Quote:
Originally Posted by Five-hole
No it's not. It's the haphazard way the tax codes of all the jurisdictions in the world overlap, the fact that the international tax system is about 100 years out of date, the fact that there are quite a few economies in the world that depend almost entirely on corporate registrations and fees and so charge no corporate income tax, the fact that if any one jurisdiction tried to "shore up" it's international rules, highly mobile companies whose core assets consist of intellectual property can simply declare their income elsewhere, the fact that countries would rather undertax corporations than risk double-taxing them and having them set up shop elsewhere, that tax treaties are not unilateral policy instruments, the fact that some of the smartest people in the world have dedicated their careers to lowering income tax bills of large corporations by hook or by crook, ... and on and on.
This problem is among the most complicated in the legal sphere.
I know you're a lawyer, so if you've got time (har) check out the General Electric Capital Canada v. R. case on transfer pricing. Even companies that want to comply with international tax codes get dinged with massive reassessments followed by astronomically expensive and lengthy litigation. It's a complete mess and with the mounting political will to "do something about it" it's going to get worse before it gets better.
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I'm a bit confused as to how any of this counters my point that it's Congress' rules that allow it. If they wanted Apple to be required to pay increased US taxes they have the ability to make that happen. What you're talking about is Apple's likely response to avoid those increased taxes. No doubt that part of the reason the rules exist as is is the convoluted situation you've described above, but that doesn't change that this is outrage for political purposes above all else.