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US taxpayers could end up covering Apple's back taxes in Ireland
https://www.yahoo.com/finance/news/us-taxpayers-could-end-covering-000000874.htmlEuropean authorities have clamped down on a special deal between Apple (AAPL) and Irish tax authorities, saying the arrangement uniquely favors Apple and is unavailable to other companies. Nixing the deal—which lowered taxes on much of Apple’s foreign income to virtually nothing—will force Apple to pay taxes in Ireland at the higher rate other companies pay. The bill: about $14.5 billion for the past 10 years, plus interest.
But Apple may get reimbursed for all of that by an unlikely benefactor: the US taxpayer. “It’s extremely possible the US taxpayer will have to pay this bill,” says Stuart Gibson, a former government tax official who’s now editor of Tax Notes International. “For every dollar in tax Apple has to repay in Ireland, they may get to reduce their US tax bill by $1.”...
The commission acted, however, because Apple and a few other multinationals, such as Starbucks (SBUX), Amazon (AMZN), McDonald’s (MCD) and Alphabet (GOOGL), have been extremely aggressive at “tax arbitrage,” which is basically the practice of assigning profits to lower-tax nations, even if the revenue being taxed wasn’t earned there. Ireland has played the same game, lowering its corporate tax rate from 32% in the late 1990s to a mere 12.5% today, one of the lowest rates of any developed nation. That has made Ireland an offshore hub for many multinationals, especially tech firms, which can benefit from the way Ireland treats intellectual property. The comparable US rate is 35%.
The European Commission claims that Apple’s financial maneuverings allowed it to pay a tax rate of .005% on a large portion of foreign income, derived not just from Ireland but from much of the world, other than the United States. Apple CEO Tim Cook fired back in a blog post, saying “we never asked for, nor did we receive, any special deals.” The courts will now decide, and in the twisted logic of foreign tax schemes, American taxpayers have reason to hope Apple’s Irish loophole remains open.
But Apple may get reimbursed for all of that by an unlikely benefactor: the US taxpayer. “It’s extremely possible the US taxpayer will have to pay this bill,” says Stuart Gibson, a former government tax official who’s now editor of Tax Notes International. “For every dollar in tax Apple has to repay in Ireland, they may get to reduce their US tax bill by $1.”...
The commission acted, however, because Apple and a few other multinationals, such as Starbucks (SBUX), Amazon (AMZN), McDonald’s (MCD) and Alphabet (GOOGL), have been extremely aggressive at “tax arbitrage,” which is basically the practice of assigning profits to lower-tax nations, even if the revenue being taxed wasn’t earned there. Ireland has played the same game, lowering its corporate tax rate from 32% in the late 1990s to a mere 12.5% today, one of the lowest rates of any developed nation. That has made Ireland an offshore hub for many multinationals, especially tech firms, which can benefit from the way Ireland treats intellectual property. The comparable US rate is 35%.
The European Commission claims that Apple’s financial maneuverings allowed it to pay a tax rate of .005% on a large portion of foreign income, derived not just from Ireland but from much of the world, other than the United States. Apple CEO Tim Cook fired back in a blog post, saying “we never asked for, nor did we receive, any special deals.” The courts will now decide, and in the twisted logic of foreign tax schemes, American taxpayers have reason to hope Apple’s Irish loophole remains open.
10 replies
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They have a separate dodge for that, a subsidiary called Braeburn Capital (cool! another variety of apple, just like Macintosh! 
), HQ'd just up the road in Reno, 'cause Nevada has no corporate income tax. Its staff of four (!) ensures that all profits are somehow routed through it. Meanwhile, we can still barely afford to pay for basic social safety net services. 
U.S. taxpayers should always have to foot the bill for private sector tax evaders that get caught, especially for the ones who have already screwed U.S. taxpayers by moving overseas to avoid paying U.S. taxes.
