|Apple is going to repatriate offshore profits to the US in 2017 through paying billions of dollars in deferred taxes to the US Treasury. Tom Cook provided a summary of Apple’s 2014 tax affairs, citing the Irish and US taxes as $400m each. He provisioned several billion for the US for payment as soon as Apple repatriated. However, this revelation came as a surprise due to Apple’s previous refusal to countenance such a move.
Apple is no different from many US multinationals, who have for decades been pooling their non-US profits outside of the US. Exploiting loopholes in the tax laws, tech giants can defer US taxes continually so long as income is not repatriated to the US. Apple’s cash held offshore is $214.8bn, which is the largest of any American company.
Apple was recently accused by the European Commission of receiving state aid from Ireland, and immediately took a decision to repatriate foreign profits. The European regulators claimed that Apple’s Irish-registered companies were allowed to pass billions of income untaxed. However, both Apple and Ireland have denied any wrongdoing and promised to appeal against the decision. In response, some American politicians called it a political attack.
Previously, Tim Cook had consistently said he would not repatriate Apple profits to the United States until it decreases the US tax rate, because today it would cost him 40% to bring it home, which is clearly not a reasonable thing. The matter is that Apple makes large provisions for US taxes in its annual report, which allows the company to claim that it has an effective tax rate of 26% – this is much higher than many other tech firms.
However, behind these accounting provisions Apple has made clear it is not going to repatriate profits and really pay these taxes while the current tax rate is maintained that high. In other words, its reported tax rate is just an accounting fiction.
A federal tax rate in the United States is 35% on corporate profits and is regarded one of the highest in the world. Moreover, businesses can also end up paying an additional 5% in local state taxes on top of it. In reality, loopholes in the country’s tax code allow US tech giants to aggressively defer tax payments until any income earned outside the country is kept offshore. This is how many multinationals achieve some of the lowest effective tax rates ever.
Saturday, September 3rd, 2016
|apple should pay it's taxes like everyone else. after all, they'rs supposed to be the richest company profit wise in the world so no excuses. if they don't like the tax rates, cease operation !!|
maybe prison would suit their execs better !
after the attacks on companies for copyright payments, you'd think governments would be relentless in pursuit of that tax .other companies pay so why should apple be an exception ? if us govt doesn't sort it out , the eu will make stupid laws exclusively for apple , maybe apple tariffs , apple tax or simply ban the import and sale of
apple products !
they're over priced cheap products don't impress me at all ! no wonder they have the largest profits ! over priced and no tax contributions ! a lot of other companies will follow suit if apple has to pay, good for economies.........
i hope they stick it right up them !!
|Apple trying to escape paying even more to the EU.|
|posted by (2016-09-04 01:48:29)|
|Apple is obviously trying to get on the Governments nice side.|
First they leak information of its users now this?
Sure they're losing money but it's money they shouldn't have had in the first place.
|@Selsley really? "syphoning profits out of the world to pay american taxes" funny since Apple was founded in America and is for lack of a better word an American Owned Company, so dont you think they should pay American taxes first then pay the rest of the world not the other way around, it would be the same if a EU owned company payed American taxes before EU taxes... doesnt make sense you pay taxes in the country or origin first, the only reason that apple has so much $$$ in other countries is so they can AVOID paying American taxes, which is BULLSHIT|
To give you a brief economics lesson. Overseas Apple has to pay tax on the profit on the products it sells in that country before it repatriates any profits back to Apple Ireland. It then pays a very low tax rate in Ireland before it repatriates any profits back to Apple US.
It is an economic fundamental that tax is first paid in the country that the sales are made in not in the country that the company has its headquarters in.
Here in Australia Apple sell an Apple iPhone 6 for around $800.00 to the public. Apple Australia buys the iPhone from Apple Ireland for approx $725. This leaves Apple Australia with a very low profit on which to pay tax on; basically Apple has moved the profit off too the low tax country of Ireland. Apple Ireland gets the Apple products direct from the factory in China & other countries so no tax is payable to the US government until it brings any profits back into the US.
|posted by (2016-09-07 04:40:02)|
|They are playing the game based on the rules that are set up. They are a business. A business's job is to make money. If they are not always looking for ways to reduce their tax liability then they are not practicing smart business. You dont like it, you dont have to buy Apple products. You can get active and get your country to change its tax laws. Dont hate on Apple for using existing loop holes to pay less taxes. They didnt create the loop hole. If you had income at that level would you not use any loop hole you could find to pay less taxes?||
Most Popular Stories