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Apple May Bring Back Billions In Profits To The U.S. (siliconbeat.com)
An anonymous Slashdot reader quotes a report from the San Jose Mercury News:
Apple CEO Tim Cook says the company plans to bring back billions of dollars in profit to the U.S. next year. Cook's statement, made during an interview with RTE radio Thursday, contradicts his previous public statements on the issue: He has said for years that U.S. corporate taxes are too high, and that the Silicon Valley company wouldn't be repatriating profit until its home country changed its tax code.
"Right now I would forecast that we repatriate next year"Cook said, saying that the company has "provisioned several billion" for that purpose.
An interesting side-note: Apple accounts for 40% of Silicon Valley's profits.
"Right now I would forecast that we repatriate next year"Cook said, saying that the company has "provisioned several billion" for that purpose.
An interesting side-note: Apple accounts for 40% of Silicon Valley's profits.
Apple just wants to scare the EU, there are plenty of other countries they will hold their money that won't charge as much as the US will.
I'm sure being required to pay billions in Ireland even if they leave the money overseas, and the publicity that fighting that will have for their home tax arrangements, has nothing to do with this change of heart. Tim Cook is just a really nice guy who wants Apple to pay its fair share.
(In before Google/Microsoft/whatever Apple competitor you think I MUST favor if I'm even mildly critical of Apple, are no doubt every bit as bad and worse and eat babies too).
Another interesting side-note: Microsoft accounts for 95% of the software security problems of the planet.
From "Hi, I'm the EU and I'll be your robber." to "Hi, I'm the USG, and I'll be your robber."
Only now that they are cracking down on expatriating for tax evasion
I find this a bit hard to swallow.
Obviously Cook is planning that taxes are lower for corporations next year, or that Apple will get a break for bringing back the taxes - either condition would meet his statement that Apple would not re-patriate because taxes are too high.
What large-corperation loving candidate is very likely to win the election and be in office next year to make that happen, hmm...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
not will
The tax bill in both the House and Senate reduces business taxes to between 15-20% from the current 35-38% federal (Apple pays about 25-30% after deductions for R&D and energy rebates). The rate to bring back funds is currently at those 35%+ rates and will be reduced to 8-10% if any elected candidate signs the already passed bills. They technically will have to repass the bills for the next congress.
If I post this to MacRumors I will be BANNED because it touches on the subject of poly-tics (many blood sucking insects).
An interesting side-note: Apple accounts for 40% of Silicon Valley's profits.
Completely untrue. Apple may well account for 99% of Ireland's profits but they don't account for any significant amount in Silicon Valley. Until next year, maybe, unless they can cut a better deal elsewhere.
A transition from a future convicted tax evador to a national hero whose taxes will save the nation's social security and educatio^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h^h military-industrial complex.
Apple is not bringing "back" profits. That money was never in the US. The money that is in question is profit Apple made on sales overseas in the EU. If the US chose to bring the money into the US, the tax rate would be probably 35% at the top rate. So Apple kept the money overseas and never moved it. Part of it is for operations overseas. Part of it was the tax rate the US would charge.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Given the habit of multinationals to rort US taxation and labour laws, the cynic in me thinks they've found another loophole or captured another government department.
http://www.cityprofile.com/forum/attachments/national-politics-debate/40633d1320853833-death-personhood-corpos.gif
See also: https://philosophersforchange.org/2014/02/11/takeover/
If this move turns out to be contrary to the fiduciary interests of shareholders, expect a class action lawsuit. A CEO can't simply throw money away.
Isn't that profit rightly produced in Ireland? Or was that in the Bermuda Triangle? At least Ireland will get their cut of the imaginary Irish profits (when forced by EU to assess legal tax rate on Apple's Irish subsidiary.) Longer term, countries where profits are made will want to see their rightful tax, e.g. as Austria'a position. Curious though, what these tax scams, offshore domiciling etc, imply when assessing trade treaties etc. I mean, by the "supposed" numbers, Ireland has a certain benefit of trade, even though that is untaxed Apple money. If those anomalies are removed, wouldn't that substantially change the over-all picture of trade benefits? (trade treaties are conventionally concluded on basis of mutual benefit) Bigger picture, is the number of "high tech" companies etc, benefitting from tax avoidance, and the distortion effect that creates, effectively subsidizing them vs. other businesses who would otherwise compete for investments, never mind "high tech" products which wouldn't be viable at all if not avoiding taxes.
Stolen? Please elaborate.
This announcement makes perfect sense if you think of it as a move in the game of chess between Apple and the EU.
Despite his public proclamations and rhetoric, Tim Cook knows that the EU investigation into the tax deal between Ireland and Apple is absolutely not, "political crap" and he's had now enough time for his lawyers to tell him so. That event is an issue between the EU and Ireland and, in a sense, has nothing to do with Apple. The problem for Cook, then, is what to do? He can't put Apple in the middle of the dispute with the EU. He has no options.
Except one.
He can go to the US government to ask for help. "Hey Barak, that sweet deal we had with Ireland, the one that is letting us be profitable and employ lots of Americans? It's going south. Can you help?"
Obama isn't stupid either. He knows that now that the wheels are in motion, Apple is going to have to pay some taxes to someone - and Obama would rather the someone was the US Federal Government and not the Irish government. So what we're seeing now is Apple asking Washington for help. Washington have said, "Sure, we can help. But of course you're going to have to pay some tax somewhere..."
So Tim Cook has made this announcement about repatriation to show Barak that he's serious. Washington will now attempt to apply pressure to Brussels in order to get the EU to back down and allow Apple to continue to operate across the EU, all whilst paying less than 1% Corporation Tax. Meanwhile, Apple will repatriate some of their profits, which the US will tax, as part of the arrangements.
At least, that's their plan. However, bear in mind that the EU are just in the process of throwing out TTIP, which is going to make any attempt by the US to negotiate forcefully absolutely fraught with danger. The worst possible thing would be for the US to try and apply pressure right now: all they will do is make the entire EU mad at them. The only potential ally they would have had, the UK, is in the process of leaving the EU [with the planned start of Article 50 to commence in the New Year].
But the thing that all us little people need to remember here is that every pound, euro or dollar in tax that Apple "avoids", well that's a pound, euro or dollar that we have to find. When companies don't pull their weight, tax-wise, the private individuals are the ones who get stung. You only need to look at the international tax arrangements of the big multinationals to realise what a joke this process has become. What we need is a clear, internationally-agreed law that says that for tax purposes, a transaction occurs at the location that the buyer initiates the transaction. [ Turning that around, and saying that it is where the seller processes the transaction achieves nothing: Apple and others would just put their transaction processing system in a tax haven ].
The interesting thing is that these practices cost "local" tax payers HUGE amounts of extra taxes. So it's entirely possible that what we're seeing here could set a precedent that benefits 500 million people across the EU... Let's hope so...
Profit shifting
most likely a result of there tax haven (Ireland) no longer being as safe a place as they thought to hide there stolen billions.
You keep using that word. I do not think it means what you think it means.
If anything it's the the government that steals through taxation.
The gov't printed the money, clearly they're just trying to collect their property...
Regardless of where the income is generated, U.S. corporations need to pay U.S. taxes the same as any U.S. citizen. Calculate the tax after all (foreign) wages, expenses and taxes are subtracted. No more of this slight of hand bullshit, pay your fucking taxes or move your corporation. Hell, most have already moved the majority of their workforce, the rest of the U.S. based employees are executives and their staff.
--- Keep the choice with the user..
and every word that comes out of tim cooks mouth is a toxic hellstew of lies
I would be all for lowering their taxes, on one condition.
American workers only within the US.
You want the tax breaks ? You quit going the H1B route cheating the US workforce out of a job.
You hire foreign labor ? Your tax rate will increase to compensate. Pretty simple. Do the math, set the rates to make hiring US workers a financial win for the company. Price of doing business in the US I'm afraid.
Don't like it ? Move your company to India or Ireland or wherever you want. See how well you do when you're denied access to the US market.
Those that are gaming the system can just gtfo or deal with the tax man.
Timmy has no intention of suddenly paying a much higher corporate tax rate by repatriating funds. He's only looking for leverage against his European bureaucrat opponents by recruiting eager EU members like Ireland to fight for him to preserve what little he contributes to their economies.
It should be illegal to move income like that.
And.......
This has absolutely nothing to do with what recently happened in Ireland where it was found that Ireland had violated European law and charging Apple a 1% to 0.005% profit rate for the past decade all while funneling their US and the bulk of their European profits through it and now has the European governments ordering them to pay back at least 13 BILLION dollars in back taxes that it had managed to evade on.
This change has nothing to do with that..... Nope, just trying to what the right thing.
Just remember folks, if Apple repatriates a big part of the business that is currently on Ireland, this means:
- Ireland will have huge losses - jobs, tax revenue, etc;
- Apple product prices could increase even more, as taxes increases and the transition will probably not be cheap. The money to cover such moves always comes from somewhere;
- Sour relations with EU will probably have consequences as well;
I mean, if it really happens, it initially sounds great for the US. Big tax influx, jobs and all, though I'm not quite sure the next president will really make good use of that. :P But when such a huge ammount of money suddently moves from one country to another, the consequences tends to be extreme on both sides.
In a way, I guess it's kinda fair... tax heaven countries and states are overall damaging to the company's country/state of origin. It ultimately means that huge companies making huge profits return less for the community they have business at.
But changes on that scale are still worrying.
it means exactly as it was meant to mean. They made an illegal deal with the Irish government to act as a tax haven to shelter their earnings from other countries. You can call it profit shifting, tax minimisation or whatever the hell you want, but it has been declared illegal finally and I call it theft.
Didn't help them out when they supported Obama, on the other hand Bush Jr did.
"Make America great again! Lower takes and make other countries pay for our walls!"
Since you obviously don't even know how 'taxes' is spelled it raises the question:
Is that you, Donald?
by moving profits to Ireland they are in effect stealing tax revenue from other countries in a shell game that Ireland has been complicit in. Ireland gets jobs and apple gets a safe haven to hide profits and avoid tax.
the apple ceo goes 'waaaaahhhhhh'
now is not the time to throw a tantrum, now is the time to man the fuck up and pay your fucking taxes.
"it means exactly as it was meant to mean. They made an illegal deal with the Irish government to act as a tax haven to shelter their earnings from other countries. You can call it profit shifting, tax minimisation or whatever the hell you want, but it has been declared illegal finally and I call it theft."
Not at all, it has been considered as an illegal subsidy/gift _from_ Ireland to Apple and the Irish are now 'forced' to ask for that 'gift' back, just like other countries before them.
It's easy to make more profit than your competitors when you're aren't paying any tax, in any country that you operate in.
Strangely bad for PR when it gets on the news, though. And strangely ends up changing from a hush-hush golf-and-a-posh-meal secret deal with the local ministers to laws being changed to prevent it happening when it does make the news.
Starbucks found that out in the UK.
So, technically, Apple don't make 40% of the profits in the Silicon Valley. Because those profits aren't properly taxed. And they aren't registered as profit in Silicon Valley at all. They are registered as profit only in Ireland. Which was charging them basically 0% tax. They are the LEAST profitable company in Silicon Valley, or else the US taxman would have had their share a long time ago.
But they are in fact the most profitable in Ireland, while also being the least taxed. Strange that.
I could earn twice what I do if I didn't have to pay tax.
And I could make any company outstrip all its competitors if it didn't have to pay tax (get company, make no changes, stop paying tax, bang, you just doubled your profit most likely, and can lower prices or buy suppliers to put your competitors out of the market).
I'm much more interested in an article entitled "Who pays the most tax in Silicon Valley?"
Not at all, it has been considered as an illegal subsidy/gift _from_ Ireland to Apple and the Irish are now 'forced' to ask for that 'gift' back, just like other countries before them.
Not at all yourself. All tax codes around the world categorically state that profits must be booked where they are earned. That makes profit shifting/transfer pricing illegal but because it's difficult to prove many companies, particularly those dealing in "intellectual property" where it's basically impossible to prove, do it anyway.
It looks like Apple is assuming Trump will be in office by next year. I doubt that they have any intention of importing their money just to get it confiscated.
Progressivism: Parasites helping parasites to help themselves - to other people's stuff.
On the books, US has a somewhat high corporate tax.. but with so many loopholes, the ones with enough lawyers and accountants pay much much less. Doubtless this is Apple's strategy once they repatriate, so while they'll pay somewhat more than Ireland's ~0% tax, it'll still be way, waaaaay less than they should be. And they'll whine publicly all the way, while they make a big PR song and dance about "coming home" and "doing the right thing".
Barring Ireland, if they could legally get a rate lower than US+loopholes they'd be talking about moving to wherever that would be.
They bring the cash back to the US, deposit close to 50% into the US general treasury and spend the remainder on foreign parts and labor. Next story.
C: Sure I know how to spell Taxes - my cousin lives in Taxes.
G: No - dollars, dollars!
C: Atsa right - he lives in Dollars Taxes.
and then linking to breitbart shows both an absurd level of ignorance, and a desire for ridicule.
it means exactly as it was meant to mean
Then you STILL don't know what it means...
I'd explain it to you, but you likely aren't listening, so what's the point?
Make Apple Great Again!
Comment removed based on user account deletion
I say screw'em. Classify this behavior as what it is, tax evasion. Arrest, try and throw each of these tax avoiding asshole CEO's into jail. Job done.
What I don't understand about all of this is Congress is mad at the EU for wanting to tax the enormous profits of a multinational whose Human rights record is not very good.I understand Ireland wanting to set itself up as a tax haven for Apple. But that violates the rights of the EU. Congress should be mad at Apple for parking it's money offshore. I just read on here the other day Apple increased its profits by having the company in China who makes their products cut pay and increase hours on the workers. Everybody thinks poor Apple is the victim in all this. I think everybody is the victim of poor Apple. We have been denied any tax on their profits, their Human rights record stinks, and their products are overpriced. I'm not knocking the quality or performance, just the price.Price they put on Humans and the price they put on the USA for what they are doing. I for one don't drink the Apple juice. I think if they were boycotted for the business practice it would go a long way towards changing their culture. Probably won't happen though, cause nobody cares.
Cook is saying that Apple will repatriate profits...next year. As in after Obama is out of office. Clearly, Apple has not been able to negotiate an agreement with the Obama administration that they can live with. By saying next year Cook is basically saying that he has given up on this administration. Trump has already come out publicly against the EU decision.
Interestingly the Obama administration is also against the EU decision. Why? I can think of two possible reasons:
1) They would rather get their own grubby hands on the money...or....
2) If Apple ends up paying the EU then that money will pass through as a US tax credit for Apple. Dollar for dollar. Which means that basically the US taxpayer will end up being on the hook for all those billions of dollars.
What is interesting to note is that this whole thing is fault of the federal government. They wrote the laws that Apple is using to their advantage. Government accepted the bribes...err...political campaign contributions that allowed business to influence the laws to their liking.
Eritrea is the only other country that taxes the revenue of its citizen worldwide. /s
You might know Eritrea as being extremely high on the scale of respecting human rights.
Was the money ever in the U.S.?
If Apple "brings money back", what impact would that have on the bonds market?
Why bother bringing it to the states? What overall positive impact does it have for anyone at all?
What will the national impact be on Ireland and others? I'd imagine that this could quite severely negatively disrupt the world economy.
I suppose that is what they want people to worry about.
We noticed that foreign tax havens aren't so reliable, so we'll try some domestic tax havens for a change. We'll bite the bullet and probably have to pay twice the tax we had to pay in Ireland (which would probably be a whooping 0.01% instead of the 0.005% so far).
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
had a word with him, and the word was that you can't let the tax money fall in the hands of the EU, give them to your own country's government instead.
"We paid $400m to Ireland, we paid $400 (million) to the US and we provisioned several billion dollars for the US for payment as soon as we repatriate it and right now I forecast that repatriation to occur next year," he said.
To put this in perspective, Apple makes several billion dollars profit every month.
If you think about it what has been happening here it is insane. Companies like Apple are getting into an effective tax range of 1-5% on their profit.
The purpose of paying taxes is that you get a benefit out of it. I am happy to pay taxes as long as I then have very good roads, a good school system for my kids, decent healthcare, etc, etc.
When you want to do business in a country and that country has a tax setup where companies also pay taxes in their profit, the pay it! It equalises the playing field for all and truly makes the competition fair. The better product, service, setup will win.
In this case companies move money between countries by using the tax rules agains eachother. In the case of StarBucks the royalties on the brand and the profit on that are not taxable in Ireland. Profit in the UK on their actual operation are taxable in the UK. If I now increase my costbase by charging just enough royalties (the right to put starbucks on the window and use the brand) to make the profit close to zero......... we are all smart enough to do the math I presume.
The rule should be that when you make profit in a country, you pay taxes in that country: Period! This way we all get an equal playingfield and companies actually start to contribute to the societies they are making a profit on. I am sure that with this system we will all benefit, including the companies themselves.
If you think about it what has been happening here it is insane. Companies like Apple are getting into an effective tax range of 1-5% on their profit. The purpose of paying taxes is that you get a benefit out of it. I am happy to pay taxes as long as I then have very good roads, a good school system for my kids, decent healthcare, etc, etc. When you want to do business in a country and that country has a tax setup where companies also pay taxes in their profit, the pay it! It equalises the playing field for all and truly makes the competition fair. The better product, service, setup will win. In this case companies move money between countries by using the tax rules agains eachother. In the case of StarBucks the royalties on the brand and the profit on that are not taxable in Ireland. Profit in the UK on their actual operation are taxable in the UK. If I now increase my costbase by charging just enough royalties (the right to put starbucks on the window and use the brand) to make the profit close to zero......... we are all smart enough to do the math I presume. The rule should be that when you make profit in a country, you pay taxes in that country: Period! This way we all get an equal playingfield and companies actually start to contribute to the societies they are making a profit on. I am sure that with this system we will all benefit, including the companies themselves. Reply to This
Creative accounting has made corporate taxes for international companies obsolete. Tax consumption, not production. Apple Execs buy pizza and mansions somewhere. Tax those things.
-Dave
Watching this show, I have a question about what options are available to Apple.
By an amazing process, Apple actually does real, physical things which make neat products which real people buy and use.
Lets call this process X. For argument, say it includes US designing things, China making things, and the EU buying things.
By a more amazing process, Apple creates a less real process for tax purposes.
Lets call this process Y. For argument Y includes Apple Caymen and Apple Ireland as physical bystanders, but financial principals.
I'm ok with the rule that says that an entity can and should arrange their affairs to minimize their tax obligation.
Arranging affairs should certainly include choosing what real, physical acts between willing, independent buyers and sellers. (like X)
It's less clear to me that arranging should include choosing how to describe your operations for tax purposes. (like Y)
But it looks like the Y stuff is a real part of the game.
So if the EU is changing the effective rules in mid game, and Y is simply a fiction for taxes, does Apple get to change Y in mid game.
That is, do the get to refile their taxes and say that now instead of Y, they would like to use a new description Z instead?
Surely they have plenty of random corporate entities lying around and they could 'discover' a different one of these actually 'made' the money.
This is tax stuff is a confusing game. I'm having a hard time seeing the rules. (If there are any.)
Do you think corporations will absorb these extra taxes and take less income, or pass the increases along to the customers?
Only the State obtains its revenue by coercion. - Murray Rothbard
AIUI the USA charges corporations on their global profits but
1. It gives them credits for foreign tax paid on foreign profit.
2. Profits made by foreign subsidaries are only taxed when they are "realised" by the parent company.
Apple has been avoiding taxes in Europe. This has left them with a lot of profits in their European subsidaries which they can't bring back to the US without a large tax bill. If they end up having to pay taxes in Europe, they would be able to claim credit for those taxes when bringing the money home.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
"He likes to show but just want to go out in the rain, when there are less people on the street. (Or just want to make fun, which is the standard response to any attitude of who does bitching here)"
Source: Google Translate.
Right on, brother! In the same vein, I hereby declare piracy to be theft, because that's illegal too!
One would almost think this is an iTaxAvoidance
Its well past time to close the loopholes. 2017 should be the year that profits made in the past 20 years in the US must be paid in the US, and at current rates. Fines, interest, and interest on the fines for late payers are all applicable. "We don't care what Ireland does, or the EU or the Grand Cayman Islands, if you made the profits here, you pay the taxes here!" Oh, and if you don't like US taxes, don't sell product there.
0.0005% tax threat loss is not worth being scared. Even ireland can eat that one.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
"Basically the only country in the world that will keep fucking you over even after you try to leave it behind for ever. Glad I'm not a 'citizen'."
As soon as you stop being an US citizen you stop paying that tax. So no not really forever.
Score high:
"US, a country known to deny effective council, torture people and lock up people without trial"
Mmm hm.
Clinton is a square shooter. Clinton 2016!