
Apple to Pay £3.8m Tax on £1.2bn UK Sales - Bobby_Carpark
https://digit.fyi/apple-to-pay-3-8m-tax-on-1-2bn-uk-sales/
======
taylodl
You're not taxed on sales, you're taxed on profits and according to the
opening paragraph of this article Apple’s pre-tax profits totalled up to
£33.7m for which Apple paid £3.8m in tax - which is over 10%.

Now the article does mention Apple paid a £13m dividend to its parent in
Ireland, which presumably is the money Apple is sheltering from taxes but even
then that would only be roughly £1.3m in additional taxes, which admittedly
would be a roughly 30% increase but still seems like a small issue.

Am I missing something here?

~~~
reallydontask
Do you think that a profit margin for Apple of 0.0275% is reasonable?

Nobody questions the right amount of tax is being paid on the declared
profits. People question that the declared profits are actually the actual
profits that the Apple operation generates in the UK without any sort of
financial shenanigans, e.g. transfer pricing, etc ...

~~~
qaq
You do realize it works this way for all goods and the only reason people
single out Apple is because they have lots of $.

~~~
reallydontask
I'm pretty sure that Starbucks, Google, Microsoft, Amazon and, I might be
mistaken here, Facebook, have all been pulled up on this type of financial
engineering in the UK before.

If you want to believe that these companies genuinely generate these kind of
profit levels for their UK operations that's up to you, but I don't think that
belief is based on evidence.

~~~
qaq
All companies shift profits to home office do you think Land Rover USA is
showing profits? Or UK banks in other countries show huge local profits?

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bsaul
"Shortly after the news of tax payment decrease was announced, Sir Jony Ive,
Apple’s British design chief, said he would leave after almost 30 years to
start his own firm."

What kind of journalism is that ?? Unless the journalist has something on
johny ive leaving because of apple shady tax schemes, what is the point of
linking the two info ???

~~~
swarnie_
Written by a bot, proofread by a human who couldn't care less is my go to bet.

~~~
jdavis703
Are you claiming that the byline for Sinead Donnelly is made up?

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jknz
Profits should not be calculated on a subsidiary basis, period.

Profits should be calculated as the global profits (of the main form and all
its subsidiaries), multiplied by the ratio of revenue in that country vs
global revenue.

One reason this is not implemented by some countries is this: the USA (or
Ireland) wish to tax Apple on as much of their their global profits as
possible, and France/Germany want to tax Airbus on as much of their their
global profits as possible, not only the profits made in these countries. And
the no double-taxation principle means that profits can only be taxed in one
place.

------
ChuckNorris89
I wish I would be taxed only on profits instead of my income. Like why not tax
whats remaining after I pay for my rent/mortgage, food, utilities and kids?

~~~
petercooper
If companies were taxed on their revenue rather than profit, it'd be an
interesting world. I'd love to see a calculation of what would occur, but I'm
guessing prices would go through the roof as every single step of the supply
chain for every product would have to add 10-20% to cover the taxes.

~~~
ukoki
Yes. And vertically integrated companies would have a huge advantage, making
it really hard for smaller companies to compete.

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pjc50
The accounts are at the top of this list:
[https://beta.companieshouse.gov.uk/company/04996702/filing-h...](https://beta.companieshouse.gov.uk/company/04996702/filing-
history)

This applies to "Apple Retail UK Ltd" only. "Apple Europe Ltd" is a separate
company. Both probably pay substantial "IP license fees" (not visible in the
public accounts) to the parent Irish Apple
([https://www.theguardian.com/world/2018/sep/18/ireland-
collec...](https://www.theguardian.com/world/2018/sep/18/ireland-collects-
more-than-14bn-disputed-taxes-from-apple) ), which hangs onto the money to
avoid remitting it to the US where it would be taxed.

------
kartan
> We pay all that we owe according to tax laws and local customs wherever we
> operate

The problem is that Apple and other big corporations have lobbied all around
the world to minimise the amount of taxes they pay.

That they follow the law becomes kind of irrelevant when they have helped to
design the law.

Meanwhile, 130,000 people died in the UK because governments are cutting on
healthcare. ([https://www.theguardian.com/politics/2019/jun/01/perfect-
sto...](https://www.theguardian.com/politics/2019/jun/01/perfect-storm-
austerity-behind-130000-deaths-uk-ippr-report))

To be legal is not the same that to be moral or even sustainable in the long
term. Someone has to pay for education and health care. If the middle class
have to support everyone else, who will buy the next iPhone? Long term and
capitalism are at odds. We need some more thinking into it.

------
a_paddy
Any source on why the tax bill has dropped?

------
swarnie_
Hate to say it but i'm sure Apple are paying every penny they are legally
obligated to as defined in law.

This is a global regulatory issue which no country or union is big enough to
solve solo.

~~~
consp
> Hate to say it but i'm sure Apple are paying every penny they are legally
> obligated to as defined in law.

It is not always the case that law makers had the intention to create most
loopholes (sometimes they do) which are being exploited. You are technically
correct but it might still be morally wrong.

------
mtgx
> _“As the largest taxpayer in the world, we know the important role tax
> payments play in society. We pay all that we owe according to tax laws and
> local customs wherever we operate,” Apple said._

Translation:

"We pay all that we owe (but only after we pay tens of millions of dollars to
a dozen of the best legal firms in the world to find us the most cutting edge
accounting and legal loopholes so that we can avoid paying most of what we
really owe)."

This is Apple Ethics™ for you.

~~~
alluro2
I deeply dislike it as well, but they are a business and it's only normal that
they do - I'm pretty sure any for-profit company in the world would want to
maximize profits at expense of tax. It's up to lazy politicans collecting
their fat paychecks to close the loopholes when they're found, or pay more
attention when they're writing legislation and not create them in the first
place. Or not be corrupt and ignore the loopholes for other interests.

~~~
alkonaut
And this discussion is exactly how these loopholes are being brought to light,
so that when I vote next time I can try to do something about it. Let's not
see discussions like these as being something disconnected from "oh well
that's a legal/political issue". This is how we close loopholes.

------
sparkling
So we are just going to ignore the 20% sales tax that got slapped onto the
1.2bn worth of sales? cool

~~~
lexapro
Which is paid by Apple customers, not Apple.

~~~
Reason077
> _" Which is paid by Apple customers, not Apple."_

VAT is paid by businesses, who collect it on behalf of HMRC on any sales they
make.

Yes, it adds 20% to the price of goods sold. But you could say this of any
tax: if Apple was paying £200m in UK corporate taxes then it's a fair bet that
prices would increase to compensate.

What is unfair, however, is the way that multi-nationals can shift profits
across borders to low tax countries, putting them at an advantage relative to
domestic competition who pay full UK corporate tax rates.

~~~
AnthonyMouse
> What is unfair, however, is the way that multi-nationals can shift profits
> across borders to low tax countries, putting them at an advantage relative
> to domestic competition who pay full UK corporate tax rates.

That unfairness is inherent to corporate income tax. Apple reports profits in
Ireland because the rate is lower there, but if the rates were lower in the US
or China or some other place where they actually have major operations and
they reported profits there instead, the argument that the profits don't
belong there falls away even though you have the same end result. And the same
disadvantage for domestic companies compared to international ones.

The solution is to stop trying to tax "profit" to begin with and only tax the
thing that actually happens in your jurisdiction (e.g. sales, employment,
property ownership).

------
gargravarr
So by my calculations, this means Apple sold 1 iPhone X last year...

------
gigatexal
Tax breaks for corporations are a tool used by lawmakers for all sorts of
things. If you don’t like them write your lawmakers and ask them to grow a
spine. But as long as it’s legal corporate figure heads are likely to face
jail time for being derelict in their fiduciary duties if they don’t maximize
profits.

~~~
rtpg
> But as long as it’s legal corporate figure heads are likely to face jail
> time for being derelict in their fiduciary duties if they don’t maximize
> profits.

This is extremely untrue. Apple themselves do a whole spiel about this when
they talk about their environmental practices.

You can totally choose to not try to minimize your tax bill agressively.
hundreds of thousands of businesses do this every year (if only by not having
the army of lawyers and accountants and lobbyists that Apple does)

"It's legal" doesn't make it moral or ethical, and if you don't have a more
nuanced defense of it we're totally within our right to judge Apple for it.

~~~
gigatexal
The tax codes in various nations needs to catch up. There’s no reason for
Apple to pay any more tax than it needs to legally under the law. The same
goes for Apple. I go out of my way to hold onto receipts and the like to be
able to deduct all I can. I offer to do everything I can to fix even the
smallest lightbulb going out at my small little rental so that I can deduct
that. Apple is just doing all this on a much bigger scale.

There’s new efforts to simplify the code and make it easier to ensure that
businesses like Apple and Amazon and others have some tax to pay with the EU
internet giants tax of something like 3% on receipts made in the EU is just
taxed. Period. That for example could be a viable hedge against things like
moving revenue generation to other countries.

