Following the EU decision that Apple must pay 13.000 million euros to Ireland in respect of corporation tax, taxes Apple again become a topic of conversation. And we all know that the apple company is a moneymaker and we want our part.
Because let’s think this way, we are talking about a company that sells exceptions, mobile and more expensive personal computers. It also has a music store and applications. It is estimated that the volume of business is 1,100 million euros. It seems little.
But the question that needs us to see, is that if taxes are paid where the value is generated, what is the value that the two companies that has Apple ? Both Apple Marketing Iberia and Apple Retail are merely companies dependent subsidiaries in Ireland.
By comparison, BQ (much smaller) has paid six million euros in taxes since its founding and Inditex (if it is a giant but another sector) has paid 860 million euros in 2015.
That does not mean that Inditex has not tried to reduce their tax bill as they had to announce it would no longer pay taxes from Ireland by the pressure that occurred when the news came out that it was the country that had chosen for his store. On the other hand, still it continues to sell from Ireland to some jurisdictions .
Using the laws giving the EU and US
Possibly there attention that Apple is using the jurisdiction of Ireland to pay less tax, but keep in mind that not only tax lower societies is all that Ireland has to offer Apple (in fact corporation tax lowest is in Bulgaria ). English language along with a skilled workforce (and the ability to attract workers from across Europe), a good legal framework and other factors have caused many other multinationals use Ireland as abase for its European operations or even global.
Other companies that have taken advantage taxation offered by Ireland are Google or Amazon . It has also investigated the use of Holland by Starbucks or Luxembourg by Fiat. What is normal that US companies when coming here choose to structure their European business fiscally advantageous way , but I think when a European company (Fiat or if Inditex said) it hurts a little more.
Yet American companies also use the tax advantages that give them the states. Google is incorporated in Delaware , like many other companies. Citigroup and Wells Fargohad not chosen Sioux Falls in South Dakota if it were not for the tax benefits that gives them this state. When there is competition, any tax sovereignty is trichera. Which to many it may seem unjust.
Now suppose we got match all types of companies in virtually all countries of the world (North Korea would certainly exceptions), where should a multinational company to pay taxes to make it fair?
Just I do not know, but complicated …
Returning to Apple where the value of the products it sells is generated? The iPhones are manufactured in China by specialized companies such as Foxconn. But what we paid not by a phone Made in China, since almost all are made there.
So when you buy an iPhone is paid primarily by the quality of manufacturing, design and software. Because the real difference between an iPhone and a mobile with Android is in the software and Apple added values against those of Google in it. Why the greatest value center Apple is in Cupertino, California. That is why the salaries paid by Apple in California are much higher than those paid elsewhere.
The question is where Apple should pay taxes if all types of corporate tax are the same?In the background an iPhone sold in a store would not provide benefits only to Apple, but also to manufacturing in China and design in California. Where would it be fair that taxed the benefits of this iPhone? In California where it was designed ?In China where it was manufactured? Or maybe in where it was sold? The only thing that is clear is that VAT would stay, but nothing more.
Even if the rate of corporation tax were equal across the EU and the iPhone had purchased online do we believe that corporate tax would be paid in? Quite possibly it not. Most likely is that Apple had a single store throughout the EU it would be easier to manage. In that case the country would leave him more on account.Perhaps Ireland for its advantages, perhaps a country with lower labor costs such as Slovakia.
It ‘s no wonder that multinationals use tax part as a way to decide this , the end ofthe day your goal is to make money, not to assign the best possible way taxes between jusrisdicciones who are not able to agree on what what what do they want.