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It looks like the real issue is the high corporate tax rate in the US then. Are there not double-taxation treaties to avoid overtaxing otherwise? On the other
by return0 11y ago
It looks like the real issue is the high corporate tax rate in the US then. Are there not double-taxation treaties to avoid overtaxing otherwise?
On the other hand, the scenario of a UK company owning a company in a tax-free zone in dubai and thus paying 0% taxes anywhere doesn't sound fair either.
- IkmoIkmo 11y agoDouble tax treaties are pretty common, it depends on the good and the corridor so I don't really know what it's like for Apple. Still, the fact they mention tax as a reason to keep cash offshore probably means the treaties are non-existent or limited at best.
- charlesdm 11y agoWell, the second part of this equation is that they are able to funnel a ton of cash to low tax companies (via loans/royalties/other loopholes). So maybe they've only paid 1-5% on the entire amount. Repatriation of those funds would essentially mean paying close to 35% tax (+ state taxes). DTTs don't fix that, they just make sure you don't pay the same amount twice. I.e. the 20% in the UK AND 35% in the US. Add to that fact that Apple can pretty much borrow unlimited funds in the market (debt != income, you don't pay tax when you borrow) to fund share buybacks and dividends. Why repatriate? Financially it just does not make sense, since you'd lose so much of your equity. It's better to invest it abroad. Re Dubai: If an entity is a conduit company, then maybe not. But if you're operating a business or selling stuff there, then I think it is. No income tax is more of an anomaly these days, and a way for countries to attract new business.