Apple coughs up $350m – 2.3 days of annual profit – to make Italy's taxmen go away Apple will fork out $350m (318 million euros) to make up for five years of missing tax payments in Italy. It emerged today the iPhone goliath has agreed to cough up the cash, which covers corporation tax owed from 2008 to 2013. California-based Apple had funneled profits from its Italian operation through its offices in …
Let's imagine we live in a democracy for a minute. What I want is for a clear tax level to be set and for everyone to be liable to pay the same rates, no negotiations.
I'm sick and tired of hearing how large company X has decided it should only pay a small percentage of what it owes and then having the taxman go "yeah OK, sounds good to us".
Try doing that if you're a smaller company and see how far you get......
This is anti-competitive at best and corrupt at worse.
I agree, but the problem is in deciding who is a taxable entity within a country. Simply "doing business" in a country is going to be difficult for small businesses who trade on the internet, and is largely unenforceable without complex treaties etc. Methods of accounting (mis)used by large companies are there to help smaller companies to offset purchases and avoid tax that would cripple them. I don't know what the answer is, but I doubt it will be simple.
I guess the brightest mind working for governments could come up with a solution.... if they only wanted. Most holes are now clear and known, and it wouldn't be that much difficult to close them. Just, it would impact not only some very well known big names - also powerful when it comes to fund and talk about politicians - but also a lot of less known companies and people often very close to politicians and government officials.
That does not surprise me.
Italian govt is spiraling down trying to keep incomes high enough to maintain the delicate equilibrium of bribery alive. Without the grease, mouths will start speaking and angels falling.
Apple is not the first to have coughed up, guess will not be the last.
Cheers
Alessio
"Apple is not the first to have coughed up, guess will not be the last.".
I hope so too.
Apparently "Italy" was able to convince Apple that some profit was actually made in Italy and not all of the 200bn in Ireland. You know how the Italians are prone to fashion.
I believe the IRS have slightly similar feelings about it too. Then, of course, I would guess there are some shareholders who argue that some of that profit belongs to them. One could even argue that some people working for Apple feel some of that money should have magically trickled down to them. Nothing new here the only people allowed to loot the company are at the top of the company. Perhaps there is some odd logic/balance to it as the same people are also able to destroy the company.
I was very impressed with my Apple Computer II+ and the only software I hate to admit I did not invent was VisiCalc (not invented by Apple by the way, nor was the microcomputer.) Damn it, those where the days when actually new was invented, at least compared to rounded corners.
And while Jobs was half a crook, half mad, half disgusting, half an Arab and to American standards half white, there was that other half that was superb. Compare that to the Republican presidential candidates with only the mad part.
I can also admit that when the iPhone appeared I had to finger it for several minutes, never bought one and the odd thing is that if I today pulled an iPhone out of my pocket I would feel stupid. Things change, brands also. I could still accept a Apple laptop as quality hardware if I put Linux on it
However what I wanted to write about was about bribery, please be careful with that word.
Transparency International does indeed put Italy at number 69 while the UK is at number 14 and the USA at number 17. The top ten are as expected.
The problem for all of us is that if we start to compare us always to the less good then we start to loose track of the reality, the reality of where we are as there is always somebody worse than us.
If you start to feel that all men envy you and all women love you then, behind your back, world plus dog will fuck your girlfriend/wife.
I need a new year soon, and a happy one for all of us.
"Apple will fork out $350m (318 million euros) to make up for five years of missing tax payments in Italy."
And from the BBC story "The company's chief executive, Tim Cook, has rejected accusations that the firm has been sidestepping US taxes by stashing cash overseas, insisting: "We pay every tax dollar we owe."
Well, somebody must be lying.
With over $180 billion of Apple money held offshore, and liable to 35% US tax if brought into the US, Cook is not lying, but is stretching the limits of truth.
Now, if the Italian tax authorities can make Apple pay, why can HMRC not manage it (hint: their senior staff are mainly part-time employees, their other jobs are with banks, accountancies and BigBiz)
From my understanding, if that supertanker load of $$ was repatriated at a tax rate that Apple could agree to, the likes of Carl Ichan (large investor sorry speculator in Crapple) would demand a goodly percentage of it.
The leeches like Mr Ichan deserve to get nothing. They are only in it for themselves and care nothing for the best interests of the other stockholders or employees or anyone. They need to be taken down more than a peg or two.
But he'd demand that most of it was given back to shareholders. That should drive up the share price but with so many Anal(ists) on Wall St sipping the 'Apple is doomed' cool-aid (more like a reality distortion fields all of its own) it will probably drop 5% which affect a lot of ordinary people because of investments by their pension company.
So by all means argue for that money to be returned to the US but beware of the consequences.
This argument does not only apply to Apple but Google,MS, Adobe etc.
Persnally, as long as I can sell my Apple Stock at a decent profit (held it for 11 years so far) and use it to fund my retirement then I'm happy.
I'm guessing HMRC aren't doing too much because every time they try they get drowned in lawyer red tape (ironic, I know). Rangers FC are a prime example, whilst "big" in Scottish Football terms they aren't a flea on Apple's backside globally, but are still (after 3 years) fighting HMRC over their EBT case.
Tax law allows this unethical behaviour. And corporate law demands officers take advantage of the law. (And politicians benefit)
NY Time front page article about how the corporations and the super-rich do this....
http://www.nytimes.com/2015/12/30/business/economy/for-the-wealthiest-private-tax-system-saves-them-billions.html
I think the clue lies in the phrase you quote: "We pay every tax dollar we owe." BigCorp (Apple or any other example) have a very differant take than we ordinary mortals on how much tax they owe. The phrase "as little as fucking possible, by any means possible as long as we members of the Managerati are not at any risk of being personally fined or doing jail time" comes to mind. Icon? My reaction to that type of behaviour.
IIRC he managed to defer paying his company taxes from the 1960s until the 1990s - again IIRC the difference was 4 months income vs 4 days ...
"I don't know anybody that doesn't minimise their tax," Mr Packer growled as he stirred his delicate parliamentary china cup of tea with a teaspoon. "I'm not evading tax in any way shape or form. Of course I'm minimising my tax. If anybody in this country doesn't minimise their tax they want their head read. As a government I can tell you you're not spending it that well that we should be paying extra." (1991)
Why is this so difficult to understand?
The reason they settled for 350m is not because they owed more, but because the Italian authorities need to prove a case. Likewise with Vodafone. So they settle because they don't have a brilliant case in the first place, or because there is a chance they'll lose and set a precedent.
As for Apple not wanting to pay 35% on the $180bn sitting offshore is because they already paid tax on it to local governments, eg the Irish government where they are based, and in settlements like this.
Who else would want to pay tax twice?
And here's the final point, none of these countries have been short changed, every time they made a sale they paid vat handsomely. Or more importantly, the end user paid handsomely. When will people realize that companies don't pay taxes, the customer pays the tax, even corporation tax. A company merely passes on the cost of doing business to their customers.
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