Europe has been against our corp tax for years and years. Not too happy with our economy being run by foreign companies but it's a bit late to change all that so we have to keep them happy.


Government will appeal the decision , because we actually don't want to take the money off them.


As far as I know Apple paid a 0.005% tax in 2014 after all reductions were taken into account.

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I think badger is right.   A company can't claim a foreign tax credit on their US income tax return unless they declare the related income on their US tax return.  But that would defeat the purpose of relocating to Ireland.   So really, the idea that American taxpayers would foot the bill if they paid more tax overseas makes no sense at all.

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As far as the second part in bold, eventually it will affect U.S. tax payers since it will end up being less tax revenue coming in.  Every dollar that Apple pays in taxes to a foreign country can be deducted from their U.S. tax bill.

 

Is that how it works? I thought the deduction comes off of their profits, not their tax bill. That's similar to the difference between a mortgage interest deduction vs. a child tax credit. In the former case it lowers your taxes, but not by 100%, just the additional taxes you'd pay on the income that went to mortgage interest.

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"Why should I give information to you when all you want to do is find something wrong with it?"

Is that how it works? I thought the deduction comes off of their profits, not their tax bill. That's similar to the difference between a mortgage interest deduction vs. a child tax credit. In the former case it lowers your taxes, but not by 100%, just the additional taxes you'd pay on the income that went to mortgage interest.

 

The foreign tax credit does reduce your liability dollar for dollar.  Any dollar you spend on foreign taxes will reduce your tax owed to the IRS by the same amount.  Mortgage interest is an itemized deduction so it only has potential to reduce your taxable income.  The FTC or CTC (credits) actually reduce the total tax.  However, like I said, I dont think that is the issue at hand here.  Apple should not be getting a FTC on income they dont report in the US.

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I think badger is right.   A company can't claim a foreign tax credit on their US income tax return unless they declare the related income on their US tax return.  But that would defeat the purpose of relocating to Ireland.   So really, the idea that American taxpayers would foot the bill if they paid more tax overseas makes no sense at all.

 

 

The foreign tax credit does reduce your liability dollar for dollar.  Any dollar you spend on foreign taxes will reduce your tax owed to the IRS by the same amount.  Mortgage interest is an itemized deduction so it only has potential to reduce your taxable income.  The FTC or CTC (credits) actually reduce the total tax.  However, like I said, I dont think that is the issue at hand here.  Apple should not be getting a FTC on income they dont report in the US.

 

You may or may not be correct.  I don't know the tax code well enough.  I was just going by the financial news that I read yesterday, specifically this article from Yahoo Finance.

 

From the article.

 

That provision is known as the foreign tax credit, which unlike much of the tax code is fairly simple, in concept. Under the US code, American companies doing business in foreign countries pay tax in the US as well as where they earn the revenue being taxed. In order to prevent companies from being taxed twice, companies earn a 1-for-1 credit on their US tax bill for taxes paid overseas.

 

<p class="" style="color:rgb(38,40,42);font-family:'Helvetica Neue', Helvetica, Arial, sans-serif;font-size:15px;">In a simplified example, if Apple paid $14.5 billion in taxes to Ireland in a given year, and its tax liability to Uncle Sam was $50 billion, it would generally be able to reduce its US income tax by the amount of taxes it paid to Ireland. So it would only owe $35.5 billion in US taxes.

<p class="" style="color:rgb(38,40,42);font-family:'Helvetica Neue', Helvetica, Arial, sans-serif;font-size:15px;">That’s $14.5 billion in revenue the US Treasury won’t get, which means the government can cut spending by $14.5 billion to offset the loss, or borrow to make up the difference. In reality, the government never cuts spending based on the flow of revenue from a single source, or raises taxes on some other entity in real time. So the difference is essentially made up by borrowing, which is a future obligation borne by US taxpayers.

 

Again, I'm not sure how this would really affect tax payers in the future.

 

In my opinion, this situation just illustrates the need to fix the tax structure in our country.

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There are 10 kinds of people in this world.  Those who understand binary and those who don't.