European Union Accuses Ireland of Giving Apple Illegal State Aid with Tax Deals

[jmpage2]

About time too. The EU should fine Ireland a multiple of taxes lost, in the same way European companies are subject to such fines in the US. It is time for this to end.

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To be honest it's not really Apple's fault. if you are a business and a country offers you a fantastic sweetheart deal what are you going to say ?

Taxes should rise for Apple and by a lot. The US tax authorities are rightly very unhappy with the use of tax avoidance techniques by Apple, in particular sheltering their international profits abroad and paying very little tax on them either via deal likes the one with Ireland

Companies are getting worse than this.

The new thing that companies are doing is inversion... whereby they completely flee the high tax countries that made them successful and move to a low tax country by purchasing a company there and merging with it.

Depending on your geopolitical views you can either view this as a triumph of globalization or you can view these people as traitors.

Corporate leaders love to decry the high taxes of countries like the US, Canada, the EU and Japan, all the while ignoring that those high taxes are paying for the infrastructure that allowed them to hire educated workers and prosper in the first place.

 

[Thunderhawks]

What lawsuits are you talking about?

If corporations move their jobs the ones to blame are the corporation and Ireland, no one else

And, by the way, nothing is done retroactively

EU may try to hold Ireland to EU agreements, but as we all know there are always loopholes, interpretations etc.etc.

Those are the issues for a lawsuit. EU most likely wants that settled for all of EU members

Before thousands of jobs (especially young people) go by the wayside they'll take a hard look.

My prediction, nothing major will happen , just a shifting of numbers (i.e. tax loopholes become a little smaller and amounts allowed to be tax free adjusted.

 

[BoxerGT2.5]

"I'm worth $3.5 million that the government knows about".

 

[Thunderhawks]

Companies are getting worse than this.

The new thing that companies are doing is inversion... whereby they completely flee the high tax countries that made them successful and move to a low tax country by purchasing a company there and merging with it.

Depending on your geopolitical views you can either view this as a triumph of globalization or you can view these people as traitors.

Companies will always just pay minimums/only what they have to.
No ethical/moral issues in the business world when it comes to money.

 

[0x0x0x0]

Really? I figured EU laws were below local laws... it seems quite odd to me that nations would choose to join if it meant giving up some of their own sovereignty.

It has been a long settled law since Costa vs ENEL where it was held that national laws could not undermine EU law, as that would lead to the undermining of the principles of association, etc...

 

[JAT]

I understand the law as you have explained. I guess I am not clear if Apple did anything illegal. A company has the right to negotiate with another company for goods or with a state for tax breaks. There is nothing illegal with that. If Apple knowingly entered into a contract that was illegal due to EU regulations then I agree that should get punished, but if Apple simply negotiated well and it was Ireland that acted knowing they were violating the EU regulations then why should Apple have to pay? I don't know the details, but it sounded from this article that the EU found that Ireland did wrong, not Apple.

Semantics really don't matter for Apple, not when deciding the liability. If anything is found to be wrong in how much tax was paid, the first part of the solution is for Apple to pay more tax.

But the fact is that you may be wrong in the bold sentence. Ireland is not in a total sovereign position, the other countries in the EU may also have rights to taxation of companies. Esp considering just how much of Apple's sales are run through Ireland.

 

[0x0x0x0]

EU laws are mostly guidelines and can be interpreted by each country differently. That's why the law is different in every European country...

That's complete rubbish - you're ignoring the legal difference between Treaty Articles, Regulations, Directives, and Opinions...

 

[Oletros]

EU may try to hold Ireland to EU agreements, but as we all know there are always loopholes, interpretations etc.etc.

Those are the issues for a lawsuit. EU most likely wants that settled for all of EU members

Before thousands of jobs (especially young people) go by the wayside they'll take a hard look.

My prediction, nothing major will happen , just a shifting of numbers (i.e. tax loopholes become a little smaller and amounts allowed to be tax free adjusted.

I think you have to read some more about the case because all three things you say are wrong.

 

[Atlantico]

Because EU law supersedes national laws.

No, they don't. But Ireland has signed a treaty to implement laws that were made on EU level. Thus it isn't EU laws that supersedes anything, but the obligation to implement laws according to the treaty Ireland entered into by joining the EU.

As for Apple, well I have no sympathy for them. If they owe taxes, then they better cough up, like the rest of us.

 

[BoxerGT2.5]

Companies are getting worse than this.

The new thing that companies are doing is inversion... whereby they completely flee the high tax countries that made them successful and move to a low tax country by purchasing a company there and merging with it.

Depending on your geopolitical views you can either view this as a triumph of globalization or you can view these people as traitors.

Corporate leaders love to decry the high taxes of countries like the US, Canada, the EU and Japan, all the while ignoring that those high taxes are paying for the infrastructure that allowed them to hire educated workers and prosper in the first place.

You can either try to tax your way to prosperity (see Illinois) and fail. Or you can try and provide incentive for companies to come to a given country and the more you attract, the higher the revenue for your country.

Somewhere along the line there has been a witch hunt on companies to increase pay and to penalize them with increased taxes. All of which lead to fewer jobs, no jobs, and this mentality that taxes must "hurt" the rich. This leads to a call for isolationist type policies that will do more harm then good. We wonder why companies ship things off to Bermuda, it ain't for the weather and company picnics.

 

[0x0x0x0]

I’m struggling to see what Ireland have done wrong. In essence, it appears that they’ve offered a tax break, in order to provide jobs for the populace. What's wrong with that? They control their own taxes and decide how much to collect.

Even the EU are in favour of tax breaks when it saves jobs:

The European Commission has approved tax breaks for the UK video game industry.

Perhaps you are confusing giving a tax break to an industry as a whole with a tax break to a specific corporation?..

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EU laws don't supersede national laws, or vice-versa. EU laws (which don't actually exist - they're called 'directives') are implemented by each member nation by passing their own laws. So basically, "EU laws" and national laws are the same thing.

What you wrote is seriously misconceived.

Directives are only a part of the legislative process of the EU. In case of Directives, it is open to individual Member States to which the Directives are addressed (quote often all of the States) how they implement the Directives in their national law. However, those national laws are interpreted in light of the directives, as the Member States are deemed to be attempting to implement those Directives.

The situation is entirely different with Treaty Articles and Regulations.

 

[fr33 loader]

Ah, I see, so I can't actually buy anything. I can't buy something from Walmart, because they may have stolen it and now I'm liable for it. Hell, I should go out and steal stuff and then resell it with this logic - nobody will consider me, the criminal, responsible. Of course, it's kind of useless to have money in this world that you're imagining because you can't legally buy anything with it, so there's no point in selling it.

Basically, we're saying that every item that anyone owns is actually illegally obtained and that for all to be just, we should rid ourselves of all of our belongings and return it to the Earth.

Due diligence is responsibility of the buyer. If the rightful owner can prove that it was stolen and demands his/her property it back, you have no recourse but to give it back. It's a crime to keep a known stolen property. The law is actually created to deter thieves from having an easy time selling stolen goods and unscrupulous buyers taking advantage of this black-market.

 

[Oletros]

Ah, I see, so I can't actually buy anything. I can't buy something from Walmart, because they may have stolen it and now I'm liable for it. Hell, I should go out and steal stuff and then resell it with this logic - nobody will consider me, the criminal, responsible. Of course, it's kind of useless to have money in this world that you're imagining because you can't legally buy anything with it, so there's no point in selling it.

Basically, we're saying that every item that anyone owns is actually illegally obtained and that for all to be just, we should rid ourselves of all of our belongings and return it to the Earth.

Or you don't get it or you're just joking

 

[Drumjim85]

I'm sick of the British, and the EU, blaming the Irish for all their problems. It borders on racism, and it's time for it to end.

And what race would that be?

 

[jmpage2]

You can either try to tax your way to prosperity (see Illinois) and fail. Or you can try and provide incentive for companies to come to a given country and the more you attract, the higher the revenue for your country.

Somewhere along the line there has been a witch hunt on companies to increase pay and to penalize them with increased taxes. All of which lead to fewer jobs, no jobs, and this mentality that taxes must "hurt" the rich. This leads to a call for isolationist type policies that will do more harm then good. We wonder why companies ship things off to Bermuda, it ain't for the weather and company picnics.

The bottom line is that there must be taxes, and they must be paid. No nation or state has ever survived without them. We can debate what things taxes get spent on and how necessary those things are.. that is a healthy debate. What is not healthy is arguing that taxes are bad or evil. Maybe the US could slash taxes to 10%, maybe not.

The issue in the US is that there are so many loopholes and special exemptions for different companies and businesses that it is very difficult to ascertain what the real tax liability is for the "average" big business. Depending on the business you are in you might pay something close to the full tax rate, or you might pay literally zero in taxes.

There needs to be some fairness and equity in the tax code, and that must extend to small business owners not just large corporations.

My wife and I own a small business with 7 employees. We pay a huge amount of taxes, a much higher amount percentage wise than larger business pay for sure.

Small businesses account for 80+% of all US jobs but you would not be able to tell that based on the way our politicians chase after big companies with their tongues hanging out.

 

[vladi]

And Irish cannot even walk into Apple store to buy stuff cause there is none.

 

[jmpage2]

And Irish cannot even walk into Apple store to buy stuff cause there is none.

I think Ireland would happily take what they are getting from Apple vs having a couple of retail stores.

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You can either try to tax your way to prosperity (see Illinois) and fail. Or you can try and provide incentive for companies to come to a given country and the more you attract, the higher the revenue for your country.

Somewhere along the line there has been a witch hunt on companies to increase pay and to penalize them with increased taxes. All of which lead to fewer jobs, no jobs, and this mentality that taxes must "hurt" the rich. This leads to a call for isolationist type policies that will do more harm then good. We wonder why companies ship things off to Bermuda, it ain't for the weather and company picnics.

My only second point to you is that taxes for the wealthy are the lowest they have been in the past 60+ years.... so how exactly is it a witch hunt to argue that those taxes should move closer to where they were in the 50's, 60's and 70's when the US had better infrastructure and a more prosperous middle class than we have today?

As Buffett said, there is class warfare going on... the rich have declared war on the rest of us and they are winning.... partially through brain washing people like yourself into believing that they are job creators who should be given immense perks because somehow that will benefit the rest of us when they buy another yacht, mansion or car.

 

[BoxerGT2.5]

The bottom line is that there must be taxes, and they must be paid. No nation or state has ever survived without them. We can debate what things taxes get spent on and how necessary those things are.. that is a healthy debate. What is not healthy is arguing that taxes are bad or evil. Maybe the US could slash taxes to 10%, maybe not.

The issue in the US is that there are so many loopholes and special exemptions for different companies and businesses that it is very difficult to ascertain what the real tax liability is for the "average" big business. Depending on the business you are in you might pay something close to the full tax rate, or you might pay literally zero in taxes.

There needs to be some fairness and equity in the tax code, and that must extend to small business owners not just large corporations.

My wife and I own a small business with 7 employees. We pay a huge amount of taxes, a much higher amount percentage wise than larger business pay for sure.

Small businesses account for 80+% of all US jobs but you would not be able to tell that based on the way our politicians chase after big companies with their tongues hanging out.

Not gonna argue with you on that, my wife's family owns a small business so I know all well what they face. There seems to be this prevailing witch hunt (see the 99%'ers)on any company who turns a profit in the US when they hit a certain size.

I do agree that our tax code needs to be simplified, close the loopholes, lower the rate and make it equitable for all business. Lets make this country more attractive to bring business in to, that will boast our revenues more than taxing everything to the hilt.

 

[69Mustang]

Ah, I see, so I can't actually buy anything. I can't buy something from Walmart, because they may have stolen it and now I'm liable for it. Hell, I should go out and steal stuff and then resell it with this logic - nobody will consider me, the criminal, responsible. Of course, it's kind of useless to have money in this world that you're imagining because you can't legally buy anything with it, so there's no point in selling it.

Basically, we're saying that every item that anyone owns is actually illegally obtained and that for all to be just, we should rid ourselves of all of our belongings and return it to the Earth.

The problem with unreasonable examples is that, by nature, they are unreasonable. I'm sure you know your Walmart example qualifies as such. You would have been much better off admitting you don't know about the laws regarding stolen property - which again was a bad example to start with. There is an internet full of information on the topic.

Bolded: Nobody but the victim, police, judge, and your jailor. Remember you're the only one calling what you wrote "logic".

 

[skunk]

Basically, we're saying that every item that anyone owns is actually illegally obtained and that for all to be just, we should rid ourselves of all of our belongings and return it to the Earth.

Proudhon put it rather more elegantly.

 

[Reason077]

No, you don't pay VAT, you pass the difference between the VAT collected and the VAT paid as a consumer to the government.

Of course. But how is that different from a tax on profits? The money that generates company profits ultimately comes from customers buying their products. No sales = no profits = no tax. All tax revenue is ultimately the result of human economic activity.

If anything, sales tax is the fairer way to do it because there is no way for companies to weasel their way out of it by, for example, registering in a tax haven and funnelling the revenues off shore.

 

[Oletros]

Of course. But how is that different from a tax on profits? The money that generates company profits ultimately comes from customers buying their products. No sales = no profits = no tax.

What? Where do you get that if you don't get profits the VAT is not passed to the government?

VAT is independent of profits, it is a consumer tax.

 

[Reason077]

Taxes are always paid by the consumer. Tax is a business expense that gets passed on to the consumer in order for a business to make a profit (fancy word for money).

Yes, this was exactly the point I was trying to make. Thanks!

 

[Oletros]

When you file your taxes, do you claim dependents, take deductions (either the standard deduction or itemized), file a joint return, etc.? Do you contribute to your 401k, an HSA, a 501, etc.? If so, you are guilty of "tax avoidance." A business exists to make money. Part of making money = minimizing expenses. Tax = expense.

I'm pretty tired of the suggestion that somehow our country wouldn't be in such debt if conglomerates like apple "paid their fair share." What a load of crap. As if lack of income is the government's problem, rather than out-of-control spending on wars, waste, fraud, and abuse.

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Taxes are always paid by the consumer. Tax is a business expense that gets passed on to the consumer in order for a business to make a profit (fancy word for money). How can you own a business without understanding that Profit = Revenue - expense?

VAT is not a business expense

 

[Reason077]

What? Where do you get that if you don't get profits the VAT is not passed to the government?

VAT is a sales tax, so it is always passed on (unless, perhaps, the business goes bankrupt or whatever). Corporation tax, on the other hand, has various loopholes that many companies exploit to pay less or none - even if that company is generating a profit.