Slashdot Mirror
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.
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.
SJW n. One who posts facts.
Compared to what they owe planet wide.
They and every other megacorp out there.
That's a good deal for Apple because they got to keep the money for so long. Meanwhile potential local competition had to pay up from day one and never got to grow to their level.
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.
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.
Funny how the EU always levies fines on American tech companies, and never dares touch Chinese companies.
Maybe the Chinese companies aren't dodging taxes? Or they haven't been around in the EU market long enough for their dodginess to be uncovered? Non-tech Chinese products have been on the EU market for a long time...and the EU raised quite a big fuss over some of them.
Also you will be glad to know that besides dishing out fines for American companies, the EU happily does that for it's own companies and those from other countries (like Japan) as well when they break the rules.
Okay, I'll bite. How much do they owe planet wide? And why do they owe whatever amount you specified?
And do remember to refer to the relevant sections of the tax codes of each and every country on the planet that will be affected by paying "what they owe the planet"....
Myself, being something other than a tax lawyer (French or otherwise), I suspect that they pay an SI buttload of tax lawyers to make sure that they pay the absolute minimum they can LEGALLY pay....
"I do not agree with what you say, but I will defend to the death your right to say it"
Can you not read? This is France, not the EU and it concerns payment of taxes Apple had not paid, not a fine.
"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.
This is just legally due taxes that ANY other corp would have paid in time.
Tax evasion is illegally not paying due taxes, tax avoidance (tax avoidance being the legal use of tax laws to reduce one's tax burden) is legal and encouraged.
Did they avoid taxation or evade taxation?
--I like turtles...
Calm the fuck down, McCarthy.
"Prediction: within 10 years, Windows will be a Linux distribution." Me, 7-6-2016
being that the agreed to a payment it seems they evaded. Why would they pay back taxes that the legally avoided and do not owe.
Nobody forces Apple, Amazon, Google, Facebook etc to offer their products and services in the EU.
being that the agreed to a payment it seems they evaded. Why would they pay back taxes that the legally avoided and do not owe.
Sometimes you pay for other reasons than "being guilty". It may be cheaper (or more profitable) to get the issue behind you and move on.
This is the equivalent of punishing a company because France regulators suck at writing tax code. If Apple is using loopholes, that is tax avoidance. Using the tax laws to your advantage is encouraged in the accounting field. So much so, that a quote about this was on the cover of my tax accounting book in college. The philosophy stuck with me...
--I like turtles...
Part of the problem with our complex tax situation and why any attempt to simplify the tax plan fails, is because taxes are used more then just revenue for the governments, but a tool to help manage behaviors especially towards large organizations.
Economist both liberal and conservative in general know corporate taxes are a net negative on the economy on the whole, which creates higher priced goods, slows down growth, and requires an expensive labor force to manage all the taxes correctly. which slows down the economy more then what the revenue will bring in.
But we also have billionaires who gets paid a dollar a year. But their wealth is tied into the company. So he needs a new car the company gives him a car. The company writes this off as a business expense and the CEO gets a fancy car with a net less money spent, then if I normal Joe bought the same car with my hard earned money, because I would need to spend full tax as well on it.
So we get such shenanigans which the general population doesn't like, so the tax laws gets more complex, trying to reward good behavior, and discourage bad behavior without having to outwardly make it illegal.
So the government wants you to follow the spirit of the tax laws that will lower your taxes, because that means you are doing actions they want you to be doing.
However if a company is caught "hacking" the laws so they are paying less taxes without trying to perform the goal of the law. Then the government gets annoyed, and less forgiving of minor mistakes.
In general France wants a portion of the billions of dollars Apple sells to that country. Because an issue is Apple doesn't need a big Brick and Mortar store front to sell its products. Thus billions of sales where Frances money leaves the country without supporting local jobs or economy.
In short it is all very complicated without a simple fix. And I havn't heard any leader (Government or Business) willing to really deal with the complexity, but just throw a cheap fix get a few bucks out of it, until the other side finds a cheap fix to make it pointless.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Funny how the EU always levies fines on American tech companies, and never dares touch Chinese companies.
Not paying taxes isn't a cornerstone of chinese business. They have their own set of problems to be sure but that doesn't seem to be one of them.
Wanna buy a shirt?
https://www.redbubble.com/people/stealthfinger/shop?asc=u
Local competition to Apple in Europe?
Bwahahaha!
You don't get to be (one of) the richest company in the world by paying your taxes and dues. Just ask Amazon et al.
Wanna buy a shirt?
https://www.redbubble.com/people/stealthfinger/shop?asc=u
So you admit they owe nothing?
If your law allows for something, then it isn't illegal. Why would you write a law allowing for a loophole and then get pissed that someone simply did that thing?
Not wanting to side with tyrannical mega corporations, but I don't see how theyre wrong to do this.
This new thing that is "assumed law" needs to end quickly, you don't get to say "well you knew what we wanted you to do" just because you can't control something, but want to control it
You don't allow for loopholes, they exist from mistakes/oversights and then you notice then exploit them. Loopholes that can be closed usually are.
Wanna buy a shirt?
https://www.redbubble.com/people/stealthfinger/shop?asc=u
On innovative US brands. Investing in the EU is a trap.
Apple? Innovative?....HAHAHAHA good one +1 funny
Wanna buy a shirt?
https://www.redbubble.com/people/stealthfinger/shop?asc=u
You think its intended for company to sell their own name to another company (they own) then rent that name back at oh would you look at that just the amount that would put you into certain tax margins because you're just not making any money because you spend it all renting your name from yourself? And that's just one of the tricks.
Wanna buy a shirt?
https://www.redbubble.com/people/stealthfinger/shop?asc=u
There's a grey fuzzy area between avoidance and evasion which takes a court case to decide. Due to the uncertainty, they reach a settlement. If it is clear cut avoidance, the company would go to court, and likewise for the government. I'd guess the settlement depends on likelihood of one side winning.
Probably depends on amount as well. If the government claimed I owed another $100, I'd just pay it rather then arguing.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
How convenient. They can arrest anybody any time they want under that code. I'd move ASAP.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Or, they could use that tax money to create a universal healthcare system any time they want.
I'd move ASAP.
It's OK Bender, there's no such thing as 2.
I'm not a tax guy, so could someone explain why the amount owed to the public (taxes) hasn't actually been disclosed to the public? I assume it has to be made public at some point, given that both parties have agreed to a deal and the amount isn't likely to change.
Also, I'm not sure this is to be celebrated, because it's rather likely that a negotiation took place, and Apple is likely paying less than it was originally supposed to. That's the way "deals" work, as opposed to "orders."