“Google and Apple have fought back in the row over the big tech groups’ tax regimes, saying they are being unfairly targeted as the public backlash over the controversy escalates,” Murad Ahmed, Vanessa Houlder, and Tim Bradshaw report for The Financial Times.
“Google on Wednesday defended its £130m settlement with British tax authorities for the first time in a letter to the Financial Times, arguing that it was complying with British law,” Ahmed, Houlder, and Bradshaw report. “Separately, Apple said it should pay nothing over Brussels’ investigation into its alleged sweetheart tax deals in Ireland.”
“Silicon Valley groups and US business leaders are stepping up their lobbying campaign in Washington, arguing that European authorities are discriminating against multinationals. A group of US senators recently said any fines imposed on companies such as Apple amounted to ‘discriminatory taxation,'” Ahmed, Houlder, and Bradshaw report. “Luca Maestri, Apple’s chief financial officer, told the FT: ‘This is a case between the European Commission and Ireland and frankly there is no way to estimate the impact right now, we need to see what the final decision is going to be.’ He added: ‘My estimate is zero. I mean, if there is a fair outcome of the investigation, it should be zero.'”
News Corp’s Executive Chairman Ruper Murdoch weighed in via Twitter:
Google et al broke no tax laws. Now paying token amounts for p r purposes. Won't work. Need strong new laws to pay like the rest of us.
— Rupert Murdoch (@rupertmurdoch) January 27, 2016
Global tech companies making enormous profits most places, funnelling $$ thru tax havens. Unless stopped will ruin local businesses who pay.
— Rupert Murdoch (@rupertmurdoch) January 27, 2016
Tech tax breaks facilitated by politicians easily awed by Valley ambassadors like Google chairman Schmidt eg, posh boys in Downing St.@
— Rupert Murdoch (@rupertmurdoch) January 27, 2016
Google has cleverly planted dozens of their people in White House, Downing St, other governments.
Most brilliant new lobbying effort yet.
— Rupert Murdoch (@rupertmurdoch) January 27, 2016
Read more in the full article here.
MacDailyNews Take: Shit, meet fan.
Let the fun begin!
Apple could trigger global tax war, potential breakdown of the international tax system – January 27, 2016
Apple CEO Cook lobbies EU antitrust chief over Irish back taxes – January 21, 2016
Think Ireland’s corporate tax is unfair? Wave goodbye to Apple and thousands of jobs if it’s changed – November 14, 2015
Apple announces 1,000 new jobs in Ireland as EU tax ruling nears – November 11, 2015
Apple tax probe won’t hurt Ireland, Finance Minister Noonan says – October 5, 2015
EU’s Vestager says will not complete tax inquiries of Apple, others in second quarter – May 5, 2015
Apple warns of potential ‘material’ financial damage from European tax probe – April 29, 2015
Apple may have to pay Ireland 10 years of back taxes – April 30, 2015
Ireland’s Prime Minister: Apple has nothing to fear from end of ‘Double Irish’ tax avoidance strategy – November 4, 2014
Apple says it may lose Irish tax break – October 31, 2014
Ireland to end tax lures that drew U.S. firms – October 14, 2014
EU tax probe spotlights Ireland’s allure for multinationals – October 13, 2014
EU watchdog to give reasons for inquiry into Ireland’s tax treatment of Apple – September 29, 2014
European Commission accuses Apple of prospering from illegal Irish tax deals – September 28, 2014
EU threatens expanded probe into Ireland’s tax practices regarding Apple, Googles, other companies – June 20, 2014
EU’s investigation of Apple’s taxes isn’t going to cause the company any problems – June 13, 2014
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013
European Commission – We need some more money. Lets change the tax law . . . retroactively.
I’ve said it here before…
IF the EU forces Ireland to change its tax laws Apple must pay those newly imposed tax rates *GOING FORWARD*, but not one penny in back taxes as Apple currently complies with the current law. (IF in the extremely unlikely event that the EU can prove beyond a reasonable doubt that Apple did illegal things [clearly illegal according to Irish law, not just “inappropriate actions” in the perception of EU regulators] to get those low tax rates, then Apple should be liable for all past taxes too.)
The EU should not be able to force Ireland to collect back taxes when Apple has been complying with the current and past law.
The problem is that Apple, like the majority of multinational companies do transactions (even physically, like in Apple Stores) in countries like Germany, Italy etc. but they “officially” take place in Ireland, where taxes are significantly lower, especially for IT corporations.
In Germany, for example, the Apple Stores are having great losses (because construction costs, wages, rents etc. are of course paid by the local subsidiary) while the profits are made by the Irish subsidiary. This way Apple not only “avoids” taxes it should pay to the German government but it even gets tax credit for the following years. I wrote “avoids” instead of “evades” because it’s a grey zone which is due to the lack of clear European laws that effectively outlaw this kind of behavior.
Apple paid, from 2009 to 2014, a total of 40 million euro in taxes in Germany. That’s absolutely ridiculous if you consider how important the German market is.
Without the Ireland trick it would have been 1.3 BILLION.
Again: it’s not a fault or a mean thing. In business whatever is not explicitly forbidden is allowed.
The governments have to be quicker in making effective laws which protect them from these abuses which severely impoverish them.
google strictly does’t need to pay taxes because there are no actual profits from any of it’s services. It’s somewhat like Enron accounting all over again but scaled up 1000 times bigger.
We have here a case of irresistible forces meeting immovable objects. Governments have a duty to provide infrastructure and services (roads, public safety, public health, courts, etc.), and they have to pay for it. Ideally, each governmental entity should receive about as much in income from the average taxpayer as it spends on behalf of the average taxpayer.
At the time the Constitution was adopted, almost all wealth was tangible property of some sort, mostly real estate and improvements, and most governmental services were provided to property owners. Hence, governments made most of their money through property taxes that fairly apportioned the burden among those best prepared to pay.
In the early 20th century, most wealth was in the form of cash income from labor, business, or investments, so most governments shifted the cost of financing government to income taxes, because they fairly apportioned the burden among those best able to pay. Property taxes do no such thing when (as in my community) most of the land is owned by single-family homeowners with fixed or at least finite incomes.
More recently, governments have increasingly used consumption taxes like a sales tax or VAT, because they provide a better approach to those who have the ability to pay.
All these systems tacitly assume that the person or entity that receives the government services is a local resident that is also paying for those services though equitable taxation. That assumption is no longer accurate. A corporation with headquarters in Ireland may be making products in Thailand and selling them in Brazil. How does one divide up the burden of financing government in such a way as to be fair both to the multinational taxpayer and also to the local taxpayers who must pick up the slack if the multinational consumes more services than it pays in taxes?
The immovable object is that each nation has an interest in preserving its own sovereignty and financial independence. The irresistible force is the reality that there may be no way to do that without international cooperation that may be seen as impairing local sovereignty and independence.
In the current Apple situation, both the company and the local government (Ireland) are perfectly happy with things as they are. It is the international community (the EU) that is forcing the issue on behalf of other countries that see themselves being asked to bear the cost of infrastructure and services for Apple without receiving equivalent revenues. Nationalism, meet multilateralism.
The real solution would be an international system that would tax all entities uniformly, regardless of location. That would allow companies to chose where to site their operations based on business considerations other than differential taxation. That isn’t happening unless countries are willing to cooperate, which would require giving up a measure of control. Does anybody see that happening in the US (or much of anywhere else) in the current protectionist/nationalist climate?
mentality of a slave
Mentality of a freeloader. Who do you think pays for infrastructure except taxpayers? If you don’t want to pay taxes, you should move to a cave so you won’t be using the roads I pay for.
To avoid posting twice: “Who is THEY?” We are “they.” We pay taxes, but we do not directly pay the bills for government infrastructure and services. The government pays its employers and contractors for that. You could try eliminating the middleman, as they have in Somalia and Libya, but I don’t think you would want to live there.
VAT and GST on Apple products may be the largest source of company generated revenue in many of these countries. VAT 15 to 20%. In addition Apple employs thousands of employees directly and tens of thousands indirectly (e.g developers) who also pay taxes. So why be so frigging greedy.
Non international companies pay VAT, employ staff and pay NI. They also pay corporation tax, unlike Google, Apple, Starbucks. it is not governments that are greedy, but multinationals not paying their fair share.
Who the FCK is THEY????!
THE PEOPLE WHO PAY
TAXES IS “THEY”!!! you moron.
“THEY” (the taxpayers) HAVE TO PAY!!
Governments PAY? GMAFB.
No one would give a poop about this if Apple (or others) were not making so much money, even while complying with the laws. Laws written by the same d-bags that now what a ‘piece’. Tony Soprano would be so proud!
Please read the article. The party pushing for Apple to pay more taxes is the European Commission, which will not see an extra euro in revenue. The Irish Government, which stands to make billions, is standing alongside Apple on this because they think the tax arrangement was and is good for Ireland. Not every government action is driven by short-sighted greed. Again, the best current example of a country without taxes is Somalia. Do you want to live there?
When are you Americans going to work out the tax shifting and freeloading US multinationals are hurting Americans as well. Not only are they shifting their profits but they are shifting American jobs.
This is not a rest of the world problem. It is a few rich people getting richer through political influence to get tax laws to suit them and no one else.
It is very rich for Murdoch to be defending his rich class. News Corporation pays no taxes in Australia and he is still looking for a government mandate media monolopy to eliminate competition. He breaks the laws with his wiretapping and hacking – his people even hacked the accounts of his new tart.
MacDailyNews has lost its morals when it trots out the line tha Apple is just obeying the vRiouus tax laws. And Apple is always smirking about Google’s line about doing no evil.
For your information, Hedware, not all “multinationationals” are United States corporations. Many are of UK, Asian (Korean), Chinese, Russian, or other origination. You make yourself look ignorant by lumping them all as “US multinationals.”
You don’t have far to look for the problem beyond EU laws for what is causing the situation in Europe.
I agree with you that not all multinationals are US companies. But it is Americans who are so stoutly defending the right of US multinationals not to pay tax in the countries where they earned their profits. MacDailyNews does this in its mindless defence of Apple (I have been with Apple since Apple II and my experience has that Apple is no shining golden apple).
I am saying that Americans are also missing out because their multinationals don’t pay tax even in America.
Domestic American firms are penalised because they pay tax while their multinational competitors dont and therefore unfairly reduce their costs to outcompete domestic firms.
Domestic firms pay for the US transport, legal, etc services and so are subsidising their multinational competitors.
In line with your point non-US multinationals are doing the same.
As others have said here, we have a global economy and tax shifting needs a global response for fairness and equity. US Governments have not been helping by touting the line about capitalism at all costs – and doing this in despite what is happening to employment in middle America.
Sorry, you are wrong. Apple PAID US TAXES. What part of that do you fail to realize? It is the income they earned on FOREIGN SALES you are claiming they should be paying US Income Tax on. . . but they HAVE paid INCOME TAXES in the countries where they earned those revenues. That’s where you are making your error. ONLY the United States expects to be able to tax income earned elsewhere in the world on re-patriated income. All the other countries have a modern tax system that recognizes that money is taxed where it is earned, not in the home country of where the company is headquartered. The USA wants it BOTH ways. It taxes foreign multi-nationals on money earned here, and then taxes OUR businesses on money earned off shore when they bring it home, even though it has already been taxed by the country where it was earned!
Apple has never shifted earnings HERE off-shore to avoid taxes. In fact, for example, in 2012, Apple was the single largest payor of US corporate income taxes, paying $1 of every $40 of US corporate income taxes paid to the IRS. Apple’s effective income tax rate that year was 27.6%, IIRC.
I state my point that US multinationals do not to pay tax in the countries where they earned their profits. US multinationals have not paid tax (or paying very little) in the countries where they earned the revenues. They might be paying some tax in the countries where they shifted their profits/earnings. To some extent the US tax laws have prompted multinationals not to pay taxes in the countries where they earned their revenue.
It is good that Apple paid reasonable taxes for earnings in the US – pity it and other US multinationals dont do the same elsewhere.
Sorry, you are wrong on what you are talking about. The laws on international taxation were established in the 1920s and have been in effect for almost a century. To change them would put a huge monkey wrench in international and even national economies. The USA is only one of two countries that really doesn’t follow the world standard on international taxation of taxing a companies income only where it is earned, not where the company is headquartered. The USA wants to have it both ways. The other country is a small landlocked African country that essentially has no home-grown companies so its taxation laws are irrelevant. But the USA is the giant gorilla in the corner, expecting to tax everything it sees, and demanding access to financial institutions everywhere in the world to assure our taxing agencies that American companies are paying our central government every penny of income taxes on money earned elsewhere than on shore here. Every other company only taxes what is earned in country inside their jurisdictions. Not the USA. They want to drain taxes from other countries’ citizens’ purchases. It is THOSE countries that have made the infrastructure investment that allows our country’s businesses to do business in their country, and the taxes should ONLY be paid there.
I see your point, but I dont care what the US wants or how it applies its own tax laws (especially as its approach is rather unique).
You are correct in saying ‘Every other company only taxes what is earned in country inside their jurisdictions.’ Maybe the US could do the same. Heaven help the US if China decided to have the same policy.
There wasn’t much of a global economy in 1920s and multinationals could not profit shift like they can today. So international tax laws are looking for change.
US research by Cobham and Jansky assert that in 2012 US multinationals (many Fortune 500) shifted about $US500 billion-$US700 billion or roughly 25% of their annual profits to countries where those profits are not taxed like Bermuda, Nederlands.
US hates these new attempts by other countries and wants to block them imposing the ‘Google tax’ on US multinationals. Why? Because it wants to collect the cash that it has not been able to get its hands on for decades. It wants to get the cash before any of these other countries get their hands on it. These companies didn’t want the US Government to get its hands on the money and so fought to swing the US legislators their way. What happened? they kept their money offshore and to themselves.
Ironically if these countries bring their Google Taxes then the US companies may find it in their interest to stop profit shifting. But you can bet that these companies are busy right now in trying to lock in tax deals and giving up a modicum of tax on their past profits.
Their research was fatally flawed. Cobham and Janskey’s research was based on a lot of assumptions that had little basis in fact. It was their paper that the US Senate Investigation Committee was relying on when it accused Apple of shifting profits out of the United States, only to have their accusations blow up in their faces when Apple brought in documented evidence that ir was all false and that Apple did not play such tax games. This blew big holes in Cobham’s and Janskey’s report because Apple was one of their center piece company’s and made up a high percentage of the money they were claiming was being “shifted.” If they were dishonest or wrong in Apple’s case, how accurate were they in any of the others? I submit once one was enough to impeach their work and conclusions.
Lets talk about the gaul and hypocrisy of Murdoch in telling Apple and Google/Alphabet to pay taxes. Murdoch’s company has some 20 plus tax haven subsidiaries. News Corp paid no net tax at all in the UK on its 1.4 billion pounds made since 1987. In Australia eight of the ten media companies linked to the Murdoch family paid no income tax. How can he say “Global tech companies making enormous profits most places funnelling $$ thru tax havens” with a straight tweet?