Posts by Shagbag

Don't bash the MPs for doing their job

But they're NOT doing their job. That's the point. MPs should be changing legislation to stop this type of activity. Trying to 'shame' a corporation into paying more than they're legally obliged to do so is a exercise in timewasting. Business is business and Moses is Moses.

Bash the MPs for not doing their job.

Don't forget - these MPs pontificating about the immorality of legally avoiding taxes are the same MPs that threw up the "I've done nothing illegal" defence when they were caught with their snouts in the trough over parliamentary expense claims.

The clear double-standard is repulsive as does no service to the PAC.

Re: Pretty much

No. You have overly simplied the facts.

1. Rent the factory, don't build it. You can claim tax relief for rent, I'm not sure if you can get capital allowances for a building you built. Even if you can, paying rent may give greater tax releif.

2. Don't employ people, use contractors (which is a whole tax avoidance question in itself).

3. If you incorporate the business in Ireland, you'll need to prove that Central Management and Control is not located in the UK where you are. Otherwise you've fucked up. Big time.

By all means try out your 'simple' tax scheme, but unless you know what you're doing (and I suspect you dont'), you'll soon end up behind bars being pounded in the ass by Mr Big.

Re: Eh?

Like most countries, the US does not tax the earnings of a foreign corporation until those earnings come back ('repatriated') to its US holding company via dividends. There are exceptions, eg. Controlled Foreign Corporations, whose earnings are deemed to have been repatriated, if you like, so that those foreign earnings are taxed in the US even though the cash never never goes anywhere near the US.

Most large multinationals set up their corporate structures so that foreign 'subsidiaries' are not considered CFCs. This ensures no US tax is paid until the cash actually comes back into the US.

It's usual for the US to allow a reduction in the US tax bill for the amount of foreign taxes paid (so that there's no double-payment of tax) but it's likely, in Apple's case, that little or not foreign tax has been paid because the foreign corporations are located in low-tax counties like Ireland (company tax rate = 12.5%).

The upshot of all of this is that when the foreign earnings are repatriated (eg. so that the holding company can pay dividends or return capital to its shareholders) there is a large US tax liability that must be paid.

No one likes paying tax (except Labour-voting lefties and, even then, they prefer someone else pays it, not them) and there are many US corporations with the same problem as Apple.

It appears Apple's solution is to keep the cash offshore but raise new cash by issuing bonds to investors, and then use this new cash to pay shareholders. The bonds require regular interest payments, of course, but this can be met (in part) by the interest income on the deposits the foreign company has. Of course, there's some fiscal drag (since deposit rates are lower than borrowing rates) but maybe Apple has a plan for this, eg. invest in its own debt so that it's a cash merry-go-round - but with out the tax liability.

Now that really would be a tax shag.

"The market is going to be all over it,"

...said Todd Duvick, corporate credit analyst at Stifel Nicolaus. "It's a name that everyone follows and they're comfortable with. From a credit perspective it's going to be a good diversification name for a lot of accounts."

Spoken like a true salesman. IIRC there were a lot of people saying the same thing about Facebook's IPO.

We at El Reg know that Apple's new product pipeline is looking quite poor and this has been reflected in the 30%+ drop in its share price in the last 6 months (ie. the present value of growth opportunities has been heavily discounted by investors).

Lies, damn lies and statistics

Top left of chart: "US Consumer Survey".

We know that Apple enjoys strong brand loyality in the US but not outside of it, so the %s are to be expected.

People like to forecast, but then nobody in 2007 forecast the MASSIVE RECESSION we've had since - including all those over-paid Central Bankers who somehow feel they have the wisdom to tell other economies what's good for them even though those same Central Bankers ALL failed to predict the worst recession on record.

Forecasts are bullshit. People who consume them are eating bullshit.

'Yankee Group' = more like the 'JerkOffee Group'

Provided it ends with consensual, full sexual intercourse, I don't see the problem with it.

Re: HTC One Black - no stock

What you're seeing is HTC slavishly copying Apple.

HTC have followed the Apple model of restricting manufacture so that they can claim they've 'Sold Out' of handsets to import some sort of 'runaway success' in the minds of potential buyers.

While the effect usually lasts only a few days before people get wise to it, Apple has learned that most of its purchasers will never admit to being duped so they keep the handsets.

Apple have worked very hard over the last decade or two to sell 'the image' rather than 'the machine'. Because of this, there are a devout number of Apple-owning consumers who think it's cool to own last year's technology in today's designs and they proudly go around displaying their i5s like the Emporer displayed his new clothes.

The question that remains to be answered is if HTC can perform the same.

Re: Blimey

On the contrary. I find the read quite entertaining. Which is, I suspect, the intended effect.

Share buy-back

"We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases"

LOL.

Any student of investment analysis knows that a buy-back has positive effect on a company's share price because it means having the cash sitting around in a bank earning sub-cost of capital returns won't be dragging down the company's value anymore.

An equally valid interpretation is that management have recognised that they have no use for this excess cash (ie. they can't ever see investing it in R&D/new products) so they give it back to the shareholders who can choose to put in bank deposits themselves rather than being forced to have it in a bank deposit by company dictat. Anyone can put cash in a bank account. You don't need to pay £££s to Cock et. al. to do it for you. If there's no foreseeable future use for it stop destroying shareholder value and give it back to the shareholders for them to invest in other projects themselves according to their own appetites for risk.