samedi 17 septembre 2016

26. Greedy Apple, Hungry Apple

Greedy Apple, Hungry Apple

As Irish Universities spiral down in the QS World University Ranking(1), so does Apple's taxes on income in Dublin. The corporation sealed a deal with the Irish government so that Apple Sales International (ASI)—Apple's ghost company in charge of its offshore intellectual properties—only pays 0,005% of tax income(2) in Ireland. If most of Apple's innovations are made in the United States of America, the USA Permanent Subcommittee on Investigation (PSI) pointed out that most revenues generated from patents and original ideas were shifted offshore to Dublin. Apple then uses a legal loophole to avoid taxes from both the USA and Ireland as the USA checks, for tax purpose, where a company is incorporated and Ireland, where a company is managed and controlled. Just like ASI, Apple Operations International (AOI) and Apple Operations Europe (AOE) are managed from the USA while incorporated in Ireland. ASI pays almost nothing to Ireland while AOE and AOI have not paid anything to any government since thirty years(2).

In 2013, the PSI held a ten hours hearing titled the Offshore Profit Shifting and the U.S. Tax Code. Half of the hearing dealt with the ways Apple avoids to pay up to 9 billions US each year out of the 15 billions it has to pay on its pure profit(2). Other countries are also unable to tax Apple's activities on their territory. For instance, all European and most world wide Apple's profits are shifted to Ireland(3). On the 30th of August this year, the European Commission issued the result of a year long research about Apple's tax benefits in Dublin, followed by the statement that the Irish under-taxation of Apple was illegal according to European State Aid Rules. Apple's CEO, Tim Cook called the (at least) 13 billions Euros bill “political crap” and was in Brussels less than a week after the European Commission's decision to lobby in favour of the prior arrangement(4). Apple's executive also threatened Europe with job loss over the issue and Cook asserted the corporation would appeal to the decision(5). For the last year, Apple inc. broke the record for corporate profit in history with a staggering 53.4 billions in annual revenue.

About closing such loopholes used by Apple and other corporations, USA senator Carl Levin said in 2013 that they “could provide hundreds of billions of dollars to reduce the deficit and avert damaging budget cuts to our defense, our schools, our roads, the safety of our food supply and other important priorities”.(2) In Ireland, the Irish Universities Association blames the lack of funding over the last decade for the poor scores of its university(1). It is somewhat a paradox that the Irish government still refuses to claim any money to Apple to protect its image for international investors(6).

Over this situation, Apple will release on the 16th of September its new Iphone which has no headphone jack. This last is the one quasi-universal port that allows compatibility and retro-compatibility between all audio devices since more than half a century(7). This is not the first time Apple gets rid of technology still used by its concurrence, from floppy disks to DVDs(7). In the actual state of the laws on intellectual properties, the corporation insures that there is no compatibility between its product and the rest of the market. It forces costumers to either buy more Apple products or to use an adapter (which at least comes free with the phone, but makes for a clunky experience).

Altogether, the USA government is now working on closing diverse loopholes, the European Union on stopping tax evasion and Dublin on keeping its status as a gateway to Europe for the greediest of investors. In the context of austerity in most of Europe, getting back Apple unpaid taxes represents more than 2800 Euros for each Irish. In parallel, the USA could use some of the money it invests in its country to upgrade the security around its easy-to-enter-in nuclear facility(8).

Hungry Apple, Greedy Apple
Little ball of money
Hungry Apple, Greedy Apple