[tinkerrr]

>And with another quirk - this time in US tax laws - the do not even have to pay taxed in the US on those earnings, as they have not repatriated the funds.

This is not a 'quirk' as you think. No country in the world, other than the US, tax their corporations on already taxed profits in a different jurisdiction. This actually ends up hurting the US because corporations cannot repatriate already-taxed funds without being taxed again.

[shaqbert]

The US tax code is a huge mess, agreed. But you gotta pay your dues (aka taxes) somewhere, and here Apple et al goes essentially Scot free. That is not cool.

[X86BSD]

Every time this apple in Ireland tax issue comes up it makes my brain hurt, literally hurt to read all these replies who don't seem to look at this problem correctly.

First, Apple did nothing illegal. There is no wrong doing here. They pay tax in every country they owe tax. Period.

Second, perhaps it's not Apple that's the problem? Perhaps it's the tax that is the problem.

If you have mega corps building entities outside its main jurisdiction to avoid the main jurisdictions tax burden, perhaps you need to revamp your insane tax code. Hmm?

[Certhas]

No, if you have mega corporations build entities outside your tax code, you have a case of countries having designed very attractive tax codes for corporations. Small countries especially have an incentive to do so, as a smaller percentage of tax of a larger percentage of capital going through their country counts for a lot per capita.

As companies benefit from this incentive, they lobby to keep it around. Very successfully.

So no, revamping the US tax code is (quite obviously) not an answer to Apple not paying tax in the EU. Having enforced taxation rules that prevent the race to the bottom is. Unfortunately taxation is not in the remit of the EU at the moment. Hence the back door approach through "unfair tax benefits".

We don't need trade deals that harmonize things so countries can, we really need tax deals that harmonize, or at least put minimum standards on taxes.

Why wouldn't something like that fly? Well because if the impression European observers have gotten over the last years is correct, then Apple et.al. basically own US policy on that point, to such a degree that the US actually threatened the Commission against ruling as it did.

So no, Apple did nothing illegal, but what is happening is clearly wrong, and Apple is lobbying to keep it that way. Heavily and successfully. And that is wrong.

For an example of an ethical stance a corporation could take here: IBM was, at least for a while, lobbying for abolishing software patents while at the same time owning a massive amount of them and registering new ones.

A structural fix would be to work towards making the US (and the EU, and all other) political system more resilient to lobbying pressure from powerful corporations.

But that is about as hard a problem as you are likely to find.

[burkaman]

"Apple did nothing wrong" does not follow from "Apple did nothing illegal".

[soperj]

This is the point where Godwin's law comes into effect. Seriously though, it was legal to own slaves in the US not all that long ago, most people now a days wouldn't say "There is no wrong doing here", just because it was legal.

[speleding]

The only relationship between slavery and corporate profit tax is that both should be abolished.

There are hundreds of different ways to tax. Taxing corporate profit is controversial because it's very hard to determine what exactly constitutes profit and for multinational firms like Apple deciding in what jurisdiction profit occurs is highly arbitrary (your iPhone has parts from half a dozen countries). The most logical conclusion is to simply get rid of corporate tax and make up the shortfall by increasing other taxes. Several countries already do this, countries like the US that stubbornly persist in trying to levy such arbitrary taxes will simply chase away international business.

[haneefmubarak]

I agree with you to an extent, but I've often heard the argument that in that case wealthy individuals would just place all of their finances in a corporation and never have to pay any taxes whatsoever. How would you address this?

[riskable]

This one is easy and points out another problem: The ability of businesses to write off expenses.

The cost of goods inside airports would be significantly lower if business travelers couldn't just expense everything they buy. As long as it's max 1/3rd of the usual food allowance businesses can charge that amount and be assured that business travelers will pay.

If you take away corporate taxes then "expensing" will go away entirely. Along with all those receipts you have to save and the entire industries and businesses that profit from it (e.g. fake receipt producers, Concur, etc).

Wealthy individuals wouldn't be able to expense their purchases through subsidiary corporations anymore which would necessitate collection via sales tax. If you think that's an awful lot like the Fair Tax system you're not far off.

I'm actually not an advocate of the Fair Tax or even a Federal-level sales tax because it would be very regressive: Vastly unfair to the bottom 50% of society. Having said that, if you abolish corporate taxes it's one of the only ways to obtain tax revenue.

[speleding]

Storing money inside a corporation is actually something that happens a lot already. I'm not sure that's a problem, because eventually the money has got to come out of the corporation if you want to do anything useful with it, and it will be taxable then. There are countries that have a flat yearly tax on capital, which would be one way of getting at it, but anything you do would make money flee the country. In my opinion it's more fair, and easier, to tax a flow (labour, sales, pollution) instead of a stock (bank account).

[cmdrfred]

Or when the corporation buys a luxury car and the CEO leases it to himself for $1/year (this is a very common tax avoidance tactic, as the car is for "an employee" they call that lamborghini murcielago a business expense). There are too many loopholes to fix in my opinion. Why tax earnings as opposed to assets anyway?

[premium-concern]

So what you are saying is that we should let poor people pay more taxes instead?

Because that is what abolishing corporate profit tax comes down to. The only substantial tax most states have are consumer taxes, and we all know that these taxes disproportionately hurt people that are already poor.

[cmurf]

This is like saying the float on currencies should be abolished, which effectively is already done by Euro countries within the EU. They can't each set their own monetary policy independent from the EU, but they have sufficiently different economies if it weren't for having one currency, they'd have float to make up for their differences. So now the EU is trying to take away yet another mechanism by which countries are trying to get some aspects of currency float back. I think if this decision stands, it will put more pressure on the EU. And I don't think that pressure is likely to be relaxed by countries giving the EU more centralized control over monetary policy - most EU countries just aren't up for that.

[cmurf]

Ha, well if something sounds too good to be true, it probably is. Whether Apple did something illegal isn't really what people are bringing up, but whether Ireland and Apple agreed to a loophole no one at the EU level actually intended. It'd sorta be like Apple getting out of paying U.S. federal tax because of a California loophole that disproportionately applies to Apple.

I don't see the EU giving Microsoft grief. It'd seem they're paying EU taxes differently than Apple.

[soVeryTired]

But... the ruling? Illegal state aid?

[Marazan]

Apple asked for a special exemption and got it.

Apple paid 0.0005% tax on its European profita. There is no non-'insane' tax code that could compete with that.

[zepto]

No, they don't go scot free. If and when they repatriate the money, they will pay the tax. Just because they have chosen not to do that yet, doesn't change anything about the liability.

[euyyn]

"Yet". Why would they do it ever?

[snuxoll]

Just like individual income tax for expats corporations only pay the difference between their foreign tax liability when moving funds to their US-based sister or parent companies, last I checked.

[premium-concern]

Which would be a shit-ton of money with their current tax "avoidance" schemes.

[nedwin]

Which is why it exists - to reduce tax avoidance by holing up in tax-friendly jurisdictions away from Uncle Sam.

[premium-concern]

I love how people try to downplay the things corporations do.

"Oh, it's not tax evasion, it's tax avoidance!"

And now "oh, it's not tax avoidance, it's tax-friendly jurisdictions".

Let's just agree to close the loopholes so that everyone pays their fair share.