Why does no one get mad at the governments who have the large tax loop holes? Shouldn't it be "Ireland close your loopholes!"
Why do you assume no one is? This has been discussed at length during the last French presidential election for example.
See also: https://www.bloomberg.com/news/articles/2017-10-24/macron-ha....
"According to one diplomat, the strongest level of opposition came from Ireland, Malta and Cyprus. Luxembourg was said to have raised a series of practical problems about the proposal, arguing it would introduce a lot of complexity into the tax system."
Go figure. Noncompetitive EU countries complaining the loudest.
I'm starting to thing that there might also be a geopolitic reason to become a tax heaven, not just an economic one, something along the line "Let's convince Amazon to book profits here, and there let's see who will dare mess with us, given that Amazon will be protected by USA"
Ireland's corporate tax rate + joining the European single market, resulted in one of the greatest booms in modern economic history. From $40 to $280 billion in GDP in just 17 years.
Given the extreme nature of the benefits, a small nation is probably crazy not to do it.
Because they're picketing Apple and not the National Assembly?
http://www.internationaltaxreview.com/Article/3410898/Irelan...
Apple is a public company with an obligation to its shareholders to make money, not pay erroneous taxes.
I'm not so sure about this as I'd question that it's possible for a single government to close loopholes on its own. Arguably yes, governments should be pressured into closing "certain loopholes", but not because this necessarily leads to a better outcome.
>Apple is a public company with an obligation to its shareholders to make money
Not everyone agrees that companies ought to maximise only shareholder value.
That's the argument against signing global warming treaties, isn't it?
If such a loophole exists, and it's blatantly obvious that you're a dick for using that loophole, yes, that loophole should be fixed. But that doesn't mean you're not a dick for using it in the first place.
To put it in another perspective: If there was a loophole that allowed me to kill someone without facing any consequences, yes, that loophole should be fixed. But that doesn't mean that I'm not a dick for using it.
So no, not done.
Apple doesn't get to decide for us what our collective moral values are. If they don't like them, they should stop doing business in Europe. Otherwise, they should just pay their dues like nearly every person and small/midsize company in Europe does. Since Europe is a hugely profitable market, this is the better option for them.
I wouldn't exactly call these values "moral".
Apple should just pull out from Europe.
If you want to do business in a country, you have to live by the laws of the country. If a country's laws specify that a certain percentage of profit should be paid as taxes, it is like it is.
Some countries prefer free-for-all capitalism. Other countries prefer to have state-mandated universal health care, a decent amount of holidays, a certain income for unemployed, etc. Those facilities have to be funded somehow.
I wouldn't exactly call these values "moral".
Sure, for someone who believes in pure capitalism, it is not moral. For someone who believes in social democracy, it is. For a typical EU citizen (making a large generalization), US-style capitalism is immoral. Unfortunately, the US tries very hard to export their model to the rest of the world (which is of course in the interest of the US).
Apple should just pull out from Europe.
Even with the normal taxation tariffs (that smaller companies cannot dodge), Apple will make a large profit in Europe. So, that would be a large loss to them.
I mostly don't care, but for the sake of argument, setting up shell corporations and then saying they made this purchase or that deal for tax reasons isn't exactly being honest.
It reminds me of the "characters" Bunbury and Ernest from Oscar Wilde's "The Importance of Being Earnest":
"""
You have invented a very useful younger brother called Ernest, in order that you may be able to come up to town as often as you like. I have invented an invaluable permanent invalid called Bunbury, in order that I may be able to go down into the country whenever I choose. Bunbury is perfectly invaluable. If it wasn't for Bunbury's extraordinary bad health, for instance, I wouldn't be able to dine with you at Willis's to-night, for I have been really engaged to Aunt Augusta for more than a week.
"""
That’s why Apple USA sells iPhones to Apple France at some price above hardware production costs. It doesn’t make sense any other way. Value isn’t created on sale, it is only realized as money at that point.
Like it or not, taxation internationally is currently based on where value is produced which is why...
> Under the current international tax system, profits are taxed based on where the value is created. The taxes Apple pays to countries around the world are based on that principle. The vast majority of the value in our products is indisputably created in the United States — where we do our design, development, engineering work and much more — so the majority of our taxes are owed to the US.
https://www.apple.com/newsroom/2017/11/the-facts-about-apple...
The value is not created at time of sale! Well, some value is created by virtue of the sale itself that go into retail profits, but the store has to pay its suppliers the price they charge regardless of the supplier’s markup. Imagine it’s a department store (Nordstrom’s or whatever) selling LV bags, LV is not charging the department stores just production cost. France in turn is taxing LV on the design value added in France, that tax money isn’t going to China or the USA where the bag is sold. France would be pissed otherwise.
If France wants to tax America’s R&D, then they can change their laws, but the USA isn’t going to be very happy about that, obviously.
Let's say I can recreate the new IPhone with only 1/1000 of the budget of Apple's R&D, would I make a profit? Yes of course I would. If Apple could create their new IPhone for only 100$ of total R&D, be sure they would do it.
On the other hand, ask yourself why there is no Apple Store in a lot of African countries. It's because Apple does not meet the local markets requirements for a store there to be profitable, so they would not get any value out of it.
R&D being a cost center is the reason most of the countries in the world have tax-breaks specifically on R&D and also why the copyright laws are that harsh to prevent ripping of all the value by selling copies of your competitor.
At anyrate, value is well defined across the world. If it was define the way you want, the countries would see all their exporters as freeloaders, not paying for the infrastructure that is realizing their profit. Heck, places like Switzerland and Singapore wouldn’t be able to survive.
Tax breaks are on R&D, not sales and Apple does not have any R&D in France so I don't follow you...
> At anyrate, value is well defined across the world.
There's no common tax laws across the world so this does not seem to be true.
Sales is not the only source of value to be had. It is weird that you are on this site and think development is value free.
I find it the opposite, I find weird that you are on this site and think value magically appears out of R&D since the countless startups which are failing every month... Just look at YCombinator data from the past 5 year and I bet most of the startups back then (which had products) failed because they did not generate enough revenue to sustain themselves.
See this Forbes' article on transfer pricing as tax avoidance:
https://www.forbes.com/2010/06/24/tax-finance-multinational-...