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> How many billion dollars is Apple keeping out of the US for the sole reason of avoiding paying tax on it? There is no point in paying tax on offshore money i

> How many billion dollars is Apple keeping out of the US for the sole reason of avoiding paying tax on it? There is no point in paying tax on offshore money if they will immediately then spend it outside the US. There is no benefit to bringing the money onshore so why on earth would they do so?

Arnt 8y ago
Right. Some people seem to assume that it's natural to build a phone in China, sell it in Italy, and then move the profit to the US and pay tax there. That assumption isn't good. There has to be a point to moving the money to the US.
- BLKNSLVR 8y ago
  The problem is that they move the money to the lowest taxing area. They redirect profits earned in the US through various carefully constructed loopholes (so it's not illegal, it's just questionably immoral) so that it looks as if it's earned in the Canary Islands or something totally bullshit like that. It's not an exclusively US problem, it's a problem for any country in which Apple sells goods and services that has higher taxation rates than the lowest in the world. I'm picking on Apple singularly here, but they're just a high-profile example of the many globe-spanning companies performing these tax 'minimization' (let's not get all slandery) acrobatics. Designed in California. (4% tax paid in Ireland)
  - Arnt 8y ago
    I don't quite understand what you're getting at here. There are several kinds of taxes. Some are due at the time of something is sold, typically called VAT. Are you suggesting that Apple pays 4% tax in Ireland instead of paying the usual US VAT? I think not. Some taxes are due later, when a company decides to have a profit. That can be the same year, but it doesn't have to be. It's entirely legal to save some or all of this year's income to spend on a planned investment in three years' time. If you want to build a new factory, or acquire some startups, you can put aside money from this years's income, and that happens with before-tax money. (The general principle is that if the owners are willing to defer their dividends, then the taxman defers the tax.) I know Apple has been doing that, keeping enormous sum of money in case it wants to acquire companies. Are you suggesting that US companies shouldn't be permitted to save money for future investments? Or are you suggesting that foreign daughters of US holding companies shouldn't be permitted to save money for future investments? Or that the sums they save should have some sort of limit, e.g. "no more than x months' turnover"?
- coldtea 8y ago
  >That assumption isn't good. There has to be a point to moving the money to the US. The point is, you are a US company, benefiting from US infrastructure, US diplomacy, US market, US government spending, even subsidies and tax cut rates, and so on -- so bring the money there -- but that's too much to consider for today's elites... The fact that you already took the jobs out (making the phone in China) just increased your margins on those revenues... So, the point is, I dunno, corporate social responsibility?
  - Arnt 8y ago
    Well, if corporate social responsibility is your central concern, why aren't you asking Apple to pay tax where the jobs are? The factories are in China, the workers are there, most of the parts are designed and made there, right?
    - coldtea 8y ago
      >why aren't you asking Apple to pay tax where the jobs are? Because it's an American company? Similarly, I'm all for Huawei and Lenovo paying taxes in China.
      - deleted 8y ago
        [deleted]
      - Arnt 8y ago
        That's a kind of "corporate social responsibility" that excludes the underpaid schmucks who work in the factories, and the cities they live in. I find that revolting.
        coldtea 8y ago
        >I find that revolting That's because you have a job as it currently stands. If your job (and especially your whole sector) had gone abroad, you'd find the outsourcing PLUS tax evasion revolting. And as you'd be scrapping to pay the rent you'd wouldn't find particularly comforting that some consumer goods would be cheaper make this way... That said, who said anything about the people "who work in the factories"? Strawman much? The tax Apple saves from not paying it to the US isn't going to those "schmucks" (sic), so whether those people should be paid more (which I'm all for) is orthogonal to whether Apple should pay more taxes in the US instead of looking for legal loopholes Let's see companies keep their "corporate social responsibility" to their own societies and countries first -- which they don't --, and we can talk about them "improving the world" at large afterwards...

Arnt 8y ago

Right. Some people seem to assume that it's natural to build a phone in China, sell it in Italy, and then move the profit to the US and pay tax there. That assumption isn't good. There has to be a point to moving the money to the US.

BLKNSLVR 8y ago
The problem is that they move the money to the lowest taxing area. They redirect profits earned in the US through various carefully constructed loopholes (so it's not illegal, it's just questionably immoral) so that it looks as if it's earned in the Canary Islands or something totally bullshit like that. It's not an exclusively US problem, it's a problem for any country in which Apple sells goods and services that has higher taxation rates than the lowest in the world. I'm picking on Apple singularly here, but they're just a high-profile example of the many globe-spanning companies performing these tax 'minimization' (let's not get all slandery) acrobatics. Designed in California. (4% tax paid in Ireland)
- Arnt 8y ago
  I don't quite understand what you're getting at here. There are several kinds of taxes. Some are due at the time of something is sold, typically called VAT. Are you suggesting that Apple pays 4% tax in Ireland instead of paying the usual US VAT? I think not. Some taxes are due later, when a company decides to have a profit. That can be the same year, but it doesn't have to be. It's entirely legal to save some or all of this year's income to spend on a planned investment in three years' time. If you want to build a new factory, or acquire some startups, you can put aside money from this years's income, and that happens with before-tax money. (The general principle is that if the owners are willing to defer their dividends, then the taxman defers the tax.) I know Apple has been doing that, keeping enormous sum of money in case it wants to acquire companies. Are you suggesting that US companies shouldn't be permitted to save money for future investments? Or are you suggesting that foreign daughters of US holding companies shouldn't be permitted to save money for future investments? Or that the sums they save should have some sort of limit, e.g. "no more than x months' turnover"?
coldtea 8y ago
>That assumption isn't good. There has to be a point to moving the money to the US. The point is, you are a US company, benefiting from US infrastructure, US diplomacy, US market, US government spending, even subsidies and tax cut rates, and so on -- so bring the money there -- but that's too much to consider for today's elites... The fact that you already took the jobs out (making the phone in China) just increased your margins on those revenues... So, the point is, I dunno, corporate social responsibility?
- Arnt 8y ago
  Well, if corporate social responsibility is your central concern, why aren't you asking Apple to pay tax where the jobs are? The factories are in China, the workers are there, most of the parts are designed and made there, right?
  - coldtea 8y ago
    >why aren't you asking Apple to pay tax where the jobs are? Because it's an American company? Similarly, I'm all for Huawei and Lenovo paying taxes in China.
    - deleted 8y ago
      [deleted]
    - Arnt 8y ago
      That's a kind of "corporate social responsibility" that excludes the underpaid schmucks who work in the factories, and the cities they live in. I find that revolting.
      - coldtea 8y ago
        >I find that revolting That's because you have a job as it currently stands. If your job (and especially your whole sector) had gone abroad, you'd find the outsourcing PLUS tax evasion revolting. And as you'd be scrapping to pay the rent you'd wouldn't find particularly comforting that some consumer goods would be cheaper make this way... That said, who said anything about the people "who work in the factories"? Strawman much? The tax Apple saves from not paying it to the US isn't going to those "schmucks" (sic), so whether those people should be paid more (which I'm all for) is orthogonal to whether Apple should pay more taxes in the US instead of looking for legal loopholes Let's see companies keep their "corporate social responsibility" to their own societies and countries first -- which they don't --, and we can talk about them "improving the world" at large afterwards...