Apple’s U.S. tax fallout set to have global impact

“The clamour surrounding Apple’s tax affairs in Washington on Monday is set to reverberate around the world in the coming days, following revelations that taxpayers abroad have suffered more than those in the US from the company’s tax avoidance tactics,” Richard Waters and James Politi report for The Financial Times.

“In one unusual arrangement, Apple cut a deal to pay a corporation tax rate of 2 percent or less in Ireland over the past decade, far below the usual 12 percent rate,” Waters and Politi report. “It then passed billions of dollars of earnings through subsidiaries in the country, enabling it to escape large tax payments to other countries around the world. All of Apple’s sales outside the Americas are channelled through the country, according to Monday’s revelations, which were contained in a report from the Senate’s permanent subcommittee on investigations.”

“‘There’s going to be some shockwaves I believe going through Europe when the other countries see Ireland not even implementing their own tax rates but working out these deals with Apple,’ said Carl Levin, the committee’s chairman,” Waters and Politi report. “Tim Cook, Apple chief executive, is set to face withering questions over the revelations on Tuesday. But in a written submission published on Monday, Apple denied that the Irish entities were purely ‘shell companies’ designed to avoid taxes. Instead, it said that AOI had been set up to manage its “global flow of funds” and that investment income on the unit’s cash holdings were taxable in the US.”

Read more in the full article here.

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51 Comments

  1. WHY IS COOK GOING TO DC???

    no other CEO is going to DC to fight this. What’s the possible good outcome for Apple? There’s a reason why NO OTHER COMPANY is going to DC to talk about tax evasion.
    I don’t get it…..if congress wants the biggest companies CEO’s to line up and talk about why they are ALL avoiding taxes then maybe they should launch an actual investigation with actual subpoenas and expose the truth (which everyone knows).
    What benefit does Cook possibly see in this publicity stunt??

      1. The same thing Google was accused of. Hypocrites, you fanbois slam Google for avoiding payment of taxes, but when Apple does the same you say it’s perfectly fine. You people are either deluded, stupid, prejudiced, or all three.

        1. One of the most famous speeches of all time was NOT, “I have a dream, you bunch of clusterfuck dipshits. Listen up you friggin’ assholes.” Hmmm. I wonder why not.

          What do you care about? Do you actually care about persuading anyone about anything, or do you just want to vomit negativity and be a petulant little bully? IF you care about ever persuading a single other person, I can guarantee you that it will never happen with that kind of language.

          People are persuaded to new points of view by logical ideas that are clearly, reasonable and respectfully articulated —- and when those ideas also show the listener that their self interest is best served by the new idea. NO-ONE is persuaded by the swearing and insulting you so frequently dirty this site with.

          I’m speaking from experience. I’ve done the ranting – when I was MUCH younger and much more naive. It accomplishes nothing. So get your testosterone under control, and think whether you actually want to accomplish anything.
          – If you do want to contribute anything positive, change how you talk.
          – If you don’t, then you really are nothing but a poisonous little bully, and your words are much worse that a mere waste of space.

    1. I imagine that the only reason Cook is the one to show up, is because Apple is the only company that doesn’t line the pockets of Congress. All of the other companies (I’m looking at you Google), at the very least use lobbyist, but they also do other under the table money exchanges to the politicians. those CEO’s don’t have to show up because they’ve already paid off Congress. So all that’s left is to attack Apple, the only honest company left.

      1. Maybe not now; maybe not in our lifetime; but one day justice will be done to those whose eyes deserve the corkscrew treatment, since they’ve squandered the gift of vision.

        1. I think that Day of Justice is coming sooner than you think. Richard Milhous Obama’s Den Of Thieves is about to end, hopefully repercussions will throughout government and especially international banksters…gonna be an interesting summer.

            1. Your life gets a little sadder every day, doesn’t it, botvinnik? You really need to seek professional psychiatric help. Posting drivel to MDN won’t cure what ails you.

        2. The problem is this: The Salieris of the world band together like jackals to bring down the Mozarts, who only want to be left alone to produce excellence. In my opinion, it’s the worst trait a human being can have.

  2. It looks like Apple is responsible for governments changing their laws. Good on them! Hopefully, they will eventually make it hard to make knock offs of their products.

    1. Wouldn’t it be sweet justice if Apple’s “competitors” found themselves not so competitive in a tax climate that they couldn’t – ahem – avoid?

  3. Seems like a witch hunt. I wish they would just end corporate taxes and just create a Mational sales tax. Taxes Apple, Google or whoever pay just get passed on to us consumers anyway.
    Oh wait, if they did that, than maybe that would make it harder to redistribute the wealth and give those who don’t want to work for a living, free money.

    1. Have you never taken basic economics? Sales taxes are massively regressive and punish those who make the least money the most. When you’re paying so much in sales taxes, which would need to be high as hell, on your basic needs, its killer. Then the rich get to take and just endlessly grow their disposable money exponentially.

  4. As i said weeks ago. Google and Apple think they are beyond the laws. Shit coming home. About time. You fanturds think Apple is Jesus. Watch the slide of AP in the morning. Americans hate cheaters. Bye bye Apple.

    1. You and your Apple FUD. Apple finally has a sizable fan base (thanks to the introduction of iPod in 2001) and yet people like you try to ruin it. I bet you are nostalgic for the 1990s, a dark time in history when Apple was a joke. I think you are a Windows fan who is afraid that Apple and even Google is beating M$ up in the OS game. As much as I hate Android, I still would use it over Windoze Phoney.

    2. You won’t get through to these fanboys.

      They’re hopeless. So they look to a business (Apple) for hope to keep on living. It’s like a cult.

      Yet, I’ve been pulling records and reading other investigative journalism and at this point, it is undeniable that Apple has a massive tax avoidance scheme in play globally.

      At least 5 shell subsidiaries some in tax havens and over 70% of their profits are overseas, yet they’re an American company…

        1. You fucking idiot shitheel.

          Never once did I say Apple did anything illegal. Ever.

          I’m attacking all of you for attacking Google, MS, and others for doing exactly what Apple does. I’m pointing out facts that Apple does in fact have a foreign tax scheme using shell holdings. This stuff is a matter of public record.

          You’re all hypocrites.

          Frankly, I could give a fuck what Apple does.

          My mission is to get you guys to wake up and shut up. The next time you say Google is evil for having a tax scheme you’ll have to say Apple is to. In fact, it may even be that Apple innovated the very tax schemes these other companies use.

          Should Apple sue them for copying them?

            1. I’ll tell you why. Because I’m sick of life. I’m sick of people complaining. I’m sick of how long it takes for social and political change. I want to live in a better place. The only way this is going to happen is if people shut up and start working and doing things to make it better.

              We’re slaves to corporations because we’re slaves to a bank account and debt. It’s not necessarily our faults. But you guys bullshit and complain about evil Google and all these other companies yet defend Apple at every turn when Apple in fact is probably a worse offender at some of these things than the other guys.

              This is called delusional thinking. It’s an illustration of the problem with people. With humans. We’re delusional. Sometimes it works out for the better: we take huge risks in spite of the low probability of success and it can work out.

              But when it comes to defending a brand and how emotional people get. Wake up. Stop defending brands. They don’t care about you. They just want your money. That’s it. They can’t exist without it. Apple doesn’t deserve any more empathy than anyone else. They honestly don’t give a shit about you other than your money. Sure they have noble causes to make easy to use products and a few at the top have lofty visions. But they driven by profit and money.

              I’ve worked in the tech industry for a long time and I know how greedy and messed up people are, including people from Apple. And people are greedy and messed up in other industries too. It’s not just here.

              I wish for people to stop blaming everyone else. Stop worshipping companies. Start doing things yourselves. Stop looking for someone to blame. I know that it’s people I want to connect with and that they have the power to promote a better life. It’s not companies. Companies are driven by profit and that’s it. It’s just a big sham. And I own a company…

            2. @sfgh
              “I’ll tell you why. Because I’m sick of life. I’m sick of people complaining. I’m sick of how long it takes for social and political change.”

              As I said to MacFreek, one of the most famous speeches of all time was NOT, “I have a dream, you bunch of clusterfuck dipshits. Listen up you friggin’ assholes.”

              POSITIVE change is not produced by poisonous negativity.
              – Either just wallow in your rage and pain, but don’t inflict it on others.
              – Or grow up, get a grip and become a better person — the kind of person who would be part of the society you want.

              People can be inspired into producing positive change. Whipping people emotionally will never produce anything you want. If you’re not willing to give up the poison, please just go away.

            3. Because he cares about our welfare even more than he cares about our wrongness. Or because he despises what sheep we have become, and how blind we are to the common failings of our ill-chosen champions, where once he cared deeply. Or that what we once accepted as good has become squalid and contemptuous, alerting him to a need for his counsel, grudgingly though it may be proffered. Frankly, Jim, I can’t puzzle it out. The logic bits aren’t clicking into place. I want to take him at his word, but his incessant spite is uncomfortably like my sister’s PMS.

      1. “Apple pays an extraordinary amount in US taxes. Apple is likely the largest corporate income tax payer in the US, having paid nearly $6 billion in taxes to the US Treasury in FY2012. These payments account for $1 in every $40 in corporate income tax the US Treasury collected last year. The Company’s FY2012 total US federal cash effective tax rate was approximately 30.5%.”

        Enough said.

  5. Tim Cook is an idiot for going in front of Congress. He’s going to get grilled with questions he’s not prepared for and information is going to come out that isn’t in Apple’s best interest.

    This is what’s going to happen.

    But the more I read about this the more I wonder whether Apple is in some shit because I’m seeing quite an elaborate, complex web of foreign shell holdings from them. The wheels are now spinning and I’m sure Apple’s going to be under a lot of pressure.

    Perhaps Apple realizes they could be in some trouble and that the US Government is going to crack down on their elaborate tax avoidance scheme… so they’re going to try and negotiate with the GOV to make the break up of these schemes and return of profits to the US easier to swallow. If this latter is the case, maybe Cook et. al don’t have much of a choice here?

    You have to admit, this is very bizarre for Apple to be going in front of congress.

    1. It’s just standard politicking. Tim Cook will do fine. He is an intelligent man who knows what he is dealing with. He may never be our generations Steve Jobs, but just be glad he isn’t messing up royally like Bald Ballmer and Eric T. Mole.

      1. Apple has to show up or be tarred and feathered in absentia. The had the balls to stand up to DOJ on the price fixing case and to fight for their patent rights.

        Wish TC would drop a bomb on Samedung, if there is evidence they are paying no US income taxes on their phone sales. by selling to US carriers from an off shore subsidiary. All he has to do is suggest that Senate seek input form domestic and foreign cell phone manufacturers. On the other hand Samesung probably has something to do with Apple being called on the carpet. Money talks.

        1. I do see some potential for Time Cook to drop some bombs on these Political Hacks…point out how a *foreign competitor* is avoidding paying US tax on US sales *WHILE* stealing IP from a US company … it would make for great theater.

          Similarly, these Politicans haven’t done their own bleeping JOB for the past … how many years? … in coming up with a Federal budget. That can & should also be thrown back into their face.

          But that’s not what’s going to happen. What’s going to happen is that instead of there being actual Questions asked in the Q&A, they’re going to make Political Grandstanding Statements … and the proper back-at-ya response from Cook which would be wonderful to hear (but unlikely) should be nothing less than: “Congressman X … you failed to ask me a question.”

          -hh

  6. Apple. Too big to ignore.
    When you have this much money and potential influence you either play the game everyone else is playing or prepare to be singled out for not playing along.

  7. Apple has always been and always will be in the hot-seat for not conforming. One shot across the bow after another and “withering” nay-saying over nearly three decades from consumers, bankers, traders, innovators…, and Apple keeps teaching big business how it’s supposed to be done, and (in spite of recent nay-saying to the contrary), Apple keeps leading the tech industries with what’s up next. Why is Samsung still relentlessly stealing Apple’s stuff – uuuh, gee, I dunno, could it be that’s because that’s where it’s all going next? Why isn’t Samsung stealing Google’s stuff – oh that’s right, they’ve already got that – and that is apparently not the way to go since the grass seems perpetually greener on the other side of Samsung’s fence.

    Everybody thinks they’re going to teach Apple a lesson – let’s see what happens, but I think they’ve got their respective roles reversed.

  8. And all this means what ?? NOTHING.

    I challenge ANYONE to name one Fortune 100 company that DOESN’T use shelters to house foreign income to avoid US tax.. That’s the way the US tax laws are written you morons!!

  9. C-SPAN in the USA is covering Tim Cook’s hearing at the Senate Permanent Subcommittee on Investigations. You can view the hearings at 9:30 AM ET from the C-SPAN.org page, or directly at:

    http://www.c-spanvideo.org/event/219084

    Note that the above link is LIVE and may not be available after the event has completed. But the hearing will most likely be kept in C-SPAN’s library.

    BTW: I’m hearing a few loud-mouth lout Senators stating garbage like “I’ve never seen anything like it!” when in fact the Senate already found nothing illegal about Apple’s actions AND we already know that other companies such as Google already use exactly the same method of minimizing the impact of US taxation on earnings made outside the USA. IOW: Propaganda event amounting to nothing IMHO. But we shall see what spin is put on the situation.

  10. Total Apple Turnover PA $6 BILLION AUD.

    Total Turnover Apple Australia PA $1 BILLION AUD
    Total Australian company tax $28 MILLION AUD.

    Total Turnover Apple online & Retail (100% American owned) $5 BILLION AUD
    Total Australian company tax NIL

    Total Tax on Australian turnover $28 MILLION AUD. 0.466%

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