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But Apple is following the local laws. You're sidestepping the question - why does New Zealand care whether or not Apple pays Irish taxes in Ireland?

• mikeyouse 10y ago
  It's amazing how far people go to defend these supranational corporations who are clearly in the wrong but I'll bite. Nearly every country on earth has a law on the books that voids transactions that only exist to avoid tax. Usually with penalties. It's 2am or else I'd reference the specific law in New Zealand, but the relevant case law in the US is from Gregory vs Helvering: https://en.m.wikipedia.org/wiki/Gregory_v._Helvering https://en.m.wikipedia.org/wiki/Gregory_v._Helvering It's transparently obvious that Apple's subsidiaries in Ireland and the Netherlands exist purely to evade taxes. However their lobbying and economic power have protected them for years, which may have broken recently when the EU determined that they owe $14 billion for illegal benefits (http://www.cnbc.com/2017/01/31/apple-misses-deadline-to-pay-ireland-illegal-tax-benefits.html http://www.cnbc.com/2017/01/31/apple-misses-deadline-to-pay-...). So to answer your question, New Zealand has an agreement with all of the companies that they recognize their revenue and expenses and pay tax on the difference. When Apple New Zealand says that they owe their Irish counterpart hundreds of dollars per phone for licensing, and the New Zeaand authorities see that it's an obvious tax dodge shell company, they can and should question whether those hundreds of dollars fall into form vs substance. There is no actual business purpose to pay licensing fees to an Irish subsidiary that was gifted huge amounts of Apple IP.
  • gozur88 10y ago
    >It's transparently obvious that Apple's subsidiaries in Ireland and the Netherlands exist purely to evade taxes. To avoid taxes? Sure. Tax evasion is a crime, though, and they haven't even been accused, let alone convicted. >However their lobbying and economic power have protected them for years, which may have broken recently when the EU determined that they owe $14 billion for illegal benefits... The issue for the EU revolved around whether Ireland must tax Apple under EU law, not whether the profits Apple is recognizing in Ireland can legitimately be recognized in Ireland. >So to answer your question, New Zealand has an agreement with all of the companies that they recognize their revenue and expenses and pay tax on the difference. When Apple New Zealand says that they owe their Irish counterpart hundreds of dollars per phone for licensing, and the New Zeaand authorities see that it's an obvious tax dodge shell company, they can and should question whether those hundreds of dollars fall into form vs substance. There is no actual business purpose to pay licensing fees to an Irish subsidiary that was gifted huge amounts of Apple IP. You're still sidestepping the question. I didn't ask whether tax authorities in New Zealand have an interest in making sure Apple pays what it owes in New Zealand. The question was why would New Zealand care whether or not Apple pays Irish taxes in Ireland.
    • erichocean 10y ago
      > Tax evasion is a crime, though, and they haven't even been accused, let alone convicted. It's almost like you're just making shit up, since the EU did exactly that with Apple's Ireland tax scheme already: Apple tax: Why tech firm has been hit with £11bn bill[0] Google "apple tax evasion" if you'd like to know more. [0] http://www.independent.co.uk/news/business/news/apple-ordered-to-pay-11bn-in-back-taxes-ireland-european-commission-tax-avoidance-a7216206.html http://www.independent.co.uk/news/business/news/apple-ordere...
      • gozur88 10y ago
        >It's almost like you're just making shit up, since the EU did exactly that with Apple's Ireland tax scheme already... It's almost like you have no idea what you're talking about. The issue in that order was whether or not Ireland had to charge Apple the normal EU rates, not whether Apple had done anything illegal.