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There are no one-off deals, and Apple doesn't pay 0.005%. Apple pays Ireland 12.5% of all taxable-in-Ireland income. That's because that's Ireland's corporate

by jholman 10y ago

There are no one-off deals, and Apple doesn't pay 0.005%. Apple pays Ireland 12.5% of all taxable-in-Ireland income. That's because that's Ireland's corporate income tax rate. Conveniently, because of the structure of Irish tax law, very very little income is taxable in Ireland. And that's more than is taxable in any other EU country. And, in fact, there's no country where very much of their income is taxable. Pretty awesome for them, I guess. When the bullshitters say "paying 0.005% effective tax rate", they mean "when you take all their revenue everywhere [in the EU], they pay 0.005% on that". That's not how tax works for any corporation ever.

scholia 10y ago
As I've said in another comment, what Apple is doing is basically a scam. (1) Avoid paying taxes in the UK, Germany, France etc by claiming you're taxed in Ireland. (2) Once in Ireland, channel the money into a fake company (0 staff, 0 offices) that is stateless and isn't taxed anywhere. This is "creative accounting" at its finest.....
- jholman 10y ago
  You're missing several stages in how the creative accounting works, and each of those stages are, separately, probably good things, which is why they exist in the first place. Note, for example, that the UK and Germany and France all have laws that make it okay to avoid paying taxes by claiming (truthfully) that you're taxed in Ireland, according to the laws of tax residency of those respective countries. But yes, it's an undesirable-to-collective-civilization loophole, and it'd be nice for it to be closed. I'd love for Apple to be compelled to pay more taxes. Yes yes yes! I'm surprised that the EU is making so much headway in this round, but if they fail in this round, I resoundingly hope they pass some new laws, such that they can win in the future. The "head office" company isn't stateless, btw, and btw it technically has an office (usually a P.O. Box) and some people do work for it. There are maybe a dozen companies involved, including the actual-work-doing companies in the UK and Germany and France, and every one of those companies have an HQ in a state. I think that the "head office" is even located legally in Ireland.
  - scholia 10y ago
    > the UK and Germany and France all have laws that make it okay to avoid paying taxes by claiming (truthfully) that you're taxed in Ireland Yes. The problem is that Apple isn't paying taxes in Ireland on the money it tells the UK and Germany and France is being taxed in Ireland. There's no good way to gloss over this. It's either criminal or it's unethical.
- dkonofalski 10y ago
  It's not a scam as much as it's a loophole. The other countries allow for corporations to not pay taxes if they are paying taxes in another country. Apple is paying taxes in Ireland, so they are not required to pay taxes in those other countries. In Ireland, though, the law there says that you can only be taxed on income that's actually generated in Ireland. Since Apple only generates sales income in Ireland from things like online sales and regional sales, they only get taxed on those amounts. It's a loophole. The loophole should be closed, but I don't think Apple should have to pay anything in back taxes because what they were doing was completely legal and allowed by all the laws currently in place.
  - scholia 10y ago
    > It's not a scam as much as it's a loophole. You surely don't mean that Apple accidentally created a stateless company with no staff and no buildings to swindle taxpayers out of billions? I'm pretty sure a lot of planning went into it. If it's arguably legal, there's nothing ethical about going out of your way to devise and exploit these "loopholes". Frankly, it's just what you'd expect from a brutal multi-national corporation that mercilessly exploits underpaid Chinese workers, despite having over $200 billion in cash....
    - dkonofalski 10y ago
      I never said that planning didn't go into it nor did I suggest that there was any accident. It's a loophole, though. It's a creative way to use the current, lawful tax codes. Why would a company pay more than what they're legally entitled to pay? That's literally throwing money away. As I said, in my last comment, the loophole should be closed but to suggest that Apple should pay back taxes on it is ridiculous. Edit: I also want to push back on your comment about them exploiting Chinese workers. Apple doesn't exploit the workers, the factory owners do. Apple does everything it can to minimize the exploitation of the workers including random factory audits and employee surveys. No other electronics company in the US does this and, frankly, Apple doesn't have to. They pay someone to make components for them and if the company they pay say that they can make those components, then that's really the end of the story. Apple realizes that Chinese culture and law don't support human rights and well-being so they go above and beyond to try and correct the situation. If they were as monolithic and uncaring as you claim, they wouldn't even do that.
deleted 10y ago
[deleted]
disiplus 10y ago
afaik the problem is this. apple should pay taxes where they do business, but they dont, they tunnel everything thru ireland. and ireland says, ok apple you have to pay only the tax on the income u generated here in ireland, everything that came from outside is free.

by jholman 10y ago

scholia 10y ago

As I've said in another comment, what Apple is doing is basically a scam. (1) Avoid paying taxes in the UK, Germany, France etc by claiming you're taxed in Ireland. (2) Once in Ireland, channel the money into a fake company (0 staff, 0 offices) that is stateless and isn't taxed anywhere. This is "creative accounting" at its finest.....

jholman 10y ago
You're missing several stages in how the creative accounting works, and each of those stages are, separately, probably good things, which is why they exist in the first place. Note, for example, that the UK and Germany and France all have laws that make it okay to avoid paying taxes by claiming (truthfully) that you're taxed in Ireland, according to the laws of tax residency of those respective countries. But yes, it's an undesirable-to-collective-civilization loophole, and it'd be nice for it to be closed. I'd love for Apple to be compelled to pay more taxes. Yes yes yes! I'm surprised that the EU is making so much headway in this round, but if they fail in this round, I resoundingly hope they pass some new laws, such that they can win in the future. The "head office" company isn't stateless, btw, and btw it technically has an office (usually a P.O. Box) and some people do work for it. There are maybe a dozen companies involved, including the actual-work-doing companies in the UK and Germany and France, and every one of those companies have an HQ in a state. I think that the "head office" is even located legally in Ireland.
- scholia 10y ago
  > the UK and Germany and France all have laws that make it okay to avoid paying taxes by claiming (truthfully) that you're taxed in Ireland Yes. The problem is that Apple isn't paying taxes in Ireland on the money it tells the UK and Germany and France is being taxed in Ireland. There's no good way to gloss over this. It's either criminal or it's unethical.
dkonofalski 10y ago
It's not a scam as much as it's a loophole. The other countries allow for corporations to not pay taxes if they are paying taxes in another country. Apple is paying taxes in Ireland, so they are not required to pay taxes in those other countries. In Ireland, though, the law there says that you can only be taxed on income that's actually generated in Ireland. Since Apple only generates sales income in Ireland from things like online sales and regional sales, they only get taxed on those amounts. It's a loophole. The loophole should be closed, but I don't think Apple should have to pay anything in back taxes because what they were doing was completely legal and allowed by all the laws currently in place.
- scholia 10y ago
  > It's not a scam as much as it's a loophole. You surely don't mean that Apple accidentally created a stateless company with no staff and no buildings to swindle taxpayers out of billions? I'm pretty sure a lot of planning went into it. If it's arguably legal, there's nothing ethical about going out of your way to devise and exploit these "loopholes". Frankly, it's just what you'd expect from a brutal multi-national corporation that mercilessly exploits underpaid Chinese workers, despite having over $200 billion in cash....
  - dkonofalski 10y ago
    I never said that planning didn't go into it nor did I suggest that there was any accident. It's a loophole, though. It's a creative way to use the current, lawful tax codes. Why would a company pay more than what they're legally entitled to pay? That's literally throwing money away. As I said, in my last comment, the loophole should be closed but to suggest that Apple should pay back taxes on it is ridiculous. Edit: I also want to push back on your comment about them exploiting Chinese workers. Apple doesn't exploit the workers, the factory owners do. Apple does everything it can to minimize the exploitation of the workers including random factory audits and employee surveys. No other electronics company in the US does this and, frankly, Apple doesn't have to. They pay someone to make components for them and if the company they pay say that they can make those components, then that's really the end of the story. Apple realizes that Chinese culture and law don't support human rights and well-being so they go above and beyond to try and correct the situation. If they were as monolithic and uncaring as you claim, they wouldn't even do that.

deleted 10y ago

[deleted]

disiplus 10y ago

afaik the problem is this. apple should pay taxes where they do business, but they dont, they tunnel everything thru ireland. and ireland says, ok apple you have to pay only the tax on the income u generated here in ireland, everything that came from outside is free.