Apple

[Culprit]

http://www.theage.com.au/business/the-economy/apples-headache-is-the-start-of-tax-revenue-wars--and-australia-may-join-the-fight-20160830-gr528m.html

This could be the start of Multinationals actually paying tax where they profit rather than shift profits off shore to pay less tax. Our Government which has given away a plethora of tax revenue streams and keeps boosting middle income welfare would be keen to get a share of the profits. It goes against LNP policy to make the rich pay tax so they will have a major dilemma on their hands. The Plebiscite is a side show but that show won't last for long and with the Polls smashing Turdbull I am sure we will be due for a challenge sooner rather than later.

[stui magpie]

Good.

I'm all for these companies paying tax in the country they earn the revenue, but the tax laws are a complicated mess and we also need to watch out for the law of unintended consequences.

One possible outcome of making a company like Apple pay tax on revenue generated in Aus is that they may decide to raise prices here (and in other countries that join in) to cover the shortfall or just withdraw from markets where they deem it to be unprofitable.

Potentially messy game.

[Culprit]

Stui, it's going to be interesting. Ireland don't want the cash as they fear Apple pulling out and costing jobs. Personally if they make profits off Australians they pay tax. If Companies don't wish to pay tax in the Countries they sell products in then they should pull out. Eventually they will run out of Countries.

[stui magpie]

It is going to be interesting.

Australia is a small market and a long way away from everyone else. If we play hard ball, we're not doing so from a position of strength.

No issue at all with looking into it, they should pay tax here, but tread carefully.

[David]

This is why international co-ordination on tax avoidance is so important – MNCs can just keep getting away with murder if the countries they operate in are too scared to tax them fairly. As citizens, we should be demanding that this stuff gets pursued; after all, we're the people who are getting ripped off in the long run.

[stui magpie]

^

I'm not arguing, just pointing out that you have to play the cards you're dealt.

Ireland offered tax subsidies to get MNC's in there. Cooperation is nice but always back self interest.

[Dave The Man]

We should try and get money off Apple after the Ripped everyone off.

I bet majority of Rich Companies don't pay tax

[Tannin]

Great news!

Do you know that two years back Apple paid 0.002% tax?

What a friggin' disgrace they are. Hammer the barstards till they squeal, then hammer them more. Complete scum. If you or I defrauded the tax office one ten-millionth of the amount Apple got away with, we would go to jail.

[stui magpie]

Settle Gretel, you misinterpret my posts.

I'm not thinking of the employment I'm thinking of the impact on the consumer market if large MNC's decide we're too far away and too difficult to deal with.

As I said repeatedly, I'm happy for them to be hit with the tax, just remember that just like Newtons 3rd law, when you do stuff - other stuff happens, It doesn't work in a vacuum.

[What'sinaname]

Apple - 1.2% effective tax rate
Samsung - 0.5% effective tax rate

http://www.abc.net.au/news/2015-12-17/tax-transparency-report/7036708

Maybe we can kick these two out and go back to using Nokia 3310's

[Tannin]

[Mugwump]

Tannin, you're a bright bloke, and deep down i can't believe you completely believe the above. Corporate taxes are only one way that companies create tax revenue in an economy, and among the least important.

Like others, I am pleased to see Apple get a massive tax bill, as they have been gaming the system for too long. I have an interest in a small, independent, only slightly profitable restaurant business in the Uk, and I revile the fact that bloody Starbucks pay almost zero tax while we pay 20% and undergo regular time-consuming inspections. It is clearly wrong on many levels. However, governments certainly do derive benefit from having large companies locate operations in their fiscal jurisdiction because they offer lower rates of taxation than other nations.

If i read your post correctly, you seem to suppose a closed economy, but Apple operates within the global trading system. The reality of Apple's operations in Ireland are that income taxes are generated by thousands of employees there, as are business rates, payroll taxes, and the consumer spending of apple's employees. All of this spending, and its multiplier effect across the economy, is substantial, and it is paid for by revenues generated in other countries, so it is a net transfer to Ireland from abroad. Their teachers and park rangers are indeed underpinned by it.

I disagree that Australia can milk corporations for whatever corporate taxes we like with zero impact on jobs, skills, consumer product quality or tax revenues. The quality of products sold in your country matters : it matters in terms of the quality of life (I drove a Trabant recently in the old East Germany, which made this point in admirably spluttering fashion) and it matters because scale effects make products cheaper, so people can afford to buy more nice stuff that they want.

It also matters for Australia's skills and participation and profit in the global economy. If Apple amd Samsung do not sell their products in far-flung Australia because the government gets too greedy, then developers of apps in australia will soon cease to exist. An Australian-only substitute tablet or smartphone product or another player's second-rate product is the way to the technological equivalent of the Trabby.

Corporate taxation is difficult to pin down because it really is very difficult to determine where profits arise in a value chain that is integrated with regard to a corporation, but disarticulated across different national fiscal regimes. Where, in an integrated value chain, is the value created ? A new settlement needs to be found, but i don't think your "string em up" approach is the right direction.

What is the answer ? Well, one answer is simply to charge the company a royalty on every product sold in Australia ; a kind of corporate GST. They may pass it on to consumers, of course, but they probably do that with corporation tax anyway, in some sense.

Another approach (channelling David's idealism about international cooperation) would be develop an OECD protocol which charges a certain proportion of home stock exchange reported corporate earnings or net cash generation to tax (say 25%) and apportion this fund across the economies according to sales. Most companies will not suppress their global reported earnings to avoid tax, given the impact on share price.

A third approach is to accept that corporation tax made sense in another age when economies were more closed, and to abolish it and replace it with a GST which is rebated to customers according to the amount of tax paid by the company in the country. You want your customers to like you and buy your products? Pay back their tax.

I do not know which of these is best, but however it plays out, it needs to be fixed and the paradigm does not work any more. I dont think the way to pay for teachers and park rangers is to repel international business from your country through uncompetitive taxation relative to lower-tax jurisdictions.

Resource rents, i think, are a diffent kind of issue. You own something someone wants to improve and sell on, amd you do not have enough capital, skills or risk-tolerance to do so. What's your share when they have done it ? Well, it depends on supply and demand for the unimproved and improved product, the risks to be taken, etc. It is a different dynamic, I think.

[David]

Not entirely irrelevant to this thread:

https://youtu.be/-ppMEK2Uj_o

[Tannin]

Tannin, you're a bright bloke

I agree.

I am also dilligent, well-educated, good-lookin', cheerful, rich, funny, single, modest, a wonderful lover, generous, kind, and honest to a fault.

Well, single anyway. And mostly cheerful. I'm working on those other things.

Deep down i can't believe you completely believe the above

That is because you've made a series of unfounded assumptions about what you think I might have written and proceeded to criticise those self-generated assumptions. Hell, I agree with you. I reckon the bloke who wrote that nonsense you imagined you read is a fruitcake.

Corporate taxes are only one way that companies create tax revenue in an economy
Of course

and among the least important
Generally, no. It all depends on the company and the industry. Consider the example of a car manufacturer. They pay little tax because they make small profits, but they generate enormous indirect benefits ranging from training of apprentices through improved defence capacity because of better self-reliance to (of course) massive employment with all its flow-on benefits. This example supports your case.

Now consider Google. Google pays about the same dollar amount of tax as Dave the Man, possibly less. Google employs 400 Australians. This is its one and only claim to providing a public benefit apart from the taxes it doesn't pay. To achieve those 400 jobs, we, the people of Australia, give away half a billion dollars every year in avoided tax. If Google left Australia tomorrow, we could pay those 400 workers one million dollars a year each to sit on the beach and still have 100 million dollars left over to do something useful with. Yes, one million dollars a year each!

However, governments certainly do derive benefit from having large companies locate operations in their fiscal jurisdiction because they offer lower rates of taxation than other nations.

Indeed. These governments (Ireland is the case in point) effectively steal a large amount of money from other countries in their trading block in order to get a small amount of money for themselves. This is why the EU took the government of Ireland to court and won: Ireland was was leeching on its trading partners, and now they have been caught at it.

If i read your post correctly, you seem to suppose a closed economy

Nothing of the kind. I don't know where you got that idea from but it certainly wasn't me.

The reality of Apple's operations in Ireland are that income taxes are generated by thousands of employees there, as are business rates, payroll taxes, and the consumer spending of apple's employees. All of this spending, and its multiplier effect across the economy, is substantial, and it is paid for by revenues generated in other countries, so it is a net transfer to Ireland from abroad.

Precisely. Ireland is leeching on the rest of the EU, and the EU is sick of it.


I disagree that Australia can milk corporations for whatever corporate taxes we like with zero impact on jobs, skills, consumer product quality or tax revenues.

It is, of course, a matter of degree. If we were to impose (say) a 90% tax rate, that would have serious consequences - possibly even consequences almost as serious as those of the near-zero tax rates we are charging at present. But there is absolutely no reason to charge less than the market will bear. As we can see from the Thailand example (and from many others around the world), the market will bear vastly more than the multinationals are currently paying.

The quality of products sold in your country matters : it matters in terms of the quality of life (I drove a Trabant recently in the old East Germany, which made this point in admirably spluttering fashion) and it matters because scale effects make products cheaper, so people can afford to buy more nice stuff that they want.

It also matters for Australia's skills and participation and profit in the global economy. If Apple amd Samsung do not sell their products in far-flung Australia because the government gets too greedy, then developers of apps in australia will soon cease to exist.

Good point. Those poor Australian app developers. Whatever will they do with no Apple and no Samsung products? They won't have enough choice of products to buy and write their apps on! With Apple and Samsung gone, all they can do is buy one of these phones or tablets instead:

• Acer
  
• Airo Wireless
  
• Alcatel
  
• altek
  
• Amazon
  
• Amoi
  
• ARCHOS
  
• Asus
  
• AT&T
  
• Barnes & Noble
  
• BenQ
  
• Siemens
  
• Best Buy
  
• Bird
  
• BlackBerry
  
• BLU
  
• Casio
  
• CAT
  
• Celkon
  
• Cingular
  
• Coolpad
  
• COWON
  
• Cricket
  
• Danger
  
• Dell
  
• Dopod
  
• Emporia
  
• Ericsson
  
• Eten
  
• Firefly Mobile
  
• Fly
  
• Fujitsu
  
• Fusion Garage
  
• Garmin-Asus
  
• General Mobile
  
• Gigabyte
  
• Gionee
  
• Google
  
• Haier
  
• Handspring
  
• Helio
  
• Hitachi
  
• honor
  
• HP
  
• HTC
  
• Huawei
  
• ICEMOBILE
  
• i-mate
  
• i-mobile
  
• INQ
  
• Jolla
  
• Karbonn
  
• Kogan
  
• Latte
  
• LAVA
  
• Lemon Mobiles
  
• Lenovo
  
• LG
  
• Lumigon
  
• Maxon
  
• Maxwest
  
• Meizu
  
• Micromax
  
• Microsoft
  
• MiTAC
  
• Mitsubishi
  
• mobiado
  
• Motorola
  
• NEC
  
• Neonode
  
• NIU
  
• Notion Inc
  
• Nvidia
  
• O2
  
• OnePlus
  
• OPPO
  
• Orange
  
• Palm
  
• Panasonic
  
• Pantech
  
• PCD
  
• Philips
  
• Plum
  
• Qtek
  
• Sagem
  
• Sanyo
  
• Saygus
  
• Sendo
  
• Sharp
  
• Siemens
  
• Sierra Wireless
  
• Sonim
  
• Sony Ericsson
  
• Spice Mobile
  
• Sprint
  
• TAG Heuer
  
• TerreStar
  
• T-Mobile
  
• Toshiba
  
• UMX
  
• Velocity
  
• Verizon Wireless
  
• Vertu
  
• Verykool
  
• VERZO
  
• Videocon
  
• ViewSonic
  
• vivo
  
• VIZIO
  
• VKMobile
  
• WND
  
• Xiaomi
  
• Xolo
  
• Yezz
  
• Yota
  
• Zen Mobile
  
• ZTE
  
• (I have doubtless missed a few dozen more.)
  

This is the point of markets: there are many buyers and many sellers. That's what a market is. If one seller or another leaves the market, it simply doesn't matter. Others are only too happy to do the business.


Corporate taxation is difficult to pin down because it really is very difficult to determine where profits arise in a value chain that is integrated with regard to a corporation, but disarticulated across different national fiscal regimes. Where, in an integrated value chain, is the value created ?

I agree. It is indeed difficult.

(Omitted: a series of sensible and useful suggestions about ways of charging corporate tax which I won't repeat because I largely agree with them, at least as methods to consider.)

I dont think the way to pay for teachers and park rangers is to repel international business from your country through uncompetitive taxation relative to lower-tax jurisdictions.

We are not setting out to repel businesses. We are simply saying "pay your fair share or piss off". We welcome honest businesses. Cheats and leeches are not invited.

Further, our tax rates are not "uncompetitive". Australian business taxes are around about the international average. Our headline rate is higher than many, but most other jurisdictions have a slew of subsidiary state-based and local-based taxes (we don't, other than the insane 19th-century hangover of payroll tax, which is in any case a very small amount), and/or a range of other compulsory charges (such as social security "insurance") which are not included in the headline rate but nevertheless drive up the effective total cost of doing business in exactly the same way as a tax.

Australia's corporate tax rates, in other words, are perfectly reasonable, and competitive with most other nations.

What we do need to do is black-ban the cheats. Obviously we take the likes of Google and Apple and Ikea outside into the alley and give them a good kickin' pour encourager les autres. More importantly, we need to develop an anti-leeching protocol. For example (and this is just a quick example, there may be much better methods to achieve the same thing) we could declare certain tax-leech countries "non-conforming". Imports from and exports to (e.g.) Ireland and Singapore and Taxhavenstein, and sales by corporations registered in those places are subject to a 33% witholding tax, refundable on the presentation of evidence that the company is actually paying an appropriate rate of tax.

Bugger it. I just wasted more than an hour doing this and I have business to attend to! This is why I don't post on Nick's much anymore. I get sucked in and lose entire days I haven't got to spare.

Wasted time or not, urgent tasks notwithstanding, it is always a pleasure to cross swords with you Mugwamp.

[HAL]

In any case, Well that's okay. What a coincidence. I am single too! Extracted : supports your case. How so?