Tax Experts Check Out Arguments From Apple Over Ruling
The European Union wants to crack down on the ways that companies minimize their tax bills in Europe, especially in Ireland. In the 1980s, Ireland began modeling itself after Bermuda, a well-known corporate tax haven, said Khadija Sharife, a forensic financial researcher
.. Ireland’s corporate tax rate is 12.5 percent, compared with 35 percent in the United States.
.. The European Commission makes clear, and tax experts agree, that Ireland let Apple determine how much of the income that it generated in the country would be recognized and taxed there.
The rest of Apple’s income that was not recognized and taxed in Ireland could be put in other corporate structures that were effectively stateless. That meant the money in those structures was not taxable anywhere — not even in Ireland — and thus not subject to Ireland’s 12.5 percent tax rate.
While other companies have also had the right to negotiate with Ireland, the commission considers these sorts of loopholes a no-no.
.. Mr. Kleinbard said the commission is not replacing Ireland’s tax law with a view of what the commission thinks should happen. It is simply asking Ireland to enforce the tax rate that it has and close loopholes that allow companies like Apple not to recognize large portions of the income they generate in Ireland and pay even less.
.. It’s true the majority of Apple’s profits are taxed in the United States.
But Ms. De Simone said Apple has also kept more than $200 billion in accumulated profits offshore. That money could someday be brought home and taxed, but Apple is in control of whether or not that actually happens.
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People would do well to also remember the total amount of government revenue being lost to low-cost tax deals, he said.
“If we allow companies like Apple to pick its tax haven — to place a few thousand employees in a place for a lower tax rate — we do add a few jobs,” he said. “But more widely, the taxes given up globally could be used for public service, worker training and infrastructure repair.”