SEC Concludes Review of Apple's Tax Policy, Asks for Additional Information for Investors

[Gasu E.]

Give U.S. based multinational companies a tax holiday. Let them repatriate their foreign money for no or little tax. This will do a lot more to help the economy than any "stimulus" our govt. can think of.

There are some valid arguments for this. However, there is a strong counterargument: this would encourage corporations to keep even more profit offshore in the future, waiting for the next tax holiday.

Really, a better fix would be just to remove all the corporate tax loopholes, especially ones earmarked for a particular industry; then lower the overall tax rate commensurately. The offshoring is partly due to the fact that the US has a high corporate tax rate, even though (seemingly paradoxically) US taxes collected as a share of profits are on the low side; both relative to other developed nations, of course.

 

[gnasher729]

I agree that tax avoidance is not illegal.

It's legal by definition. If it's legal, it is called "tax avoidance". If it is illegal, it is called "tax evasion".

 

[alexgowers]

Corporation:

Oh look what our accountant did to help us increase profits and avoid tax, you might want to slip him some money to keep this gig legal though. But is it going to get us into legal trouble? No we've paid some politicians off, it's all been put there by out guys in government to help super large companies remain profitable in America (or any country for that matter) Ok that's Great!

Government:

People keep blaming us for the lack of tax money coming! We made too many big corp loop holes when they gave us big back handers. The Money helped us get elected though. do you think it's time we blame someone? Yeah lets pick some huge company and drag their share prices through the mud so we can devalue it and also warn the investors so they can play ball too and make some cash, we all win apart from everyone not in on it...

You, Me and Us:

What the heck my apple shares just went down, that seems suspicious. God damn my taxes have gone up! Ok where's the money going... lets blame the government they can't run the country properly if I pay this much in tax apple must be giving em loads, there should be tonnes of gov money out there. Ok The gov have run out of money WTF how!....Wait a sec the government can't be the bad guys they are saying it's all apples fault they didn't pay any tax. Thats not fair, they pay less per dollar than everyone i know apparently!

Lesson:

Apple, the government, etc are all crooks just like every corp ever created. They are the family bank balance run by numbers, lies and loop holes.

You can't run your life like a corp, they play by different rules and no one will ever be able to stop them. Know that you are actually supporting these theives in their criminal endeavours around the world and that anytime you can **** one over please do the balance is most righteously screwed.

 

[skywalkerr69]

I think you misunderstand the use of the word "language." The SEC is looking for a more detailed discussion of risks.

They are stating the wording they use is vague and they need clarification. Only juvenile managers or analysts cannot understand what the language in their fileings. The SEC is probably responding to a complaint. They are asking for clarification on how Apple evaluated their own decisions. Funny how General Electric who paid zero corporate income taxes last tax year doesn’t have any SEC investigations on their 10ks.

 

[Kaibelf]

Corporation:

Oh look what our accountant did to help us increase profits and avoid tax, you might want to slip him some money to keep this gig legal though. But is it going to get us into legal trouble? No we've paid some politicians off, it's all been put there by out guys in government to help super large companies remain profitable in America (or any country for that matter) Ok that's Great!

Government:

People keep blaming us for the lack of tax money coming! We made too many big corp loop holes when they gave us big back handers. The Money helped us get elected though. do you think it's time we blame someone? Yeah lets pick some huge company and drag their share prices through the mud so we can devalue it and also warn the investors so they can play ball too and make some cash, we all win apart from everyone not in on it...

You, Me and Us:

What the heck my apple shares just went down, that seems suspicious. God damn my taxes have gone up! Ok where's the money going... lets blame the government they can't run the country properly if I pay this much in tax apple must be giving em loads, there should be tonnes of gov money out there. Ok The gov have run out of money WTF how!....Wait a sec the government can't be the bad guys they are saying it's all apples fault they didn't pay any tax. Thats not fair, they pay less per dollar than everyone i know apparently!

Lesson:

Apple, the government, etc are all crooks just like every corp ever created. They are the family bank balance run by numbers, lies and loop holes.

You can't run your life like a corp, they play by different rules and no one will ever be able to stop them. Know that you are actually supporting these theives in their criminal endeavours around the world and that anytime you can **** one over please do the balance is most righteously screwed.

Whine whine whine. Yet not a single word explaining why Apple should pay America taxes on products that are manufactured, distributed, and sold wholly overseas, and which are already taxed in the place of purchase. Sorry, but as an American, I accept that I won't magically have the right to tax everything that happens in other countries.

 

[Menel]

This an international problem that can't be solved by any one government alone. The UK government has no jurisdiction of Ireland's tax laws which is where Apple pays most of its tax in Europe.

I agree that tax avoidance is not illegal. I haven't heard anyone say otherwise. It might be immoral but it's not illegal, although I do think that HMRC could do a lot more to close some of these loopholes and push for international tax agreements through the G20.

Immoral? Not as immoral as an income tax system itself is.

Pay the government money, or they come with guns and put you in jail. Tax is theft. The entire concept violates most any concept of morality that values peace.

 

[croooow]

I keep hearing companies blamed for avoiding tax using perfectly legal tax avoidance methods.

I wish people would BLAME THE GOVT, if they want to bitch about it. The GOVT set the rules in place, so it's the govt's fault if companies then follow their laws!

Thank you!

 

[mrxak]

While I have no problem with added transparency for investors, I do hope the SEC will demand the same standard of transparency for every other corporation, and they're not merely singling out Apple for political reasons.

Now, that said, the SEC found that Apple was doing nothing wrong at all. This doesn't surprise me, nor should it surprise anyone that any company would use every tax avoidance measure available to them under current tax law. To do otherwise would be stupid and suicidal as a business.

I would gladly welcome a public conversation about tax policy in this country, and perhaps some true reforms for the betterment of everyone involved, but it seems that our political leaders are more interested in "winning" (whatever that means) rather than actual governing. For example, the current government shutdown. I am entirely pessimistic so long as we have the two major parties trying to destroy each other instead of acknowledging the other's right to a point of view and attempting to work with each other since the other isn't going away. My only optimism comes from the idea that perhaps, seeing this as voters, we might finally reject parties and start electing a lot more independents who care more about the country than about a party affiliation.

 

[thekev]

Quite an interesting difference in the spin, one of these headlines sounds like it was written by an android user.

This one is just not sensationalized.

Give U.S. based multinational companies a tax holiday. Let them repatriate their foreign money for no or little tax. This will do a lot more to help the economy than any "stimulus" our govt. can think of.

They tried that in 2004. I will try to find a good article on the topic if you like.

 

[Thunderhawks]

While I have no problem with added transparency for investors, I do hope the SEC will demand the same standard of transparency for every other corporation, and they're not merely singling out Apple for political reasons.

Now, that said, the SEC found that Apple was doing nothing wrong at all. This doesn't surprise me, nor should it surprise anyone that any company would use every tax avoidance measure available to them under current tax law. To do otherwise would be stupid and suicidal as a business.

I would gladly welcome a public conversation about tax policy in this country, and perhaps some true reforms for the betterment of everyone involved, but it seems that our political leaders are more interested in "winning" (whatever that means) rather than actual governing. For example, the current government shutdown. I am entirely pessimistic so long as we have the two major parties trying to destroy each other instead of acknowledging the other's right to a point of view and attempting to work with each other since the other isn't going away. My only optimism comes from the idea that perhaps, seeing this as voters, we might finally reject parties and start electing a lot more independents who care more about the country than about a party affiliation.

Probably a combination of a complaint and trying to get some press with Apple being a popular company to be mentioned with.

Any time"investigation" is mentioned, it implies something illegal MAy be going on, but after the initial press release the public's short attention span is already done with it.

They will not get part 2 i.e. in that nothing was illegal.

I also find it comical that the tax codes have loopholes left and right (and having been lobbied for by all corporations) and then the government complains when these loopholes are being used.

And, why would a company owe tax again for money made and tax paid for in another country?

Just because it's an American company? LOL

 

[CodeJingle]

No. I am of the opinion that using dodgy foreign partners rather than using in-house workers results in lower quality services for Apple's products outside the US. I'm pretty sure if Apple hired a few people, they can begin to actually remove the numerous POI errors that I and others have reported in the UK version of Maps.

Sounds like a good idea to hire local developers in each country to work on better Maps and Siri integration within those countries.

 

[IbisDoc]

More CEO's should sit at the state of the union speech with a big dumb grins their faces. It will pay off with Democrats no longer expecting them to "pay their fair share". Rather, they will be protected in all kinds of subtle ways.

 

[sransari]

I keep saying the same thing when they bitched about Google / Amazon and all the other corps. If they use a LEGAL loophole - guess what - close the damn loophole if you really care. BUT - every loophole would affect individuals sitting in those positions too - so I am sure they have a somewhat personal interest to keep the holes open.

Or just get rid of ALL the loopholes, and replace our entire tax system with a simple, consumption based tax (excluding food, medicine, and thrift store purchases) that is impossible to avoid, unless you flat out steal products/services. This would also end all the debate regarding immigration where illegals don't pay income taxes. Move everything to a consumption based tax, and everyone will pay taxes based on things they chose to buy, instead of being penalized for being productive.

 

[theheadguy]

Or just get rid of ALL the loopholes, and replace our entire tax system with a simple, consumption based tax (excluding food, medicine, and thrift store purchases) that is impossible to avoid, unless you flat out steal products/services. This would also end all the debate regarding immigration where illegals don't pay income taxes. Move everything to a consumption based tax, and everyone will pay taxes based on things they chose to buy, instead of being penalized for being productive.

I like this idea, but how does this address making money here and sending it for overseas consumption?

 

[appleisking]

deleted.

 

[MacDav]

I look forward to the day the average citizen can use the Double Irish loophole to avoid paying taxes too. Shell corps in Belize all around!

How to pay for the USA? Sell the country to China! Easy.

Since when does the "average citizen" run a large international business? Why should Apple give more money to our broken down government to waste on rampant fraud in the many entitlement programs. The government could easily be cut to half it's current size and the country would be much better all around.
If fact we're living in tax and regulation hell right now.

 

[ucfgrad93]

I keep hearing companies blamed for avoiding tax using perfectly legal tax avoidance methods.

I wish people would BLAME THE GOVT, if they want to bitch about it. The GOVT set the rules in place, so it's the govt's fault if companies then follow their laws!

Agreed. The government is the one that set these byzantine rules that companies like Apple & Amazon have to follow. Yet people like to complain about the companies instead of the real culprit.

 

[MacDav]

Or just get rid of ALL the loopholes, and replace our entire tax system with a simple, consumption based tax (excluding food, medicine, and thrift store purchases) that is impossible to avoid, unless you flat out steal products/services. This would also end all the debate regarding immigration where illegals don't pay income taxes. Move everything to a consumption based tax, and everyone will pay taxes based on things they chose to buy, instead of being penalized for being productive.

Yeah that would be great. Unfortunately it will never happen. Do you have any idea how many tax lawyers there are and tax accountants who would be out of a job? You think the millions of tax lawyers would ever let this happen? The simple flat tax idea has been around forever. Reagan used the idea in his campaign. Once he was elected it never happened. Guess why?

 

[giantfan1224]

Or just get rid of ALL the loopholes, and replace our entire tax system with a simple, consumption based tax (excluding food, medicine, and thrift store purchases) that is impossible to avoid, unless you flat out steal products/services. This would also end all the debate regarding immigration where illegals don't pay income taxes. Move everything to a consumption based tax, and everyone will pay taxes based on things they chose to buy, instead of being penalized for being productive.

I agree 100% with a consumption based tax but we have to recognize the reality of things. We live in an entitlement society. People want something for nothing. They want someone else to pay for it. A tax system such as yours--which makes a world of sense--would never be passed into law because those that live off of others (which is a large growing section of society) would have to start paying taxes. Their own fair share. Unfortunately never going to happen.

 

[ActionableMango]

Or just get rid of ALL the loopholes, and replace our entire tax system with a simple, consumption based tax (excluding food, medicine, and thrift store purchases) that is impossible to avoid, unless you flat out steal products/services.

Won't work. Any goods they sell in the US is already taxed in the US. Any services they sell in the US is already taxed in the US.

The profits they move to Ireland are for intangible things. Apple and other companies make tons of money on business agreements such as licensing patents, software, etc. They sell the business agreement out of the Irish office, so the money is made there and taxed there. All that changed hands was a contract, and they send the contract from that office.

In other words, a US consumption tax is irrelevant to the existing loophole because virtual activity can occur anywhere in the world, thus avoiding the entirety of US tax law in the first place.

This is why a physical goods business like WalMart will have an effective tax rate that is very close to the actual US tax rate, whereas technology companies like Google and Apple pay a very low effective US tax rate... anything that doesn't absolutely have to be delivered in the US, isn't.

 

[MacDav]

Won't work. Any goods they sell in the US is already taxed in the US. Any services they sell in the US is already taxed in the US.

The profits they move to Ireland are for intangible things. Apple and other companies make tons of money on business agreements such as licensing patents, software, etc. They sell the business agreement out of the Irish office, so the money is made there and taxed there. All that changed hands was a contract, and they send the contract from that office.

In other words, a US consumption tax is irrelevant to the existing loophole because virtual activity can occur anywhere in the world, thus avoiding the entirety of US tax law in the first place.

This is why a physical goods business like WalMart will have an effective tax rate that is very close to the actual US tax rate, whereas technology companies like Google and Apple pay a very low effective US tax rate... anything that doesn't absolutely have to be delivered in the US, isn't.

Apple is in Ireland to save on taxes. If they lower corporate tax rates in the U.S. to something near what other countries are offering there will be no reason to go "Off Shore" with their money. Right now the government is getting zero taxes on that money. Isn't 15 to 20% of $100 billion better than 35% of nothing?

 

[macs4nw]

Give U.S. based multinational companies a tax holiday. Let them repatriate their foreign money for no or little tax. This will do a lot more to help the economy than any "stimulus" our govt. can think of.

I agree. But maybe we need a permanent solution, rather than just a one-time deal like a tax holiday. Apple has paid tax on that income, in the country where it was earned. Why shouldn't they be able to repatriate that money, and spend it here, without being taxed twice. Right now Apple is practically forced to spend that cash overseas, and that does nothing to stimulate the US economy. Case in point: that planned R&D Center in Taiwan for future iPhone development; why not open that in Massachusetts or Texas, or whatever.

Correct me if I'm wrong, but I believe it's the same with personal income earned abroad by US citizens. Also taxed at source, and again in the US. Why not a more comprehensive bilateral tax treaty with more other countries?

This is something congress needs to address, sooner rather than later.
If Apple alone is already sitting on a $145 billion cash hoard and growing, most of which is overseas, are we talking about a few trillion $$, if all multinationals are included? The status quo is doing nothing for our economy.

 

[ActionableMango]

Apple is in Ireland to save on taxes. If they lower corporate tax rates in the U.S. to something near what other countries are offering there will be no reason to go "Off Shore" with their money. Right now the government is getting zero taxes on that money. Isn't 15 to 20% of $100 billion better than 35% of nothing?

My entire post was a response to "flat tax is impossible to avoid", and has nothing to do with rates.

I agree with you that if the US tax rate was more in line with other countries, it would remove the incentive to offshore profit.

In the mean time, all the tax revenue from economic activity that couldn't be offshored anyway is also being reduced. So while you get your 15% of $100 billion you are also reducing from 35% to 15% of the revenue you were getting from everything else.

Also, such a move can trigger a race to bottom. For example if we switched to 15%, Ireland, missing all that tax revenue, figures 10% of $100 billion is also better than nothing. So they switch to 10%. Then Switzerland decides 5% of $100 billion is better than nothing, so they lower it to 5%. Then the Republic of Sealand figures 0.2% is better than nothing...

 

[Ciclismo]

Immoral? Not as immoral as an income tax system itself is.

Pay the government money, or they come with guns and put you in jail. Tax is theft. The entire concept violates most any concept of morality that values peace.

Seriously? So how would a "moral" society in your opinion finance schools, fire and rescue services, law enforcement, critical infrastructure such as water, power, sewerage, roads etc. etc.? Privatise everything? Because that has worked out well in the past

 

[thekev]

Also, such a move can trigger a race to bottom. For example if we switched to 15%, Ireland, missing all that tax revenue, figures 10% of $100 billion is also better than nothing. So they switch to 10%. Then Switzerland decides 5% of $100 billion is better than nothing, so they lower it to 5%. Then the Republic of Sealand figures 0.2% is better than nothing...

As you point out it's not just Ireland. If a country lacks much in the way of infrastructure, it can attract money by being a tax haven. After all they wouldn't have to worry about undercutting if very little is collected at a domestic level. Even within the US states do this to a degree.