
Tim Cook to repatriate money - perseusprime11
http://www.wsj.com/article_email/apple-chief-executive-expects-ireland-to-appeal-eu-tax-ruling-1472720654-lMyQjAxMTE2NDA4MTEwODEwWj
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QuantumRoar
Am I getting this right? Apple pays 1% or less on corporate profits in the EU.
An EU court decides that this is bullshit and shouldn't be that way. Tim Cook
complains that they made everything up and that the below 1% tax rate is
reasonable and completely legal.

Meanwhile Apple's $200 billion are sitting in Europe far away from the 35% tax
rate in the US. Tim Cook says that 35% is too high to pay and says that
something like 25% would be reasonable. If the US doesn't change its corporate
tax rate to something lower, they won't get a single dollar from Apple.

Here's the thing I don't get, how is 25% in the US acceptable but more than 1%
in Europe is considered wrong? 25% of the $200 billion would be $50 billion
which is way higher than the $13 billion fine...

Am I comparing Apples to Oranges here? Or is Apple simply unwilling to pay any
corporate taxes outside the US?

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hodder
Well Europe is changing the rules retroactively, while the US is clear about
taking their share upon repatriation.

~~~
lokedhs
This has been discussed multiple times in several thread, and no, Europe (i.e.
the EU) is not changing any rules retroactively. You're welcome to point out
the specific rule they have changed if you feel that I'm wrong.

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protomyth
"An Apple spokeswoman said that Mr. Cook was referring to his optimism that
the U.S. will change its tax code next year, and that his comments didn’t
represent any change to Apple’s position on the question."

Not quite the same meaning as the headline.

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bapbap
Is there any reason why I should have any sympathy? From my basic
understanding, these companies engineer their structures and finances in weird
and wonderful ways to reduce their tax bill. Fair enough, they have the global
reach and luxury of doing so and some aspects legitimately occur in other tax
jurisdictions.

However I have no sympathy for their complaints that it is too expensive to
repatriate the money. It seems unfair to expect the law should change because
you made the decision to accumulate money outside of the country to avoid
paying taxes that would otherwise be due. I might be naive expecting parity
but just like everyone else corporations should pay their way.

~~~
cjensen
Yes, Apple and other international companies have a real point. If they sell
stuff in Portugal, for example, the pay taxes on the item to Portugal plus
make some profit. If they then transfer the profit to the US, the US would
like to tax the company a _second_ time.

It's kind of questionable that transferring properly earned and taxed funds
from another country into the US makes the US suddenly want to tax the funds.

This also has consequences. If the best place for Apple to invest some of its
money is the US, but the tax makes it less profitable, Apple may choose to
invest that money in a different country instead. So the tax code _encourages_
US countries to invest overseas profits into overseas investments.

~~~
perseusprime11
They can claim a tax deduction of all the taxes paid globally on their U.S tax
returns.

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jomamaxx
"They can claim a tax deduction of all the taxes paid globally on their U.S
tax returns."

No - I don't believe this is true in the sense you mean it.

Effectively for corp. taxes - US companies are indeed 'double taxed'.

This means US companies are incented to leave zillions overseas and not bring
it back to America.

The US tax code basically ignores the fact that the rest of the world exists.
Most countries tax codes have to deal with the fact there is such a thing as
'international markets'.

The terrible thing is - there is any easy fix. Any President could pull it off
I think.

If the US got rid of double taxation, and reduced the corporate tax rate - I
think most business leaders would accept the closing of all the crazy
loopholes.

~~~
perseusprime11
Are you sure about this? I am pretty sure you can claim the tax paid to other
countries on your taxes. Can a CFO here chime in?

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hackuser
Taxes are not someone else's problem, independent from your own. It's not like
someone else's rent or salary.

If someone else doesn't pay their taxes, either you make up for it by paying
more or government services are cut.

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supergirl
"right now I would forecast that repatriation to occur next year"

seems like he's dangling the money in front of the US gov's nose. perhaps the
US gov will help apple avoid this huge bill from EU.

~~~
zghst
He gave a testimony to Congress 3 years ago in which he complained about the
tax rate. I hardly think this signal will do anything, well all know the one
candidate that publicly called for lower corporate taxes and Cook didn't
fundraiser for that guy...

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jomamaxx
The USA is alone in the world with it's odd repatriation laws.

If a company pays x% tax somewhere overseas - they still have to pay full
amount of corporate tax when repatriating - meaning US companies are 'double
taxed'.

I.E. They pay 30% in Russia, then another 35% in the US.

That's crazy.

In most countries, you pay tax in the jurisdiction overseas - and then a 1-4%
'repatriation' fee bringing it home. This is more rational.

The US also has crazy high corporate taxes - some of the highest in the world
- added to this a crazy bunch of odd loopholes.

The US tax system needs to be cleaned up here:

A) Small repatriation tax, and don't double tax foreign sales.

B) Reduce corporate taxes to make them more competitive with international
standards.

C) Get rid of the loopholes and actually make corps pay the tax.

Obviously - the EU needs to clean up it's act as well.

Sane, rational taxation would have solved the repatriation problem - and the
EU/Ireland tax avoidance problems a long time ago.

Unlike healthcare or some other unwieldy subject - this one is easy. Everyone
knows what needs to be done. Nobody seems to be willing to do it.

~~~
Veratyr
Does anyone have insight into why this is? The US seems uniquely aggressive in
the way it pursues its citizens' and corporations' international earnings.

Why is the US the only country that does this? Is it just greedy? Does it feel
more entitled to taxing those things than other countries? Is there a
historical or cultural reason it ended up this way?

~~~
jomamaxx
I think it's because the laws were made a long, long time ago when
internationalism didn't really exist.

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chillaxtian
misleading title - there's no certainty of repatriation happening in the
article.

~~~
throwanem
@dang, or whoever's still in the office - can you change the title here to
match that of the actual article? Thanks!

("Tim Cook Says Apple Could Send Cash Back to U.S. Next Year")

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perseusprime11
Apple is actually arguing that all of it's value is created in the United
States, and so Only U.S. should collect the taxes. But it won't send them to
Treasury yet as it is hoping the Govt would lower the tax rate next year.

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zghst
Well I guess Tim Cook is looking forward to Trump's 15% corporate tax next
year...

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B1FF_PSUVM
Therefore voting for him?

Well, maybe Scott Adams can stop declaring himself a Clinton supporter for his
safety ...

~~~
perseusprime11
Who is Scott Adams? And how did he enter this argument? Sorry I am trying to
understand your comment.

~~~
B1FF_PSUVM
Author of the fairly well known Dilbert comic. The dilbert.com page has a link
to his blog.

I was referring to this:

[http://blog.dilbert.com/post/145456082991/my-endorsement-
for...](http://blog.dilbert.com/post/145456082991/my-endorsement-for-
president-of-the-united-states)

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perseusprime11
How do I get rid of flagged tag on this submission? Does anyone know why it's
flagged?

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codesterling
Dumb move by the EU.

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emilsedgh
Care to elaborate?

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cjensen
I don't know what the parent comment had in mind, but here's why I think it's
a dumb move: the EU just announced to the world that they can override the
decisions of the member countries retroactively and at will.

If you want to invest in something in an EU country, you might calculate the
taxes due on your investment before deciding if the investment is suitably
profitable. With this decision, you now have an unexpected new risk factor to
take into account: the EU bureaucracy may retroactively change your tax rate.
That means uncertainty of payout, therefore the investment has a lower payout,
therefore you are less likely to invest in an EU country.

~~~
ttepasse
It wasn't "just now". The rule against privileging single companies is a rule
of the Treaty of Rome. Which was first signed in 1957. And by Ireland in 1973.
Also the recovery of unlawful state aid is nothing new but established
practice.

A better way of minimizing your risk factor would be hiring tax lawyers who
know the rules of the EU Single Market. Which makes Cook's comments so
baffling: Apple should have known that there is a possibility of a crackdown.

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codesterling
How exactly does a law predate the institution?

~~~
ttepasse
European Economic Community → European Communities → European Union.

Maybe this timeline helps:
[https://en.wikipedia.org/wiki/Treaties_of_the_European_Union...](https://en.wikipedia.org/wiki/Treaties_of_the_European_Union#Ratified_treaties)

