Doesn't it already? I've been under the impression that is one of the big "things" about being an American. You will always pay taxes to the US:
"If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside."
For the US to start taxing Apple's foreign income abroad is not like taxing an American living in Ireland (and even that is crazy). It's like if the US started taxing an Irish person in Ireland[1].
However obvious it is that EU Apple is a sock puppet of US Apple, directly imposing taxes on foreign companies operating in foreign countries would be met with retaliation. It is not a smart nor a profitable trade policy.
>>For the US to start taxing Apple's foreign income abroad is not like taxing an American living in Ireland (and even that is crazy). It's like if the US started taxing an Irish person in Ireland[1].
I'm not sure I follow. Apple is an American company.
It would be more akin to the US taxing a dual American/Irish citizen living abroad. Which they do. You cannot just pretend not to be a US citizen when convenient.
Of course, typically you aren't taxed on the first $100k of income abroad, but likely businesses have similar carve-outs...
Yes, the US taxes the income of citizen's that live and work abroad. Those citizens' are taxed twice: once by the country they live in and again by the US[0]. From the article:
"If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside."
You get an offset though for the foreign tax you paid, right? So you aren't taxed twice as much as you are just taxed at the higher rate of the two countries.
Up to a certain point. Above that point, not only do you have to pay the tax to the foreign country in which you earned the money, but you also have to pay American income tax on that as well. I believe the cutoff is around $90,000.
You can choose to either take a foreign income tax exclusion (up to the first ~100k earned), and deduct income taxes paid beyond that point (like paying state taxes), or get a credit for foreign taxes paid.
So if you earn less than 100k, you need to file US taxes, but will only pay the foreign tax rate. If you earn, say 200k, then you’ll pay at least as much as the US would have taxed you on that income.[0]
There are still absurd pieces of this law: for instance, if you buy a home using foreign currency, then sell the home for the exact same amount, but the foreign currency became a lot stronger, you owe US taxes on the change in USD to your home’s value.
"If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside."
Per https://www.irs.gov/individuals/international-taxpayers/taxp...
EDIT: To answer your question, no, I don't like that, but I don't think "companies" should be exempt.