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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.
https://www.merriam-webster.co...
Table-ized A.I.
They can do this because... country laws allow it all over the world.
I can't fucking stand Apple one bit.
But I'm infinitely more annoyed that any such arrangements are legal, no matter which countries are involved in helping them do this, than anything else. That only happens because the people writing the laws are using the same tricks themselves.
If governments wrote tax-laws properly, they wouldn't be losing out on such tax, no matter what arrangement Apple tried to use.
No, it's not.
Those are big words for "lying through omission" or rather "cheating taxes".
But these activities are not illegal, just immoral - smudging the actors a little bit.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
Paying taxes is neither moral or immoral....it is just something you have to do to help fund government.
You are only obligated to pay what you legally owe.
This is not an action that has morality anywhere in the equation.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Apple is famously secretive, and famously punishes those who break their secrecy.
Correct.
Tax avoidance is legal but immoral.
Tax evasion is both illegal and immoral.
Exploiting legal loopholes to your advantage is legal but immoral.
Breaking the law is illegal and immoral.
There are also activities that are morally right but illegal, for example feeding pigeons in Venice.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
Paying taxes is the price that we have to pay for the right of living in a civilized society.
That's fine and all; we pretty much all understand this.
The question is, WHAT price? It's pretty obvious that 100% of your income is too hight a price to pay for "living in a civilized society" since then you can not even feed or clothe yourself.
So there is some percentage of your income less than 100%, that is an acceptable compromise between paying nothing and paying everything.
In the case of Apple and foreign taxes, consider this. They design everything in the U.S, (modulo some development offices in Ireland), then produce it all in China. So the only monies we are talking about is Apple shipping products overseas and selling them. What does 3% seem low? It's almost 2 billion dollars that the foreign governments get today for doing nothing at all other than letting Apple sell there. Why does that seem overly unreasonable? What costs for those countries is Apple generating that are not being paid for by those taxes? Remember that all those countries are getting of top of that sales tax from Apple products as well...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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
No apple products here.
Not Ever.
"It then moved the firm holding most of its untaxed offshore cash, now $252 billion, to the Channel Island of Jersey."
Where is this happening?
Across the Channel in Jersey.
Everything is legal in Jersey.
.
This Space Intentionally Left Blank
No, it's not.
Those are big words for "lying through omission" or rather "cheating taxes".
But these activities are not illegal, just immoral - smudging the actors a little bit.
That is what they said last time, which was since proven to be illegal....
So stop defending them. They are serial tax frauds, and I don't trust their new scheme anymore than the old one.. The one proven to be fraudulent.
The fix is an easy one. The simpler laws are, the harder it becomes to find loopholes. If the law was that everyone must pay 10% VAT regardless of buyer or seller country, then it become much harder to min-max the system. It is only when you start trying to introduce complexity and exception into the rules that loopholes get created.
Apple better enjoy its position, because sooner or later, nation states will decide that they aren't going to have multi-nationals screwing with them, and just collectively decide to slap them down once and for all. Nation states don't need lawyers if they decide they want multinationals to pay their share of taxes, they have guns, cops, and tanks. Fuck with them at your own risk.
HA! I just wasted some of your bandwidth with a frivolous sig!
How much do the law firms that set up all the bullshit companies charge to hide your money from the tax man? How much money do you have to have in play to make this sort of thing worthwhile? Can someone with 10 million dollars benefit, or does it take 500 million? How do they guarantee that someone in the Cayman islands isn't going to disappear with a suitcase full of your cash?
With all the discussion of taxes lately, I looked up Apple's US income taxes, see http://investor.apple.com/fina...
Bottom line: on income of about $64 billion, Apple paid about $16 billion in taxes. So even a company as rich as Apple is not paying the 35% rate that keeps being quoted by Congress, yet we need to lower the rate to 20%.
Paying taxes IS moral. If some douchebag finds and exploits a loophole (like Trump, who actually had segments of the tax code created just to stop his accounting BS back in the 80's and 90's), that is taking money out of MY pocket. Wealthy assholes dodging taxes means it's left to everyone else to make up the shortfall, thus they are effectively stealing from everyone else.
Your argument reminds me of what lawful evil characters use in D&D. Laws without morality will always be exploited, and that is exactly what these rich assholes do.
~X~
But hey, Apple is clickbait, and the only miscreant worth mentioning.
I predict this will be marked as a troll around the time some folks wake up. Either by Apple haters or you know who... 3...2...1...
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
You just don't get it, do you.
Paying taxes is neither immoral nor illegal, I agree, that's a correct statement.
People as well as corporations have to pay what they are legally bound to pay.
Then there are loopholes and exceptions and fiscal paradises - exploiting them is legal but immoral.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
The morality is in spending not inconsiderable amounts of money finding ways to subvert the clear intention of the tax law. Most people don't have that option, and those that do reduce their own tax burden at the expense of those people.
Just because it is technically legal doesn't make it morally acceptable to shirk your responsibilities while enjoying the massive benefits of being able to operate in those countries.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
If it were only paying a bill, you'd be correct. In practice, our complex tax system is riddled with judgement calls. There is a moral choice of whether to pay for your kid's ski lessons with child-care deductions, which is clearly not in the spirit of the deduction. It's easy to say 'well, I followed the rules' and absolve yourself of any moral responsibility, but your fellow citizens are paying (on average) ~30% income + ~8% consumption based taxes. If you're reasonably well off and still cutting every corner, you're greedy and that's a moral failing.
Millions long for immortality who do not know what to do with themselves on a rainy Sunday afternoon. -- Susan Ertz
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
Of course Apple remains the world's largest taxpayer. It is the world's most profitable corporation.
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.
This is why complex tax laws are bad, and anyone who thinks companies pay taxes is fooling themselves. Companies sell products to make money, and the price of those products is dependent on a sum of all costs (which includes taxes) and a profit margin.
On the other end, it is actually pretty rare for companies to sit on massive amounts of cash like Apple. Those massive amounts of cash are making the dishonest politicians in the EU drool over the chance to grab more for their failing states, thus all of the tumolt over Apple's perfectly legal tax practices. When companies have billions of dollars, they have the money to hire expensive attorneys to minimize tax liability, and you wind up with companies like apple paying less than 2%. If the EU doesn't like it, they need to fix their shitty tax laws, not try to demonize Apple. Most of the time, companies do one of three things with their cash, they either pay bonuses to people, pay stock holders (through dividends or stock buybacks) or re-invest in the company. Apple is a corner case because they have had such a meteoric rise in profits that they literally do not know what to do with their cash. This is in part due to the incompetence of leadership at Apple (I would love to buy an Apple work station that had premium cooling, a hex core CPU and 64GB DDR4, but if I want one of those, I have to build a Hackintosh. I would love to see real new features in an iPhone (built in micro projector, holographic display, IR camera, true 3D photography, etc.), and some real storage (how about 500GB base size) and a 2 day battery life on my damn phone. For $1200 I can buy a windows gaming laptop, Apple and their rabid fans have lost sight of this simple truth, which is why I am see no reason to upgrade my iPhone 6plus.
Regardless of the incompetencies of management at Apple, the countries "missing out" on tax revenue only have themselves to blame. Instead of trying to tax Apple, which as we have already established above does not pay taxes, just jack up your sales tax rate to what you want. The net effect of making goods and services more expensive is the same, but it is nearly impossible to game the system or find loopholes with sales tax. The consumer still pays the tax and you can fire all the tax attorneys and most of the tax auditors since it is so simple to keep track of sales taxes.
If you disagree, please post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like
yeah yeah yeah yeah!
It crowds out domestic competition
Come on, at best if Apple and Google vanished overnight all that would happen is everything sold would come from China. The truth is Europe is a very long way from competing in most of the markets Apple is in.
take Baidu for example
That seems like a really bad example because it's domestic competition succeeding against Google.
"There is more worth loving than we have strength to love." - Brian Jay Stanley