6 ms·

Why does no one get mad at the governments who have the large tax loop holes? Shouldn't it be "Ireland close your loopholes!"

Voloskaya 9y ago
> Why does no one get mad at the governments who have the large tax loop holes? Why do you assume no one is? This has been discussed at length during the last French presidential election for example. See also: https://www.bloomberg.com/news/articles/2017-10-24/macron-has-some-awkward-questions-for-irish-leader-on-tax-policy https://www.bloomberg.com/news/articles/2017-10-24/macron-ha....
- pcurve 9y ago
  Found another article. https://www.rte.ie/news/2017/0916/905202-donohoe-eu-tax-plan/ https://www.rte.ie/news/2017/0916/905202-donohoe-eu-tax-plan... "According to one diplomat, the strongest level of opposition came from Ireland, Malta and Cyprus. Luxembourg was said to have raised a series of practical problems about the proposal, arguing it would introduce a lot of complexity into the tax system." Go figure. Noncompetitive EU countries complaining the loudest.
  - 21 9y ago
    Can't help notice that three of the four are tiny countries. And the fourth, Ireland, is not that big either. I'm starting to thing that there might also be a geopolitic reason to become a tax heaven, not just an economic one, something along the line "Let's convince Amazon to book profits here, and there let's see who will dare mess with us, given that Amazon will be protected by USA"
    - adventured 9y ago
      For a small nation, it's one of the few outsized competitive advantages they can try to offer (that is, something they can do that can benefit them far beyond the scale of their population). Ireland's corporate tax rate + joining the European single market, resulted in one of the greatest booms in modern economic history. From $40 to $280 billion in GDP in just 17 years. Given the extreme nature of the benefits, a small nation is probably crazy not to do it.
      - Boothroid 9y ago
        Is that inflation adjusted?
  - barrkel 9y ago
    France has a lower effective rate of tax than Ireland's for companies in the CAC40 - 8%. There's a lot of hypocrisy whirling around about tax. The larger a company is, the lower tax it pays in France owing to various breaks and deals. A bunch of this criticism is just another way of saying France First.
- humanrebar 9y ago
  > Why do you assume no one is? Because they're picketing Apple and not the National Assembly?
  - Voloskaya 9y ago
    As far as I know, the French national assembly doesn't make the law in Ireland, so I fail to see the point.
  - owebmaster 9y ago
    Would you be discussing the occupation of the National assembly here in HN? Did you the last time?
bauerd 9y ago
Maybe people are mad at their government but more mad at Apple?
- bdibs 9y ago
  More would be accomplished by protesting the government that allows certain loopholes. Apple is a public company with an obligation to its shareholders to make money, not pay erroneous taxes.
  - bauerd 9y ago
    >More would be accomplished by protesting the government that allows certain loopholes. I'm not so sure about this as I'd question that it's possible for a single government to close loopholes on its own. Arguably yes, governments should be pressured into closing "certain loopholes", but not because this necessarily leads to a better outcome. >Apple is a public company with an obligation to its shareholders to make money Not everyone agrees that companies ought to maximise only shareholder value.
    - xiphias 9y ago
      Shareholder value and making money are not the same thing (and the job of the CEO is to maximize shareholder value, not money). I'm a Tesla shareholder, and I would be quite disappointed if the company would stop caring about scaled sustainability and would just stay as a luxury car brand (which would make it easy for Tesla to not lose money on research).
    - humanrebar 9y ago
      > I'm not so sure about this as I'd question that it's possible for a single government to close loopholes on its own. That's the argument against signing global warming treaties, isn't it?
      - bauerd 9y ago
        It's not an argument against closing loopholes.
jules 9y ago
The problem is the EU, not Ireland. France should be able to tax apple on its own.
- seanmcdirmid 9y ago
  France does tax Apple on its own. They still pay VAT of course as well as on any profits classified as French (e.g. retail). The question is then everything else whose origin isn’t obvious.
  - rsj_hn 9y ago
    The issue is using various IP transfer schemes to make it look like their French division has no profits while the Isle of Man division is earning billions.
    - seanmcdirmid 9y ago
      Technically speaking, almost all of the value is created in the USA via R&D. I don’t think Apple has any significant amount of R&D creation in France (hopefully a lab or two). Then there is some by order manufacturing in China, along with component acquisition, leaving just retail and distribution for local markets. Now, Apple can and has done some dodgy IP transfers to tax havens, but France wouldn’t have been the wronged party in that, the USA would be.
      - realusername 9y ago
        Value is only created when you sell products, not when you create them (and especially not in R&D which is gamble cost for most companies), otherwise all the startups would be rich. If there would be no value creation in France, Apple would not have any business there.
        seanmcdirmid 9y ago
        Ridiculous, how would that even work? Profit is “sales - expenses.” So how would Apple account for the R&D in the states, or does Apple France just want to tax them assuming all the inputs don’t exist? That’s why Apple USA sells iPhones to Apple France at some price above hardware production costs. It doesn’t make sense any other way. Value isn’t created on sale, it is only realized as money at that point.
deleted 9y ago
[deleted]
barrkel 9y ago
Ireland is closing its loopholes. Specifically, if a company is managed outside the country but registered in the country, it was considered non-resident for tax purposes. That changed in 2014, with a grandfathered provision that expires in 2020. http://www.internationaltaxreview.com/Article/3410898/Ireland-Changes-to-Irish-corporate-residence-rules.html http://www.internationaltaxreview.com/Article/3410898/Irelan...

Voloskaya 9y ago

> Why does no one get mad at the governments who have the large tax loop holes? Why do you assume no one is? This has been discussed at length during the last French presidential election for example. See also: https://www.bloomberg.com/news/articles/2017-10-24/macron-has-some-awkward-questions-for-irish-leader-on-tax-policy https://www.bloomberg.com/news/articles/2017-10-24/macron-ha....

pcurve 9y ago
Found another article. https://www.rte.ie/news/2017/0916/905202-donohoe-eu-tax-plan/ https://www.rte.ie/news/2017/0916/905202-donohoe-eu-tax-plan... "According to one diplomat, the strongest level of opposition came from Ireland, Malta and Cyprus. Luxembourg was said to have raised a series of practical problems about the proposal, arguing it would introduce a lot of complexity into the tax system." Go figure. Noncompetitive EU countries complaining the loudest.
- 21 9y ago
  Can't help notice that three of the four are tiny countries. And the fourth, Ireland, is not that big either. I'm starting to thing that there might also be a geopolitic reason to become a tax heaven, not just an economic one, something along the line "Let's convince Amazon to book profits here, and there let's see who will dare mess with us, given that Amazon will be protected by USA"
  - adventured 9y ago
    For a small nation, it's one of the few outsized competitive advantages they can try to offer (that is, something they can do that can benefit them far beyond the scale of their population). Ireland's corporate tax rate + joining the European single market, resulted in one of the greatest booms in modern economic history. From $40 to $280 billion in GDP in just 17 years. Given the extreme nature of the benefits, a small nation is probably crazy not to do it.
    - Boothroid 9y ago
      Is that inflation adjusted?
- barrkel 9y ago
  France has a lower effective rate of tax than Ireland's for companies in the CAC40 - 8%. There's a lot of hypocrisy whirling around about tax. The larger a company is, the lower tax it pays in France owing to various breaks and deals. A bunch of this criticism is just another way of saying France First.
humanrebar 9y ago
> Why do you assume no one is? Because they're picketing Apple and not the National Assembly?
- Voloskaya 9y ago
  As far as I know, the French national assembly doesn't make the law in Ireland, so I fail to see the point.
- owebmaster 9y ago
  Would you be discussing the occupation of the National assembly here in HN? Did you the last time?

bauerd 9y ago

Maybe people are mad at their government but more mad at Apple?

bdibs 9y ago
More would be accomplished by protesting the government that allows certain loopholes. Apple is a public company with an obligation to its shareholders to make money, not pay erroneous taxes.
- bauerd 9y ago
  >More would be accomplished by protesting the government that allows certain loopholes. I'm not so sure about this as I'd question that it's possible for a single government to close loopholes on its own. Arguably yes, governments should be pressured into closing "certain loopholes", but not because this necessarily leads to a better outcome. >Apple is a public company with an obligation to its shareholders to make money Not everyone agrees that companies ought to maximise only shareholder value.
  - xiphias 9y ago
    Shareholder value and making money are not the same thing (and the job of the CEO is to maximize shareholder value, not money). I'm a Tesla shareholder, and I would be quite disappointed if the company would stop caring about scaled sustainability and would just stay as a luxury car brand (which would make it easy for Tesla to not lose money on research).
  - humanrebar 9y ago
    > I'm not so sure about this as I'd question that it's possible for a single government to close loopholes on its own. That's the argument against signing global warming treaties, isn't it?
    - bauerd 9y ago
      It's not an argument against closing loopholes.

jules 9y ago

The problem is the EU, not Ireland. France should be able to tax apple on its own.

seanmcdirmid 9y ago
France does tax Apple on its own. They still pay VAT of course as well as on any profits classified as French (e.g. retail). The question is then everything else whose origin isn’t obvious.
- rsj_hn 9y ago
  The issue is using various IP transfer schemes to make it look like their French division has no profits while the Isle of Man division is earning billions.
  - seanmcdirmid 9y ago
    Technically speaking, almost all of the value is created in the USA via R&D. I don’t think Apple has any significant amount of R&D creation in France (hopefully a lab or two). Then there is some by order manufacturing in China, along with component acquisition, leaving just retail and distribution for local markets. Now, Apple can and has done some dodgy IP transfers to tax havens, but France wouldn’t have been the wronged party in that, the USA would be.
    - realusername 9y ago
      Value is only created when you sell products, not when you create them (and especially not in R&D which is gamble cost for most companies), otherwise all the startups would be rich. If there would be no value creation in France, Apple would not have any business there.
      - seanmcdirmid 9y ago
        Ridiculous, how would that even work? Profit is “sales - expenses.” So how would Apple account for the R&D in the states, or does Apple France just want to tax them assuming all the inputs don’t exist? That’s why Apple USA sells iPhones to Apple France at some price above hardware production costs. It doesn’t make sense any other way. Value isn’t created on sale, it is only realized as money at that point.

deleted 9y ago

[deleted]

barrkel 9y ago

Ireland is closing its loopholes. Specifically, if a company is managed outside the country but registered in the country, it was considered non-resident for tax purposes. That changed in 2014, with a grandfathered provision that expires in 2020. http://www.internationaltaxreview.com/Article/3410898/Ireland-Changes-to-Irish-corporate-residence-rules.html http://www.internationaltaxreview.com/Article/3410898/Irelan...