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Apple do pay their taxes just like you for everything they sell in the US. It's what they sell outside of the US that they don't pay, but they do pay in those o

Apple do pay their taxes just like you for everything they sell in the US. It's what they sell outside of the US that they don't pay, but they do pay in those other countries. The biggest unfair advantage they have against you is if you sell to overseas markets (you're paying US tax, not them) but if your market is US only then Apple isn't paying less than you are.

styx31 9y ago
I am speaking for the tax rate in EU countries, what is quoted in the related article. Regarding revenues in EU countries and moving expenses/royalties between countries to benefit from the lower rates. I think that the same cases exists in the US, between states themselves (Delaware ?). Where you create companies in multiple states depending on your activity to split your revenues. Again, a small company can't afford such tricks.
mpweiher 9y ago
>but they do pay in those other countries No, they do not. That is, they have optimized their rates so well as to pay next to nothing. Incidentally, this is the problem with repatriating those profits to the US: the IRS actually does recognize taxes that have already been paid and will "deduct" (don't know the exact technical mechanism, but that's the gist) the taxes that have already been paid to foreign tax authorities from the taxes due to the US. However, due to the tax "optimization" that's been happening, the actual tax paid is minuscule, and so the tax due on repatriation is substantial. So what Apple and other US multinationals would prefer is for the "tax already paid" to be a boolean rather than an amount. As in "we already paid 0.00004% tax on this, therefore it is already taxed and the IRS gets nothing", whereas the IRS says "well you paid 0.00004%, so we get (US rate - 0.00004%)". Of course, the corps call this "double taxation" and rail against it, but in fact double taxation is not happening, or only in that very warped sense.
Ixio 9y ago
> It's what they sell outside of the US that they don't pay, but they do pay in those other countries. Except they don't. The open letter says "What these filings also show is that since 2010, Apple’s foreign-earned income has been taxed at a rate of between 1 and 7 percent" however in Europe most countries have a corporate tax rate around 20% (cf https://en.wikipedia.org/wiki/Tax_rates_in_Europe https://en.wikipedia.org/wiki/Tax_rates_in_Europe). For Germany it looks like Apple is paying at least ten times less taxes than it should.
Swinx43 9y ago
While I appreciate the sentiment it is time to start taking a more global look at these antics of companies. I run my own company in the UK and I know for a fact that apple makes a massive amount of money selling in this country. Now as a small business owner I am taxed at 20% on corporate profit. (19% going forward now due to a tax cut in corporate rates introduced during the last financial year). You then also get taxed on any dividends you pay out to yourself as the owner of that company according to normal income tax rates, (Sure you get a £5000 dividend tax free allowance but after that you are on normal income tax bracket rates). There is simply NO way for me to change this. I pay my taxes each year diligently, otherwise I end up in jail. However massive companies that make billion in revenue from countries get to play the tax game and effective pay percentage wise a LOT less than small businesses in the UK while benefiting from the infrastructure provided and paid for by public funds that they contribute very little to. That infrastructure includes the Healthcare and Education system. Both which are under constant stress due to under funding. I am not for high taxation but I surely am for everyone paying their fare share. The employees working for these companies pay many times more tax on their salaries compared to what the corporation pays on its profits. At some point this vampire squid behaviour of extracting out of a country without helping fund the infrastructure that helped make it be a successful market cannot continue. This behaviour also gives me VERY little hope that AI and Automation will ever lead to the benefit of but a select few. /<rant>
- jaymzcampbell 9y ago
  I have been having the exact same argument with a friend on Facebook (I know, I know)... There is something about this whole thing that people seem to rationalize. My friend's ultimate argument was "well they pay more tax than I will in my lifetime anyway so what's the big deal". I had to give up in the end.
  - Swinx43 9y ago
    It is honestly a really tough point to argue with people. It becomes even worse when the person you are arguing with is in the fortunate position of having a good income and no current true worries. I used to be one of those people that believed that tax is theft until I have seen how quickly your situation can change due to unforeseen circumstance. A close family member got a terminal medical diagnosis and was the main source of income for the family. The person lived an exceptionally healthy life and got diagnosed with a condition for which they exhibited none of the normal risk factors. At that point where your survivor biased gets challenged by real hard hitting life events your illusions are shattered. I never wish anyone to experience the same, but I do wish more people can be made to realise that paying tax to look after those services that look after us all when life goes horribly wrong is actually worth it! (And that includes the corporations that benefit from having a fit and healthy workforce and consumer base)
PacketPaul 9y ago
Not true. Apple pays on the profits made in the US. The trick is to move the patents overseas and charge a lot to use those patents. Thus the US profits are small but the overseas patent royalties are huge.

styx31 9y ago

I am speaking for the tax rate in EU countries, what is quoted in the related article. Regarding revenues in EU countries and moving expenses/royalties between countries to benefit from the lower rates. I think that the same cases exists in the US, between states themselves (Delaware ?). Where you create companies in multiple states depending on your activity to split your revenues. Again, a small company can't afford such tricks.

mpweiher 9y ago

>but they do pay in those other countries No, they do not. That is, they have optimized their rates so well as to pay next to nothing. Incidentally, this is the problem with repatriating those profits to the US: the IRS actually does recognize taxes that have already been paid and will "deduct" (don't know the exact technical mechanism, but that's the gist) the taxes that have already been paid to foreign tax authorities from the taxes due to the US. However, due to the tax "optimization" that's been happening, the actual tax paid is minuscule, and so the tax due on repatriation is substantial. So what Apple and other US multinationals would prefer is for the "tax already paid" to be a boolean rather than an amount. As in "we already paid 0.00004% tax on this, therefore it is already taxed and the IRS gets nothing", whereas the IRS says "well you paid 0.00004%, so we get (US rate - 0.00004%)". Of course, the corps call this "double taxation" and rail against it, but in fact double taxation is not happening, or only in that very warped sense.

Ixio 9y ago

> It's what they sell outside of the US that they don't pay, but they do pay in those other countries. Except they don't. The open letter says "What these filings also show is that since 2010, Apple’s foreign-earned income has been taxed at a rate of between 1 and 7 percent" however in Europe most countries have a corporate tax rate around 20% (cf https://en.wikipedia.org/wiki/Tax_rates_in_Europe https://en.wikipedia.org/wiki/Tax_rates_in_Europe). For Germany it looks like Apple is paying at least ten times less taxes than it should.

Swinx43 9y ago

While I appreciate the sentiment it is time to start taking a more global look at these antics of companies. I run my own company in the UK and I know for a fact that apple makes a massive amount of money selling in this country. Now as a small business owner I am taxed at 20% on corporate profit. (19% going forward now due to a tax cut in corporate rates introduced during the last financial year). You then also get taxed on any dividends you pay out to yourself as the owner of that company according to normal income tax rates, (Sure you get a £5000 dividend tax free allowance but after that you are on normal income tax bracket rates). There is simply NO way for me to change this. I pay my taxes each year diligently, otherwise I end up in jail. However massive companies that make billion in revenue from countries get to play the tax game and effective pay percentage wise a LOT less than small businesses in the UK while benefiting from the infrastructure provided and paid for by public funds that they contribute very little to. That infrastructure includes the Healthcare and Education system. Both which are under constant stress due to under funding. I am not for high taxation but I surely am for everyone paying their fare share. The employees working for these companies pay many times more tax on their salaries compared to what the corporation pays on its profits. At some point this vampire squid behaviour of extracting out of a country without helping fund the infrastructure that helped make it be a successful market cannot continue. This behaviour also gives me VERY little hope that AI and Automation will ever lead to the benefit of but a select few. /<rant>

jaymzcampbell 9y ago
I have been having the exact same argument with a friend on Facebook (I know, I know)... There is something about this whole thing that people seem to rationalize. My friend's ultimate argument was "well they pay more tax than I will in my lifetime anyway so what's the big deal". I had to give up in the end.
- Swinx43 9y ago
  It is honestly a really tough point to argue with people. It becomes even worse when the person you are arguing with is in the fortunate position of having a good income and no current true worries. I used to be one of those people that believed that tax is theft until I have seen how quickly your situation can change due to unforeseen circumstance. A close family member got a terminal medical diagnosis and was the main source of income for the family. The person lived an exceptionally healthy life and got diagnosed with a condition for which they exhibited none of the normal risk factors. At that point where your survivor biased gets challenged by real hard hitting life events your illusions are shattered. I never wish anyone to experience the same, but I do wish more people can be made to realise that paying tax to look after those services that look after us all when life goes horribly wrong is actually worth it! (And that includes the corporations that benefit from having a fit and healthy workforce and consumer base)

PacketPaul 9y ago

Not true. Apple pays on the profits made in the US. The trick is to move the patents overseas and charge a lot to use those patents. Thus the US profits are small but the overseas patent royalties are huge.