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Apple To Be Investigated By the EU Over Tax Affairs
mrspoonsi (2955715) writes "The European Commission is to open a formal investigation into Apple, Starbucks and Fiat in relation to tax arrangements with three EU countries. The firms' arrangements with Ireland, the Netherlands and Luxembourg will be investigated. Announcing the move, tax commissioner Algirdas Semeta said that 'fair tax competition is essential.' Last year, a US Senate investigation accused Ireland of giving special tax treatment to Apple. The European Commission will look at whether the companies' tax affairs breach EU rules on state aid. Competition Commissioner Joaquin Almunia said: 'In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes.' Countries in Europe cannot allow certain firms to pay less tax than they should, Mr Almunia added."
Why single out apple in the heading?
They shouldn't forget the other big IT companies - Google, Facebook, etc.
They're very diligent about keeping tax costs low and manufacturing costs very low. They use marketing and image to keep prices high. They pump as much money out of the middle class and as little as possible into the (world) lower class.
Nominally, that's supposed to be how businesses work, but in that same nominal world, competition is supposed to bring prices down. Apple is the clearest example of how marketing and branding are tools to keep that from happening.
some countries like the USA tax all the worldwide income of a company like apple and google
its impossible for any company to be in compliance with the law in every nation they operate in if they have to pay 30% taxes on all of their worldwide income to each of a half dozen countries
What we need is a uniform global taxation scheme so these corporate people can't slip through the cracks between countries. I say the UN should set up a bureau enact such a regimen.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
yeah, how else are they going to pay for their socialism
The governments of countries shorted by the Irish model covet the money, too.
It's difficult to sustain a socialist state from within, and not that the mega-corporations are without sin, but they've become the shakedown target of choice for systems starved for cash flow.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
How is it that with basically direct access to everybody's wallet, the governments are constantly needing to ask for more and more, and give less and less?
Might it have to do with the fact that more money is owed in the world then there is money available? (Way to pass the buck on to your kids assholes.)
Also doesn't "fair tax competition" require that if some nations can survive without taxes then tax havens are essentially a good downward pressure on abusive tax collecting nations?
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Posting AC because I no longer trust moderators not to destroy my karma because I express my opinions.
May I humbly suggest that you go back to sticking your head in the Sand. If you think that the EU and Europe in General is socialist then comrade, you are in Cloud Cuckoo Land a.k.a. The USA.
Sure we have things that you might consider 'socialist' and therefore evil (Commie Bastards) but our is IMHO a more mature society than the one in the US. We don't put up notices along the roadside like 'Trespassers will be Shot, Survors will be shot again' etc. (As seen in Colorado a few days ago).
We don't consider paying via our taxes for universal healthcare, free at the point of delivery. IMHO, this is a fundamental right.
A more liberal society indeed but certainly not Socialist and most certainly not Communist. Have you ever lived in a truly Socialist or Communist country? Probably not so go and stick your head back in the Sands, possibly somewhere near White Sands in the hope that you get your ass blown off by a rocket.
Since some people feel let their moral affections and prejudice against rich individuals (sometimes deserved, sometimes not) cloud their judgement , I'm going to explain what's going to happen and why.
(1) EU Government makes a big deal about "cracking down" on rich individuals because it makes the general public happy and the general public doesn't bother to double check anything anyway
(2) Big ceremony with lots of speeches
(3) Meeting between large companies representatives and lawmaker's staff. They have one topic of discussion: "How can we lower your tax burden while making it look like we are raising it?" There are two main reasons for this (a) They don't want to lose campaign funding from the companies (b) They don't want the companies moving even more of their operations overseas (your personal morality be damned, no one who matters cares at all) and leaving unemployment and a net lower tax revenue (c) Rich people spend a larger proportion of their income on economic progress like starting new companies, you spend your money on beer and video games
(4) They will come up with a brilliant idea like larger taxes on repatriating corporate money (larger companies simply won't repatriate directly, but send the money to bank accounts first in the form of income) or a tax on company growth that sounds like it only affects large companies but only serves to destroy new competitors, or something brilliant like raising corporate income on income reported locally (except they already did that but got caught so they'll find a new trick).
In the end, if the game plays out correctly, low income individuals will still payer higher taxes, large companies will pay less taxes, but it will sound a lot like the opposite is occurring. You'll be happy and the economy will be slightly less screwed than if we listened to you and made companies actually pay 30% - 40% of their income directly to the treasury trough.
This will end up as just another pointless "look, we actually do something!" PR stunt, with the inevitable outcome of a token "no admission of wrongdoing" fine that amounts to 30 seconds' worth of Apple's profits and probably doesn't even pay for the "investigation".
I don't like that multinationals have perfected the art of gaming the world's tax systems, but I highly doubt Apple (and others) actually broke any laws here. Intra-company licensing fees make it trivial to shuffle both income and expenses around the world to the most favorable jurisdictions; and tax havens like Ireland that use territorial taxation make it too easy to pick a destination for reporting profits.
We don't need an investigation, we need serious tax reform. As a complete no-brainer, we could solve 99% of the problem (and not just the tax problem, but also the "3rd world child slave labor as a manufacturing strategy" problem as well) by simply disallowing cross-border cost allocation. You sell something in the US? You only get to offset that revenue (for tax purposes) with US expenses, and no, you can't sell yourself Indonesian-made iPads and call it a US expense. You have legitimate expenses? You'd damned well better have domestic profits to offset them, then, or you get to eat them. Can't afford your slave workforce anymore? Cry me a frickin' river.
But that will never happen, because no one in power seriously wants the situation to change. You think the EU doesn't understand the benefit they get from a massive influx of capital via Ireland (even if not taxed directly, it still moves around the economy)? I have a bridge to sell you. Even US leaders have no motivation to act, because it takes a hell of a lot less effort to control a welfare-dependent population than a self-sufficient one. As they see it, the higher the unemployment rate (or better, the higher the full time minimum wage employment rate - Someone has to serve Larry Ellison his lattes and Obama his chili-dogs, after all), the better.
In the face of the last 17 years of Apple's progress?
Does software write itself? Services? Store-fronts and their employees? How about hedging against future competition or cannibalisation? Against mistakes like MobileMe or exploding batteries? Against patent-wars with similarly well-endowed companies? Will the time come when they don't sell any more kit because everyone is too satisfied to bother upgrading anymore? Was the last WWDC Keynote an absolute firecracker because of the excitement over the new APIs, or a squib because they didn't announce an iWatch or a TV?
You hardware guys are weird.
No, Europe doesn't want to steal American Companies' $.
We want €.
So not only do we have to put up with insane taxes, now those passing insane taxes are mad that companies are avoiding them? You can't have your cukin cake and eat it too. Freedom from stupid choices isn't possible. If you make it impossible to make a profit due to high taxes and over zealous "regulations" ( usually meaning just pay the right people off), then yeah companies won't stick around and grow your economy.
This is a very well known scam
http://en.wikipedia.org/wiki/D...
the UK parliament is rather upset about it, assorted companies have been asked grumpy questions about their tax avoidance, in particular Google. The problem is closing these loopholes requires a lot of international cooperation and it isn't generally in the interests of the smaller countries to play ball.
Trouble is, they just set up shell companies that are subsidiaries and say we made no money to pay tax on, because of all that IP we had to buy from shell-company-x, woe is us.
The solution is basically a gross receipts tax, which does have its drawbacks but is a lot harder to dodge. I'm an accountant and take it from me that it is a LOT harder to fudge the top line than the bottom line. If you just tax profits then it is fairly trivial to shuffle money around such that you show "no profit". It's called Hollywood accounting. All these schemes that Apple and others are engaging in are variations on Hollywood accounting.
Apple has conspired with the Irish government to move it's profit outside the space/time continuum. How else can you explain "revenues are subject to no jurisdiction?" That means the money has no legal presence anywhere on the planet. Or off the planet, as far as we know.
There are lots of locations where the rule of law doesn't apply. There are places where many different legal systems claim to be in charge. There are places like Antarctica where the international community has set up treaties so that one one country has control. Apple has been able to secrete it's money so it is not in any of these places.
They have outflanked the rule of law. They are in a literal sense "lawless": without law. Yet they make extensive use of the legal system and expect to have their business protected by civil and criminal authorities. It's corporate hypocrisy at it's most blatant.
Why are they getting away with this? I have a counter suggestion: round up all current and former living board members, everyone who was a Chief Executive Anything, put them in indefinite detention and strip them of every asset they have. Why do the deserve legal protection when they have made it their business to be above the law?
Why is Snark Required?
The EU investigates Apple. And Toyota investigates Hovercars.
I'll see your senator, and I'll raise you two judges.
As always when it concerns the economy /. is mostly full of complete nonsense. Apple is a wealth GENERATION engine, no iPhones, no iPads etc. are taken from anybody by Apple and 'extracted', they are created by Apple and then redistributed into the population. As per usual the socialists completely miss the entire point of the economy and of free market capitalism, which is the engine that produces wealth at the rate higher than any other methodology ever discovered by humans on this planet.
When a company creates new products it creates the wealth. In fact the entire point of a company to combine scarce resources in such a way as to produce maximum amount of wealth at the minimum expense and Apple is EXCELLENT at it obviously, otherwise they wouldn't be where they are.
Extraction is what governments do, not productive businesses.
You can't handle the truth.
don't hide it any more in the pristine EuroCenter!
if this is supposed to be a new economy, how come they still want my old fashioned money?
It's not stealing, Europe should receive taxes for Apple goods sold in Europe. It's just that tax laws have not been updated to handle globalization.
I see the moderators are gov't shills again. There is absolutely no difference between taxes and "protection money."
Then give the same organized crime syndicate the right to print money and charge interest for lending it to people.
how, exactly, does apple generate wealth? you told us before that the world only has a constant amount of wealth - by way of your reciting your favorite scriptures about the infinite wisdom of the gold standard. hence unless apple is involved with the creation or extraction of gold, it is physically impossible for them to create wealth.
what kind of punishment will your religious leaders pass down upon you for this blasphemous speech?
That's a nice patent portfolio you've got there. You say your entire business model hinges on intellectual property, some ephemera that requires a court system to adjudicate? And maybe some Customs officers to block infringing devices from the US market?
Why, it'd be a shame if the courts and Customs didn't help. Kind of hard to be exclusive with just a bunch of paper backing you up..
Of course, you report that income and pay those taxes, that's maybe something we could help you with.
Or maybe your Irish friends can help you, you know, use that diplomatic influence they have with the Chinese and Koreans, since you seem to see them as your global HQ..
Apple has conspired with the Irish government to move it's profit outside the space/time continuum. How else can you explain "revenues are subject to no jurisdiction?"
It means the author is exaggerating things.
Apple's cash is certainly subject to jurisdiction. The cash is in real banks & securities in real countries governed by the rule of law.
BUT, due to Ireland's tax laws, Apple is able to create a corporate structure that is not resident anywhere for tax purposes.
I'm sure Apple is obeying the law. The solution is to change the laws & treaties that allow this to occur.
Fine those greedy niggers hard.
Why are they getting away with this? I have a counter suggestion: round up all current and former living board members, everyone who was a Chief Executive Anything, put them in indefinite detention and strip them of every asset they have. Why do the deserve legal protection when they have made it their business to be above the law?
Since technically their monies that are non-jurisdictional, they can be alternatively considered as either money from black-market economies (i.e. criminal activities), or signs of illicit financial activity, such as funding terrorism.
In other words, from a legal perspective, if the monies and activities are entirely extra-judicial globally, then these people and their money are also not subject to habeas corpus and other ethical, moral, or legal rights and protection.
Need to tax the walmarts and other who let tax payers pick up of the costs.
There should be a h1b tax to cover the people who are out of work due to it.
and the walmarts need to have a tax to cover the costs of the workers being on welfare
where they have just person who just picks up mail somewhere.
One classic way of using these companies is buying and selling through them, which means that the owner does not need to report international operations conducted through the shell company and will be able to avoid any taxes on the profits. Shell companies are also used to conduct various other pieces of shady business, including selling supermarket brand goods without impacting the value of the main brand.
This is very bad for the Netherlands. It was in the paper this morning that because we are a tax paradise, especially for American companies, the Fortune 500 companies have 127 billion dollars stashed up in our country. If now suddenly the EU starts to meddle with the way we do business, this money may vanish and we lose a lucrative and easy part of our yearly income.
-- Cheers!
Stickin' it to the Corporate Man!
http://en.wikipedia.org/wiki/Corporation_Trust_Center_(CT_Corporation)
Of course news about a fake are Fake News.