7 ms·

=> But if a US company earns income in Germany it pays both German taxes and US taxes. This is not portrayed accurately. If you pay German taxes, you claim exc

=> But if a US company earns income in Germany it pays both German taxes and US taxes. This is not portrayed accurately. If you pay German taxes, you claim exception for that amount. So if you pay more taxes than the rate in US, you owe no tax for that income in US. If the rate is less in the country than in US, you pay the difference.

adw 9y ago
If there's a double taxation treaty for corporate income in place. I have no idea, but it's somewhere in https://www.irs.gov/pub/irs-trty/germany.pdf https://www.irs.gov/pub/irs-trty/germany.pdf ...
benjaminl 9y ago
Yes, that is correct but since the US had until recently the highest corporate tax in the OECD, the US corporation will would almost always pay more taxes on German income than a German corporation would on German it’s German income. Giving the US corporation a systematic disadvantage unless they kept the money out of the US. But all this has now changed.
- TheSpiceIsLife 9y ago
  > What is little known about this tax bill > But all this has now changed I live in Australia. As a casual outside observer, can you inform me as to whether this tax bill has passed in to legislation, or is likely to?
  - trothamel 9y ago
    It's law, as of a few weeks ago. Some provisions will go into effect over the course of this year.
  - jldugger 9y ago
    It's law: http://thehill.com/sites/default/files/styles/thumb_small_article/public/trumpdonald_signingtax_122217getty.jpg?itok=_4458LR0 http://thehill.com/sites/default/files/styles/thumb_small_ar...
  - stevenwoo 9y ago
    It passed, but there are parts of the bill that only last ten years (those applying to personal/small business taxes), and then those tax rules revert to the previous version after ten years unless they are passed again under non-Byrd rules in the Senate. https://www.bloomberg.com/news/articles/2017-11-14/how-the-byrd-rule-will-shape-u-s-tax-overhaul-quicktake-q-a https://www.bloomberg.com/news/articles/2017-11-14/how-the-b...
    - cavisne 9y ago
      Which will of course be extended as no government would survive a personal tax increase
      - SolarNet 9y ago
        Which assumes rational government. Our government is controlled by one party and yet we are heading to a government shutdown over immigration. Rational seems far away.
        talmand 9y ago
        If the opposing party is threatening shutdown of the government then it would seem that the government is not ruled by that single party.
        pwinnski 9y ago
        That single party has the majority of both houses of Congress and also the White House, and yet cannot manage to get a majority vote in the Senate because of disagreement within their own party. The opposing party is not threatening shutdown. A group within the majority is. Since that group within the majority party won't play ball, the majority of the majority party is hoping to garner some support from the minority party. As it happens, some of the changes they want to make would require 60% of votes rather than just 50%+1, but they haven't yet demonstrated they can get to 50%+1, so that's irrelevant here.
      - pg314 9y ago
IBM 9y ago
Yes you get a credit for the foreign taxes paid, but even still it's absurdly punitive for being an American corporation.
- Pulcinella 9y ago
  I would not consider taxes to be “punitive.” Taxes aren’t punishment. They are much more like a membership fee.
  - IBM 9y ago
    I think it's fine to view taxes that way, but we should also realize that to a business taxes are a cost to be minimized. No for-profit business willingly conducts their affairs to maximize taxes. We live in a rules based system and the rules should be designed to incentivize the behaviors we want. Expecting any business to deviate from whats in their best interest is just... out of touch with reality.
    - fjsolwmv 9y ago
      That's been repeated ad nauseum and isn't relevant to this discussion. Parent was replying to someone who said "punitive".
    - rhizome 9y ago
      What's good for America is good for General Motors.
      - Helloworldboy 9y ago
        What’s good for America may make GM uncompetitive internationally.
    - burnallofit 9y ago
      Many public corporations want to (indirectly) maximize taxes. That's because taxes are levied on profits, and maximizing profits to increase share value is often a good thing.
revelation 9y ago
But of course Apple isn't paying no German taxes. They didn't pay taxes on any of this overseas money, and they had the gall to ask for an "repatriation holiday" so they could pay overall zero taxes on that huge heap of money. Now they are paying the US gov. Unless they can keep coming up with more Irish tax avoidance schemes, going forward they will probably also have to pay in Europe.
- valuearb 9y ago
  Yes, they paid taxes in Germany, France, etc. it’s reported in their financial statements. They’ve already paid 8 or 9% foreign income taxes on their foreign earnings.
  - gaius 9y ago
    Really? Because those are EU countries and Apple has a tax deal with Ireland in the EU.
    - skgoa 9y ago
      Their corporate headquarter is in Ireland. They pay payroll taxes, VAT etc. in each EU member state just like every business has to. They do not, however, have to pay taxes on their corporate earnings in EU countries other than Ireland. That is a central part of "Freedom of Commerce" in the EU. (One of the EU's 4 foundational freedoms.) What Apple has been rightfully accused of is not paying their taxes on corporate earnings in Ireland.
  - revelation 9y ago
    How do you evade sales tax, labor overhead? 9% is a far ways off from the nominal.
- speleding 9y ago
  Apple paid millions in VAT, income tax for German employees, environmental (packaging) taxes, etc. They did not pay much tax on their profits in Germany, but it's debatable which part of the profit of a firm designing phones in the US and building them in China should fall to Germany.
MrMorden 9y ago
And either way you have to do all the work for both countries' tax systems. Compliance costs are not negligible.

adw 9y ago

If there's a double taxation treaty for corporate income in place. I have no idea, but it's somewhere in https://www.irs.gov/pub/irs-trty/germany.pdf https://www.irs.gov/pub/irs-trty/germany.pdf ...

benjaminl 9y ago

Yes, that is correct but since the US had until recently the highest corporate tax in the OECD, the US corporation will would almost always pay more taxes on German income than a German corporation would on German it’s German income. Giving the US corporation a systematic disadvantage unless they kept the money out of the US. But all this has now changed.

TheSpiceIsLife 9y ago
> What is little known about this tax bill > But all this has now changed I live in Australia. As a casual outside observer, can you inform me as to whether this tax bill has passed in to legislation, or is likely to?
- trothamel 9y ago
  It's law, as of a few weeks ago. Some provisions will go into effect over the course of this year.
- jldugger 9y ago
  It's law: http://thehill.com/sites/default/files/styles/thumb_small_article/public/trumpdonald_signingtax_122217getty.jpg?itok=_4458LR0 http://thehill.com/sites/default/files/styles/thumb_small_ar...
- stevenwoo 9y ago
  It passed, but there are parts of the bill that only last ten years (those applying to personal/small business taxes), and then those tax rules revert to the previous version after ten years unless they are passed again under non-Byrd rules in the Senate. https://www.bloomberg.com/news/articles/2017-11-14/how-the-byrd-rule-will-shape-u-s-tax-overhaul-quicktake-q-a https://www.bloomberg.com/news/articles/2017-11-14/how-the-b...
  - cavisne 9y ago
    Which will of course be extended as no government would survive a personal tax increase
    - SolarNet 9y ago
      Which assumes rational government. Our government is controlled by one party and yet we are heading to a government shutdown over immigration. Rational seems far away.
      - talmand 9y ago
        If the opposing party is threatening shutdown of the government then it would seem that the government is not ruled by that single party.
        pwinnski 9y ago
        That single party has the majority of both houses of Congress and also the White House, and yet cannot manage to get a majority vote in the Senate because of disagreement within their own party. The opposing party is not threatening shutdown. A group within the majority is. Since that group within the majority party won't play ball, the majority of the majority party is hoping to garner some support from the minority party. As it happens, some of the changes they want to make would require 60% of votes rather than just 50%+1, but they haven't yet demonstrated they can get to 50%+1, so that's irrelevant here.
    - pg314 9y ago

IBM 9y ago

Yes you get a credit for the foreign taxes paid, but even still it's absurdly punitive for being an American corporation.

Pulcinella 9y ago
I would not consider taxes to be “punitive.” Taxes aren’t punishment. They are much more like a membership fee.
- IBM 9y ago
  I think it's fine to view taxes that way, but we should also realize that to a business taxes are a cost to be minimized. No for-profit business willingly conducts their affairs to maximize taxes. We live in a rules based system and the rules should be designed to incentivize the behaviors we want. Expecting any business to deviate from whats in their best interest is just... out of touch with reality.
  - fjsolwmv 9y ago
    That's been repeated ad nauseum and isn't relevant to this discussion. Parent was replying to someone who said "punitive".
  - rhizome 9y ago
    What's good for America is good for General Motors.
    - Helloworldboy 9y ago
      What’s good for America may make GM uncompetitive internationally.
  - burnallofit 9y ago
    Many public corporations want to (indirectly) maximize taxes. That's because taxes are levied on profits, and maximizing profits to increase share value is often a good thing.

revelation 9y ago

But of course Apple isn't paying no German taxes. They didn't pay taxes on any of this overseas money, and they had the gall to ask for an "repatriation holiday" so they could pay overall zero taxes on that huge heap of money. Now they are paying the US gov. Unless they can keep coming up with more Irish tax avoidance schemes, going forward they will probably also have to pay in Europe.

valuearb 9y ago
Yes, they paid taxes in Germany, France, etc. it’s reported in their financial statements. They’ve already paid 8 or 9% foreign income taxes on their foreign earnings.
- gaius 9y ago
  Really? Because those are EU countries and Apple has a tax deal with Ireland in the EU.
  - skgoa 9y ago
    Their corporate headquarter is in Ireland. They pay payroll taxes, VAT etc. in each EU member state just like every business has to. They do not, however, have to pay taxes on their corporate earnings in EU countries other than Ireland. That is a central part of "Freedom of Commerce" in the EU. (One of the EU's 4 foundational freedoms.) What Apple has been rightfully accused of is not paying their taxes on corporate earnings in Ireland.
- revelation 9y ago
  How do you evade sales tax, labor overhead? 9% is a far ways off from the nominal.
speleding 9y ago
Apple paid millions in VAT, income tax for German employees, environmental (packaging) taxes, etc. They did not pay much tax on their profits in Germany, but it's debatable which part of the profit of a firm designing phones in the US and building them in China should fall to Germany.

MrMorden 9y ago

And either way you have to do all the work for both countries' tax systems. Compliance costs are not negligible.