Anorak News | The EU’s investigating those Google, Vodafone, Amazon and Apple tax deals

The EU’s investigating those Google, Vodafone, Amazon and Apple tax deals

by | 13th, September 2013

I’M not sure how far they’ll get though, based on what it is that they seem to be investigating.

This is all about the Starbucks n’ Google n’ Vodafone n’ Apple stuff. How can they be doing so much business and paying so little in tax?

According to a US Senate report earlier this year Apple has a ‘special deal’ with Dublin and pays no more than two per cent tax on profits, at least 10 per cent below what some other businesses have to in Ireland. 

Either the US Senate of the Mail don’t understand what is happening here. Apple doesn’t pay 2% in Ireland: it pays 12.5% just like every other business in Ireland. However, Ireland runs what is called a territorial tax system. Meaning that you only pay tax on business that really happens in Ireland. Stuff that happens through an Irish company but that takes place elsewhere doesn’t get taxed at all. So, Apple Eire buys from China and sells in the UK: no tax.

The 2% is the average tax rate that Apple pays on all its foreign trade, not some special deal just for them in Ireland.

The subcommittee’s report estimates that Apple avoided at least $3.5 billion in US taxes in 2011 and $9 billion in 2012 by using the tactic.

And Apple hasn’t avoided any American taxes at all by doing this. American laws syas you only pay US tax on foregin profits if you take them into he US. So, Apple leaves the money outside the US and pays no tax on it. This might save them some cash, sure, but it’s completely different from anything happening in Ireland.
I hope the actual research starts with beter information than this report seems to have.

Posted: 13th, September 2013 | In: Money Comment | TrackBack | Permalink