slider

The Race Is On To Tax Apple's "Pot Of Gold" In Ireland

djmcaleese/flickr / Via flic.kr

Ireland will appeal against an EU ruling that Apple owes it $14.5 billion in unpaid taxes, its prime minister confirmed on Friday, saying its challenge "is about Ireland, it is about our people, it's about us as a sovereign nation."

And while the appeals process drags on, the EU's ruling has already made its mark elsewhere — in the race among tax collectors across the world to claim their share of trillions of dollars of untaxed cash stowed away by multinational corporations.

In that race, Apple's stockpile looms largest: the accumulated windfall of the company's singularly profitable position in the mobile revolution of the past decade. Apple has made more profit from mobile devices than the rest of the industry combined, and for every iPhone and iPad sold anywhere in the EU — the world's largest economic bloc — profits found their way to Ireland. And now that mountain of money, more than $200 billion of it, has its first big tax claim. More will come.

First in line, if its lawmakers can get their act together, will be the US Treasury. Apple has said it is open to bringing much of its offshore cash home if tax rates on overseas profits are lowered, as many politicians, both Republican and Democrat, have proposed. But the likelihood of any deal being struck in the near term is remote, meaning for the time being, the EU is in the lead.

"The EU has taken their share of [Apple's revenues], but that doesn't mean the US can't take theirs," wrote George Turner, who runs Finance Uncovered, a British investigative project on the financial industry. "The problem is that US policy makers have been unable to determine how to do that. That is not the EU's problem however."

But while it may be overturned on appeal, some believe the EU's ruling will inspire a fresh round of deal-making in Washington, where policymakers fear a European tax windfall could pre-empt one of their own.

"All of a sudden the pot of gold starts dwindling and there are fewer chips to negotiate with," Stephen Myrow, a managing partner at Beacon Policy Advisors, told BuzzFeed News. "It lights a fire under the US, it's basically saying, 'People, listen, we have to get a deal done. If these companies are paying this money, better pay to us than the Europeans.'"

As an example of such thinking, consider Chuck Schumer, the New York Democrat who has led efforts to assemble a corporate tax reform package. He said the EU ruling was a "cheap money grab" that specifically targeted "US business and the US tax base."

"The European Union is going to grab this money, instead of the U.S.," he told the New York Times.

Not everyone agrees with Schumer's interpretation of exactly where Apple's European profits should go. Turner wrote that Apple is "liable to pay taxes on profits made in other countries to the governments in those countries" and that its Irish tax arrangement allowed Apple to avoid paying taxes on profits earned elsewhere in Europe. "This scheme has deprived European nations of tax due to them, but hasn't deprived the United States of anything," he wrote.

Outrage over Apple's tax arrangements largely originated in the United States, with a congressional investigation in 2013 that lad to Apple chief executive Tim Cook's appearance before a Senate committee. When Cook took questions, Michigan Democrat Carl Levin said that Apple's financial shenanigans were "the epitome of creative tax gimmickry."

In a white paper released last week, the Treasury Department said that the EU's investigations into US companies "was an unforeseeable departure from the status quo" and that the investigations could "undermine the United States' efforts" in setting tax rules. The EU's actions could even "call into question the ability of Member States to honor their bilateral tax treaties with the United States," the Treasury said.

But the Treasury needs to worry about more than just tax treaties: Its own tax receipts could take a hit. Apple, if it ever pays the $14.5 billion the EU insists it owes Ireland, could use that payment as a credit against taxes owed in the US, said William Gale, the co-director of the Urban-Brookings Tax Policy Center.

And it might not be the last company to do that. The European Commission is also looking at similar tax arrangements for Starbucks in the Netherlands, and Amazon and McDonald's in Luxembourg. So could the threat of US tax receipts taking a hit due to European rulings spur DC into a rare moment of cooperation?

"There's nothing like an external enemy to unite people," Gale said.



via BuzzFeed - Tech http://ift.tt/2c0oqbS

IFTTT

Put the internet to work for you.

Turn off or edit this Recipe

The Race Is On To Tax Apple's "Pot Of Gold" In Ireland The Race Is On To Tax Apple's "Pot Of Gold" In Ireland Reviewed by admin on 14:11 Rating: 5

No comments:

Powered by Blogger.