Apple Tax investigation Ping!
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Posted on 09/28/2014 6:54:49 PM PDT by Swordmaker
“Apple will be accused of prospering from illegal tax deals with the Irish government for more than two decades when Brussels this week unveils details of a probe that could leave the iPhone maker with a record fine of as much as several billions of euros,” Tim Bradshaw, Alex Barker and Vanessa Houlder report for The Financial Times. “Preliminary findings from the European Commission’s investigation into Apple’s tax affairs in Ireland, where it has had a rate of less than 2 per cent, claim the Silicon Valley company benefited from illicit state aid after striking backroom deals with Ireland’s authorities, according to people involved in the case,” Bradshaw, Barker and Houlder report. “Apple, which has operated in Ireland since 1980, maintains that its agreements with Ireland did not break any laws. ‘There’s never been any special deal, there’s never been anything that would be construed as state aid,’ Luca Maestri, Apple’s chief financial officer, told the Financial Times.”
“Based on its concerns, the commission has decided to open an in-depth investigation of arrangements between Apple and the Irish authorities dating back to 1991. It is part of a wider crackdown on what Joaquín Almunia, the EU’s competition commissioner, has called “aggressive” multinational tax avoidance,” Bradshaw, Barker and Houlder report. “‘We know that we didn’t do anything that was against the law and we are very confident that through the investigation it will be shown that there was no selective treatment in our favour at any point in time,’ Mr Maestri said… The company has invested $100m in its Irish operations in recent years, he noted, and is among Cork’s biggest employers.”
Time to stop doing business with Europe. Asia and Russia are much bigger.
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That was my reaction too.
I am SICK of governments suing companies for govt. profit.
Another is India.
That’s Europe’s only real source of income...fining successful US companies like Apple,Microsoft,Boeing and MacDonald’s.
Tax avoidance, is not tax evasion. But Apple actually PAYS the income taxes in the jurisdictions where they are earned. Apple does park those post tax earnings in its Ireland subsidiary to avoid high tax rates on interest and investments earned.
This has been covered in Apple’s testimony befoe the socialists in the US Senate last year, when Democrats accused Apple of paying no US Income taxes. However, Apple showed they actually paid 1 out of every 40 dollars of corporate income taxes paid in the US in 2012, and in fact was the highest corporate payor of income taxes in the country. Apple’s effective US tax rate was ~27%. A few Demonrat senators were hoist on their own petards with Tim Cook’s testimony and provided evidence.
The member states of the EU need to clip Brussels's wings severely or junk the whole union. The EU should go back to being just a free trade, open borders arrangement between its members. They should get rid of the Euro and Brussels's authority to regulate as if it were Washington or something!
Don't forget Google.
We sue BP for billions of dollars and now put them on the hook for 18 billion more in fines and we dont expect the EU to retaliate against American companies. Ray Charles could have seen this coming. I’m not saying it’s right, but this admins continious shakedowns of businesses and banks was bound to lead to other govts biting back.
So like the US govt the EU are into shakedowns also.
They’re socialists. What do you expect?
There they go again, blaming the Irish : )
The same people running these companies always help vote in the socialists.
this is how things are done,
number$ are for discussion purposes only.
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Apple-Ireland pays $50 to a Chinese vendor for an iPhone.
Apell-Ireland puts in some programming, costs next to nothin.
Apple-I sells Iphone to Apple-USA for$450.
Apple-USA sell iPhone to AppleStores for $500.
Apple-USA only makes enough markup to pay
for its USA operation, most of the markup shows up
in Ireland.
does anyone at FR actually like this arrangement?
With communists nobody or anything pays its fair share of taxes because their fair share is relative to the needs of the appropriate communist government. Note that this is an EU investigation not the Irish government ... NWO raising its ugly head.
The EU socialists spend 130 billion a year and they are going to extort Apple for 3 billion to kick into it.
It seems to me most iphones bought in America are shipped directly from China to America
5/28/2013 @ 7:46PM 94,313 views
How Does Apple Avoid Taxes?
Apple’s brand halo is slipping. Silicon Valley’s well-known vanity and contempt for government are amply displayed in Apple’s tax figures. Apple, a consumer products company that sells beautifully designed gadgets, pays very little tax anywhere in the world, including the United States.
Apple AAPL +2.94% is playing fast and loose with consumers’ affection for its highly discretionary products, especially in Europe. It is ill-advised for any consumer products company not to pay tax where it sells products. Equally important, Apple’s tax avoidance is also testing the patience of strapped European governments that are looking for ways to get American multinationals to pay tax.
The Senate Homeland Security Permanent Subcommittee on Investigations laid out Apple’s tax planning in a May 20 report. The report concluded that Apple’s tax arrangements have nothing to do with its business. Even for a jaded tax lawyer used to hokey schemes to avoid taxation, Apple’s arrangements were surprising.
Apple set up some Irish subsidiaries a mere four years after it was founded. Foreign sales, which account for 60% of Apple’s profits, are routed through these Irish subsidiaries and taxed nowhere. How is this possible, when the intellectual property that supports the value of Apple’s products is in the United States?
Apple has an Irish holding company with no operations or employees at the top of its foreign operations. This company also serves as a group finance company. Apple Inc., the U.S. parent of the whole group, pays U.S. tax on the investment earnings of this company. Otherwise, the holding company pays no tax to any government, and has not paid tax for five years. It claims tax residence nowhere.
Beneath the holding company is an Irish principal company that holds the contracts with Apple’s Chinese contract manufacturers and owns the inventory they produce. It also claims tax residence nowhere, despite having paid some tax to Ireland in recent years, but at rate far below the statutory rate. It and another Apple operating affiliate share the foreign rights to Apple’s U.S. based technology.
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http://www.forbes.com/sites/leesheppard/2013/05/28/how-does-apple-avoid-taxes/
Ah, but is the arrangement illegal?
That’s NOT how Apple works, Rocky.
You can see the records in Apple,s books.
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