4 ms·

Apple paid only 2% corporate tax outside US

12 points by wr1472 14y ago

protomyth 14y ago
"All of the companies do pay considerable amounts of other taxes in the UK such as National Insurance and raise large sums of VAT."
- mtgx 14y ago
  It's fair to mention the other taxes like national insurance, but VAT shouldn't be mentioned here. VAT is simply "collected" from the customer, and then sent to the Government. No company ever includes VAT in their prices when they plan out the prices. They are simply added after the fact, and the consumer pays for it. So disregarding other taxes, if say Apple wants $500 for the iPad, then they won't include the VAT in that price, they will simply add the fact to the $500 price, and make it $600, or whatever the VAT is in that country.
  - spindritf 14y ago
    All taxes are collected from the customer, just not necessarily "simply". Arbitrarily dividing taxes into simple and complex and then reporting only on the complex seems even more misleading to me.
- gm 14y ago
  If you understand what VAT is and how it works, then you realize it's not the company paying the tax, it's the ultimate consumer (British consumers in this case).
rayiner 14y ago
I call for a moratorium on journalists quoting taxes either only on a single year basis or singling out only a particular type of tax to focus on. The proper way to understand the tax burden of a company is to look at the number analysts use: effective tax rate, averaged over some substantial period of time. This is not a complicated number. You basically take 100% - (income after all taxes) / (income before all taxes) Apple's effective tax rate, according to their 10-K filings, has been 25-30% for the last 3 years: http://www.forbes.com/sites/timworstall/2012/04/18/apples-9-8-tax-rate-entirely-mind-gargling-nonsense/ http://www.forbes.com/sites/timworstall/2012/04/18/apples-9-... I should note that there is, somewhat ironically, a wild inaccuracy in this Forbes article which I don't want to seem like I'm endorsing: "We might ponder upon the way that federal taxation as a share of the entire economy has grown hugely over this period as well, meaning that what you can extract from corporations has fallen not because corporations are taxed any less but because others are taxed much more." Total federal taxes as a %-age of GDP have fluctuated between 15-20% for the last 50 years. It was as high as 19% as early as 1952, and hasn't been as low as it is now (15%) since 1950. There is a mythology that the federal government keeps getting bigger, but almost all the growth in the federal government came in the 10 year period between 1934 and 1944. This growth can be explained almost entirely by just three things introduced in this era: social security, medicare/medicaid, and a huge peacetime military. See: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...

12 points by wr1472 14y ago

"All of the companies do pay considerable amounts of other taxes in the UK such as National Insurance and raise large sums of VAT."

mtgx 14y ago
It's fair to mention the other taxes like national insurance, but VAT shouldn't be mentioned here. VAT is simply "collected" from the customer, and then sent to the Government. No company ever includes VAT in their prices when they plan out the prices. They are simply added after the fact, and the consumer pays for it. So disregarding other taxes, if say Apple wants $500 for the iPad, then they won't include the VAT in that price, they will simply add the fact to the $500 price, and make it $600, or whatever the VAT is in that country.
- spindritf 14y ago
  All taxes are collected from the customer, just not necessarily "simply". Arbitrarily dividing taxes into simple and complex and then reporting only on the complex seems even more misleading to me.
gm 14y ago
If you understand what VAT is and how it works, then you realize it's not the company paying the tax, it's the ultimate consumer (British consumers in this case).

rayiner 14y ago

I call for a moratorium on journalists quoting taxes either only on a single year basis or singling out only a particular type of tax to focus on. The proper way to understand the tax burden of a company is to look at the number analysts use: effective tax rate, averaged over some substantial period of time. This is not a complicated number. You basically take 100% - (income after all taxes) / (income before all taxes) Apple's effective tax rate, according to their 10-K filings, has been 25-30% for the last 3 years: http://www.forbes.com/sites/timworstall/2012/04/18/apples-9-8-tax-rate-entirely-mind-gargling-nonsense/ http://www.forbes.com/sites/timworstall/2012/04/18/apples-9-... I should note that there is, somewhat ironically, a wild inaccuracy in this Forbes article which I don't want to seem like I'm endorsing: "We might ponder upon the way that federal taxation as a share of the entire economy has grown hugely over this period as well, meaning that what you can extract from corporations has fallen not because corporations are taxed any less but because others are taxed much more." Total federal taxes as a %-age of GDP have fluctuated between 15-20% for the last 50 years. It was as high as 19% as early as 1952, and hasn't been as low as it is now (15%) since 1950. There is a mythology that the federal government keeps getting bigger, but almost all the growth in the federal government came in the 10 year period between 1934 and 1944. This growth can be explained almost entirely by just three things introduced in this era: social security, medicare/medicaid, and a huge peacetime military. See: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...