Re:Paradise Papers: Dear Tim Cook
by mpweiher on Wednesday November 08, 2017 @07:11AM
(#15651623)
>but they do pay in those other countries
No, they do not. That is, they have optimized their rates so well as to pay next to nothing.
Incidentally, this is the problem with repatriating those profits to the US: the IRS actually does recognize taxes that have already been paid and will "deduct" (don't know the exact technical mechanism, but that's the gist) the taxes that have already been paid to foreign tax authorities from the taxes due to the US. However, due to the tax "optimization" that's been happening, the actual tax paid is minuscule, and so the tax due on repatriation is substantial.
So what Apple and other US multinationals would prefer is for the "tax already paid" to be a boolean rather than an amount. As in "we already paid 0.00004% tax on this, therefore it is already taxed and the IRS gets nothing", whereas the IRS says "well you paid 0.00004%, so we get (US rate - 0.00004%)".
Of course, the corps call this "double taxation" and rail against it, but in fact double taxation is not happening, or only in that very warped sense.
No, they do not. That is, they have optimized their rates so well as to pay next to nothing.
Incidentally, this is the problem with repatriating those profits to the US: the IRS actually does recognize taxes that have already been paid and will "deduct" (don't know the exact technical mechanism, but that's the gist) the taxes that have already been paid to foreign tax authorities from the taxes due to the US. However, due to the tax "optimization" that's been happening, the actual tax paid is minuscule, and so the tax due on repatriation is substantial.
So what Apple and other US multinationals would prefer is for the "tax already paid" to be a boolean rather than an amount. As in "we already paid 0.00004% tax on this, therefore it is already taxed and the IRS gets nothing", whereas the IRS says "well you paid 0.00004%, so we get (US rate - 0.00004%)".
Of course, the corps call this "double taxation" and rail against it, but in fact double taxation is not happening, or only in that very warped sense.