Thatās not true. Appleās global income last year was 216 billion dollars, based on their consolidated financial statements. Of that 75 billion was US based.
They made a pre tax profit of 61 billion on all worldwide income.
They provided for 15.7 billion in taxes.
That is an effective rate of around 25%.
They have money stashed abroad, but that money is within the margin of profit declared on the sales above. Tax will be paid on that, eventually. Apple makes a provision for US taxes on the majaority of its foreign earnings, hence why they have an enormous deferred tax amount on their balance sheet. The only ones that a provision hasnāt been applied to is for 92 billion of earnings, which they have a disclosure for.
Effective tax rate is the amount of tax a company actually pays Tim. āProviding for taxesā by hanging it up on your balance sheet is not the same as paying tax, they have to do that to meet accounting standards. All itās doing is putting a label called tax on 25% of their offshore cash, they havenāt a notion of paying a cent of tax on their offshore profits unless they get favorable treatment on itās repatriation i.e. something between 5 - 10%.
Iām not arguing that Apple or any other MNC are doing anything illegal or disallowed under accounting practices. The rules allow Apple to do what they have been doing for years, which is paying no tax in any jurisdiction on their non US generated income. Itās not a legal question, itās an ethical question.
It depends on how tax reform gets implemented in the US and when it is implemented. What we do know is that a US Senate committee found in 2013 that Appleās practice of dividing their R&D cost between the US and Ireland (specifically Apple Sales International, an Irish subsidiary) is a load of bollocks. Tim has confirmed this above, as almost all of the R&D is in Cupertino. This is the accounting practice (legal) which allows Apple book their non-US revenue in the Irish subsidiary. Everyone knows its bullshit, but nothing will happen until tax laws are changed. The EU have in effect precipitated action as real money is now in play.
They havenāt provided in full for the foreign tax which is not included in that figure which is what I stated above. As I said, they provide for the majority but not all. I just looked there and the 92 bn not provided for has gone up to 110 bn in their latest financials, which seems about right when you consider the figure talked about for Ireland is 13 bn (a bit less than 12.5% of those earnings). The figure above is just a disclosure so not included in our tax figure above.
In cash terms though, for example, their headline income tax in 2014 was nearly 14 billion. The actual cash paid over the next year for that was 13.25 billion. Thatās well over 25% given profits of 53 billion.
Your statement regarding profits and foreign money was incorrect. Where you pulled 10%, I donāt know. The only time 10% taxes was reported was several years ago when some idiots didnāt realise that you pay taxes in arrears and you canāt put it as a % of current income.
The reason why I said Apple pay between 20-40% and it depends how you measure it is because of all the various taxes Apple pay.
I donāt think itās right that Apple can shore 100 billion of earnings abroad indefinitely (and earn interest et al on that) but that is a US issue. I am also extremely wary of some of their business practices. However, this meme about Apple not paying tax and the Commissioner plucking out 0.005% is just plain misinformation.
OK Tim, land the plane. Of the roughly $250 billon in cash that Apple have on their balance sheet, almost all generated from oversees profits, how much tax have they actually paid and to what jurisdictions?
That would require going back years and years to figure out.
The best estimate of āunpaidā taxes I could give you would be the deferred element of Appleās balance sheet tax of 22 billion and whatever tax is due on the 110 bn of earnings which no tax has been provided on. So letās say 50 billion.
But the actual liability and āstolenā benefit on that deriving to their owners is nowhere near that. Investors know well, as Apple provide for some of that and disclose the rest, thus this is factored into their share price.
But that is just moving the goal posts by you. All your statements so far bar them shoring cash abroad havenāt been substantiated.
where is the 10% from?
the consolidated financials includes worldwide money
they do pay tax on foreign earnings as is
I never denied that Apple avoid tax, I merely stated that 1) Ireland has no right to this money and 2) they pay a lot of tax and the meme that they donāt is tosh.
If you were in government in the morning Mike, would you really rock the boat, cut off their FDI flows, try and get them to pay the 12.5% and reckon theyād toe the line.
Irish political parties should be embracing sustainable Irish smeās rather then throwing all of their eggs into this basket.
It wonāt last foreverā¦but while it does we as a small island on the periphery of Europe should do our best to keep the jobs here while we can.
Well duh, but I have argued the other way. I pointed out that Ireland, Apple, a host of Irish tax experts and the US disagree and provided similar arguments to them. Your default here is to go back to āthe EU donāt agreeā. Brilliant debating
More windmilling. That isnāt a rebuttal to what I said, it is asinine debating.
And just to point out again, this was all raised in response by you to me giving out that people on the dole were doing better out of the budget than low and middle income earners.
Nothing wrong at all with 12.5% as a means to gain a competitve edge over other countries for jobs.
Whats wrong is they all pay a fraction of that while their employees pay 49%ā¦taking apple as an exampleā¦$250 billion in cash on the balance sheet is nuts when you have the poverty thats their across the world not just Ireland obviously.