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.

Comments

good.

[serviscope_minor]

These large companies are built on civilisation, which is paid for by taxes. Everybody needs to pay in so success stories like Apple can exist. And it's certainly fair that those that benefit the most pay the most.

Anything else is fleecing the middle class to pay for the extravagance of the ultra rich. A strong middle class is needed for a strong economy and demand. If the Apple's of this world all actually got what they wanted they'd be screwed since there would be no one to buy their "premium" offerings.

It's pure hypocrisy. The excuses for doing it are just terrible too and amount to saying it's ok doing something deeply unethical and borderline illegal if you do it for money.

Complicated issue with no simple solution

[monkeyxpress]

Since this is slashdot, where the average IQ is meant to be a little higher, I'll have a go at explaining this issue. While I completely agree that having these companies not pay taxes in the local countries that they operate in is a bad thing, I think that the way everyone is trying to make this equivalent to someone's personal tax situation (and, let's be fair, most people get their employers to calculate, file and pay their taxes, so don't even need to understand the tax code) is not useful. We saw this sort of shallow argument during the whole occupy movement, where everyone knew what the banks were doing was bad, but they couldn't articulate exactly what it was that was wrong and how it could be fixed. The end result is the occupy movement fizzed out and nothing much changed.

The fundamental issue here is that Apple owns the complete value chain (apart from a small cost of manufacturing that goes to China). Most people would agree that some of that value should be taxable in the country of purchase. But most would also agree that rest of the value should be taxable in the USA (where Apple is based). The question then is, how much should be attributable to each country? To further complicate matters we tax profits, not value, otherwise a high volume low margin product would be disproportionately taxed vs a high margin low volume product. To calculate profits you need to attribute costs. So after you've decided what value add should be taxable, how do you apportion Apple's operating costs to each country? Then you've got intangible assets such as the money spent on R&D for a product.

At the moment the answer to these questions is 'its complicated'. But 'fortunately' for all these multinationals there are giant loopholes in various EU country's tax laws that allow them to avoid that question by reducing in country profits to zero. So guess, what, that is what they all do.

The solution then is two fold, and not entirely simple. Firstly, the EU needs to shutdown the loopholes that countries like Ireland, Luxembourg, the Netherlands, and the UK have that are really only there to give those countries a competitive advantage over other EU countries. So far that is taking a very long time (so who's fault then is that?). Secondly, there needs to be some sort of agreement on how much of Apple's profits are attributable to each country in which it operates. This is no easy thing to do, and may not even be possible as the best way to do this would be to reach some sort of agreement with the IRS to have it share tax take. But the US itself has a bunch of tax loopholes that allow these countries to avoid US taxes, so you would first have to get those shutdown (again, why is that taking so long...) and then get the IRS to agree to a profit sharing deal (good luck with that). The whole thing is a huge beauacratic mess, and frankly, Apple and its ilk are simply making the most of rules as they stand.

I'm not really sure what the solution is. Personally I think the best approach is to go after the ultimate recipients of the profits (the shareholders) and ensure they cannot avoid income taxes as easily as they are currently able to do. Companies themselves can only invest their profits (which ultimately is good for the economy) or distribute them to shareholders, so going after the shareholders (who it is much easier to lock down to a jurisdiction) seems like the better approach, but that would require voters to educate themselves on the loopholes that get introduced to benefit the 0.1%, and given the current state of western democracies I seriously doubt the ability to deal with these issues.

Re:Protectionism by another name NO IT'S NOT

[Anonymous Coward]

This is NOT a fine.
And that's the problem.

This is just legally due taxes that ANY other corp would have paid in time.
Apple was(*) stealing money from France for years and nobody cared.
And when Apple finally paid they're not fined for trying to steal.

* and Apple IS STILL stealig money with help of Ireland.

And about EU fines against US I think you're all wrong :
when US levies fines on EU companies those are fined Billions and not Millions.