Apple Paid $0 In Taxes To New Zealand, Despite Sales of $4.2 Billion (nzherald.co.nz) 448
Apple paid no income tax to New Zealand's Inland Revenue Department for the last 10 years, according to an article shared by sit1963nz, prompting calls for the company to "do the right thing" even from some American-based Apple users. From the New Zealand Herald:
Bryan Chaffin of The Mac Observer, an Apple community blog site founded in 1998...wrote that Apple was the largest taxpayer in the United States, but 'pays next to nothing in most parts of the world... [L]ocal taxes matter. Roads matter. Schools matter. Housing authorities matter. Health care matters. Regulation enforcement matters. All of the things that support civil society matter. Apple's profits are made possible by that civil society, and the company should contribute its fair share.'"
Apple's accounts "show apparent income tax payments of $37 million," according to an earlier article, "but a close reading shows this sum was actually sent abroad to the Australian Tax Office, an arrangement that has been in place since at least 2007. Had Apple reported the same healthy profit margin in New Zealand as it did for its operations globally it would have paid $356 million in taxes over the period."
"It is absolutely extraordinary that they are able to get away with paying zero tax in this country," said Green Party co-leader James Shaw. "I really like Apple products -- they're incredibly innovative -- but it looks like their tax department is even more innovative than their product designers."
Apple's accounts "show apparent income tax payments of $37 million," according to an earlier article, "but a close reading shows this sum was actually sent abroad to the Australian Tax Office, an arrangement that has been in place since at least 2007. Had Apple reported the same healthy profit margin in New Zealand as it did for its operations globally it would have paid $356 million in taxes over the period."
"It is absolutely extraordinary that they are able to get away with paying zero tax in this country," said Green Party co-leader James Shaw. "I really like Apple products -- they're incredibly innovative -- but it looks like their tax department is even more innovative than their product designers."
That's their job (Score:5, Insightful)
"but it looks like their tax department is even more innovative than their product designers."
That's their job. Change your laws.
Re: That's their job (Score:5, Informative)
It's not even that.
Apple Australia and Apple NZ deliberately run at no profit, because they are not meant to run a profit. There job is to get products in people hands and handle returns.
If they make money, Apple would just charge Apple NZ more money for products, until they make no money.
Apple (ireland?) buy all the products from apple china and sell them to Apple NZ at a profit.
Every government wants in on this.
The truth is, governments are prepping for a tax on revenue, essentially a value add / gst tax increase, but not called that.
Re: That's their job (Score:4, Insightful)
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Change your laws.
NZ would not change their laws, as the far away country makes whatever possible to attract businesses. However, import duties, VAT and GST on Apple expensive products give their fair share of tax revenue.
Re:That's their job (Score:4, Insightful)
That's their job. Change your laws.
Indeed. How many individuals "do the right thing" and pay extra taxes beyond what they are legally required to pay?
It is not Apple's fault that NZ has dumb tax laws.
Re: That's their job (Score:5, Interesting)
And yet most individuals pay more income tax than Apple.
Re: That's their job (Score:5, Insightful)
Apparently you don't know how VAT works. Hint: corporations don't pay VAT, they merely collect it. Besides, only the last retailer in the chain collects VAT, it doesn't apply in B2B transactions.
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Apparently you don't know how VAT works. Hint: corporations don't pay VAT, they merely collect it. Besides, only the last retailer in the chain collects VAT, it doesn't apply in B2B transactions.
It doesn't matter who pays the tax. It's the end user in all cases. Whether Apple sells it's phone $1000 and pays the govt $150 or sells its phone $850 and the user pays the govt $150 makes no difference other than semantically.
Tax incidence vs competition (Score:5, Informative)
It doesn't matter who pays the tax. It's the end user in all cases. Whether Apple sells it's phone $1000 and pays the govt $150 or sells its phone $850 and the user pays the govt $150 makes no difference other than semantically.
You are talking about tax incidence [wikipedia.org]. But you forgot about an important detail. Companies cannot always simply pass on any taxes. Just because the government assigns a particular tax rate to my company doesn't necessarily mean I can raise prices to compensate. The reasons for this vary but usually it is because of competitive pressures. So in many cases the company ends up eating some percentage of the cost and their profits are lower. It's unclear if this would apply in Apple's case but it is clear that Apple cannot simply charge any amount they want. At some point the price gets high enough that people will seek out alternatives which is why Android has huge market share despite modest profits. In the long run (years) all prices are variable but for shorter periods of time there often are constraints on pricing power.
But if a company can manage to (legally) dodge all taxes that can be a huge competitive advantage in pricing power. It allows them to sell a product for less money than would otherwise be possible, even if it is a premium product with a fat margin.
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You are talking about tax incidence [wikipedia.org]. But you forgot about an important detail. Companies cannot always simply pass on any taxes.
I feel like I'm really repeating myself but here goes. Of course. The tax burden will fall on customers, employees, and investors. How it gets split up depends on the labor, product, and investment market conditions. If you're in a tight labor market, you can't cut (or not raise) wages. If you're in a competitive product market, you can't raise prices. If you're in a competitive investment market, you can't cut your net profit margin. If all three are competitive, adding a tax may drive you out of business.
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Apple, a US company, uses profit shifting to pay zero local taxes in New Zealand.
Any local company does not have this competitive advantage so they are more likely to go out of business meaning loss of tax for the government, and more people unemployed which also leads to loss of taxes.
By not paying taxes Apple in effect has an unfair advantage to the detriment of New Zealand and New Zealand based businesses.
Apple has no right to any compe
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EVERY business who has a turn over of over about $50,000 pa MUST register for GST. They are obligated to collect the sales taxes for the government and hand them on , however this is NOT a business tax which is why businesses can claim the GST back on everything they buy (e.g. the metro for their work vehicles, their electricity, insurances, etc etc etc).
However unlike Apple, those NZ based business ALSO have to pay taxes on their prof
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Re:That's their job (Score:5, Interesting)
Indeed. How many individuals "do the right thing" and pay extra taxes beyond what they are legally required to pay?
Many.
Over here (the UK) there's all sorts of weird shennanigans you can pull if you put in the effort by contacting via offshore companies, and every so often you hear about people in the news doing so. Such things are available to everyone in principle. Most people don't do that and simply take salary the normal way and pay taxes the normal way.
Most people don't "like" paying taxes and grumble about them except that we all like our smoothly operating first world country with a high standard of living. Combine the awkwardness of actually setting up such a scheme legally with the vague feeling of unease many people get due to not being psychopaths and realising that not paying their fair share is bad and the result is most people pay a reasonable amount of tax.
It is not Apple's fault that NZ has dumb tax laws.
See this is why we can't have nice things. It's very hard to set up laws that allow reasonable business things and can't be abused. Because of scum like Amazon, now every small company has to deal with the horror of VATMOSS. Your idea to fix the laws is great and all but it will hit every single company that legitimately licenses IP of various sorts from abroad in a perfectly normal, non tax dodging way.
The only fiduciary duty that company directors have is to not fuck up egregiously or with intent. You can check the case law if you like, but until you can provide a reference where someone actually won a lawsuit over breach of fiduciary duty for merely not maximizing profits, I won't accept such a duty exists. There's also duties in many countries about public good as well.
Someone, somewhere chose to dodge those taxes. Just because they were able to get away with it doesn't mean it wasn't their fault. Ultimately people are responsible for their actions.
Re:That's their job (Score:4, Interesting)
and pisses away of tax money in "foreign aid" at a time when there is a budgetary deficit in our own country.
Maybe you should look up the ROI on foreign aid sometime. It's money we spend to stop problems from developing into larger problems which would actually cost us more money. I bet you're one of these people who wants to keep out the refugees. Well, guess what foreign aid is for? Yeah, that's right. Creating less refugees.
If you want to talk about pissing away money, there is only one discussion to be had at this time: The F-35. Every other pissing away money story is just pissing into the wind.
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When the UK is giving £50-60m a year to a nuclear power that holds the record for the most satellites launched into space on a single rocket I don't give a shit what the ROI is, I want that money spent in the UK.
It's money we spend to stop problems from developing into larger problems which would actually cost us more money.
How about the Indian government spend their own money instead.
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: shrug:
No system is perfect, but on the global scale we're doing pretty well. We have a decent health service as measured by outcomes for less per capita expenditure than many comparable countries. We have low crime, good worker and consumer protections, a police force which is low in corruption as these things go, a functional transport network, utilities with a very high availability and so on.
Other countries do some things better, others some things worse, but as places go, it's really pretty good.
Now,
Re:That's their job (Score:4, Interesting)
How many individuals "do the right thing" and pay extra taxes beyond what they are legally required to pay?
It depends on what you mean by 'legally required to pay'. The amount of tax that I pay is the amount that you get by taking my salary and multiplying the parts of it in different tax brackets by the tax rates. There are a huge number of tax avoidance schemes that I could use to reduce my tax burden, but I've received a lot of benefits from living in a functioning society with a working social safety net and I can quite easily afford the taxes, so I'd rather just pay them. I doing so, I am not in a minority, this is precisely what most other people in the UK do.
If this is your definition of paying more than you are 'legally required to pay', then most people do, but most large corporations don't.
Your words might mean something (Score:2)
Re:That's their job (Score:5, Informative)
I hope people understand the consequences of demanding changes to taxes for corporations. I'm not defending the status-quo, but you have to understand how US taxes are out of step with the rest of the world.
US companies are taxed, no matter where their income is generated. US citizens are taxed no matter where their income is generated. Therefor US companies and US citizens are not competitive with foreign companies or foreign workers. The US only gets away with it's taxes because moving companies is impossible (eg burger king merging with tim hortons and thus becoming a canadian company) without a huge expense of buying and creating numbered companies that exist for a short period of time. US citizens are not mobile like EU citizens are.
So you have two options, either make trade with the rest of the world ridiculously expensive with tariffs, thus protecting the domestic workforce and domestic corporations from having to compete, OR you force your domestic workforce and corporations to compete. Trump is going to try the former through regressive policy.
What would fix things, or even the playing field is by literately getting rid of corporate taxes and push ALL taxation onto the workforce. Because rich people create shell corporations to hold their assets, they love this idea. But it's not good for people who can't do that. So the correct fix for this is to tax people based on where they own property. So unless you never want to "own" a home, you pay taxes everywhere.
Since US taxes are out of step with the rest of the world (the only country that requires you to pay taxes by virtue of being born a US Citizen) that has to change.
So basically, if you own a home, you pay worldwide income taxes to that country that home is owned in. If you have a home in two countries, then guess what, you pay taxes in both places. Minimize the tax burden by declaring "non-immigrant(alien) resident" and split the taxes between each country that you own a home in. You'd do this by indicating the address of every home owned, and dividing the taxes by all of them. So if you own 3 homes, 1 in Canada and 2 in the US, then you pay 1/3 of Canada's taxes to Canada, and 2/3rds to the US, and the IRS and CRA will simply verify that taxes have been paid in each others country. Problem solved.
To solve the corporate taxation problem, you make sure that "wealth holding companies", numbered companies, etc, play no corporate taxes to any government, but must pay out 90-100% of profits (eg like a REIT or Income Trust) or re-invest those funds (eg they can not be paid to anyone) if directed to do so. That way the tax payers are consistently paying taxes on capital gains, it's like having a personal bank that pays high interest.
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The Corporate then owns the home, and pays no taxes
The corporate effective makes zero profit , but it pays 100% of it back to the resident of the house, the sole shareholder.
That corporation is outside of US law, so it can do all sorts of things, like pay for the house occupier to inspect the other houses they may occupy, first class flights, house staff, access to a boat etc.
These people will pay HUGE election donations to what ever politicians they need to to ensure t
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"but it looks like their tax department is even more innovative than their product designers."
That's their job. Change your laws.
Taking advantage through bullshit loopholes and questionable interpretation done blatantly and flagrantly to a system that has little capability to audit and hold abusers accountable is not easily resolved with "change your laws", unless you're talking about making ethics a matter of legality.
Done properly and ethically, the tax systems of the world would generate billions more in benefits to society. Instead, we watch the chasm of wealth grow and divide the elite from the rest of the "poor" world, who's
If it's legal... (Score:4, Interesting)
People always complain about this sort of thing, but you know most individuals would use legal tax "loop-holes" to avoid paying taxes if they could (and many wealthy people come close). Apple and all the other zero-tax paying companies are not non-profits, they're in it for the money. If people are upset about all this, perhaps our elected representatives can change the laws? Seriously, if it's legal, what of it? Like I said, most people would do the same if they could...
Re:If it's legal... (Score:5, Insightful)
Seriously, if it's legal, what of it?
There is legal and there is ethical. Only people in the law profession put the former before the latter.
After all, everything slave owners did and the Third Reich (oh my Godwin!) was entirely legal at the time.
Re:If it's legal... (Score:4, Insightful)
Seriously, if it's legal, what of it?
There is legal and there is ethical. Only people in the law profession put the former before the latter.
After all, everything slave owners did and the Third Reich (oh my Godwin!) was entirely legal at the time.
Paying more taxes is not ethical. Nor is it like slavery or nazis. Governments are necessary evils to maintain social contracts and civilization. Overreaching government is unethical. Government double-taxing is unethical.
And...corporate income tax is a dumb idea in the first place, when those funds have already been taxes through both income and sales.
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Re:If it's legal... (Score:5, Insightful)
Nope. Tax evasion definitely falls into the former category, wrong regardless of "legality". Especially if achieved via legalistic shenanigans. And doubly so if those shenanigans are only possible due to favourable tax laws and interpretations obtained via corrupt political lobbying and campaign financing.
Corporations benefit from all the things that taxes provide - roads, police, education, and thousands more - so they should contribute to them as well.
hate to break it to you, but you're NOT a temporarily embarrassed millionaire. These tax scams you're championing (out of some brainwashed mindless fantasy that one day you'll "make it" and be part of the exploiter classes rather than the exploited) are NEVER going to benefit you. They're stealing from you, and from everyone else.
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Tax evasion, by definition, is illegal. What's being discussed here is tax avoidance, which isn't. And if nobody ever engaged in tax avoidance, what incentive would politicians have to fix tax law? If anything, there needs to be more tax avoidance, preferably highly public, to shame them into acting. And the public needs to start putting the blame on the politicians, where it belongs. If the politicians are letting themselves be bought off, one more reason to blame them.
They're stealing from you, and from everyone else.
Yes, keep confusing legal and illegal
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> Is "legalistic shenanigans" a really twisted way of saying "legal"?
no. it means breaking the law with yet another version of the same old dodgy accounting scams, and getting away with it until somebody notices and points out that what you are doing is, in fact, breaking the fucking law.
because bullshit accounting practices that have the sole purpose of evading tax are fucking illegal in pretty much every jurisdiction in the world, including NZ and even in the corporate-arse-licking US.
so, no, "haven't
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It's perfectly ethical to follow the law in a free country like New Zealand and pay whatever taxes you owe. If the amount that you owe calculates to zero, then you are still acting ethically. The legislature is, of course, free to vote to change the tax laws, but there are often unintended consequences that come of it. Taxing your country's economic activity always produces less activity.
I disagree. In my opinion, governmental laws define the absolute minimum level of conduct that is allowed to avoid sanction. To say that I am a law-abiding citizen is equivalent to saying that I am as close to being a criminal as possible. The threshold of ethical behavior lies well beyond the lines of legality.
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Guess what?? Your ignorant opinion does not override the law.
I can't deny that I'm ignorant about many things and probably about most things in general. My main assertion in this thread is that the law does not proscribe ethics, an assertion that would seem to at least be anecdotally supported by various laws that are obviously not ethical in the context of contemporary sensibilities, e.g., laws that legalized slavery, the killing of Jews, etc.
Re:If it's legal... (Score:5, Interesting)
So, if I'm a legal shareholder of Apple NZ, and year by year it produces a $0 profit, is it acting in my interest?
Apple NZ is a sockpuppet entity with sole purpose of its existence being shielding the parent company from taxes. Its main purpose is NOT generating profit. This is an abuse of the system where successful local entities pay taxes, but unsuccessful ones don't have to - creation of a fake shell that artificially inflates local costs to a point of zero revenue to redirect actual income to a tax paradise.
The law normally doesn't allow such sock-puppets. If person X is shareholder of both the sock-puppet and parent company, using the sockpuppet to dodge the tax, they are about universally considered a tax fraud, and persecuted. But building a sufficiently complex hidden network of money flow and ownership, it's possible to obscure the fact how person X factually owns the sock-puppet, while not being legally the owner - it's still exactly the same tax fraud, but much harder to prove.
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patently incorrect, you are confusing morals and ethics.
Hmm, well maybe, or we're just leveraging differing semantics. According to dictionary.com, ethics can mean "pertaining to or dealing with morals or the principles of morality" or "being in accordance with the rules or standards for right conduct or practice, especially the standards of a profession." I was using the first definition of ethics. The second definition suffers the same dilemma as adherence to governmental laws, since those "ethics" are basically professional laws.
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Have you never heard of austerity measure, people are suffering and dying as a result. The responsible should pay for those deaths, corporate executives, lobbyists and corrupt politicians. They should pay in kind for the suffering they have caused through sheer insensate greed, they are to be condemned as individuals and as corporations, truly disgusting behaviour.
Careful what you wish for... (Score:5, Interesting)
If people are upset about all this, perhaps our elected representatives can change the laws?
The problem with this is that these companies have an army of lawyers trying to find holes in whatever laws are passed. They can find these holes faster than laws can be patched because governments have to tread carefully to make sure new laws do not accidentally penalize companies who are behaving themselves. The only way I can see governments defeating this is by giving themselves far more discretionary taxation power to target individual companies than they currently have and that can lead to abuse of that power if we are not careful.
But hey, lets get pissed at Apple (Score:2)
Fix the fucking goddamned tax laws for fucks sake.
Oh, my bad. Dude/industry giving my re-election campaign hundreds of thousands goes away. Loophole? What loophole?
VAT (Score:5, Informative)
Re:VAT (Score:5, Informative)
The VAT tax rate on that $4.2 billion is 15%. New Zealand made a lot of money off those iphone sales.
And all those taxes were paid by New Zealanders. Who still had to pay other taxes.
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And all those taxes were paid by New Zealanders. Who still had to pay other taxes.
Sounds win-win for everyone. New Zealanders pay for their government, government gets the taxes and spends it on stuff New Zealanders apparently want, and Apple gets lower tax rates.
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Taxes levied against businesses are paid by the customer, too. Doesn't matter where you try to hide the tax, it is the customer that ends up paying.
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Should be interesting when Trump gives Apple that same deal in the USA
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Declare any and all IP claims Apple could make null and void in New Zealand.
The contents of the Apple App Store could probably fit on a 4 terabyte hard drive that could be installed in every Public Library in New Zealand. I bet Tim Dotcom could help them set it up.
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Isn't VAT paid by the people who BOUGHT the iphones?
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The VAT is collected from Apple's customers, though, not Apple themselves. And in fact, if the 'government services' that said collected taxes are applied toward the interests of the taxpayers it could lead to a very different situation for Apple than exists in many countries.
Why should Apple customers pay tax to their government and then have their government act in Apple's interest against them?
Perhaps New Zealand could set up a national firewall that intercepts and bypasses Apple's App store. App Store
Didn't Apple just raise the price (Score:2)
This is the problem with corporate income tax. (Score:5, Interesting)
This is a basic problem with corporate income tax: everyone in the world feels they are entitled to their "fair share". Corporate tax itself is a kind of double taxation: a corporation is made up of people who pay income tax. In addition, there is sales tax paid on all goods sold in a given country. I imagine a great deal of sales tax has been paid on Apple products in New Zealand, money the government wouldn't have if Apple didn't sell products there.
The problem with corporate income tax is that it is always possible for a mutlinational corporation to shift its profits to whichever country offers the lowest tax rate, unfairly enriching that one country. The best solution is probably to get rid of corporate income tax altogether, and make up the difference with sales taxes. (After all, the cost of corporate taxes are passed along to the consumers anyway.) This way, there's no arguing about who is entitled to the tax money: it's paid by the consumer wherever the sale takes place. This isn't the first time corporate taxes have caused problems: remember the court battle in which the E.U. argued that Apple owed more taxes to the Irish government, despite the fact that the Irish government didn't even want those revenues? This is the kind of absurdity that results from corporate taxes.
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Corporate tax itself is a kind of double taxation: a corporation is made up of people who pay income tax
Ok, I am not a tax specialist, but isn't corporate tax applied to profit?
Wouldn't people's salaries (on which they pay income taxes) count as a corporate expense and be deducted from the profit already?
The problem with corporate income tax is that it is always possible for a mutlinational corporation to shift its profits to whichever country offers the lowest tax rate
I believe the solution is to prevent shifting profit (forbid "licensing" costs that transfer profit from one country to another).
remember the court battle in which the E.U. argued that Apple owed more taxes to the Irish government, despite the fact that the Irish government didn't even want those revenues? This is the kind of absurdity that results from corporate taxes.
Not absurd at all. Ireland tried to do something E.U. membership explicitly forbids. Whether they "wanted" these taxes from Apple is completely irrelevant.
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Ok, I am not a tax specialist, but isn't corporate tax applied to profit?
But those profits still enrich the company. Which means the value of the shares go up and shareholders pay capital gains taxes. No matter how you look at it, corporate income tax is double taxation.
remember the court battle in which the E.U. argued that Apple owed more taxes to the Irish government, despite the fact that the Irish government didn't even want those revenues? This is the kind of absurdity that results from corporate taxes.
Not absurd at all. Ireland tried to do something E.U. membership explicitly forbids. Whether they "wanted" these taxes from Apple is completely irrelevant.
Wow. If you don't see the absurdity in a company being forced to pay taxes to a government that doesn't want them, then it will probably be very hard to convince you. At the very least, it turns the idea of taxes entirely on its head. Taxes are supposed to be a means of collecting revenue so a government can
Re:This is the problem with corporate income tax. (Score:4, Interesting)
Corporate taxation is double-taxation because their employees and customers pay taxes. Really? Do you have any idea how fucking stupid this line of argument is?
it's no different to saying "i shouldn't pay tax because the shopkeepers i buy shit from will pay tax", who then say "no tax for me because my employees pay tax", who then claim tax-exemption by pointing back to the fact that the shops THEY buy shit from pay tax.
and sure, if you're a properly brainwashed American, you'll think you're "clever" by saying something like "Yeah, exactly! Tax is theft". but tax is how civilisation is paid for. It's why you're not a slave in some shit-poor stone-age (or bronze-age at best) economy. It's why you can read, it's why you can do at least basic arithmetic (and can hopefully count your change when you buy shit). It's why countless things that you take for granted in your life exist and are maintained.
Every fucking cent has passed through multiple hands and has been taxed multiple times as it cycles through the economy. Exempting corporations from paying tax because of that is just fucking cretinous.
yeah. just like the best solution to burglary is for everyone to put all their possessions on the front lawn to make it easier for thieves. fucking idiot!
That happened because Apple was using Ireland to evade paying taxes in the countries where they sold their products. Unsurprisingly, those countries were pissed off by that tax-evading loophole, so took court action to force Apple pay the same tax regardless of where they claimed to be making the profit, making the whole profit-shifting bullshit pointless. Or worse than pointless because the administrative overhead in creating and maintaining that bullshit also has a monetary cost.
Also, the government of Ireland had a responsibility to the **PEOPLE** of Ireland to collect that tax, regardless of how many kickbacks and bribes the MPs took not to collect it.
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Good job with bringing the hammer down on inane attempts at arguments and the morons who bring them!
Would mod up if I had mod points.
Re: This is the problem with corporate income tax. (Score:2)
Corporate income tax is not double taxation, it is a fee for limited liability. If corporation owners don't like that then they can always accept unlimited liability as individuals and use an insurance as a liability limiting measure. Unfortunately they want to have their cake and eat it, too.
It's not about morality, it's about the law (Score:3, Insightful)
This is insane. A country has the power to make laws. New Zealand has laws and agreements in place that ALLOW this. Then, the same government whines if these agreements are used by companies.
If I make a rule in my house, where anybody coming in can take a candy per person, I should not complain about a greedy family of 36 shows up and takes 36 candies. I can change the rules, adjust them, fix them, but definitely not whinge about it.
Those laws are made to please the politician's rich friends -- as well as the politicians themselves -- so that they can move their assets and income to countries with stupidly low rates (Ireland, Caribbean, etc.). If you don't want this to happen, change the laws. If you can't change the laws without upsetting your rich friends, put up and shut up.
Free Software Magazine [freesoftwaremagazine.com]
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The NZ government does NOT have laws that allow this.
Apple lies and says that they make no profit in NZ because they buy their own products at artificially inflated prices from themselves in Ireland.
NZ wants to close this lying fucking bullshit loophole.
and fuckwits like you support Apple when they whinge about the prospect of not being able to evade taxes any more.
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There is no law that prohibits Apple from buying there own products from Ireland at whichever price they like.
I support regulation against this. As most people do.
I do NOT support Apple when they whine about tax laws being changed. I cannot stand it, however, when governments make baseless requests to companies NOT to follow their laws.
Make laws against what Apple (and everybody else) is doing. Then force them to follow the new rules.
Till then, keep the plebes (us) happy with big speeches about morality.
Fre [freesoftwaremagazine.com]
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They do contribute (Score:4, Interesting)
All of the things that support civil society matter. Apple's profits are made possible by that civil society, and the company should contribute its fair share.'"
Apple (and every other company) does contribute. They product fabulous products at prices customers are very willing to pay. That means there's a substantial consumer surplus captured by Kiwis. That's Apple's contribution to New Zealand society.
(Side note. I don't remember where I read this so I can't cite it. A study showed that most of the value created by companies is captured by customers. Apple may be worth zillions but if you add up how much people would have been willing to pay for their products, it's something like 10 to 20 times higher.)
Remember also, Apple doesn't ultimately pay taxes. It just collects taxes and writes the check. Ultimately the burden of the tax falls on Apple's customers (through higher prices), employees (through lower wages), and investors (through lower profits). I'm guessing most of them don't live in New Zealand.
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That's a fine opinion. I personally don't own any Apple products either.
Many people disagree with us. They seem to get much so much value out of their iProducts that they're very willing to pay for them. Most would be willing to pay even more and that's the consumer surplus.
Re:They do contribute (Score:4, Funny)
Oh that's a wonderful deal! So any company that produces fabulous products at prices customers are very willing to pay is now exempt of tax? Please tell that to every other company, because it looks as if only Apple is taking advantage of this New Zealand law.
Actually, yeah I'd prefer we eliminated all corporate taxes and only taxed individuals. I think taxing corporations obscures who is actually paying the tax.
The more I think about it, taxes ultimately fall on people. You and I have to decide we're not going to spend money on things we'd prefer because some of our cash went to a government. Some of that was channeled through higher prices at the store, some was carved off our income, some was lower returns on our investments. But in the end, you and I feel the effects of the tax, not a company. I think it would be clearer and more honest to avoid the middle man.
Sales Tax (Score:2)
Kill the complicated tax codes that let people do these things and replace all of it with a simple flat sales tax for your country. No exceptions.
Tada. Everyone pays something. Everyone.
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Mod parent up (Score:3)
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LOL paying taxes on taxes. That is just funny.
Just stop giving money to Apple (Score:2)
Android is better and cheaper anyway.
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Had Apple reported ... (Score:2)
Wait, so the article is saying that since Apple is hardly even profitable in NZ, and makes next to nothing, it similarly does not pay many taxes? It is almost like their is a correlation between profits and taxes...
Progressive Bollocks (Score:2)
Wrong end of the stick (Score:2)
Curious why New Zealanders buy so much Apple stuff (Score:5, Interesting)
China has a population of 1.357 billion. Apple's annual revenue in China [theatlas.com] was $48.5 billion, or $36 per capita.
Europe has a population of 743 million. Apple's Europe revenue was $49.95 billion. Or $67 per capita.
Japan has a population of 127 million. Apple's Japan revenue was $16.92 billion. or $133 per capita.
The U.S. has a population of 319 million. Apple's revenue in the Americas was $86.62 billion. Even if you attribute 100% of that to the U.S., that only works out to $272 per capita.
So either New Zealanders absolutely love buying Apple products by nearly an order of magnitude more than the rest of the developed world, or the $4.2 billion figure is somehow exaggerated.
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Of course it's exaggerated. See my other comment below.
The NZ Herald, and it's minions, is an anti-Apple propaganda machine.
It's comparable to the UK's Daily Mail (it even re-publishes DM's articles).
Trash journalism.
NZ Herald is NOT a impartial observer (Score:3, Informative)
I've lived in NZ for a number of years now and I used to read the NZ Herald, Stuff.co.nz and other publications in this group.
To say they are anti-Apple partisan is an understatement. It's just hateful bile, and industrial propaganda.
Any comments I posted under their articles were being either blocked or deleted if I said anything pro-Apple or contradicted their anti-Apple editorial.
Apple is a US company. Yes it sells into NZ and the NZ government collects the standard 15% on all Apple's sales.
I'm at a loss to understand why sales of $4.2B should be taxed for anything else but sales tax?
If NZ wants more money then they should look at imposing import tax on electronic goods.
Singling out a single company isn't right.
Legal Requirement vs Moral Obligation (Score:3)
There are lots of comments above that range from what amounts to victim-blaming (Don't like the result? Then change the laws.) to tax education (Apple merely collects the VAT for the government, but the customer is considered to have paid it.) to hysterical outrage (kill them kill them kill them ... oh, wait, maybe that was a different thread).
In my country (USA), we have non-profit and for-profit entities, as they are commonly called. The non-profits include entities that can have considerable land wealth, like universities. Two of our most famous universities, MIT and Harvard, jointly own over half of the land in Cambridge, Massachusetts, the city where they are located. Neither of them are legally required to pay state property tax, because of their non-profit status (let's overlook for the moment that state and federal tax exempt status are related but technically separate things). But they also both benefit greatly from the surrounding city and its services, so they BOTH pay tens of millions of dollars to the city; such that are called "payment in lieu of tax" so that they retain their non-profit status. I don't know if they are paying the same amount as they would if they had for-profit status.
There is no legal requirement for them to do so. Indeed, there is a clear legal position that has been created, the not-for-profit status, in order to provide them a clear and explicit means to NOT pay, as their mission is considered important to the well-being of society. But they make payments ANYWAY. It is a moral obligation. It is also not entirely altruistic, as without these payments, the social environment around the universities would deteriorate significantly. You want nice things like infrastructure, emergency services, primary and secondary education, democracy? You gotta pay for them.
There is no fundamental reason that Apple, despite there being a legal path to avoid taxes no matter how complicated, could not make contributions to each and every country in which they sell products while still making embarrassingly immense profits. I bet some sharp-penciled tax attorneys would even find a way to make such contributions tax deductable. Apple would rid themselves of the negative press, get a nice write-off, and the countries (here, NZ) would benefit as well.
Income isn't the only tax (Score:3)
Re:sorry, no (Score:4, Informative)
It seems that NZ GST [ird.govt.nz], although collected by the seller, is considered to be paid by the consumer.
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Yeah, I was thinking that companies don't generally pay sales tax on products they sell.
Re:sorry, no (Score:4, Insightful)
How is this modded insightful when it is the opposite?
Firstly Apple would have paid ZERO sales tax, because that isn't how the sales tax system in NZ works. Apple only has to remit the sales taxes that its customers have paid. It receives an input tax credit for all purchases in NZ that it makes. In essence this means that the net sales tax paid by a company is zero. Its customers are who have paid it.
As for your assertion that they shouldn't pay tax because they are just an importer, if another company imported apple products THEY would be paying corporate tax.
Apple NZ is the entity that is making the money. But it is using licensing fees to shift it's profits to another locale. That profit shifting is where governments are getting upset. And understandably so.
And your example of NZ sheep is also flawed, because this type of profit shifting can only work when you are a multinational. Those NZ farmers you use in your example will be selling their sheep to an exporter, that exporter will be selling them to a US importer and the US importer will be selling them to the final customer. That US importer will be paying US corporate tax. The ONLY way that they wouldn't be is if the whole network is owned by one company and they were charging some "sheep IP licensing fee" from a low tax country.
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The ONLY way that they wouldn't be is if the whole network is owned by one company and they were charging some "sheep IP licensing fee" from a low tax country.
Well, having one animal that's both woolly and tasty is certainly innovative. I'm sure that somebody must have patented it.
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God's patents all ran out eons ago.
Re:sorry, no (Score:4, Informative)
First off, in NZ it's called "GST" (Goods and Services Tax), which is similar to what the US calls "Sales Tax" and what other countries call "VAT".
Apple indeed would not pay any GST here because Apple is not the final retailer*. The final retailer would collect the GST from the sales of Apple goods and pay it directly to the IRD. Wholesale sales of the goods from Apple to the end retailer are GST exempt provided that they are sold to a GST registered business for the purpose of resale would would account for pretty much *all* of Apple's sales in NZ.
* As far as I'm aware there are no "Apple stores" in NZ, all of Apple's products are sold through other 3rd-party retailers here. Even if there were an Apple store it likely would not be directly owned by the same Apple NZ corporation that this article references.
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I wasn't sure if it was set up the same everywhere. Certainly there were historical sales taxes where i live which didn't have a input credit component. That said those are long gone.
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That's exactly the problem, the loophole that they have set up and are exploiting.
With fancy (i.e. bullshit) accounting practices, they pretend that they make no profit in NZ (so why the fuck are they bothering to sell anything there. or in Australia. or anywhere else they pull the same bullshit scam), that all profit is made by their Irish subsidiary.
Re:sorry, no (Score:5, Insightful)
If Apple does not want to pay taxes on profits like other businesses then perhaps an import duty on Apple gear is warranted, currently there is none.
Sales taxes are paid by the consumer, they are not based on business profits, they are collected and passed on by the retailer.
So for example if I buy an Apple computer at Harvey Normans, Harvey Normans passes on the sales tax to the IRD, not Apple.
Another approach could be
If Apple wants the protection of the laws here in New Zealand then it should pay taxes to enjoy of the benefits of citizenship
If it does not want to pay taxes, then it places its self outside of the laws, so for example they would have no patent or copyright protection in NZ.
Currently corporates have all the benefits of a country and don't pay any of the costs.
As for WHY apple should pay taxes.
Lets assume YOU are in business, and at the end of each year you have $1 Million in profits, and from this you pay $300,000 in taxes. Those taxes are used for roading, infrastructure, the legal system, etc etc etc, i.e. all the things from a civil society you benefit from.
Now Apple comes along, they are "outside" you country, then enjoy ALL the benefits of roads etc etc etc that you do, but they don't pay taxes, so in real terms they are $300,000 better off each year than you, money they can put in the bank for a rainy day.
We have a housing crisis, and business down turn, things are rough and you have to close down. Apple on the other hand has a huge stock pile of cash so they can ride out the rough times (because they did not pay taxes), so they remain in business where by you loose your business and your house.
THAT is why corporates should be expected to pay taxes, so they compete on a fair and equal basis with those local companies who can not dodge the taxes.
Or to put in in an American setting, if a Chinese firm is able to dodge taxes and use that tax advantage to put an American company out of business causing people to loose their lively hoods and houses, do you STILL think it is fair the Chinese firm pays no taxes.
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I would love that. Couple it with counting capital gains and dividends as income.
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I'm not ignorant to anything you just said. "Long term" is one year. Whoopdiedoo. I can't imagine why you think a big tax on capital gains wouldn't serve as an incentive to leave your money in the tax-free corporate entity (i.e. long-term investment).
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Apple income tax in the US on income which is generated in the US. Same as in New Zealand. Apparently, NZ isn't as good at defining local income as the US is.
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Geez, I'm still half-asleep. Insert the word "pays" after the first Apple.
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We do have Goods and Services tax, which Apples customers pay. Apple paid no tax.
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Apple's customers pay. Apple paid no tax.
That is a meaningless difference. If I pay $500 for an iPhone, and Apple gets $450 and the government gets $50, it doesn't really matter if I hand the money to them before or after the government gets their cut. The result is exactly the same either way.
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Companies rely on government investment in infrastructure like roads, power, shipping, airports, rail, military, police and fire services as well as a 1000 other more services without which they could not exist in those countries.
How much "road use" does Apple need to haul iPhones from the airport to the retail outlet?
What about a company that sells, say, ebooks, and uses no government infrastructure? Should they pay no taxes?
If you are going to justify corporate taxes based on "infrastructure use" then it should be in proportion to how much they use that infrastructure.
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I'd like to see how Outlaw Apple Stores operate. Zero law protection and enforcement.
Of course as a law-abiding tax-paying citizen, you still enjoy protection of law. If you want to shoot the Apple store clerk, you're free to do so and he's not even allowed to shoot back.
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NO, it should be based on how much money they take in from the consumers
That is a "sales tax" (GST in NZ), which Apple already collects on their sales in NZ.
When TFA says Apple pays "$0 in taxes" they mean Apple pays "$0 in taxes after you subtract all the taxes (GST, payroll, excise tax, etc) that they DO pay."
Re: American corporations are evil (Score:2)
Unless they extradite Kim Dotcom
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roman_mir is a troll who professes to believe that all taxation is inherently theft. He would, however, be the first to howl for police protection the first time some guy threatened to beat his brains out through his nose.
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So I guess you don't enjoy traveling on roads, government controlled power companies, public education, fire department, etc. It must be nice living on your 10 self-defended and manned acres with absolutely no imports. You go girl!
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I enjoy private roads, the public roads I have to suffer through. There is no question at all that nothing should be public, especially power companies, education, roads, health care, even military. Military in the hands of government is the cause of all the wars and humanitarian disasters through thousands of years, history cannot be more obvious if you bother to look at it.
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