Paul L. Caron
Dean


Tuesday, August 30, 2016

EU Orders Apple To Repay $14.5 Billion In Irish Tax Breaks

EU

https://taxprof.typepad.com/taxprof_blog/2016/08/apple-ordered-by-eu-to-repay-145-billion-in-irish-tax-breaks.html

Tax | Permalink

Comments

So much of Apple's tax avoidance looks truly questionable. How can you have physical Apple Stores all over Europe, and book all the profits from the retail sales in Ireland? In the USA, if I want to book all my sales to California in Nevada, where there's no State Income or Inventory tax, I had better ship from Reno and Las Vegas warehouses, and have no nexus with California. Here, Apple had physical stores, and instead of booking the retail markup vs. store expenses in the country of sale, and only taking the manufacturer's and maybe distributor's profit in Ireland, it took all of its Apple Store profit in Ireland.

Amazon does the same thing. It has warehouses it ships from all over Europe, and yet the profit from the transaction is taken in Luxembourg. You get an invoice from that company, even if the warehouse is nearby.

Google does something similar; instead of allocating advertising profit between countries based on the IP addresses originating the clicks, it books it all in a low tax jurisdiction.

This is beyond creative; it is not just arranging your affairs to minimize tax; it's outright abuse.

Posted by: Doug Wenzel | Aug 31, 2016 6:11:44 AM

Doug, Apple gets away with this because it can transfer its IP offshore. Once the goose is loose, it is game on. Caterpillar, however, is screwed. The problem is our tax code has not caught on to the shift from industrial to information.

Posted by: Dale Spradling | Aug 31, 2016 8:14:06 AM