Apple again faces scrutiny after paying no UK corporate taxes for 2012

“Apple may once again come under the spotlight over taxes, as the iPhone maker’s latest filings reveal that it paid no corporate taxes in the United Kingdom last year, despite having pulled in billions of dollars from its European operations,” Kevin Bostic reports for AppleInsider.

“Deductions from share awards to employees essentially negated Apple’s corporate tax liabilities in the UK through September of last year, The Financial Times reported this week,” Bostic reports. “Apple’s U.K. subsidiaries — Apple (U.K.), Apple Europe, and Apple Retail U.K. — reported pre-tax profits of £68 million in the year through September 2012, with some £27.7 million in taxes deducted due to [tax deductions from share awards to employees which helped wipe out the corporate tax liabilities of the UK subsidiaries in the year to September 2012].”

Bostic reports, “Apple has recently come under fire in the U.S. and abroad for what many have called tax avoidance. Most recently, Apple chief Tim Cook and a number of other Apple executives were called to testify before a Senate subcommittee to defend the low tax rate Apple pays on its overseas earnings. Cook maintained that Apple had done nothing wrong. ‘We pay all of the taxes we owe,’ Cook said, ‘every single dollar. We not only comply with the laws, but we comply with the spirit of the laws.'”

Read more in the full article here.

MacDailyNews Take: Last autumn, Tim Worstall wrote an interesting article for The Register. In case you missed it:

Google, Apple, eBay shouldn’t pay taxes – people should pay taxes.

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64 Comments

    1. I’ve got a better idea: I won’t denigrate your country and you extend me the same courtesy. m’kay?

      Meanwhile, let’s go after Murdoch: that arsehole hasn’t paid UK corporation tax for years.

      =:~)

  1. People should pay taxes.
    Corporations are people.
    Therefore, corporations should pay taxes.

    My opinion? Either corporations should pay taxes like people, or lose the rights, privileges, and protections afforded to them that should only go to people. One or the other. Can’t have it both ways.

      1. Doc, your Logic 101 teacher in college must have been Joan Rivers.
        …by extension:
        People should pay taxes.
        Countries are people.
        Therefore, countries should pay taxes.

        your logic: if a=b and b=c, therefore c must = Anita Bryant’s bone dry panties at a Gay Rights Parade.

        1. Don’t be dense. I’m referring specifically to the concept of “corporate personhood,” which is the legal justification for bestowing upon corporations the same rights as individual persons. I think that corporate personhood is an absolute crock, but so long as corporations are given the same rights as individuals (or, as the Citizens United decision allows, rights far exceeding those of individual persons), they should be forced to endure the same responsibilities as individual persons.

          So long as corporations are considered persons under the law, they should be treated as persons. As soon as corporations are no longer considered persons under the law, they should no longer be treated as persons. It’s that simple.

            1. Hmm, that’s funny. I thought “corporate personhood” has been a legal reality in the United States at least since 1819, with the Supreme Court case Trustees of Dartmouth College v. Woodward, with that concept expanding steadily ever since in a great many Supreme Court decisions. Silly me!

              Hmm. Denies history … has no concept of law or legal precedent … can’t understand basic logic … defends the rights of corporations no matter the situation … Hmm. You’re one of those people who give Republicans a bad name, aren’t you?

            2. “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.”

              Stated by Chief Justice Morrison Waite during the opening oral argument in Santa Clara County v. Southern Pacific Railroad – 118 U.S. 394 (1886).

              One of many Supreme Court decisions that establish that corporations are extended the same legal status and protections as natural persons under US law.

            3. yet another flaw in your pathetic, baseless argument: in 1886, the date that decision was made, there was no income tax on either corporations or individuals. Had you been the legal wizard you consider yourself, you would know that the passage of Income Tax coincided with the creation of its whore sister, the Federal Reserve Act.

            4. Oh, so I’ve proven that “corporate personhood” exists to everyone living in the real world, but rather than admit that, you try to change the argument.

              My argument was thus: if we accept that corporations are people (corporate personhood, which exists no matter how hard you try to deny it), that should extend to their responsibilities as well as their rights. I didn’t say the Supreme Court has RULED on that. Not even once did I say, or imply, that.

              But, rather than admit that I was right about an established legal concept that anyone could look up, you try to change the argument so you can convince yourself you’ve somehow won and look smart to whoever shares your views.

              Good job.

            5. you have “proven” a proposition that didn’t exist in the time frame that you quote as legal precedent when there was no tax, either corporate or individual. Your argument is like saying “The earth is flat because Columbus wasn’t around in 200 bc.”

            6. incidentally, if your premise was “if we accept corporations are people who already have paid taxes” then your argument may have some validation. Otherwise, shut the fuck up, and quit quoting Supreme Court decisions that were made before there were income taxes on either corporations or individuals.

            7. So what you’re saying is that legal precedent should only apply to the context in which it was established, and NOT apply to new situations even if the same legal precedent applies?

              By that logic, electronic documents are not protected by the Fourth Amendment because the Fourth Amendment mentions “papers,” and electronic documents did not exist in the late 1700s.

              Legal precedent gives guidelines for future cases that are similar in nature to past cases, even if the facts are not identical. That’s why it’s called legal “precedent.” And, if corporations have been treated as natural persons in EVERY SINGLE OTHER INSTANCE over the course of the last 190-some years, why wouldn’t the same legal precedent apply?

              (Also, by your logic, electronic documents are not protected by the Fourth Amendment because electronic documents are not “papers” and did not exist in the late 1700s.)

            8. I’m saying what is obvious to anyone who can read: our argument is over whether “corporation personhood” exists as a legal precedent regarding taxation. I posit that your argument is invalid because the Supreme Court precedents you quote were before corporate and individual income taxes existed. I cannot make English anymore cogent and lucid. If you want to continue to debate an argument you have already lost, please go buy a six pack of cheap beer and go to your local bar and continue there with the locals. Thanks.

            9. correction: between 1789 and 1913…corporate “personhood” cannot exist based on arguments cited by Supreme Court decisions made before those taxes ever existed. Also, the moon is not made of cheese as witnessed by Neil Armstrong and Buzz Aldrin.

            10. If, in ALL OTHER CASES, a corporation is treated as a person, with the same rights as a natural person, then why would the legal precedent set in the 1800s and built upon by dozens of other cases in the intervening years, not be valid just because income tax wasn’t passed until the 1900s?

              Your argument is that legal precedent shouldn’t create a natural extension to include an aspect of personhood that did not exist. Your argument, in essence, is to disregard the entire CONCEPT of legal precedent because YOU don’t like it.

              My argument is that, if in ALL OTHER CASES A = B, then A = B in this case as well. Your argument has been:
              First, that the legal concept doesn’t exist (which it clearly does).
              Second, that because ONE case I cited to prove a longstanding legal precedent regarding corporate personhood (the concept which you, at first, claimed does not exist in any form) took place before income tax, somehow that has bearing on this argument.
              Third, that legal precedent doesn’t apply in this one case the way it would to any other.
              Fourth and finally, that if you attack me enough as a person, it will somehow make you right.

              For the record, if you go alllllll the way back to my first post, I was saying that either corporations should be taxed under corporate personhood, or that we should do away with corporate personhood as it exists today. I would be fine with corporations not having to pay taxes–if they were to be stripped of the legal rights that should be exclusive to natural persons.

            11. You’re a very mature, intelligent individual. It has been a pleasure debating with you in such a rational manner, with both sides presenting facts to support their claims and treating each other with respect.

              I wish you the best in your future endeavors, worthy adversary.

            12. You are just wasting your time arguing with botvinnik, Doc. He just wants to argue for the sake of arguing. He has a closed mind and is not interested in learning. People who can read and comprehend logic understand your position on corporations. Corporations were intended to be simply legal entities established for the purpose of defining legal liability for an organization owned by multiple owners – shareholders. The modern interpretation of corporations as people was one of the stupidest rulings by the SCOTUS ever.

              As far as taxation goes, I would be willing to consider ending taxation of corporations. But workers would have to be paid more in order to cover the additional taxes inevitably levied on individuals in order to compensate for the loss of corporate taxes. There is no such thing as a free lunch. It appears to me that botvinnik clings to a variety of positions without fully understanding the consequences of those changes.

              Building on the idea of focusing taxes on the individual, a value-added tax of some type would b preferable to the current tax system.

            1. Your name-calling post does not expect illustrate that you are a hate-filled jerk, who has NO respect for anything or anybody that doesn’t fit with your current opinions.

            2. hypocrisy |hiˈpäkrisē|
              noun ( pl. hypocrisies )
              the practice of claiming to have moral standards or beliefs to which one’s own behavior does not conform; pretense.
              ORIGIN Middle English: from Old French ypocrisie, via ecclesiastical Latin, from Greek hupokrisis ‘acting of a theatrical part,’ from hupokrinesthai ‘play a part, pretend,’ from hupo ‘under’ + krinein ‘decide, judge.’

    1. Corporations are NOT people. They are legal entities.

      People have the right to vote.
      Corporations do not.

      Besides, Corporations DO NOT PAY taxes…ever. The money necessary to “pay taxes” comes from the PEOPLE that buy its products.

      Anybody that thinks otherwise are victims of a class war instigated by politicians that make hay over the issue.

      1. Except in the case of counterfeiters, the money that natural persons use to pay income taxes also comes from the PEOPLE who buy their products, labor, or the use of their capital. It is no different in the case of non-biological entities/persons like corporations. To claim that corporations don’t pay taxes because they charge extra to their consumers to cover the cost of taxation makes as much sense as to say that pipefitters don’t pay taxes because they negotiate wages high enough to pay their taxes along with their other expenses.

        In both cases, somebody is contributing to the cost of providing necessary social services like national defense, police, infrastructure, and so forth. The only countries without taxes are places like Somalia that have no social services or public order. I don’t fancy living under anarchy.

        In a fair taxation system, everybody pays a fair share. To do that, the government taxes profits earned by each person (natural or not) active in the economy. The people who paid the taxpayer and the people the taxpayer pays should (and usually do) pay taxes themselves on their individual profits. So, if I invest in a sole proprietorship owned by a natural person, both the business owner and I expect to pay taxes on our income. Why should it be different if the business is owned by a corporate person? The whole point of a corporation is to create a separate entity that will shield the stockholders from liability for corporate debts and torts. Why should they get the advantage of claiming that the entity is separate for liability purposes but not for tax purposes?

        That is not to say that Apple UK should be paying income taxes, not because they are a corporation that should be exempt from taxation, but because that particular corporation has no profits to tax. In essence, it buys products from Apple Europe and then sells them in Britain at cost + expenses. I will note that Apple UK does pay Value Added Tax, property taxes, and payroll taxes on the same basis as any other company in its line of business, so it is not accurate to say that it pays no taxes or that it is a freeloader on British social services.

            1. One of the single greatest achievements of the UK has been it’s social services, primarily the NHS. (National Health Service). And yes pal, people from all over the world come to this country for treatment, because they cannot get treated at home.

          1. My suggestion is that you move to Somalia–no government, no taxes, and no electricity, so you won’t be exposed to the wicked ideas circulating in civilized places.

  2. Think of the UK in the same way Apple thinks of its iTunes store. For everything sold in the market place created by iTunes, Apple expects its cut of 30% of the sale price. The UK is a market from which Apple makes a lot of money, so they should pay for using that marketplace in the same way.

      1. The Queens does not really have any real world power, nor does she have any say in UK tax affairs. The Royal family, as much as they live on the wealth of the nation, do in fact contribute greatly to the UK economy.

  3. Apple, as well as others, sell their goods through Europe via Ireland, which has low taxes.

    And Apple does not pay corporate taxes as it is paid from profits. Obviously, if Apple Ireland sells its goods with high margins to Apple UK, and Apple UK margins only big enough to cover direct Apple UK expenses, there is no base to collect corporate tax in UK as there is no free profit left once you deducted expenses.

    There is nothing wrong with this practice, and there is no way how UK could possibly forbid it — not feasible.

    Companies have the right to buy goods at any price they want, and they have the right to sell the goods at any price they want.

  4. Who here doesn’t avail himself of all the available deductions when he completes his tax return? It’s legal for you and it’s legal for Apple. If the government doesn’t like it, it should change the way the tax system works and NOT complain that someone (you or a corporation) is using the very deductions the government allows. So, STFU!

  5. Law cuts both ways. If you abide by criminal law you’re a good citizen. If you abide by tax law you should BURN in HELL for NOT PAYING MORE than the LAW REQUIRES YOU TO!

    Laws apply irrespective of political climate. If politicians don’t like it they should change the law or quit bitching.

    It was only a few short years ago that politicians were entirely comfortable with tax avoidance.

    How things change when the credit boom bubble bursts.

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