How to get Rotten Apple to pay up - Page 1
Forum section: electronics / general

author: VK3DRB
author_rank: Super Contributor
timestamp: January 26, 2016, 10:47:53 am
content: http://www.theage.com.au/business/the-economy/apples-85-million-tax-bill-is-a-fraction-of-its-almost-8-billion-revenue-20160126-gmej0z.htmlOK, they are not the only tax dodgers. Google, Microsoft and Chevron also couldn't lie straight in bed. Apple seems to have little or no concern about social justice in the countries they do business in. Legal yes. Moral, no. Remember Apple only responded to the Foxconn suicides and draconian working conditions AFTER they were named and shamed. But there are some smaller Australian companies also setting up shop in places like Ireland to dodge tax. Genuine Aussie companies who are good corporate citizens pay their 30% tax, staffed by upright CFO's and accountants, knowing they are contributing to the betterment of our society and not just to the pockets of shareholders.The problem seems to be any country can undercut the rest by lowering company tax rates. The Irish have found this to be a cash cow. Who needs potatoes. The Australian government has not found a way to fix this problem.Suggestions to fix the problem, short of installing a One World Government?

author: tooki
author_rank: Super Contributor
timestamp: January 26, 2016, 11:46:24 am
content: [Disclosure: I am a current AAPL shareholder and former AAPL employee. As an "insider", I can attest that Apple's efforts in working conditions, environment, etc. are not just lip service, but really are things the company believes in and invests a lot of money into.]First just a little clarification: Apple was taking action on working conditions (as well as environmental friendliness)longbefore the media exposés. (As for the suicides, bear in mind that at the time of the suicide "scandal", the suicide rate among Foxconn employees was significantlylowerthan that of the Chinese population at large! Foxconn's worst year was 2010, with 14 suicides from 930,000 employees. The national suicide rate was 20 per 100,000, so Foxconn's rate was less than 1/10 of the national one!) To this day, no major electronics company does as much to improve working conditions in the Asian suppliers as Apple, which combs through the entire supply chain on an ongoing basis. Apple'sSupplier Code of Conductand annualSupplier Responsibility Progress Reportare fascinating reads. There's still lots to be improved on, but Apple is the least-bad of any major electronics company.As for taxes: As an AAPL shareholder, on the one hand I'm expected to applaud cost-saving measures. And it's no secret thatApple has been at the forefrontof international tax-evasion methods. That said, the same methods are used by essentially every large corporation. Ultimately, I don't place the blame on companies that do things within the confines of the law; what really angers me is the tax lawyers and consultants whose lobbying efforts are so successful that they are able to dictate the tax code to enable new loopholes. (At least in the US, the entire legislative process has been sold out to lobbyists, and theyliterallywrite the text of laws, which just get rubber-stamped by Congress.) But on the other hand, I really want to see companies (not just AAPL, all of them) paying taxes to support the countries they operate in, since they benefit from the infrastructure, workforce, etc. I think it's totally fair for companies to be required to pay for those benefits, in essence.*As someone smarter than me said, "Taxes are the cost of civilization." I for one enjoy living in a civilized place! (I'm an American living in Switzerland. Switzerland is by any measure a highly civilized place that functions like a well-oiled machine, while the US is sadly devolving into a third-world country, and in many ways has already arrived.) I am happy to pay taxes (directly and indirectly), provided I feel I am getting a good value for them. In Switzerland, I feel that I do. In the US, not so much.I also understand the irony and hypocrisy in personally enjoying Switzerland's wealth and civilization: A significant part of Switzerland's tax revenue is by being a tax haven for foreign companies. One place, the city of Zug, is the mailbox home to most of the world's commodities companies, as well as a smorgasbord of companies (like Garmin and Walgreens!!) who move their tax home there. (Invariably, they have no staff here except for a few lawyers and tax consultants.) The corporate tax rate is low there, but because of the sheer number of huge companies whose money flows through, Switzerland gets a windfall of nearly effort-free revenue, and I benefit from that. (Zurich, where I live, lives off the banking industry, which I consider to be the least ethical industry I know, after the shit that I've seen bankers here do, and how the act.)In the end, I'm in complete agreement with you that the system needs to be reformed to make it more equitable. But like you, I have no idea how we would do that.*One of the things I really respect about Swiss culture, compared to the US, is that companies here see it as their responsibility to invest in future generations. In particular, this manifests in the apprenticeship system they have here. Most Swiss do not attend university; instead, they do an apprenticeship, which is usually 3 years long: 3 days/week paid on-the-job training at a company, and 2 days/week vocational school, for which the company must pay the tuition. What surprises outsiders is that apprenticeships are pervasive, not just limited to the trades. Everything from cooking, bricklaying, banking, precision machining, marketing, nursing, electronics, pharmacy tech, network engineering, to social work — nearly every profession here has an apprenticeship as the foundation. Anyway, companies here see the cost of training apprentices as an investment, because they know that those kids will learn exactly the skills needed by their industry, guaranteeing a supply of qualified labor. (The US has a severe lack of qualified labor in many fields.)

author: dannyf
author_rank: Super Contributor
timestamp: January 26, 2016, 12:17:03 pm
content: "Legal yes. Moral, no."The solution is very simple: criminalize all immoral activities:anyone minimizing his tax liabilities is immoral and should be thrown in jail, according to you.Anyone using modern technology is immoral and should be thrown in jail, according to your next door neighbor......Pretty much soon, everyone is a criminal and the whole society is in jail,There are reasons that illegality is a small portion of immorality.As to apple, if they violates the law, prosecute them. If they are minimizing their tax liabilities legally, leave them alone. If you find the tax loopholes objectionable, vent your anger at those politicians who passed the tax laws and focus your efforts on fixing the loopholes.But leave alone those people who follow the tax laws.

author: VK3DRB
author_rank: Super Contributor
timestamp: January 26, 2016, 12:47:16 pm
content: Quote from: dannyf on January 26, 2016, 12:17:03 pmBut here in lies a problem that is growing. If every company followed Apple's tax evasion example by moving money into offshore low tax haven accounts, the governments in which they do business would go broke or place all the burden on the honest workers who pay ALL their tax and are not involved in any way in tax evasion. So the economy would be adversely affected. So what stops EVERY company doing the same? If you want to make a fast buck, but set up a mechanism for everyone to evade tax with minimal difficulty in some dodgy overseas country. Yes they are all following the law. What is lawful is not always a good choice in life and morally questionable in our so-called free society.It appears global inequality is not getting wider in earning money (62 people now own more than half the world's population combined), but also in paying taxes.

author: dannyf
author_rank: Super Contributor
timestamp: January 26, 2016, 12:52:02 pm
content: "every company followed Apple's tax evasion example by moving money into offshore low tax haven accounts, the governm..."As long as apple is minimizing its tax liabilities legally, it is following the tax law. Your anger should be directed at the politicians who wrote the tax laws, not people who follow the tax laws.Is it really that difficult to comprehend?

author: tooki
author_rank: Super Contributor
timestamp: January 26, 2016, 01:19:38 pm
content: Quote from: VK3DRB on January 26, 2016, 12:47:16 pmIt's not agrowingproblem. The problem has already grown up into a mature adult problem. You're hard-pressed to find a major company thatdoesn'tdo this. Italready hasaffected our economies adversely.What's stopping every company from doing this? Nothing, other than tax consultant and lawyer fees, and the costs of running mailbox offices in whatever countries are involved. That's all that keeps this relegated to very large corporations: the cost of setting it up.But dannyf is exactly right, and said basically the same thing I did: Place the blame on the politicians who wrote those laws (or "wrote" in the sense of taking a lobbyist's draft and filling his name in the blanks, which is literally how it works). The way to change this problem is to change the laws, not to vilify the companies that operate within those laws.(It's quite another thing when companiesviolate the letter of the law. Then I think vilifying and punishing is completely in order. As an example, all the Swiss banks that have actively helped their rich US clients break US tax law, going as far as smuggling cash and diamonds for them.)

author: Howardlong
author_rank: Super Contributor
timestamp: January 26, 2016, 01:31:29 pm
content: In the same vein, Google and Her Maj's Revenue & Customs are under fire today as Google have come to a "deal" (did not realise you could negotiate with the tax man) where they pay £130m covering the past 10 years in the UK, which amounts to 3% Corporation Tax (currently it's 20% for any other company that don't hire expensive accountants and lawyers to devise elaborate tax avoidance mechanisms).Google's central defence is that they don't have a "permanent establishment" in the UK... which is news to me as I frequently walk past their large headquarters in Buckingham Palace Road that they've inhabited for quite some years. Surely someone from HM Treasury, 1.0 miles away according to Google Maps, must've noticed it.It is very true that every company has a duty to maximise income for its shareholders. Part of that is maximisation is in maintaining a reputation, but expensive accountants looking at the short term find that exceptionally hard to put on a spreadsheet. I would question how legal the setting up of various mechanisms and instruments with the sole purpose of avoiding tax is, and suggest that if legal precedence is anything to go by, it amounts to evasion, ie it's illegal. There is indeed precedence in the UK for this recently with various film investment companies set up offshore, well, to invest in films, but allowed the investors to to offset their consideration as a loan in lieu of paying any tax. Although the money did go to invest in films, it was deemed to amount to evasion because the primary (not even the sole) purpose of the investment instrument was to avoid tax.Starbucks and Vodafone, two other well-known UK high street tax avoiders, with tax deals made over a round of golf or the odd expensive dinner, are easy to boycott, as are Apple. Realistically outfits like Google and Amazon are much harder for consumers to avoid.

author: zapta
author_rank: Super Contributor
timestamp: January 26, 2016, 01:38:11 pm
content: Quote from: VK3DRB on January 26, 2016, 10:47:53 amIt's called competition, if you are fat and lazy you lose.

author: Falcon69
author_rank: Super Contributor
timestamp: January 26, 2016, 06:16:49 pm
content: It happens everywhere, in every business. Even the trucking industry whose company travels all 48 states. They will register all their trucks and trailers in another state that has lower registration costs....instead of the state their main hub/headquarters is located. Legal? Yes. Moral? No. The state where the company does most of it's business, loses out on registration costs which help fix the roadwayas from the weight of THEIR trucks coming and going into the main hub.

author: MT
author_rank: Super Contributor
timestamp: January 26, 2016, 06:38:38 pm
content: Quote from: VK3DRB on January 26, 2016, 10:47:53 amRun by whom? Putin and Assad? UN clearly does not work as intended. Perhaps you meant a world planetary tax officeindependent of any government? IMF?

author: grumpydoc
author_rank: Super Contributor
timestamp: January 26, 2016, 06:46:41 pm
content: Quote from: Howardlong on January 26, 2016, 01:31:29 pmIt depends on circumstances. Depending on the amount owed and the complexity of the tax law involved there may well be room to negotiate.

author: Corporate666
author_rank: Unknown
timestamp: January 26, 2016, 06:57:12 pm
content: Quote from: Falcon69 on January 26, 2016, 06:16:49 pmHow is it immoral? That's absurd. If the law affords a company the opportunity to register their trucks in various locations perfectly legally, it's not immoral for them to do just that. No more than it's immoral for an individual to move to a different state/country/city because they will pay less in taxes.All of this stuff about "corporate morality" is mostly based on envy and jealousy, IMO. As the economy has been sluggish for 8 years, and as the democrats in the USA have taken on "social justice" as a new party platform, the media and talking heads are all furthering this narrative and fomenting hate and jealousy among people that a wealthy person or corporation is "getting one over on them" by earning more money or paying less taxes.The irony is that it makes people want to enact punitive measures just to "get even", which ends up hurting the economy and ends up pushing companies to take ever more extreme measures which make things worse for the economies that are pushing them away.The bottom line is that the USA or Australia or any country doesn't have an inherent right to "own" a company or it's loyalty. It's a global economy and there are countries which are more economically forward thinking. When one city/state/country gets too greedy, it forces people to find alternatives. Just like black market and barter economies pop up when governments get too greedy towards individuals. It goes back to the role of government... are they supposed to "make everyone even", or do what's best (at a macro level) for their people? Politicians crave power and control so when they have an opportunity to tell people about a boogeyman that's responsible for their problems.. .they take it. Then people want more and more laws to 'fix' those problems which inevitably ends up making things worse due to unforeseen results... which politicians blame on those subject to the laws which makes people (foolishly) want to add even more laws. It's a death spiral.The better solution is to create an environment where it's advantageous for companies to operate/locate/HQ there. It's idiotic (to me) to not realize the places doing this (Ireland for IP... Caymans or Bermuda for corporate HQ... China for manufacturing... Pakistan for textiles... Panama for transport ship registration) and think "hey maybe we should try to be competitive?". What good is collecting 2% of a high tax rate when you could get 95% of a lower rate?

author: Corporate666
author_rank: Unknown
timestamp: January 26, 2016, 07:01:24 pm
content: Quote from: grumpydoc on January 26, 2016, 06:46:41 pmIt's a LOT more simple and common to negotiate with the tax man than even you suggest above.A company like Apple will work very closely with the IRS (USA tax authority) well before a return is even filed. Apple will present their proposed return and the IRS will present theirs, and they will negotiate back and forth. Literally every single thing Apple does in terms of US taxation has long before been negotiated and approved by the IRS. That's why it's silly when people/media/politicians point to those same companies and call them tax dodgers or cheats or whatever else. The same government run by those same politicians are the ones who worked out those tax plans and approved them.

author: rrinker
author_rank: Super Contributor
timestamp: January 26, 2016, 09:15:33 pm
content: The other thing to consider is that while the one country may suffer with less tax collection, what about the countries they move the money to? They collect taxes there, just not as much as in the 'home' country, so those countries get a huge tax boost.There's a reason for all this back and forth, too many politicians in the pockets of special interests. Back and forth it goes until a tolerable level is reached, and zero effort goes towards actually fixing anything. Instead, the tax code gets even LARGER. There is no reason OTHER than graft and corruption for there to be tax codes bigger than a dozen Digi-Key catalogs. It's all politics and not for anyone's benefit other than the politicians who manage to line their pockets and spend everyone else's money no matter what else may be going on. This isn't just a US problem, or a US phenomenon, it happens in many countries around the world. It's pretty blatant when the only real job growth is in public service jobs and those mainly with the taxation services. Complex law ensures no one can ever be 100% perfectly compliant no matter how willing they are to pay their fair share, and guarantees employment of a huge workforce of everyone from lawyers to interpret the code to collection agents to come after those they feel haven't properly complied. If things were simpler with none of the special loopholes, the rates could be far less, because the only ones actually paying the high rates are the ones who couldn't get enough politicians on their payroll to get a special loophole added that benefits them. Yes, I've grown more and more cynical over the years, but it's gone from just an annoying fact of life to absolute stupidity.

author: CatalinaWOW
author_rank: Super Contributor
timestamp: January 26, 2016, 09:42:31 pm
content: Why not just have all nations eliminate corporate taxes. I don't really understand the difference between taxing at the individual level and taxing at the corporate level. The tax at the corporate level becomes a cost of doing business and is paid by the consumers of a corporations products. How much more would your iPhone cost if Apple didn't do its tax games?Oh, but you say that you don't want product costs to increase, you just want less of the profits to be collected by those evil capitalists. While I would agree that CEO pay is out of line, and that there are certainly a lot of wealthy people benefiting from corporate stocks, the really big holders of company assets in the US are pension funds, mutual funds, IRAs and 401Ks. I doubt that bankrupting that group is solving the problem you are aiming at.So if the problem is tax dollars leaving the area where you live, stop taxing entities that cover large areas. Tax yourself and your neighbors and then decide locally how you want to spend it. Sales tax, property tax and so on. Of course some of your neighbors will vote with their feet, moving to a lower tax region, if you make those taxes too high. Silly sods, looking after themselves.

author: IconicPCB
author_rank: Super Contributor
timestamp: January 26, 2016, 10:09:37 pm
content: QuoteNo we need someone much more honest... Clinton and Blair. Both speak English, the language of hegemony ( I spit on ze Fronch)

author: HackedFridgeMagnet
author_rank: Super Contributor
timestamp: January 26, 2016, 11:13:26 pm
content: My naive solution is1. Firstly for the government to identify any companies engaging in related party transactions. (such as Apple Australia buying from Apple Ireland)(These transactions are not illegal or should they be but they are often not competitive and so not fairly priced. )2. Any companies engaging in related party transactions should be taxed differently as their profit loss statement is no longer valid.They would have to be taxed on revenue similar to GST or VAT.But I will have to face the fact that this will never happen, and Apple Australia will remain barely profitable even though it's parent company is fantastically profitable.

author: kaz911
author_rank: Super Contributor
timestamp: January 26, 2016, 11:32:07 pm
content: Quote from: Howardlong on January 26, 2016, 01:31:29 pmPE (Permanent Establishment) - does not mean they do not have offices. It means they never make any decisions of major consequence and run the company from that address/locations/country. So for something to become a PE by law - there are some "rules" to set it in motion. Fx if they do bookkeeping in the UK office - that might trigger them to have a PE. If they have board meetings for Google there (or anywhere in the UK) it can trigger something to turn into a PE. ..And regarding Swiss personal and cooperate tax - it is well known you can go down and negotiate with the tax department - no matter what the law says. It is a national sport in Switzerland for high net worth individuals and cooperate entities to negotiate with the tax man in the local county/canton. But their system works really well - tax in general is low - education is high.Btw. both Denmark, Norway and Sweden and Germany does apprentice educations where you work and study at the same time. UK does not - which is clear when when you get a "carpenter","plumber" or "electrician" into your house. 90% have no idea or a very limited area of knowledge. If you come from a country with Apprentice educated carpenter/plumbers and electricians - you end up doing "face-palms" many times in the UK.We had our previous house redone completely by certified builders. We wore lucky with the interior decoration stuff - but Electrician rewired the 1940's house completely and issued certificates. 2 years later when we moved to the middle east - we had to get it re-certified for tenants (annual check is a requirement when you let it out) and it failed miserably. But old electrician was no longer in business - so we had to cough up another 7000 pound to have it re-wired again.

author: tom66
author_rank: Super Contributor
timestamp: January 26, 2016, 11:38:59 pm
content: Quote from: Corporate666 on January 26, 2016, 06:57:12 pmThis is not as simple as using offices abroad to avoid tax liabilities - it is a matter of a pre-conceived complex plan designed to circumvent specific tax legislation. Your definition of morality obviously varies from mine - the company is deliberately abusing nuances in the law to avoid tax liability. They are spending millions on accountants and tax lawyers to avoid larger tax liabilities in a very deliberate sense, whilst benefiting from the infrastructure, services and staff that country pays for -- all of which are potentially supported by taxation.Do I expect a company to act morally? No, it will (and should) operate to maximise profitability. The law needs to be changed to effect full change. In the mean time, protests and boycotts of specific companies could cause them to reconsider, although it seems unlikely unless the majority of customers were to do this. FWIW, I've been boycotting Apple for the past 22 years.

author: kaz911
author_rank: Super Contributor
timestamp: January 27, 2016, 12:08:59 am
content: Quote from: tom66 on January 26, 2016, 11:38:59 pmThe problem is not that the companies use the rules around the world. The problem is there are countries like Ireland and many others who speculate in offering very low tax rates to get HQ "business"The other problem is most of tax law is different from country to country - so most companies actually spend a lot of time paying the RIGHT tax - and not "cheating" or abusing loop holes. My wife works in International Tax - and most of her time is spent making certain that they do not get "double taxed - or even triple or more taxed" on the same income.One should think that would be an easy task - but it is not - as there are loop holes for both pluses and minuses - so there are conflicting rules from country to country - with tax treaties between them that might have been negotiated 5-10-20-30 years ago.I think more and more companies wants to pay the RIGHT tax - but with the current laws across country lines - it is almost impossible. Either you BF yourself - or you get BF'ed by the system - or you BF the system by using the law as it is written. Or you try to find somewhere in the middle where you pay the "right" tax. But it all depends on how risk averse your board and CEO is.A company like GE in the US - have a Tax Department (or had before restructuring) of 900+ people working just on tax and VAT/Sales Tax. GE has helped "shape" the US tax laws for many years and are one of the "best" in the business of tax "planning" - better than Apple, Microsoft, IBM and all the others. So if there ever was a company to boycott it would be probably be them.So start by blaming the law and politicians - complex law leads to complex situations that most low paid (read public) tax officials can't even understand themselves. So the only way to make tax fair - is to make laws simple. Right now you as a politician get "good credit" from calling out big companies on not paying tax. But it is the same politicians who bloody MADE THE LAW that makes it possible. Cheap shots in my book.

author: Muxr
author_rank: Super Contributor
timestamp: January 27, 2016, 12:16:00 am
content: Apple pays billions in taxes each year (on domestic revenues). The major loophole they use is by not bringing in the money earned overseas back to US, instead they keep it in offshore banks and they spend it offshore. I can't really blame them. But I can also see why uncle Sam would have a word to say about it.They are no better or worse than any other global firm, which uses all the same loopholes they can to maximize their earnings.

author: kaz911
author_rank: Super Contributor
timestamp: January 27, 2016, 12:21:17 am
content: Quote from: HackedFridgeMagnet on January 26, 2016, 11:13:26 pmApple's accountant operate with something called Transfer Pricing. Any company that deals with it self - does that. The Transfer Pricing structure and basis is vetted by their auditors - and then audited by YOUR governments tax department.If they all say YES (or don't say no)- then that is the prices products are traded between entities in the same group. And your tax department then looks at other profit margins and looks at Apple's proposed transfer pricing - and as long as it is within the right band of "market profit" - than they will not complain about the transfer pricing.IT / Phone profit margins in general are "slim" - which probably means that Apple can "defend" a low local Profit - and therefore keep more of the profits in tax saving country X/Y or Z.I'm not saying the above is "right" or "wrong" from a morale viewpoint - but that is (simplified) why it is as it is.

author: cdev
author_rank: Super Contributor
timestamp: January 27, 2016, 01:16:02 am
content: If you look athttp://CTJ.orgin the US, you'll see how widespread these practices are (in the US).Basically, multinational companies have all the cards. They can and do locate staff anywhere they feel the costing and regulatory picture is favorable to them. This is called euphemistically "cross border data flows" and its increasing very rapidly.Its routine now to ship all kinds of data across borders, but of course the best known example is customer service. Apple's is probablyat least90% automated but some of it isn't, so when a customer requests an escalation, they will typically be routed to an English (or whatever) speaking customer service rep.Its not unusual for staff to work at night to service a market on the other side of the world. More and more labor intensive office work is being done that way.

author: Macbeth
author_rank: Super Contributor
timestamp: January 27, 2016, 01:19:10 am
content: Quite frankly it comes down to the insanity of the tax system. I can never understand why human labour is taxed at far greater rates than corporate profits for example (In the UK that would be the income based PAYE tax, the bogus National Insurance contribution, and then the employers "job tax" for providing employment, unlimited Employers National Insurance contribution while an income tax on dividends or interest is far lower and also doesn't have the NIC scam). Then you realise that people are just sheep to the establishment and any wheeze that can be justified to tax them more and more to keep they gravy train running has to be as clear as mud.All the traps and pitfalls the governments of the day add to the ever burgeoning tax statutes inevitably lead to wriggle room for lawyers and accountants that can find holes in their hasty legislation.The real problem I find is the eagerness for HMRC to spend £ millions on treating small businesses as scam artists in order to recoup a few piddling £ 1000's in "unfair" tax avoidance, while coming up with deals with these huge corporates to not pay a fucking penny.My favourite take on the whole cat & mouse is Lord Clydes ruling back in 1929:"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

author: dannyf
author_rank: Super Contributor
timestamp: January 27, 2016, 02:06:20 am
content: Two things that should have been understood before any graduating from high school,1 morality can only be used to constrain ones own actions. Legality is what we use to constrain others actions.2 you cannot punish people following the law. If you don't like the law, change it.Once you understood these two points you have understood how irrational your urge to punish apple is.

author: cdev
author_rank: Super Contributor
timestamp: January 27, 2016, 02:26:16 am
content: I thought the idea was to defund them so they can't go after anybody?