1. Pinning Down Apple s Alleged 0.005% Tax Rate: Mission Impossible

    Pinning Down Apple s Alleged 0.005% Tax Rate: Mission Impossible

    (Bloomberg) The European Commission’s finding that Ireland must collect as much as an attention-getting 13 billion euros ($14.5 billion) in back taxes from Apple Inc. contained a second stunning number: 0.005 percent. In a news release, the commission said that figure represented the effective corporate tax rate Apple paid on its European profits in 2014. At that rate, someone who earned $1 million would pay $50 in tax.

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    1. It's plausible, but we can't verify it.
    2. What's inappropriate is for, in the name of state aid, Europe to be rewriting tax law retroactively, reaching into a tax base that properly should be a U.S. tax base, because it's U.S. income.
    3. Apple has followed the letter of the law.
    4. If you believe Apple's annual reports, that most of its profit is earned in foreign countries, it would be impossible for them to get their rate that low unless almost all of the money is booked in tax havens.