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Paradise Papers Leak Reveals Apple's Secret Tax Bolthole (bbc.com)
An anonymous reader quotes a report from BBC: The world's most profitable firm has a secretive new structure that would enable it to continue avoiding billions in taxes, the Paradise Papers show. They reveal how Apple sidestepped a 2013 crackdown on its controversial Irish tax practices by actively shopping around for a tax haven. It then moved the firm holding most of its untaxed offshore cash, now $252 billion, to the Channel Island of Jersey. Apple said the new structure had not lowered its taxes. It said it remained the world's largest taxpayer, paying about $35 billion in corporation tax over the past three years, that it had followed the law and its changes "did not reduce our tax payments in any country."
Leaked emails also make it clear that Apple wanted to keep the move secret. One email sent between senior partners at Appleby says: "For those of you who are not aware, Apple [officials] are extremely sensitive concerning publicity. They also expect the work that is being done for them only to be discussed amongst personnel who need to know." Apple chose Jersey, a UK Crown dependency that makes its own tax laws and which has a 0% corporate tax rate for foreign companies. Paradise Papers documents show Apple's two key Irish subsidiaries, Apple Operations International (AOI), believed to hold most of Apple's massive $252 billion overseas cash hoard, and Apple Sales International (ASI), were managed from Appleby's office in Jersey from the start of 2015 until early 2016. This would have enabled Apple to continue avoiding billions in tax around the world. The report notes that Apple paid just $1.65 billion in taxes to foreign governments, despite making $44.7 billion outside the U.S. That's a tax rate of 3.7%, which is less than a sixth of the average rate of corporation tax in the world.
Leaked emails also make it clear that Apple wanted to keep the move secret. One email sent between senior partners at Appleby says: "For those of you who are not aware, Apple [officials] are extremely sensitive concerning publicity. They also expect the work that is being done for them only to be discussed amongst personnel who need to know." Apple chose Jersey, a UK Crown dependency that makes its own tax laws and which has a 0% corporate tax rate for foreign companies. Paradise Papers documents show Apple's two key Irish subsidiaries, Apple Operations International (AOI), believed to hold most of Apple's massive $252 billion overseas cash hoard, and Apple Sales International (ASI), were managed from Appleby's office in Jersey from the start of 2015 until early 2016. This would have enabled Apple to continue avoiding billions in tax around the world. The report notes that Apple paid just $1.65 billion in taxes to foreign governments, despite making $44.7 billion outside the U.S. That's a tax rate of 3.7%, which is less than a sixth of the average rate of corporation tax in the world.
The problem is, the more restrictive you make laws the more they affect innocent people.
Plus, corporations like Apple have whole departments focused on subverting the law. It's an eternal cat and mouse game.
To give you an example on the first point:
Until recently a company doing business in the EU paid VAT in their country of residence. This led to most bigger corporations being incorporated in Luxemburg (which had the lowest VAT).
To fight this the EU changed to law. Now companies have to pay VAT in the country of the buyer. The unfortunate side effect is, everyone has to reqister and pay taxes in every country they sell to. That's a massive burden to smaller companies. They either have to stop selling to other EU countries or outsource payment processing to third parties. Thus having to cut in yet another middleman.
Not so much the database table.. more problematic is the variety of different rules (different rates / thresholds in different countries, different requirements (some countries require line by line details of every invoice), the registration itself is problematic (All Finland registration paperwork is in Finnish - up to you to decipher / translate)
Quite a burden - and thatâ(TM)s *within* the EU
If governments wrote tax-laws properly, they wouldn't be losing out on such tax, no matter what arrangement Apple tried to use.
And if pigs had wings they could fly.
Governments are run by people and concentrate power, which corrupts them.
They also operate on the "economy of negative values", which generates lots of unintended consequences as the people they're trying to loot, limit, or punish find ways to wiggle through loopholes.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
The global power of the US military underwrites the peace and security of much of the world, including Europe, South Korea, Japan and many other places that would be much worse off if left to fend for themselves. As long as the United States Armed Forces are keeping the proverbial barbarians from breaking down the gates, it seems reasonable that America should enjoy some measure of compensation for its efforts. If Trump really does withdraw US protection from places that don't want to pay up, it will be very interesting to see who or what moves in to the power vacuums left behind. I very much doubt that the locals will like their new masters better than the Americans. The world would be a much more interesting place if the US allowed bad actors to do more or less as they pleased as long as Americans were left alone, but I'm not convinced that the foreigners left to "deal with it" would like the switch.