Ben Lovejoy writes for 9to5Mac:
The G20 has set a deadline for a two-prong tax crackdown on tech giants, which could hit companies like Apple, Amazon, Facebook, Google and Uber. The 20 members have agreed to put in place by 2020 measures to stop international companies using tax loopholes to pay less tax than locally-based companies.
One of the arrangements used by Apple has been cited as an example of this type of loophole… Apple’s Irish arrangement – now no longer used – was an example of a common tax avoidance measure used in Europe by a number of tech giants.
Despite being a G20 member, and signing up to this agreement, the US is threatening to retaliate against Europe, which has promised to take its own measures against the type of tax avoidance described.
US Treasury Secretary Steven Mnuchin has said the US “has significant concerns with the two current taxes that are being proposed by France and the UK”.
The technology industry has warned that the White House may take serious measures against any tax crackdown. Jennifer McCloskey, vice president of policy at the Information Technology Industry Council, a trade association headquartered in the US capital, said any taxes perceived to be discriminatory against American companies could face an investigation.
MacDailyNews Take: We’re sure all additional tax dollars confiscated will be spent oh so wisely.
Because it is oh so wise to have a tax regime like the US where major multinational corporations pay less in income taxes than a middle-class family. Tax equity isn’t a tax grab. It is an effort to shift the burden of providing government services to those who use most of the services and can pay for them from taxpayers who consume less services and have less income.
Because Apple took £70B out of the UK over the last ten years and payed 0.013% taxes on profits. Whereas my company paid 1500% more proportionately.
The G20 wants taxes to be paid at source and MDN resorts to a snide dig at the EU.
Same old
How many new jobs did Apple create in the UK? How much in Sales and VAT taxes were paid by people buying Apple Products in the UK? How much was paid by Apple employees in income taxes and property taxes now they they are earning their fat wages? How much was donated by Apple to local charaties? How many companies sold Apple furniture, how many jobs were created for night cleaning crews…it goes on and on. Any country is lucky to get Apple, Google, or (God Help Us) Facebook as corporate citizens.
My company wants to know why…since it also generates wages employing over 100 skilled crafts-workers, pays VAT, pumps money into local and national industries, buys and sells other companies products and pays all the same regional service taxes as Apple…
…it should be subject to an additional 20% corporation tax that Apple and many other large(mainly US based)companies, by virtue of manipulating an egregious tax dodge loophole, are not.
While on the subject, are we to be grateful also that the UK Apple buying customers effectively paid around $20B into the US Treasury coffers via Trump’s one-off repatriation of foreign-held profits tax-grab holiday?
Try putting a shoe on the other foot for once.
That’s a half-truth. You mention total sales, and then compare it to income taxes paid. Where’s the VAT? The point is you are minimizing the taxes to make it look more egregious. Further, Apple pays US taxes on foreign income earned. Where’s that amount?
This argument has never been about how much tax, but to whom the tax is paid. The question is whether the majority of tax should be paid in country of sale or country where the IP and value was created. Interestingly, as a consumer, I always assumed the majority of tax should be paid in country of sale, reading the tax professional comments in various articles, apparently the law sides with where the IP and value are created. That’s why companies like Google, Amazon and Microsoft have moved their IP offshore into low-tax regimes. Note, that it’s software companies of the big tech that seem to have moved their IP off-shore.
The problem, which the G20 policy is intended to correct, is that some countries tax where the money is earned, some where the IP is regulated, and some where the taxpayer resides. The US, almost alone, taxes US citizens and corporations regardless of residence. So young Archie Sussex is liable for US taxes because his mother The Duchess is a citizen, even though he is a Prince of the United Kingdom and will likely never live in America.
The G20 wants a uniform rule so that people who are similarly situated pay similar taxes to clearly defined taxing entities without double taxation or under taxation. Currently, there is a crazy quilt of laws and regulations that nobody really understands (see, for example, how Apple and Ireland pursued a scheme that they both believed to be lawful under the EU, but which may not have been).
Gotcha is pointing out the anomaly that every business in Europe pays VAT on the same basis as the business next door, but income taxes vary wildly for almost inexplicable reasons or lack thereof.
TxUser – PLEASE think about what you are saying. How many people does a middle-class family employee? Employees RECEIVE waves and PAY massive taxes. How much PROPERTY TAXES does a “middle -class” family pay? Apple pays Amazing property taxes. NEW Non-Government, high paying, private sector Jobs are the most valuable thing a country/state/country can have. Apple has been producing those like few others. Governments know this but they would prefer a “tax grab” that requires little understanding of how taxation works and plays well in the papers. INCOME taxes are inherently bad. Consumption (sales taxes) and Property taxes are a far more “fair”, predictable, and enforceable tax methods.
Tom, I don’t know how it works in Tulsa, but in Texas businesses like Apple only pay property taxes where they own property. In the Austin area, Apple is leasing property, and their landlord pays taxes in Travis County (where the plant is located), but not in Williamson County (where most of the employees live and use the roads, schools, police, and other government infrastructure). In Europe, most Apple products are sold by third parties and Apple has no taxable property in the country where they are making a massive profit.
People who are being forced from their homes because speculators have driven up appraised values, and therefore property taxes, might disagree that it is fairer to tax them than the corporations that make massive profits in states like Texas with no income or state property tax. Very few lower income folks, who spend a much higher proportion of their income on taxable items than rich folks, think that financing government with consumer taxes is fair. That only seems fair to businesses, lobbyists, and legislators.
The United States Constitution disagrees that income taxes are inherently bad. The Sixteenth Amendment is dedicated to the common-sense notion that governments should be collecting money from those who can demonstrably afford it.
Dear Tom,
Most often a company does not hire people out of the goodness of their hearts, rather they do so to make more money.
Why does a company deserve a tax break for the privilege of making more money?
Not only that, the law allows for an inequity in who gets the tax break and how much. iT’s also not a settled uniform formula.
Here’s a novel concept (not really)… companies pay their taxes and employees pay theirs.