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Post by incorrigible on Feb 10, 2017 16:32:35 GMT -8
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JDSoCal
Member
Aspiring oligarch
Posts: 4,186
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Post by JDSoCal on Feb 10, 2017 16:56:51 GMT -8
Does this mean that Apple's non-US sales would be exempt from US federal tax? That doesn't make sense but would be phenomenal for Apple (and us shareholders). I know, the article contradicts itself. First it says offshore income would be exempt, then it says it would be taxed for infrastructure. Truth is, the details are almost certainly in flux right now, but the broad strokes sound, well, phenomenal. Remember that most countries do use a territorial tax system, i.e., only tax sales within the home country. Maybe some of those with more 10-Q understanding than myself can expand on what is considered an export for Apple (i.e., are iPhones made in China and sold in China an export, or just overseas business?).
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bud777
fire starter
Posts: 1,353
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Post by bud777 on Feb 10, 2017 18:18:52 GMT -8
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Post by incorrigible on Feb 10, 2017 18:31:39 GMT -8
Thanks for the link bud. This sounds like the opposite. Since iPhones are made in China, they would be charged both corporate taxes and other local taxes.
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Post by joel90069 on Feb 10, 2017 19:05:26 GMT -8
Does this mean that Apple's non-US sales would be exempt from US federal tax? That doesn't make sense but would be phenomenal for Apple (and us shareholders). I know, the article contradicts itself. First it says offshore income would be exempt, then it says it would be taxed for infrastructure. Truth is, the details are almost certainly in flux right now, but the broad strokes sound, well, phenomenal. Remember that most countries do use a territorial tax system, i.e., only tax sales within the home country. Maybe some of those with more 10-Q understanding than myself can expand on what is considered an export for Apple (i.e., are iPhones made in China and sold in China an export, or just overseas business?). I got he impression infrastructure spending would be funded by a 10% repatriation tax. Obviously, that would collectively raise billions. Thereafter, foreign income would be exempt.
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Post by mace on Feb 11, 2017 1:15:17 GMT -8
... This sounds like the opposite. Since iPhones are made in China, they would be charged both corporate taxes and other local taxes. Frankly I don't understand what bloomberg is talking about. Earlier in the article it says corporate tax is based on location of sale which I presume whatever the foreign nation charges and would be collected by the foreign nations. Do US want to collect taxes even if the product is sold in foreign nations? The second sentence applies to goods sold in USA only or include sale outside USA?
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bud777
fire starter
Posts: 1,353
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Post by bud777 on Feb 11, 2017 10:09:35 GMT -8
... This sounds like the opposite. Since iPhones are made in China, they would be charged both corporate taxes and other local taxes. Frankly I don't understand what bloomberg is talking about. Earlier in the article it says corporate tax is based on location of sale which I presume whatever the foreign nation charges and would be collected by the foreign nations. Do US want to collect taxes even if the product is sold in foreign nations? The second sentence applies to goods sold in USA only or include sale outside USA? Taxes collected in the foreign country on Apple sales would just be those taxes imposed by that country on the seller , just like it is now(VAT for example). U.S. revenue would be taxed just like today, but at a lower rate. Since it is a tax based on where the goods are sold, it removes the opportunity for corporations to shift income to tax havens like Ireland. Since Apple's overseas cash all came from foreign sales, it would come home tax free. This gets more interesting when we look at iPhones that are manufactured overseas. To make this work, the product must be exported from the US. I am not sure how the law treats cases where 99% of the product is manufactured abroad, then shipped to the US for the final 1%. Usually the imported parts come here with no profit and all the profit is assigned to the 1% operation. There may be caveats preventing this. I believe that the article had a link to the original paper on this if I have managed to confuse things further
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Post by mace on Feb 11, 2017 20:20:20 GMT -8
Frankly I don't understand what bloomberg is talking about. Earlier in the article it says corporate tax is based on location of sale which I presume whatever the foreign nation charges and would be collected by the foreign nations. Do US want to collect taxes even if the product is sold in foreign nations? The second sentence applies to goods sold in USA only or include sale outside USA? Taxes collected in the foreign country on Apple sales would just be those taxes imposed by that country on the seller , just like it is now(VAT for example). U.S. revenue would be taxed just like today, but at a lower rate. Since it is a tax based on where the goods are sold, it removes the opportunity for corporations to shift income to tax havens like Ireland. Since Apple's overseas cash all came from foreign sales, it would come home tax free. This gets more interesting when we look at iPhones that are manufactured overseas. To make this work, the product must be exported from the US. I am not sure how the law treats cases where 99% of the product is manufactured abroad, then shipped to the US for the final 1%. Usually the imported parts come here with no profit and all the profit is assigned to the 1% operation. There may be caveats preventing this. I believe that the article had a link to the original paper on this if I have managed to confuse things further Thank you but still not very clear about what is happening. IMHO, the biggest problem with the tax issue is USA doesn't have a VAT system. Frankly, the tax based on where the goods are sold sound like the system that are currently adopted internationally, that is, they are already collecting the taxes. The only difference seems to be USA stops collecting taxes for them, except when sold in USA. Then it becomes tricky, based on total sale price or VAT?
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