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Apple Japan Unit Ordered To Pay $118M Tax For Underreporting Income (reuters.com)
Apple's unit in Japan was ordered to pay 12 billion yen, or $118 million tax by local authorities after they determined it had underreported income. Apple has since reportedly paid the sum. From a Reuters report: The Tokyo Regional Taxation Bureau determined that the unit, which sends part of its profits earned from fees paid by Japan subscribers to another Apple unit in Ireland to pay for software licensing, had not been paying a withholding tax on those earnings in Japan, according to broadcaster NHK. Apple and other multinational companies have come under much tax scrutiny from governments around the world. The European Union has ordered Apple to pay Ireland 13 billion euros ($14.6 billion) in back taxes after ruling it had received illegal state aid. Apple and Dublin plan to appeal the ruling, arguing the tax treatment was in line with EU law.
Apple failed to submit $118M of taxes for just their Japan iTunes unit. The actual revenue in question would be multiples of this amount since $118M represents just the taxes owed. This likely means Apple has been failing to pay this over several years.
Seriously, you think that kind of systems work is boring, and it kind of is, but jeez can they ever file a useful bug report. It'll be a precise description of what is incorrect and the precise conditions under which the problem occurs, not some enigma wrapped in a turd.
These guys are very big on precisely the right amount of precision. They'll let a nickel slide, but squeeze a buck til it screams for mercy. One thing I learned about their mindset is this: if there is any doubt, make the assumption that's most beneficial to the client and then see if you're called on it. So this is not a case of Tim Cook twirling his evil mustache, it's a case of the finance guys doing their finance guy thing and the tax guys calling them on it. It's a bit like intentional fouling in basketball.
Corporations aren't evil, they're amoral but at the same time careful to avoid breaking rules where they'll get caught. The underlying problem is that the rules make a lot of sketchy practices legal, this kind of situation where they're "caught" is just the penumbra of the problem. The real problem is that the rules suck, and the rules are set by politicians.
The predictable anti-corporate reaction that occurs when something like this comes out is the left wing version of the right wing's vilification of IRS auditors -- who by the way are often some of the nicest guys you'll ever meet. IRS auditors are the public face of a system that everyone knows is over-complicated, and full of loopholes and gotchas that favor the wealthy and powerful. People don't like them because their job is enforcing rules you don't like. But who made the rules? The politicians. And when a politician is for reducing the number of auditors, it's not because he wants to help you. As one auditor I knew said, the rules have been written so there's really no place an ordinary person can hide income, and that makes the kind of audits people like you face perfunctory affairs. Cutting IRS staff is really all about making sure that the big boys aren't challenged on those tricky and aggressive calls they make. You need those armies of auditors to go after the people who don't want to abide even by rules that were written to favor them.
So whenever politicians left or right tries to get you riled up about some inevitable feature of the system they have created, know that you're being treated like a useful idiot.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Your statement is true but very misleading. It doesn't matter what percentage of the total federal income tax is paid by the poor. What really matters is what PERCENTAGE OF THEIR OWN INCOME goes to taxes. You make it sound like the kid making $5 per hour only pays 2.5 cents in taxes per hour.
Warren Buffet pays way more dollars in taxes than his secretary, but he only loses 15% of his income. The secretary is technically paying fewer dollars, but he is losing 30% of what he makes. It's a proportionally heavier burden placed upon the person who is less able to handle it.