies are not looking to set up base here because they are seeking tax benefits and as upright people we will not do that.
- zaphar 10y agoIn some cases it's because .005% on billions of dollars is a better deal than 12% on zeros of dollars. These countries are competing with other countries on who offers the better deal to get a piece of the Apple/Google/whoever pie.
- geodel 10y agoOf course I agree with that. It is kind of cognitive dissonance in people that I should be able to negotiate a sweet deals for my 'humble needs' but companies must take most expensive deals for themselves.
- deleted 10y ago[deleted]