[News] Apple facing multi billion Euro tax bill

[Leekbrookgull]

Anyone seen the EU accounts in the last Twenty Years ?

 

[bha100]

So if i understand this correctly when you buy an apple product in the Brighton store apple put the sale down as being made in Ireland so it's not taxable in the uk, Then from Ireland where they pay very little corporation tax they shift the profits to a tax haven where they pay a big fat zero.

Why don't governments force companies to book the sale in the country that the product or service is sold, would this not stop all this complicated tax structures that apple and the likes use.

 

[Harry Wilson's tackle]

Interesting issue. Clearly when we Brexit we can cook up any similar such deal if we see fit, But expect repriasals from federal Europe if we do. The name of the game will be brinkmanship. England was once good at that. Let's hope we have retained the knowhow

 

[highflyer]

It isn't necessary tax avoidance. Plenty of countries give tax breaks or incentives for firms to set up shop there for jobs.

Canada have done it for film production companies for years.

The tax breaks are a part of a tax avoidance system. Apple negotiated the advance pricing agreement to ensure it would pay almost no tax on profits declared in Ireland and then proceeded to artificially shift profits made in other countries into Ireland. This whole set up has robbed the uk (for example) of an estimated $1.3bn in taxes that should have been paid here.

And even without the link to profit shifting, the evidence that tax breaks actually attract additional investment is pretty skimpy (companies will take them, but probably would have invested anyway if they thought they could make a profit). These deals were made in secret and not freely available to all companies and the Irish government provides no information as to what these breaks are costing and what (if any) benefits they bring.

It stinks.

 

[beorhthelm]

It isn't necessary tax avoidance. Plenty of countries give tax breaks or incentives for firms to set up shop there for jobs.

Canada have done it for film production companies for years.

every country does it here and there. what they are supposed to do is make it open to any companies within some qualification. the issue here is that Apple has had a unique, private arrangement.

 

[Lord Bracknell]

By avoiding paying tax, whether this is legal or not, Apple are effectively imposing an obligation on all other taxpayers to pay more to make up the shortfall.

Arguing that they have an entitlement to behave the way they do just compounds the crime.

 

[beorhthelm]

So if i understand this correctly when you buy an apple product in the Brighton store apple put the sale down as being made in Ireland so it's not taxable in the uk, Then from Ireland where they pay very little corporation tax they shift the profits to a tax haven where they pay a big fat zero.

Why don't governments force companies to book the sale in the country that the product or service is sold, would this not stop all this complicated tax structures that apple and the likes use.

its more complex than that, its around the IP royalities on products. the sale is booked in the country but some of the revenue is assigned to the IP, and that proportion gets funnled through Ireland. its pretty legitimate to do so and would still be be considered a cost on on the original item sale, except go to the HQ in US otherwise.

 

[Hampster Gull]

Apple OUT

 

[Herr Tubthumper]

Why don't governments force companies to book the sale in the country that the product or service is sold, would this not stop all this complicated tax structures that apple and the likes use.

There has been discussion around this but in general and not specifically about the Apple case eg very broadly speaking if the bulk of the work and/or resources used in the sale were in a specific country then the sale is attributed to that country. It will require a huge shift in corporate business law though. But, it could be argued a big rethink is long overdue given how international business has changed in the past decade but laws haven't.

My view is that Apple should pay their share. Or if not, then it's only fair small businesses should be able to have (realistic) access to the same tax regimes.

 

[Baldseagull]

It isn't necessary tax avoidance. Plenty of countries give tax breaks or incentives for firms to set up shop there for jobs.

Canada have done it for film production companies for years.

It is fine to have differing tax rates for differing industries, what is not, is to give one film production company a better rate than all the other film production companies.

 

[Alex Alex Dawson oo! oo!]

Anyone seen the EU accounts in the last Twenty Years ?

Yes actually, every year since 2007.