Paul L. Caron
Dean



Friday, July 24, 2020

Mason: Apple Just Saved $14 Billion In Tax — But Can The Tax System Be Saved?

The Hill op-ed:  Apple Just Saved $14 Billion In Tax — But Can the Tax System Be Saved?, by Ruth Mason (Virginia):

A European Commission decision that Apple Inc. owed $14 billion in back taxes to Ireland was annulled by the European Union’s lower court last week. There are three things to understand about the ruling. First, the commission was right that Apple dodged its taxes. Second, the commission decision trying to collect that tax was wrong, so the court was right to annul it. Third, our broken international tax system is to blame. ...

The truth is that at the time the facts of the Apple case arose the international tax system was badly broken, and although countries have made major progress since then on preventing tax abuse, including by filling some of the loopholes used by Apple, the system is still broken.

Modern tax treaties are based on a model written in the 1920s that no longer serve states’ needs in the digital economy. But piecemeal approaches cannot fix the international tax system. Instead, states must cooperate to devise a new regime fit for today’s economy. The new regime must be robust against corporate tax avoidance, and it must fairly distribute tax revenues from international commerce. ...

Even though Apple won this case, the commission will appeal it. Meanwhile, $14 billion remains tied up in escrow, and digital taxes are popping up everywhere. To make business safe for American companies abroad, and to secure its own tax revenue, the United States must cooperate to reform international tax.

https://taxprof.typepad.com/taxprof_blog/2020/07/mason-apple-just-saved-14-billion-in-tax-but-can-the-tax-system-be-saved.html

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Comments

Yeah, the same Apple whose Tim Cook likes to lecture us is the one who was part of this enormous scheme for tax evasion. And every penny of that $14 billion had to be made up in taxes or lowered service by people and business that aren't remotely as lucrative as is Apple. Next time Apple or Tim Cook tries to lecture us on right and wrong, tell them to shut up.

Posted by: Mike Perry | Jul 24, 2020 3:21:02 PM

It's okay if companies like Apple steal billions of dollars (it's all about the money after all) so long as they do the rainbow and BLM virtue signal. Otherwise BIG NO-NO!

Posted by: Anon | Jul 25, 2020 7:31:22 AM

Welcome to Globalization. Tim Cook has turned Apple into a stateless company. But if he had to choose, my guess is he would choose China over the US. After all, paying low wages in China has made jillions for Apple.

Oh, and before anybody asks, I have an iPhone.

Posted by: Dale Spradling | Jul 25, 2020 8:10:36 AM

Mason's article is interesting, but not as interesting as Apple's high ranking in the list of America's "major tax avoiders". https://www.washingtonpost.com/business/economy/a-simple-tweak-could-tell-us-how-much-tax-americas-largest-companies-actually-pay/2020/01/15/5a53ad78-37d1-11ea-bf30-ad313e4ec754_story.html

Posted by: Gerald Scorse | Jul 27, 2020 7:13:46 AM

Gerald: "but not as interesting as Apple's high ranking in the list of America's major tax avoiders"

That's not nearly as interesting as how much money Apple donates to your favorite political party:

https://www.campaignmoney.com/apple_computer.asp

And the fact that Apple has boycotted individual U.S. states for political reasons, but continues to do business in China without criticizing the PRC for anything.

Posted by: MM | Jul 28, 2020 7:37:50 PM