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Apple Reaches Deal With France To Pay Estimated $571 Million In Back-Taxes (macrumors.com)
Apple has reached a deal with French authorities to pay an undeclared amount of back-dated tax. While the amount isn't disclosed, French media suggest the sum is around $571 million (500 million euros). MacRumors reports: France has been working diligently to stop tech companies like Apple from exploiting tax loopholes in the country. The loopholes are said to have allowed Apple to "minimize taxes and grab market share" at the expense of Europe-based companies. French President Emmanuel Macron is one of the leaders behind the tax crackdown on international tech companies, with a goal of bringing a more unified corporate tax system across the nineteen euro area states.
As noted by iPhon.fr, Apple and French tax authorities reached the agreement for the payment of several years of unpaid taxes in December, according to French newspaper L'Expansion. The agreement followed a meeting in October between Apple CEO Tim Cook and President Macron, in which both reportedly agreed that a solution would ultimately be enacted by the European Union rather than France.
As noted by iPhon.fr, Apple and French tax authorities reached the agreement for the payment of several years of unpaid taxes in December, according to French newspaper L'Expansion. The agreement followed a meeting in October between Apple CEO Tim Cook and President Macron, in which both reportedly agreed that a solution would ultimately be enacted by the European Union rather than France.
Compared to what they owe planet wide.
They and every other megacorp out there.
It's not that complicated. Apple certainly knows precisely how much profit it is making, and there is a corporate tax rates levied on profits... So the amount they owe is a percentage of the profit made selling hardware and services in each country.
They try to hide it by paying bullshit licencing fees to a parent company based in Ireland, but we just ignore that. If they have R&D centres in a country they can show the accounts for them.
The IRS is irrelevant for EU taxation. It's up to the US if it wants to double-tax on profit made in the EU, but either way we are getting what is owed to us. That's the price of doing business in our extremely lucrative market.
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It's not that complicated. Apple certainly knows precisely how much profit it is making, and there is a corporate tax rates levied on profits... So the amount they owe is a percentage of the profit made selling hardware and services in each country.
You're oversimplifying it again. This is the perennial problem with the issue.
Your system would attribute 100% of the value add from sales in France to the French tax authorities. Firstly, why is that fair (France did not pay for the infrastructure that supports the workers in California). Secondly, what if Apple just goes back to what everyone did 20-30 years ago, and has a local french distributor who buys from them, adds 30% and sells it on to customers? Should France send a bill for a share of Apple's US profits to the company in the 1 infinite loop? Why would they pay? France can't ban their products or add huge tariffs as they are part of the WTO, and if the company is not directly operating in France they have no force of law to extract taxation. Also, now that you've changed the entire basis for international trade, what do other companies do? What if the US decides to retaliate and sends a bill to French companies for the share of profits that the US thinks was earnt in the US? Perhaps the US adds a cut of global profits based on how many US patents the French company has and the imputed return?
This is the problem. Your idea sounds great but ignores all the details. It's like saying 'jail the bankers' and after a year of chanting that everyone goes home because nobody knew who was meant to do the jailing, what illegal thing had been done, or even what a 'banker' was exactly.
The issue of coming up with a fair profit attribution system (not impossible, but not as simple as you are making out) is still there, along with having to get mutiple countries with competiting issues to agree to a system (unless you think starting a trade war will get you what you want). Most countries can barely agree among themselves.
"loophole" usually means finding a legal way to do something that would normally be illegal. "unpaid taxes" usually means illegally underpaying your taxes. So it can't be both.
I'm curious as to whether this was actually paying taxes they were legally obligated to do, or more of a settlement / concession / bribe to get them to quit harassing Apple for doing something they don't like but were legally able to get away with?
I could really see it being a case of them arguing "ok Apple, technically you don't have to pay this, but if you refuse to, we're just going to pass some laws that in the end will cost you more than what we're going to call a 'fine', just go get the public off our backs."
Tax loopholes are nothing shocking or new. Any person, group, or company with money uses them extensively to hang onto as much of their money as possible. This should surprise no one. "International tax havens" are very similar to your retirement account, they're both designed to entice you to invest your money somewhere in exchange for low property taxes. The investors aren't the ones that made the loopholes, they were created by the people that want to make money off YOUR money while they hang onto and protect it for you. (could be a bank, could be an investment group, could be a country) If you're getting mad at the investors because you can't legally tax them as much as you want to, you're focusing on the wrong party.
When the public gets upset over international tax havens, it's basically coming down to a problem of the benefit of they money being there having been shifted from taxes to something else in the country. They set up the loopholes in the first place to benefit the country in some way, be it increasing forein investments or something else. Wanting to have those benefits AND still tax the money the same is double-dipping, on a country-size scale. There's only one pie, and two different groups within the country both want the same slices. The loophole just changes the distribution of a few of the slices. In other words, it comes down to a problem created by the greed of a country.
And because you can't "fix" greed, this issue will never go away.
Imagine senators saying "hey, Merrill Lynch, our voters are mad at us since we created these tax shelters to increase your investments here, but the public is only looking at the lost tax revenue and thinks it's unfair they can't have their cake and eat it too. So if you don't pay us these token 'fines' so we look like we're 'addressing the problem', we're going to change the laws in a way that hurts your bottom line a lot more than the 'fines' would." Is this basically what's happening here?
I work for the Department of Redundancy Department.