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Farm Business
Politics, Covid19 and Brexit
The Apple tax case and the direction of the EU
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<blockquote data-quote="Goweresque" data-source="post: 2897062" data-attributes="member: 818"><p>They don't pay any corporation tax at US rates unless they actually send the money back to the US. Thats why they've got this massive amount of cash parked in the Cayman Islands (or whichever offshore banking location they use). Foreign earnings of US corporations aren't taxed until the money comes back to the US, and because US corporation tax rates are so high by global standards (35% as you say) many US companies just leave their non-US earnings outside the US, hoping one day someone will reduce the rate (which is what Trump has suggested, and its a decent idea) so its worth while bringing them home.</p><p></p><p>To some extent it doesn't matter to Apple what tax they pay in Europe, or Ireland, because if they ever want to take the cash back into the US they'll get a tax credit for foreign taxes paid. Thats why the US is so p*ssed off - effectively if Apple pay Ireland €13bn in tax, thats €13bn that the US will never see in taxes from Apple. The US have no problem with the Irish situation - as things stand if Apple ever decide to repatriate their non-US earnings the US taxman gets 35%. If the EU have taken 12.5% off first, thats lost to the US, they'd only get 22.5%.</p><p></p><p>This case is Apple, Ireland and the US govt vs the EU Commission. I'd put my money on the former, because the US control the world banking system, and can make life very difficult for pretty much any country in the world if they want to. If the ECJ finds against Ireland and Apple, the US won't sit back and just take it.</p></blockquote><p></p>
[QUOTE="Goweresque, post: 2897062, member: 818"] They don't pay any corporation tax at US rates unless they actually send the money back to the US. Thats why they've got this massive amount of cash parked in the Cayman Islands (or whichever offshore banking location they use). Foreign earnings of US corporations aren't taxed until the money comes back to the US, and because US corporation tax rates are so high by global standards (35% as you say) many US companies just leave their non-US earnings outside the US, hoping one day someone will reduce the rate (which is what Trump has suggested, and its a decent idea) so its worth while bringing them home. To some extent it doesn't matter to Apple what tax they pay in Europe, or Ireland, because if they ever want to take the cash back into the US they'll get a tax credit for foreign taxes paid. Thats why the US is so p*ssed off - effectively if Apple pay Ireland €13bn in tax, thats €13bn that the US will never see in taxes from Apple. The US have no problem with the Irish situation - as things stand if Apple ever decide to repatriate their non-US earnings the US taxman gets 35%. If the EU have taken 12.5% off first, thats lost to the US, they'd only get 22.5%. This case is Apple, Ireland and the US govt vs the EU Commission. I'd put my money on the former, because the US control the world banking system, and can make life very difficult for pretty much any country in the world if they want to. If the ECJ finds against Ireland and Apple, the US won't sit back and just take it. [/QUOTE]
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The Apple tax case and the direction of the EU
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