Assume so what else could it be
https://www.amazon.com/EU-Law-Text-Cases-Materials/dp/0199576998#immersive-view_1494449086851
Have a read, you might be shocked at what you find.
You are the one who claimed that Apple have an effective tax rate between 20 - 40%, with nothing to support that. We are discussing income tax, not other costs of doing business, which are in their operating expenses (employee SS contributions, employer insurance, that sort of thing).
Nobody knows what Apple pays in income tax to various jurisdictions as they donāt disclose it. This is what we know:
Apple provide for taxes of about 26% on their income statement, how much is actually paid or deferred is largely unknown (including to investors). We do know from their 2015 annual report that the provision for foreign earnings was $1.5B on $33.6B or 4.5%. The only way to achieve that kind of number is via tax havens. There is also a significant amount of foreign generated income for which income tax has not been provided. This statement from the 2015 report provides a clue " As of Sept 6, 2015, US income taxes have not been provided on $91.5B of such earnings" (earnings earlier disclosed as generated in Irish subsidies).
As to where the 10% effective tax number came from, the Senate committee in 2013 disclosed that from 2009 to 2011 Apple had pre-tax income of $65B and paid the US Treasury $5.3B or 8.2%. We know from their own annual report they provide for a very low income tax rate on foreign profits (4.5%), so assuming foreign profits are 60% of total, that works out at about an 11% effective tax rate.
The rural right trashing the urban right.
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I brought up the 20-40%, not you. I said it depends how you measure it. Apple pay a substantial amount of taxes of all kinds. Income tax is also a cost of doing business, the point about what Apple pays in taxes is to stop people talking shite about Apple not paying tax.
It isnāt particularly difficult. If you read financial statements you will see that they do in fact disclose what they pay in federal, state and foreign income taxes. Financial statements also have these things called cash flows, which tell you the various cash outflows during the year. Iām surprised a sage investor wouldnāt know this.
Here you go, here is the disclosure to their accounts.
And here is your cash flow.
So Apple provided for approx 25% on income for 2014 in income taxes, circa 14 billion and in the next year paid 13.25 billion out. In 2013 they provided for 13 billion of tax (effective rate of 26.5%) and in 2014 they paid out 10 billion (effective cash out of 21%). Whilst there are deferrals, this isnāt particularly hard to look at. The majority of their headline tax rate, is paid out.
And well done for highlighting what I already said. No tax was provided on 110 billion, meaning that headline āeffectiveā rate doesnāt include any deferred tax on this amount meaning it is utterly wrong to claim this is increasing the provision. Apple provide a disclosure but admit to not providing for this. As I pointed out, investors all would consider this when investing.
Please provide a link to this. You mentioned all these tax experts but have yet to link anything. I have looked at their cash flows and nothing corroborates what youāve said. The cash flows for those years show 9 billion being paid to the treasury. If you add up the 3 years in question the actual provision for tax was 16.6 billion and in 2010-12 they paid over 13.717 billion dollars.
You reference the annual report, but I canāt see how you failed to notice these facts.
Nice work Tim.
I have been too long in the game to accept at face value what corporations disclose to investors in their financials statements. Neither you nor I have access to Appleās tax returns as they are not public. Luckily, the Senate committee that looked into the matter have such access, and this is where you see the discrepancies between whatās on their financial statements and what they actually pay in tax. The whole report is interesting, the discussion on effective tax rate starts on page 37.
Look, Iām not bashing Apple as they are no different to most other MNCs, especially in Tech, and are doing nothing illegal. I actually like the company and have invested in them for many years, although I think Cook is lacking in vision and lack of innovation will catch up to them.
There is no hiding. You canāt on the one hand pluck figures out of the financial reports you like and on the other say you donāt believe others, that is risible. The cash flows are the cash flows, where do you think the money went then pal?
The figure you cited was bogus. You took federal taxes and divided by total income. You ignored state and foreign taxes. You didnāt take into account the accruals concept of accounting. Frankly, you are just plain lying.
Now, now, Tim, accusing people of lying isnāt very nice, but unsurprising that you would lash out given you have been caught with your pants down shilling for Appleās unethical behavior. If I am lying Tim, then the Senate committee were lying, which is a serious charge.
So, let me walk you though it. Itās only a few pages, donāt know why you canāt read it for yourself
The senate looked at the years 2009 through 2011. They took into account federal, state and local taxes, so you are wrong there. While accrual based accounting may explain anomalies in a given period, they would even out over a 3 year period. Over the 3 year period, the discrepancy between what Apple booked as tax expense on their income statement and what they actually paid to the US Treasury got larger.
For 2011, on pre-tax income of $34.2B, Apple reported a tax provision (current and deferred) of $6.9B for federal tax, $0.8B for state tax and $0.6B for foreign tax for a total of $8.3B or 24.2%. The problem, as the senate committee pointed out, is they only paid $2.5B to the US Treasury in 2011. Thatās a hell of a difference Tim, $4.4 billion. Taking the state and foreign taxes as stated, the new effective tax for 2011 was $3.9B or 11.4%. I concede it is not 10%, mea culpa.
If this were just one year, I would accept all kinds of timing issues could have an impact (a lot of profit coming in late period, tax being accrued but not actually paid yet). Itās not though, itās 3 years, and there is no evidence of any catch up, indeed the discrepancy gets wider, as no doubt they got better at ātax managementā. The discrepancy is the deferred tax they accrue on foreign profits that they ācalculateā they would pay to the Treasury if they were repatriated i.e. at 35%.
Since the beginning of this discussion I have focused on effective tax rate, which is the tax a company pays, rather than what it reports on itās financial statements to investors. Itās not easy to get at, but if you believe whatās in the financial statements accurately reflect what Apple actually pays in tax, I can only assume you have a vested interest in defending companies that avoid paying their fair share of tax.
As for where the cash went or is? Itās where Iād like to be, sipping some Sky Juice.
Christ you donāt understand you pay most taxes in arrears do you? 
On Apples annual reports itās quite clear, in the subsequent period to a reported provision, Apple Pay the bulk of what was provided for. In 2012 Apple paid out 7.6 billion in taxes i.e. A good chunk would have been related to 2011. Yes thereās provisional tax, but you donāt pay tax on what you donāt know of yet.
Appleās sales went from 24 billion to 156 billion in the space of 5 years between 2007 and 2012. In 2010 their sales were 65 billion and two years later in 2012 156 billion. āTiming differencesā are a rather big deal. This isnāt some seasonal business, this was one of the fastest growing companies in the world.
The fact is that between 2009 and 2013 they declared taxes of 43 billion and paid 33 billion over from 2010 to 2014 which is the periods this largely related to. Based on actual earnings of 168 billion that is cash paid of a nice round 20% to tax authorities. Additionally in that time for the most part they were paying over a billion per annum in stock rewards taxes, hundreds of millions in payroll taxes in the US, hundreds of millions in payroll taxes abroad and whatever other taxes governments force on business. That is why we have a 20% to 40% measure.
I must say Iām enjoying this ding dong battle about Apple and itās taxes even though I havenāt a fucking clue who is right or wrong.
Itās like a debate on Ulster Football but in this instance the people involved seem to know what theyāre talking about
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And they are remaining civil, by and large
Have there been no holocaust denier accusations thrown out yet?
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They are both wrong
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Which makes it right
Has anyone ever been right on here?
[quote=āTim_Riggins, post:1427, topic:20334, full:trueā]
Christ you donāt understand you pay most taxes in arrears do you? [/quote]
I understand perfectly Tim. You would swear we were talking about Boeing or Caterpillar who take six months to a year to build a product. When you walk into an Apple store and buy an iPhone, itās booked as a sale. Apple would know their sales, operating profit and estimated tax on a monthly basis. Corporations, in the US at least, estimate their taxes and pay them quarterly. I think Apple would have a fair idea of how fast they were growing and what their estimated tax bill is. In the context of the above, timing does not even come close to explaining the discrepancy between taxes provided for and actually paid, for 2009, 2010 and 2010.
What did Apple pay to the US Treasury in 2012?
Apple FY 2017 Q2
Cash paid for income taxes: 6,878 bn
Quarter 1 tax provision: 6,289 bn
Apple FY 2017 Q1
Cash paid for income taxes: 3,510 bn
Quarter 4 FY 2016 provision: 3,482 bn
Apple are not paying out real time tax figures quarter by quarter.
They arenāt handing over cash that they donāt need to, you thinking it is so easy to determine is a fallacy. The IRS only closed out their audits of their 2012 taxes in 2016.
To express this in another way, letās look at the growth in their deferred tax over the last few years which is where they claim they hide the taxes they declare versus what they actually pay. In 2011 they had a liability of 6 billion and this year nearly 22 billion. That is quite the jump, 16 billion, and would make you think your assertion is correct on the amount they actually pay versus provision. But in that time they provided for 84 billion in taxes. That increase is there about 19% of the declared provision for tax unpaid, take a simple calculation and that cuts off about 5% of the āeffectiveā tax rate of around 25% Apple pay annually, bringing us back to the magic 20% which is around what we see when we follow the cash flows.
thereās a right ruck developing here