back to article Irish deputy PM: You want more tax from Apple? Your problem, not ours

Ireland has denied its liberal tax laws helped Apple avoid dropping dollars into the American taxpayers' purse by funnelling billions through subsidiaries based in the country. Eamon Gilmore, Ireland's Tánaiste (deputy prime minister), said that Apple's legal tax-dodging was down to rules in other countries. A US Senate …

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  1. Cubical Drone

    I got an interesting idea

    Next time one of these companies start complaining about IP infringement and piracy issues involving other countries, corporations or end users, tell them to take their complaints to the Irish government and have them use their considerable international clout to deal with the issue.

    1. randomtask
      FAIL

      Re: I got an interesting idea

      That 'Idea' is about as relevant as the Tax Issue.

    2. Busby
      Thumb Up

      Re: I got an interesting idea

      Always had the same thought whenever Bono starts whinging about aid from Irish/British governments not being enough. Why do they even speak with him? Tell him to Feck off and take it up with the Dutch/Swiss government instead of pontificating about how other peoples tax should be spent.

      1. Mike Richards Silver badge

        Re: I got an interesting idea

        That'd be the same Bono who moved U2's business to the Netherlands so he could reduce his tax bill?

        1. Yet Another Anonymous coward Silver badge

          Re: I got an interesting idea

          To be fair that wasn't just tax - Bono's ego was getting too large for Ireland, people were being pushed into the sea off Galway.

    3. Anonymous Coward
      Anonymous Coward

      Re: I got an interesting idea

      Russians did it - after a fairly spectacular rescue in the gulf of Aden of a vessel that was russian but sailing under a foreign flag for "tax reasons" they made it extremely clear that this is "first and last time". Any further interventions will be only to protect vessels registered under the correct flag, thus paying the correct taxes and obeying the correct labor rules. Ditto for the chinese which were quite clear that Chinese vessels will get assistance only if they are flying the national flag.

      Funny - only they and the Chinese had the political guts to do so.

  2. zooooooom
    Unhappy

    Ireland is right - its not their fault!

    Everyone else should realise that when someone transfers money abroad it should be assumed to be profit until it can be justifiably demonstrated as an expense.

    O hai yeah, that billion was for IT phone support, and that one was to license the logo from our parent.

    1. peyton?
      Paris Hilton

      What precisely was this guy responding to?

      I didn't see anyone directly blaming Ireland in any of the quotes.

      In spite of what the lead sentence says, the Irish guy quoted doesn't deny that their tax rate helps Apple, et al. He just says it's not his problem (which is quite correct).

      1. Yet Another Anonymous coward Silver badge

        Re: What precisely was this guy responding to?

        Right upto the point where some other European country decides to make it 10% or 5%

        It used to be that Ireland did very well with US corporations: between the language, golf courses, whiskey and the "Mr Obama - come and meet your ancestors, the O'bamas" angle.

        But with $$$bn at stake I'm sure a few CFOs can face having their euro-headquarters in Luxembourg or Romania.

        1. Arion

          Re: What precisely was this guy responding to?

          So that would be Montenegro then at 9%, or perhaps you were refering to Albania, Bosnia, Cyprus, Macedonia, or Serbia, each of whom at 10% have a lower corporation tax than Ireland.

          Why would they go to Romania or Luxembourg? They have 16% and 28.59% rates respectively.

          1. Yet Another Anonymous coward Silver badge

            Re: What precisely was this guy responding to?

            It helps if the other country is in the Eu so there is no import duty.

            So Mr Romanian president, lower the rate to 10% and we will pretend to invest billions of $ and create 1000s of jobs in your country. Or at least put up a few brass plaques outside lawyers offices

          2. Anonymous Coward
            Anonymous Coward

            Re: What precisely was this guy responding to?

            None of them allows "resident nowhere" entity registration. That's why.

    2. WatAWorld

      Exactly, assume money exported is profit unless proven otherwise

      You have nailed it.

      1. Anonymous Coward
        Anonymous Coward

        Re: Exactly, assume money exported is profit unless proven otherwise

        Why not be honest and just admit that you ALL of their money because you're a greedy cunt.

  3. Mage Silver badge

    Except

    They don't pay Ireland 12.5% either.

  4. MattEvansC3

    Random thought but instead of complaining about capatalistic companies exploiting loop holes the governments have left open for them to get the best deal our governments should either;

    A) close those loopholes

    Or

    B) be more competitive and reduce the rate of tax.

    1. Anonymous Coward
      Anonymous Coward

      I'm with option b) The politics of envy and false indignation just ain't working

      If national treasuries want to benefit from the fruits of capitalism, some good old-fashioned market economics might help.

      Because when your wares become too expensive, people begin to shop elsewhere. Or so says my old friend Adam Smith.

      Lowering corporate tax rates is a step in the right direction.

      Logically, it attracts more companies and investment.

      Those companies can then hire people.

      Those hired people can then get off state assistance (thus reducing government spending).

      Those hired people can also spend more money and pay off their debts.

      And (gasp!) they can even start paying more taxes.

      Why didn't anyone in government think of this before ? Is their some sort of vested interest in keeping cushy government jobs, nice pension plans, murky accounting systems and massive boondoggles in place ?

      Say it ain't so Joe.

      Increasing the local job centre's budget might keep more people unemployed for longer but won't stimulate the economy very much.

      New jobs and investment stimulate economies.

      When you chase away (or chastize) the providers of new jobs and investment the economy just stagnates further (business at the job center might pick up, though).

      National and corporate tax rates are a simple line item for most multi-national businesses.

      Countries that offer lower wages and lower taxes win their business.

      And unless you can run your economy like Joseph Stalin, resistance is futile.

      The UN can barely call a quorum to agree on a half-assed suggestion, so I can't see them unifying the world's corporate fiscal policy.

      Let's face it, without healthy tax competition from countries like Ireland, most of these over-stretched, overspent governments would have bled every last cent from the companies unfortunate enough to be trapped.... er... set up within their jurisdictions.

      Tax avoidance is not "unfair" or "immoral".

      It is standard practice for any correctly managed corporation.

      Like shrinking growth, unemployment or high inflation rates, high rates of tax avoidance are just symptoms of deeper economic problems. Governments whose economic policies indicate that "moral hazard" has now become a quaint old-fashioned notion should not lecture us on fiscal "morality".

      The "immoral" part occurs when the common man / small business with no tax accountant needs to be shaken down even harder by the powers that be. How can that possibly be moral? Quid pro bono?

      In a normal market economy, companies and individuals that can't make ends meet go bankrupt.

      But now, we have governments, banks and currencies that are "too big" to fail.

      Solution?

      Current wisdom seems to be: apply a little quantitative easing here, a big bail-out there, remove a few million jobs and everything will be sorted for another fiscal quarter.

      Use the newly printed virtual money for further wastage, patronage, corruption and bail-outs.

      Lather, rinse and repeat.

      Any remaining wealth will quickly trickle upwards into fewer and fewer hands.

      This is like reverse Reagonomics voodoo and price-indexing on steroids.

      I am sorry but giving these elected fools more tax money is like buying a chronic alcoholic more booze. It has to stop.

      1. Anonymous Coward
        Anonymous Coward

        Re: The politics of envy

        It's not envy when things are blatantly unfair.

        1. apjanes
          Stop

          Re: The politics of envy

          "It's not envy when things are blatantly unfair."

          The problem with this and the whole morality argument is that "blatantly unfair" and "moral" are both such woolly, subjective words. Unless there are some hard and fast rules to define what is moral and fair, every person will judge differently and have their own line in the sand. Creating some hard and fast rules is effectively legislation that closes loopholes currently deemed unfair or immoral.

          If it's legal why wouldn't companies do it? If you personally could legally pay less tax, would you do it? Maybe you could choose to pay more personal tax; would you do that? It's possible, but I bet that is unlikely because my guess is you already feel you pay your fair share of taxes. However, my guess is also that there are other people who pay more taxes who might very well say you don't pay your fair share and are therefore immoral. It's such a relative thing.

          1. Anonymous Coward
            Anonymous Coward

            Re: The politics of envy

            Saying "the politics of envy" is no more valid than saying "the politics of greed". Neither adds anything to the debate. That's all I was saying.

            1. Anonymous Coward
              Anonymous Coward

              Re: The politics of envy

              If it was rape or muder and you said it was wrong you wouldnt' get called envious. If it's people getting ridiculous amounts of money through dubious means though it MUST be envy. What other possible motivation could there be? We all spend every waking minute trying to get more cash, yeah?

  5. Shagbag
    FAIL

    "Speaking to the Guardian"

    Yeah, like we're going to get an unbiased view from the Guardian.

    That rag is full of labour-voting lefties and aspiring-to-work-at-the-BBC journos.

    1. Frankee Llonnygog

      Re: "Speaking to the Guardian"

      "That rag is full of labour-voting lefties and aspiring-to-work-at-the-BBC journos."

      Lefties. Not just lefts but lefties who vote Labour! Lefties writing in a famously left-of-centre newspaper.

      Good spot!

      Next thing you know, we'll find out that The Mail is full of Tory-voting righties.

      Still, for an unbiased view, we can always turn to reliable sources like ...

    2. ACx

      Re: "Speaking to the Guardian"

      So, you would there for have to be a right wing swivel eyed nutjob, yes? Which would make you a xenophobic racist. Is that right?

      You know, generalizations and all that.

    3. WatAWorld

      Re: "Speaking to the Guardian"

      If you care about your country, if you care about business, you will want these corporate leeches which suck the life blood out of our country dealt with.

    4. Anonymous Coward
      Anonymous Coward

      Re: "Speaking to the Guardian"

      Err... The major readership of the Graun would be Lib Dem...

      Are you and Eadon the same person, even your politics are the same bollocks.

      1. Anonymous Coward
        Anonymous Coward

        Re: "Speaking to the Guardian"

        "The major readership of the Graun would be Lib Dem..."

        Don't know if you've noticed, but there aren't any major quantities of LibDems post coalition. Mind you there aren't that many paying Guardian readers either, perhaps not surprisingly given the decline of the paper in recent years.

        Anyway even in the BC era (before Cleggeron), a good proportion of Guardian readers weren't necessarily of the Cleggeron clan, it's just that the editorial board likes to think that they were (and it has deluded itself and some of their paid contributors that the LibDems might rise again, one day. Hallelujah, I believe in miracles.).

        The Guardian may, just about, be marginally left of what used to be called centre, but many of its remaining readers (me included) read it simply because it's the least right wing of the widely available dailies. And because it used to be the least M25-zone-centric too.

        The Guardian's management know a bit about using overseas companies to minimise group tax liabilities too (and no I'm not referring just to their coverage of activities at Barclays). They do a bit of DIY too, allegedly.

  6. Anonymous Coward
    Anonymous Coward

    Since Ireland is waging an economic war against us should we not just go ahead and recolonise? Call me Dave can then install his fucktard public school cronies as lords over there and hopefully they will then be to busy managing their massive potato estates to fuck up the mainland government.

    Once we take control say 48 hours after invasion raise the corporate tax to 50% and backdate for a decade.

    Next step warn the Dutch to mend there ways otherwise we will do SFA about global warning and watch the clog wearers drown when sea levels do rise.

    As for the rest the Channel Islands, Caymans etc surely they are small enough to literally wipe off the map one small Nuke each. Bit hard to claim your headquarters are a radioactive part of the ocean.

    1. Steve Todd Silver badge
      Stop

      What kind of screaming right wing loon are you?

      Problem: we're not raising quite as much tax as we'd like

      Solution: Declare war on a neighbouring country?

      You'd have to be absolutely barking mad to even contemplate that. Ignoring for a moment the cost in international relations, it would cost us vastly more in military resources, restart a republican terror campaign and the Irish are broke anyway.

      1. Ben Tasker Silver badge

        Re: What kind of screaming right wing loon are you?

        @Steve

        Based on

        Next step warn the Dutch to mend there ways otherwise we will do SFA about global warning and watch the clog wearers drown when sea levels do rise.

        I'd assume it was a (rather dry) joke

      2. TheDillinquent

        Re: What kind of screaming right wing loon are you?

        Maybe if the Irish put up their tax rates (and enforced them) they wouldn't be so broke.

        1. mrjohn

          Re: What kind of screaming right wing loon are you?

          good point, I seem to remember them needing "a few shillings from the English" a while back to help them with their cash flow issues

        2. deadlockvictim

          Re: What kind of screaming right wing loon are you?

          Maybe if the Irish scrutinised their banks as hard as they do their independent TDs (members of parliament), they wouldn't be as broke as they are now. [1]

          That and blindly following every order that comes in from the ECB in Frankfurt...

          [1] For those not following Irish political affairs, Ireland as a few very colourful TDs — Mick Wallace and Luke 'Ming' Flanagan being two of them — and they are rarely out of the news.

      3. Anonymous Coward
        Anonymous Coward

        Re: What kind of screaming right wing loon are you?

        The Americans didn't like the amount of tax they had to pay to London... and look what that led to. So declaring war because of tax rates isn't exactly a new concept..

        1. Steve Todd Silver badge
          Stop

          Re: What kind of screaming right wing loon are you?

          That is rather the way the Irish are likely to feel if you invade them, rather than the Americans (who were British subjects at the time and had no way of controlling tax rates) taxing too little.

        2. apjanes
          Stop

          Re: What kind of screaming right wing loon are you?

          "So declaring war because of tax rates isn't exactly a new concept"

          No, but personally I think it's a rather stupid and destructive one. It also seems pretty arrogant. Do we have the right to tell every country in the world how to run their tax affairs? Effectively that is the precedent this idea establishes. Move to another low rate country, we'll bomb that too. All well and good until the country who offers lower rates is bigger and tougher than the bully country you're advocating.

        3. John Hughes

          Re: What kind of screaming right wing loon are you?

          Please don't forget that the taxes they didn't want tp pay were to pay for a war the stupid colonials started - against london's will.

      4. Anonymous Coward
        Anonymous Coward

        Re: What kind of screaming right wing loon are you?

        A funny one ...

        1. VinceH
          Thumb Up

          Re: What kind of screaming right wing loon are you?

          "A funny one ..."

          And made all the more funnier by someone taking his post seriously.

      5. Anonymous Coward
        Anonymous Coward

        Re: What kind of screaming right wing loon are you?

        "You'd have to be absolutely barking mad to even contemplate that. Ignoring for a moment the cost in international relations, it would cost us vastly more in military resources, restart a republican terror campaign and the Irish are broke anyway."

        Good point, so the real answer is simply to nuke Ireland and then send all the travellers back to re tarmac it.

        The savings both to the UK economy and the EU budget as a whole would be massive and it would meet Bonio's requirement to write off debts as well!

        Even Gerry "Osama" Adams is going to struggle to be a terrorist after being vaporised in a nuclear explosion.

        Plus the overall reduced carbon emissions long term would keep the tree hugging prius driving loons happy as well.

        You sir are onto a winner......

      6. Phil O'Sophical Silver badge
        Coat

        Re: What kind of screaming right wing loon are you?

        > Problem: we're not raising quite as much tax as we'd like

        > Solution: Declare war on a neighbouring country?

        That's a tried and tested approach, but you'd have to be daft to pick on Ireland. If you won you'd have to pay to rebuild, and if you lost(!) they couldn't afford to take over.

        Pick on France or Germany instead, at least you'd stand some chance of a profit.

    2. John Smith 19 Gold badge
      Happy

      "Next step warn the Dutch to mend there ways otherwise we will do SFA about global warning and watch the clog wearers drown when sea levels do rise.

      As for the rest the Channel Islands, Caymans etc surely they are small enough to literally wipe off the map one small Nuke each. Bit hard to claim your headquarters are a radioactive part of the ocean."

      You are Dennis Leary and I claim my prize.

      "Why? Because we got the bombs. 2 words. Nuclear f**king weapons."

    3. joeW
      Mushroom

      should we not just go ahead and recolonise?

      Come and have a go. If you think you're hard enough.

    4. Mage Silver badge
      Devil

      Channel Islands, Caymans, Bahamas, Isle of Man etc

      Curiously a lot of the Offshore locations are British or Dutch offshore locations.

      The problem with the Irish Taxation system is that in making Royalties tax free (to encourage artists & writers) and also trying to avoid Double taxation that it opens a massive loop hole for these Corporations to exploit.

      The anti-double taxation provisions are obviously flawed as is what constitutes valid royalty payments (e.g. Starbuck's transfer of all profits to IP charges of stuff worthless on open market)

  7. All names Taken
    Paris Hilton

    Well here in the UK some sectors and the workers in those sectors have to compete internationally - in some cases the workers compete but the company just shifts jobs, investment and production overseas.

    So you see the poor working wage slave has to compete internationally for his/her job.

    Some sectors seem to be privileged and do not have to compete internationally.

    For example finance, accountancy and audit firms. Insurance and investment anyone? Of course some of these have long standing arrangements with offshore tax havens (I wonder who dreamed those up. UK by any chance?)

    So why should govmints, bankers, lawyers, judges n barristers avoid international competition?

    Why?

  8. CABVolunteer

    EU minimum tax rates

    I understand that there's a minimum rate for VAT across the EU, with exceptions having to be negotiated on a case-by-case basis (eg only 5% VAT on domestic fuel in the UK). Why can't there be a minimum rate for corporate tax rates?

    Or will we then see generous tax refunds in the form of "incentives for investment" from governments determined to 'beggar-my-neighbour'?

    1. John 98

      Re: EU minimum tax rates - or world-wide?

      Apple and the others all tell every government they really live somewhere else and meanwhile construct themselves a network of tax loopholes round the world. The governments (and just maybe that means us) need to get together and agree a collective approach to stop this game and get these guys to pay their fair share..

      There is a place called the United Nations invented for this kind of thing Oh, dear! What have I said? Am i turning into a pinko, liberal, socialist, commie dupe?

      1. graeme leggett

        Re: EU minimum tax rates - or world-wide?

        Ah but the last Government to join in on bringing the rate up has the advantage. Obviously it can't take all the tax avoiding money but it will certainly retain what it's already got and if the rate was harmonized then it might find other (geographical or social) advantages lie with its neighbours.

        If the tax rate was 20% in Republic of Ireland with costs of 5% and 20% in Northern Ireland with costs of 3.5% which side of the border would you plonk your offices?

      2. Anonymous Coward
        Anonymous Coward

        Re: EU minimum tax rates - or world-wide?

        Fuck this "fair share" bit. You stupid bastards don't understand anything about tax incidence, you're just repeating mindless slogans from the fringe left. Corporates don't "pay" tax, some combination of their customers, employees, owners, and to a lesser extend the broader stakeholders, do.

        This is all just naked greed, they have money, we want it, therefore we should take it.

        1. Anonymous Coward
          Anonymous Coward

          Re: EU minimum tax rates - or world-wide?

          "they have money, we want it, therefore we should take it."

          Which is so different from the corporate approach:

          "they have time and ideas, we want it, therefore we should take it (and pay them a pittance if they're lucky)"

      3. Tom 13

        Re: Am i turning into a pinko, liberal, socialist, commie dupe?

        collective approach so that'll be collectivist and a check.

        United Nations, and check.

        fair share.. claimed moral superiority without proof of same, check.

        hmmm...

        Somethings stil not right we've got an error indicator light still on...

        ...

        Ah-hah! Found it!

        Am i turning into a pinko, liberal, socialist, commie dupe?

        There we go all fixed up and the answer is YES.

  9. Herby

    Rules, laws and more rules.

    Look, Apple and other companies didn't write the rules that were enacted by the various governments (much as they would like to). Instead they FOLLOWED the rules as they stand. Sure the matrix of rules was analyzed to find the lowest tax rates available, but that is what a company is supposed to do. To do anything else would be irresponsible.

    If a government wants to generate tax revenue, it needs to look at the matrix and find out that (surprise) they get more money by taxing big bux at lower rates than by taxing less at higher rates. Here in the USA, we have this terrible tax rate (30%+) for corporations. If they reduced it to a more amenable rate they would get more money to the treasury, simple as that.

    This was shown to be true when they reduced the tax rate on capital gains here in the USA. The lower rate for more $$$ to the treasury. Unfortunately our Big Hefe who resides at 1600 Pennsylvania Ave. thought that lowering taxes to increase revenue was "unfair".

    "Socialism works fine until you run out of other peoples money" (ob British quote)

    1. Busby

      Re: Rules, laws and more rules.

      Apple may not have had a hand in writing the various nations tax laws but I assure you there accountants did.

      As an example look at three major UK parties all had "unpaid" helpers from the big accounting firms working for them helping write tax policy. The situation in the US is even worse with various lobbying groups (meaning Koch employees) turning over laws they have written for the Congress and Senate to then enact as is.

      1. An0n C0w4rd

        Re: Rules, laws and more rules.

        @Busby

        Whether or not the big accounting firms had a hand in the crafting of the tax legislation or not:

        - the people in govt who are on these soundbite-generating committees and investigative panels, or their predecessors, signed off on the laws that they are now blaming the companies for following and "avoiding tax".

        - the people in govt. should stop showboating and change the laws rather than blaming the companies they are calling to their 3 ring circus for using the laws to their advantage.

        They're too chicken to fix the tax laws because they're scared of the results. Even if the change is "revenue neutral" (i.e. the treasury gets the same tax the year after as it did the year before), the long term implications of tax changes are more difficult to understand and could actually make the problem worse. So rather than take the risk, they try and blame someone else for the mess.

        1. Tom 13

          Re: "revenue neutral"

          I've never seen a "revenue neutral" tax change in my life. Collected taxes either go up or down after the change, just depending on how envy filled the alleged "revenue neutral" changes were.

    2. Mystic Megabyte
      Big Brother

      Re: Rules, laws and more rules.

      >>"Socialism works fine until you run out of other peoples money" (ob British quote)

      "Marx was wrong about Communism but right about Capitalism" (Russian quote)

      1. Zot
        Big Brother

        Re: Rules, laws and more rules.

        "If you're going to bail out the banks, then it's all communism at the top of capitalist society."

    3. WatAWorld

      Re: Rules, laws and more rules.

      Apple even avoided taxes in Ireland. They completely avoided taxes in their main subsidiary, the subsidiary they channeled profits into.

    4. Tom 13

      Re: Rules, laws and more rules.

      Minor nits

      1) They can and probably did pay lobbyists for tweaks to some of the laws. Still, the governments could have said No so your primary point still stands.

      2) It isn't so much the 30% tax rate (even though I think that's too high). The problem stateside is that our tax laws want to claim that 30% AFTER they've paid whatever the prevailing rate is in the foreign country. So taking the UK numbers given above Apple would pay 35% and then another 30% after that. Then you pay it out as dividends and the shareholder pays another 25-50%. Which leaves somewhere between 26% and 40% of the original raw profit actually making it back to the person who fronted the money in the first place. So if we assume the company has an ROI of 30% on their raw profits, you are making between 7.8% and 12% on your investment. Is that really enough for a high risk investment?

  10. BinDrinkin
    Headmaster

    It's spelt "Póg mo thóin"

    1. Gannon (J.) Dick
      Happy

      I am impressed

      Don't know any Gaelic and even I saw the wisdom in what it sounded like it might mean, if that makes any sense.

  11. Jim O'Reilly

    The value of "IP"

    Tax games are years old. Tricks like Apple booking sales in another country are old hat, as was the game of moving ownership of patents and other IP to subsidiaries in low-tax countries, then charging a high license fee to remove tax liability..

    We need a new tax rule. IP licenses should be taxed in the country where the IP is used, not where it is held. Development and selling costs for the license should be captured, and used to offset the profit, but on a worldwide basis with even apportionment per license and no country preferences.

    This might tempt Apple to give away its software and play ownership games with hardware. One tested trick is that all iPhones would be nominally made for the Irish subsidiary, who marks them up to near retail before selling elsewhere. The solution is to treat any amount over the cost of acquisition by any Apple subsidiary as a license of IP, and treat it the same way as software IP.

    This should allow the EU and US to properly tax companies like Apple and Google. It would also catch the drug companies and others who play the same shell game.

    You might ask, why not just tax Apple on worldwide income, but that is very difficult to make fair. The solution might be to tax worldwide income at 35 percent, but prorate it based on a ratio of US revenue to worldwide revenue.

    1. Anonymous Coward
      Anonymous Coward

      Re: The value of "IP"

      Sounds pretty simple to me. $50 billion sales a year, $25 billion made in the states? Apple pays tax on half its profit to the US treasury. I like it!

      That sound? That's the sound of hundreds of thousands of tax accountants, lawyers, and lobbiests crying out in terror...

    2. Crisp

      Re: The value of "IP"

      9.53562951413 Surely?

    3. annodomini2
      Thumb Down

      Re: The value of "IP"

      While I understand where you are trying to go with it.

      Patents as a result would become virtually impossible for the non-corporate entity, having to maintain a local presence in every applicable country.

    4. Tom 13

      Re: IP licenses should be taxed in the country where the IP is used

      So in the case of the Apple iPhone, would that be China, Singapore, Indonesia, Ireland, or the US?

      What exactly defines "where it is used"?

      I'm sure it sounds simple in your head, but when you start examining it with a rules lawyer who is trying to break the system, you'll find problems.

  12. Eduard Coli

    Easy fix

    The USA should just charge an additional tax on all profits abroad with the the rate being the difference between local taxes in the US and wherever the tax dodgers are hiding their bonus pile.

    1. Tim Worstal

      Re: Easy fix

      Err, that's actually what US tax law is right now. With one slight proviso. You only pay that difference between US tax rates and foreign tax rates if you take the profits back into the US.

      The UK tax system worked pretty much this way until recently too. The Controlled Foreign Corporation rules. You, a UK company, stacked up your foreign profits in some tax haven. HMRC said "Yup, we see what you're fdoing. Please pay us the difference between UK tax rates and what you've already paid".

      The only problem with this was that the EU decided it was illegal (this was the finding of the Cadbury and Vodafone cases).

  13. graeme leggett

    Deputy Prime Minister

    "Tánaiste " - how's that pronounced? I can just about get away with the Prime Minister's title by mumbling "T-shirt".

    1. Irony Deficient

      pronunciation

      graeme, Tánaiste is pronounced /ˈtaːnəʃtʲə/ (roughly “tawnishcha”, with emphasis on the first syllable). Taoiseach is pronounced /ˈtiːʃəx/ (roughly “T-shuck”: emphasis on the first syllable, the final consonant as in loch). Use a “dental” T for best effect: pronounce each initial T with your tongue against the back of your front teeth, rather than against the roof of your mouth.

      1. Anonymous Coward
        Facepalm

        Re: pronunciation

        Reminds me of this story..

        http://www.independent.ie/entertainment/tv-radio/soccer-star-comically-mistook-haughey-for-teashop-owner-26213020.html

  14. ACx

    All this could be solved if we properly committed to the EU and got on with standard taxes, rather than destabilizing the economy with all this pulling out talk. Either that, or we shut the hell up. Ireland is just doing what we would like to do and offering competitive and attractive tax arrangements to attract business.

    We really are in a muddle over this. Its about time some one show some damn leadership and made one of those pathetic whiny vomit inducing "tough decisions".

  15. Triggerfish

    Is this the

    same Ireland who has been asking for bailout money, because they have no cash?

    1. Anonymous Coward
      Anonymous Coward

      Re: Is this the

      "Is this the same Ireland who has been asking for bailout money, because they have no cash?"

      Dunno.

      Is this the same Apple that's recently borrowed loadsamoney (sold $17bn in bonds) to pay the money out to shareholders because most of Apple's profits are stuck in tax havens and will be taxed by the USA if the monies ever visibly land in the USA?

      E.g. http://www.theregister.co.uk/2013/04/30/apple_bond_issue/

      Marvellous, these accountants.

      What's 2+2?

      Who wants to know?

      1. Triggerfish

        Re: Is this the

        Well if it needs to be a bit clearer for you AC.

        Then it strikes me that a country that turns round and is quite willing to stuff the rest of the EU with low tax rates and by being a tax haven, and then also says hi we have no money (considering a lot of a countries money is raised by taxes) bail us out. Well why should we, how about we turn round and say raise your taxes.

        Its worth noting Cyprus has been in a similar boat personal income tax allowance for 2012 in Cyprus did not start until you were earning 19500 euro, Which is nice when in he UK our personal allowance started at about £8000.

        Its a bit like knowing someone who spends all there money getting wasted at the beginning of the pay month and enjoying it whilst you try and be a bit more sensible, and then whines to you and comes asking for handouts at the end of the month saying I have no money, at what point do you turn round and say "get stuffed have some personal responsibility"?

        1. Alan Bourke

          Re: Is this the

          Because the low-ish corporate tax rate is one of the few things currently generating jobs, growth and other taxes in the country by attracting multinationals. We don't have the manufacturing base that Germany et al have. If you scare off multinationals by upping the corporate tax rate, then we'll have even less money as a country. And it should be pointed out that nobody pays the stated corporate tax rate in *any* country, exemptions etc make sure of that.

          1. Triggerfish

            Re: Is this the

            Yes but meanwhile the countries expecting to bail them out because they don't collect enough taxes are suffering because they are losing jobs and taxes because the multinationals all sod off and base their businesses there.

            I mean I realise there may be other reasons that companies may not choose to work or base themselves in the UK for example and would rather base themselves in somewhere like Ireland apart from tax, but I still think its a fair point.

            Also if the jobs etc are being generated shouldn't that be a sign of a growing healthy economy that shouldn't need a hand out?

            Because well taxes are getting paid, companies are paying their taxes (some exemptions yes, some are fair enough when running a business) Staff are earning a decent rate of wages and spending into the economy. If you have some of the largest corporations in the world based in your country and you are having to come begging cap in hand surely you are doing something wrong.

            1. Tom 13

              Re: Is this the

              The problem you socialist Europeans have is the same one our Socialist Democrats have on this side of the pond: You assume the expenses the taxes are supposed to support are all legitimate and required instead of trying to live within your revenue budget. If there's no money available, there shouldn't be a program for it.

              Yes, that will mean making tough choices. Man up and deal with it.

              1. Triggerfish

                Re: Is this the

                Hmmn your right the republicans have definitely done well for your economy.

        2. Toufman
          Meh

          Re: Is this the

          It isn't just the case of the low corporation tax rate in itself, it is also the tax base that needs to be taken into account: the effective tax rate paid by company will vary greatly just because what qualifies as profit is different in every country. You can be sure that most multinational corporations will choose to slice and dice their profits to fit the minimum requirements to avail of tax ceilings. Ireland is just one cog in this machine and it would be quickly deserted by most multinational companies if some of the existing loop holes in other jurisdictions which allow such legal tax friendly spreads of company profits were closed...

          Raising taxes HAS been happening in Ireland for 2-3 years now (VAT, Income Tax, Property Tax, Water charges) in order to repay the bailout money but raising the corporate tax rate would be commercial suicide for such a small economy dependent on bigger markets for exports (the UK and the rest of the EU account for well over 60% of trade).

          1. Triggerfish

            Re: Is this the

            With you explaining it like that I can see what you mean and where you are coming from.

            However I can't help but feel some resentment over the fact that countries that have basically been more responsible (if you can call the UK gov or any other gov responsible) have been expected to bail out the free ride.

            1. Daren Nestor

              Re: Is this the

              Actually, your "Bailout" was a loan at punitive interest rates to prevent you having to do the same for your own banks who recklessly lent to Irish banks, who recklessly lent to property developers who recklessly borrowed, and recklessly lent to house buyers who would have trouble paying back what they borrowed at the extremely low interest rates at the time, never mind handling an increase.

              You bailed out your own banks, so don't feel resentful (if the Irish banks had defaulted, the banks being propped up would largely be in the UK, Germany and France, and the exposure was hundreds of billions). And, as a bonus, you get all that money back, plus interest. Congratulations, you're a predatory lender.

              1. Triggerfish

                Re: Is this the

                @Darren

                Yeah I get that we had to lend to shore up one economy to make sure ours doesn't crash as well, and I know a few who have cheerfully gone bankrupt and not really cared about the debts they run up which is damn irritating as well.

                Man were fucked at the bottom basically

  16. Henry Wertz 1 Gold badge
    Trollface

    RAND? Or a takeover?

    So, Apple (along with various record companies and movie companies, among others) have this setup described in the article where the main company will send all this money to an overseas entity to license their own logo, their name, maybe the overseas company owns some of the buildings. In the case of record and movie companies, they will pay fees to license their own music and movies; in Apple's case probably software and computer design license fees. And so on.

    So, what if some legal framework were set up so these legally distinct shells were ACTUALLY made legally distinct? I.e. they would have two choices:

    1) Some grace period to let them rethink their decision to use these shell companies. The shell is eliminated, and the company must pay actual taxes somewhere.

    2) The shell licenses on a RAND (Reasonable And Non-Discriminatory) basis. After all, Apple is claiming they are licensing the logo, designs, software, and so on; the company they are licensing it from should be free to license to whomever they please. After all, it could increase the value of these licenseable properties considerably if they were not licensed exclusively to one company. Perhaps this would mean the shell company is potentially up for purchase, that is, someone could buy Apple's logo and designs in one fell swoop. They would not even have to license them back to Apple. This would also mean that Apple would be really open for purchase, since they would be virtually worthless (since they don't have much money or assets, their overseas shell company does.)

    Obviously, this isn't exactly the same thing... but (without naming names) a local cable TV and internet provider spun off operation of the actual cable internet service to a shell company, and the cable co buys wholesale from this company now. Amusingly, although the cable co did not wish to provide connectivity to a direct competitor, the wholesale company was all to happy to.

  17. WatAWorld

    Ireland is right, other countries should not allow profits to be exported

    Ireland is right, other countries should not allow profits to be exported.

    The problem is so many big politically connected companies have been doing it, going under the radar by keeping the scale "small". This taxation loophole has always been a huge advantage for big companies over small and medium sized ones.

    And now that Apple, Google, Starbucks and so on are exporting close to 100% of profits the matter has come to public attention and the long deserved taxpayer outrage is finally happening.

    These huge companies want the advantages first world governments provide them that allow them to do business, but they do not want to pay their share of what they consume.

    1. WatAWorld

      the residency loophole Apple and other companies exploit in Ireland

      Exerts from NY Times article "Apple’s Web of Tax Shelters Saved It Billions, Panel Finds" published: May 20, 2013

      "Atop Apple’s offshore network is a subsidiary named Apple Operations International, which is incorporated in Ireland — where Apple had negotiated a special corporate tax rate of 2 percent or less in recent years — but keeps its bank accounts and records in the United States and holds board meetings in California. "

      and

      "Because the United States bases residency on where companies are incorporated, while Ireland focuses on where they are managed and controlled, Apple Operations International was able to fall neatly between the cracks of the two countries’ jurisdictions."

      1. T. F. M. Reader

        Re: the residency loophole Apple and other companies exploit in Ireland

        So what are you saying? That Apple don't even pay the (full?) "special" 2% tax rate in Ireland thanks to this loophole? Funny, the Irish Deputy PM does not seem to be whining - other governments do though. Maybe, eh, the Irish really do not have a problem, just like the guy says?

    2. WatAWorld

      Re: Ireland is right, other countries should not allow profits to be exported

      "Apple Operations International has not filed a tax return in Ireland, the United States or any other country over the last five years. It had income of $30 billion between 2009 and 2012. By shuttling revenue between international subsidiaries, Apple was able largely to sidestep paying taxes, Congressional investigators said."

  18. WatAWorld

    From what the NY Times says, the issue is that other countries let companies declare where their head offices are and pay taxes there.

    Ireland looks at where the operations take place.

    So you have your operations outside of Ireland, so Ireland does not tax you. And you declare Ireland is where the headquarters are so your own country does not tax you.

    http://www.nytimes.com/2013/05/21/business/apple-avoided-billions-in-taxes-congressional-panel-says.html?hp&_r=0&_r=0

  19. WatAWorld

    Advertising money spent outside of the UK should not be tax deductible

    Money for advertising to the UK public which is spent outside of the UK should not be tax deductible.

    I imagine many major publications are using this dodge, not just Google and Amazon, which is why the press has historically been quiet about it.

  20. dssf

    Possible new update: Cook calling for single-digit tax; reveals secret 2% Ireland tax

    http://www.guardian.co.uk/technology/2013/may/21/apple-wants-single-digit-corporate-tax

    "Apple has called for US corporate tax rates be reduced to "single digits" after it admitted sheltering at least $30bn (£20bn) of international profits in Irish subsidiaries that pay no tax at all.

    In a dramatic display of how threats from multinational corporations are driving down taxes across the world, chief executive Tim Cook warned Congress that he would refuse to repatriate a total of $100bn stashed offshore unless it acted to slash the 35% US rate.

    He also revealed that Apple had struck a secret deal with the Irish government in 1980 to limit its domestic taxes there to 2%."

    If Apple pulls this off, I might have to eat crow and consider being more open to Apple, as much as I'd hate to be sucked into iTunes. An iTunes-untethered/unfettered MacBook Pro (if I ever accumulate the cash) would seem pretty sexy (as long as I get to run (even if in an emulator) PCLOS and run win 7 (for my apps having no suitable alternative in Mac).

    Two per cent, secret tax level since ***1980***? Impressive that a secret such as that lasted all these decades.

    Nice to see (and hope to see) Apple for once do some SERIOUS, SEARous, and serous ass-kicking on the congretards. OTOH, it would be scary to see the fallout being the IRS, DOJ, and other lettered agencies staging legal retribution againstt corporate offices (Cook, et all) in Apple and on other officers, bookkeepers, accountants, attorneys, etc., of other companies.

    1. WatAWorld

      And this is the same Ireland looking for the bail out from other countries

      Rather than a bailout Ireland should be looking at ending its tax haven status, for corporations and major artists (say, EU50,000 per year cap on its art creation income exemption).

      1. Alan Bourke

        Re: And this is the same Ireland looking for the bail out from other countries

        The congressional report made 5 recommendations, all to do with reforming the US tax situation, and nowhere did it suggest Ireland was doing anything outside the law. International tax law is broken.

  21. The Axe
    Flame

    Politicians

    The politicians (and their lackey civil servants) wrote the tax laws. If someone's taking advantage of them because politicians kept writing in special exceptions for their "club" and making the law more and more complex then who's at fault? I blame the politicians. And all the noise is from the politicians who have realised that they have run out of exceptions so they now need to find another way to placate their "club". You know what the answer is? Piano wire.

  22. WatAWorld

    In the US the congressional hearings will result in campaign contributions

    In the US the congressional hearings will result in large campaign contributions to whichever representatives will stonewall improvements to tax laws.

    That is what it is about there, grandstanding to the press, and then turning around and taking mega campaign contributions in return for sabotaging any move to fair and patriotic taxation rules that require mega corporations to pay for the services the nation they do business in provides them.

  23. gnufrontier

    It was like this when I got here.

    It is important to remember there is nothing illegal going on here. So what is the agenda of all these Euro and American hack politicians mouthing off ?

    First, they must believe that there constituency is completely stupid. Tax law is set by government.

    Politicians didn't seem to have any trouble with corporations avoiding environmental laws, worker safety, fair wages or any of the other multiple ways that corporations have used to avoid costs by basing operation in less restrictive countries and allowing these corporations to import those products. Why now is it so bad that corporations do the same thing regarding their tax costs ? Should we expect anything other than that. The answer is no.

    The corporate agenda is based on a completely different set of principles and laws. Of course, it is the politicians who determine the environment in which corporations exist and not the other way around. If corporations are getting away with anything it is only because we now live in a world where politicians are completely ineffectual except as tools of corporate agendas but they keep up the pretense of being representatives of "the people". They are representatives only of themselves but they pretend they aren't thus the outcry. And corporations know why politicians are doing this and know it is only for public show and ultimately will lead to nothing.

    If there is any "blame" here it resides with governments not corporations. Governments have created the complex and incomprehensible tax codes that exist for the very purpose that corporations use them.

    Taxing is the ultimate power of governments and the last thing they want is for it to be a clear and understandable process that is fair. If that was the case they wouldn't be able to leverage their ability to manipulate the code to benefit their masters, which contrary to popular opinion is not us.

    1. gnufrontier

      Re: It was like this when I got here.

      "their constituency" - a typo. I know the difference for those readers who think such spelling errors denote a lack of intellectual rigor.

  24. Gray
    Facepalm

    35% US corporate tax rate ...

    is a myth. That's an illusory percentage. Any CEO/CFO who would suffer corporate earnings to be taxed at that rate would be pilloried, persecuted, and shunned by their peers. Any first-year MBA graduate can write a strategy to avoid paying the 35% rate; why would experienced corporate tax accountants and lawyers fail to achieve a substantially reduced rate, given the morass of US tax law complexity?

    I wish the media would sort fact from fancy. Please!

    1. Tom 13

      Re: accountants and lawyers fail to achieve a substantially reduced rate

      That's what Apple did and what the loons are kvetching about.

  25. Anonymous Coward
    Anonymous Coward

    wtf?

    What so many of you have completely failed to notice is that due to tax legislation *across dozens of countries* google are able to pay an ultra low tax rate. Ireland cannot fix this alone, nor can the US. Ireland are enforcing their laws very tightly, but unfortunately that means only a tiny fraction of googles wealth is taxed, as only a tiny fraction of it is legally taxable.

  26. Yet Another Anonymous coward Silver badge

    Nationalisation

    Ireland is short of money

    It appears to have one of the worlds most profitable companies in it's backyard.

    Why not just nationalise it?

    It could even pay compensation - although since the company is mostly irish and most of their business is in Ireland - you wouldn't allow them to repatriate the money to any other tax haven.

  27. DaveMorris

    I don't know why everybody is so upset. The company is following the exact plan the politicians themselves created. If they are going to be to holier-than-thou, maybe they should have devised a more clever tax plan. You can't blame someone for following the procedures you yourself created for tax avoidance. Idiots.

    1. Richard 12 Silver badge

      No, no

      They should devise a less clever tax code.

      The cleverness is the problem. If its simple, and fully described on one side of A4, any possible dodges becomes obvious to all.

      That then means any avoidance techniques will be well- known and therefore clearly intended.

      1. Tom 13

        Re: No, no

        Well-known, yes. Clearly intended, not necessarily.

        For instance, the easiest way to solve the corporate tax avoidance problem is to set the corporate income tax level to zero. You would then plan to get all of you money via sales, vat, or personal income taxes, or some combination thereof. The new problem is that you get some yahoo (saw him on a morning news show way back when I was in middle school) who doesn't take a salary, lives in a hotel room paid for by his company and has conducts business at all of his meals so he can eat on the company dime as well. The end result is he lives in the lap of luxury and pays no taxes. Now maybe I could construct some test so that if you don't have taxable income your company expenses become taxable income, but I expect we'd soon be past the second side of your sheet of paper.

        Now, I happen to be a proponent of the no corporate income tax plan and would prefer a flat income tax with a single fixed exclusion at the bottom. If pressed I could write several pages about why. But I don't have any illusions that what I'd like to see would easily fit on a sheet of paper after you are done working out enforcement considerations.

  28. Velv
    Go

    Welcome to Scotland

    The SNP plan to "Lower corporation tax to attract corporate HQ activity to Scotland... "

    i.e. "Hello Apple, Google, Amazon, Starbucks. Move your Irish operations to our Independent Scotland and we'll help you keep your global corporation tax low"

    1. Velv

      Re: Welcome to Scotland

      And don't down vote - I'm not saying I support it - just pointing it out.

      Tax laws were written before the easy of international trade on the Internet (Starbucks excluded from this then), so tax laws now need to be addressed globally to adjust to new business practise.

    2. JimmyPage

      Two can play at that game ...

      In the event of Scots independence, I would hope *English* politicians would have the balls to follow a policy of keeping income tax, corporation tax, and VAT just a little bit lower than Scotlands. Oh, and only pay a market rate for any energy they want to try and sell us from their wind farms.

      Given the relative size and wealth of the two countries, who do you think could keep it up the longest ?

    3. Anonymous Coward
      Anonymous Coward

      Re: Welcome to Scotland

      Yeah, if Salmond can persuade the Scots that basing their economy on a dwidling, finite resource (oil) is the way forward. A resource which about 1/4-1/3 of is English (it's south of the boarder) a resource which is of very low quality (wife used to be a lab chemist for Big Oil) and fluctuates in price.

      The people of Scotland (neds aside) aren't stupid, they need to see companies basing HQ there now if there will be any independence. There is a realisation that the free elderly care, perscriptions, zero university fees, etc will all shoot up in price at the point they become independent. The SNP managed to alienate most of the people of Glasgow recently when they to all intents and purposes announced they'd be closing down all naval shipyards. They can barely make a parliament building and don't get me started on the Trams in Edinburgh.

      1. Anonymous Coward
        Anonymous Coward

        Re: Welcome to Scotland

        would that be the same Mr Salmond that wanted Scotland to form part of an arc of prosperity from Iceland to Ireland to Scotland? Maybe he should ask Cyprus to join it as well ....

        (Oh, and has anyone told him that if he wants currency union with the UK it would be at least polite to ask the people of the UK first? Then again, I suppose he seems to have gotten away with having a vote on the future of the constitution of the entire UK without the majority of the UK being consulted)

  29. SpasticHawk
    Trollface

    (i)Imagine...

    ..how expensive Apple products would be if they had to pay tax! The mind boggles....

  30. Prof. Mine's A. Pint
    Flame

    How to have your cake and eat it.

    Ireland can't have it both ways.

    If they want to operate their tax system as they are, then they can't expect any other country to lend them money to bail them out, and should repay their existing loans immediately.

    At present the Irish Deputy PM seems to want to run a business which undercuts all of it's competitors, and then asks the competition to give him cash to pay his staff.

    1. Anonymous Coward
      Facepalm

      Re: How to have your cake and eat it.

      If only it was so simple....

      As other posters have pointed out. Increase Corp Tax in Ireland and those companies will leave to a lower Corp Tax haven, removing tens of thousands of jobs as well. Then Ireland gets into an even worse state requiring more EU funded money from your pockets.

      Go on lend us a tenner. You will, you will, you will. Go on, Go on, Go on, Go on, Go on, Go on, Go on.

      1. Prof. Mine's A. Pint

        Re: How to have your cake and eat it.

        Here's a question for you;

        If the UK recovered all of the taxes due by companies using Ireland as an umbrella tax haven, would it have covered the £5 billion we gave Ireland last year?

        Personally, I'd rather have the UK lend Ireland more money, so that they can build strong foundations for sustainable growth, than have them providing a tax dodge for multi-nationals.

        What they have now isn't sustainable, as another desperate country will ultimately undercut them, and these businesses will switch location.

        1. Tom 13

          Re: would it have covered the £5 billion we gave Ireland last year?

          Start from a false premise and you can't prove anything.

          The UK can't recover "the taxes due" because if it wasn't Ireland it would be some other low tax country. That's why the socialists keep chasing the chimera of unified international tax policy.

    2. Curious

      Re: How to have your cake and eat it.

      What could Ireland change in their tax system?

      The 12.5% is not paid. Unclear how increasing this rate would do anything to the multinationals.

      The loophole is that Ireland doesn't tax some outgoing money transfers. It's not alone in the EU for that.

      Are they to match their tax rules to those of the US? Or change global accountancy rules so Google US can't charge Google Ireland 7.5 billion to 'license' the search technology. (vs 1.5 billion in 'real' running costs )

      The US could look to change their rules on transfers between companies and their wholly owned subsidiaries, the famous "double Irish" is a loophole in US law. The Dutch law on not taxing incoming transfers avoids paying the tax to Ireland.

      France's nominal corporation tax rate is higher than Ireland, but after all the accountants games, the amount paid at the end is between 2.5 to 3 %, similar to Ireland.

  31. Sander van der Wal

    Is Apple's statement correct?

    Apple says it is paying its US taxes on money made in the US, and it is not paying US taxes on money made and taxed in other countries. Why should it? Nobody has to do so, neither the biggest company, nor the smallest app developer.

    So, instead of the easy big-company-bashing, how about checking Apple's statements, and maybe even comparing them to the other big companies' practices?

  32. TheBeardyMan

    Why can't governments use import duties to discourage this?

    When a corporation uses a legal loophole to say that a sale to a customer resident in country A occurred in country B, what prevents the government of country A from saying to the customer "you imported that from country B; cough up the import duty"?

    1. Busby

      Re: Why can't governments use import duties to discourage this?

      That probably can be done in certain parts of the world. But if its from one EU country to another then there wouldnt be import duty to pay.

    2. Tom 13

      Re: what prevents the government of country A

      the same thing that thwarts states from collecting sales taxes from stuff bought on the internet in the US: it costs more to enforce the law than it would generate in revenues. You have to go after each and every offender and successfully prosecute them.

    3. Tom 13

      Re: Why can't governments use import duties to discourage this?

      Also, import duties like sales taxes tend to have maximum limits in the neighborhood of 12%. Much above that and smuggling or other avoidance becomes common place and nullifies your revenue increase. In fact, without automatic withholding it is doubtful any country could maintain their confiscatory income tax rates. Similarly, the most valuable thing about the VAT tax is it hides the real cost of government and allows the pols to blame price gouging corporations for the high cost of goods.

  33. cheeryAllyjspurs

    Im sorry but if people are so morally outraged about a company's perceived tax arrangements then dont buy their products, that will affect them more than any hot air from politicians.

    1. Tom 13

      Re: dont buy their products

      What, and miss out on the lowest priced opportunity on cool tech?

      /end sarc

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