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Adverse Ruling Against Apple Expected in European Tax Probe

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The European Commission is poised to hand down an adverse ruling against Apple next week following a three-year inquiry into the company's tax arrangements in Ireland, according to Financial Times.
Expectation of an adverse ruling gathered pace this week after the US Treasury issued a stinging attack on the commission's investigation, saying the EU executive was becoming a "supranational tax authority" that threatened international agreements on tax reform.
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The Brussels-based body, led by competition commissioner Margrethe Vestager, has been investigating whether Apple's alleged "sweetheart deal" with Ireland constitutes illegal state aid, which it determined based on its preliminary findings in 2014.

The commission has accused Apple of sheltering tens of billions of dollars by transferring revenue to multiple subsidiaries in Ireland, where it pays a significantly lower tax rate of around 2%, compared to the country's headline corporate tax rate of 12.5%.

An adverse ruling could result in Apple owing up to $21.2 billion in back taxes, although a previous study placed the figure around $8 billion, and some analysts believe the amount could be as low as $1 billion.

Apple is one of several large corporations accused of tax avoidance in Europe over the past three years, joining the likes of Starbucks, Fiat Chrysler, Amazon, Google, IKEA, and McDonald's. Starbucks in particular is currently appealing its case in Netherlands, where it was ordered to pay as much as 30 million euros in back taxes.

Apple CEO Tim Cook, who has insisted that his company fully complies with international tax law, said last month that it would appeal any unfavorable ruling in European courts. Apple has also said it is the largest taxpayer in the world.

Earlier this week, the U.S. Treasury department warned that an adverse ruling against Apple could "set an undesirable precedent." It also said the European Commission is becoming a "supranational tax authority," going beyond acceptable enforcement of competition and state aid law.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Adverse Ruling Against Apple Expected in European Tax Probe
 
Article Link
https://www.macrumors.com/2016/08/26/adverse-ruling-apple-tax-probe/
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Gasu E. said:
Oh, c'mon, was that a serious comment?
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Tim Cook is going to have to give his longevity bonus back! Or maybe they'll be forced to go down to 8 gigs for the base model of iPhones!

It might do the EU some good to have this money, but it's going to have little effect on Apple itself. Apple has more money than many, if not most entire countries. $1 billion would be a slap on the wrist as far as they're concerned, the cost of doing business. It's the ripple effect (if other countries also decide Apple should actually pay taxes) that might be worrisome.
 
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This would set a dangerous precedent. Apple and all other companies do what they can to legally avoid tax.

Could you argue it's against the spirit of the law? Probably. But that doesn't stand up. Who would pay more than they have to, if it's legal at the same time?

If there's a legal tax loophole to stop paying as much, you're damn right you'd take it. Every company does and every person does. It's within the letter of the law. Apple are being targeted because they're ludicrously rich, and that's a slice of Apple pie people are happy to dig into.

Want to stop this kind of thing? Then change the tax rules for everybody, to avoid these sort of loopholes. As the old mantra goes: don't hate the player, hate the game.
 
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Kaibelf said:
The EU has to be very careful about applying taxes ex post facto. That would run counter to just about all accepted law, especially if they are targeting only a handful of companies.
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I quite agree. It's also a bit disingenuous. The EU allowed one of its member states to strike this deal so Apple could avoid US taxes; now they turn around and say "Ireland, we want our piece too".

If they feel Ireland was wrong, they should allow Apple to go back and restate their prior-year finances according to whatever the EU seems to think is the proper reading of EU law. Or they should fine Ireland for the difference.

I'm not defending Apple here. But this seems a sleazy move by the EU to get in on the action. If anything, those Apple tax dodge savings should get repatriated to the US treasury, where they should have gone in the first place.
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Crosscreek said:
Typical multinational corporation hide and seek. Your caught.....pay up sweetheart. Can't really blame Apple....they all do it.
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Note it's the US Treasury, which ostensibly is the entity that Apple "ripped off", that is protesting the EU action.
 
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Apple - legally - did NOTHING wrong.

Those, who answer to shareholders, have an obligation to minimize their spendings.

But Apple, like many international subsidiaries, are not taxed in a reasonable and fair way, in Europe.
 
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"supranational tax authority"
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Don't provisions in FATCA to allow a rake of all bank transactions of non-domestic origin for non-disclosure of American financial assets abroad for the purpose of tax collection make the US exactly that?

I'm not defending what the EU is doing here at all - just pick a side of the fence and stay on it.
 
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It's an interesting case... from what I understand the reason companies have been able to get away with this for so long is because they are acting within the law, and if governments want to claim their fair share of tax they need to close the loopholes that companies like Apple are using. It's not wrong of any business to pay as little as it is legally obligated to pay.

But I do have to wonder, if they found Apple to be benefitting from illegal state aid from Ireland, would that not be a problem for Ireland and not Apple?
 
Kaibelf said:
The EU has to be very careful about applying taxes ex post facto. That would run counter to just about all accepted law, especially if they are targeting only a handful of companies.
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They are not applying any law retroactively. If Apple has received illegal state aid from Ireland the company has to pay it back. Breaking the law needs to result in consequences.
 
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It's pathetic Starbucks is fighting a 30 million dollar tax bill! That's probably chump change to them, these corporate giants really do think they can ignore international tax laws, because if they are appealing they have already been found guilty. I have to pay taxes, so should the rich!
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Cybbe said:
They are not applying any law retroactively. If Apple has received illegal state aid from Ireland the company has to pay it back. Breaking the law needs to result in consequences.
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This and many fail, or choose not to understand this.
 
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Gasu E. said:
I quite agree. It's also a bit disingenuous. The EU allowed one of its member states to strike this deal so Apple could avoid US taxes; now they turn around and say "Ireland, we want our piece too".
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This is simply not true. Under EU state aid rules, a member country has to notify state aid, even if legal, to the commission. You imply that Ireland has notified this particular form of state aid to the commission, and that the commission has approved it/declared it to be legal. That's simply not true. The commission has never approved Ireland illegal state aid to Apple.

I hope that the commission comes down hard on Ireland and Apple. These forms of illegal corporate handouts are utter disgraceful.
 
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So, let's say this goes against Apple. Can the State Department simply ignore its validity? Can some other authority block its implementation? Can Apple rightfully call for the dissolution of the EU in favour of a fiscal union akin to the USA in Europe and Eastern Europe and South Asia?

Just askin'.

::(
 
Gasu E. said:
I quite agree. It's also a bit disingenuous. The EU allowed one of its member states to strike this deal so Apple could avoid US taxes; now they turn around and say "Ireland, we want our piece too".

If they feel Ireland was wrong, they should allow Apple to go back and restate their prior-year finances according to whatever the EU seems to think is the proper reading of EU law. Or they should fine Ireland for the difference.

I'm not defending Apple here. But this seems a sleazy move by the EU to get in on the action. If anything, those Apple tax dodge savings should get repatriated to the US treasury, where they should have gone in the first place.
[doublepost=1472242493][/doublepost]


Note it's the US Treasury, which ostensibly is the entity that Apple "ripped off", that is protesting the EU action.
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I tought after brexit, EU can't interfere any longer... hmm
 
Rocketman said:
So, let's say this goes against Apple. Can the State Department simply ignore its validity? Can some other authority block its implementation? Can Apple rightfully call for the dissolution of the EU in favour of a fiscal union akin to the USA in Europe and Eastern Europe and South Asia?
::(
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Does Slovenia have jurisdiction in California tax matters? If you know the answer to this question, you'll know if the US has jurisdiction in a EU country.
 
(cue telex-typewriter sound)

November 26th, 2016: UE fine Apple €30B for unpaid taxes

December 1st 2016: US President Trump issues ultimatum to UE seeking fine reduction; UE does not respond

December 3rd, 2016: a nuclear warhead of unknown yeld explodes over Bruxelles UE headquarters; conflict escalates

December 6th, 2016: world is toast, Samsung partners with unscathed North Korea, world domination ensues.
 
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samh004 said:
But I do have to wonder, if they found Apple to be benefitting from illegal state aid from Ireland, would that not be a problem for Ireland and not Apple?
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No, it would be a problem for other EU countries and Apple’s competitors. The whole point of the Internal Market is that EU Member States relinquish a lot of their authority to regulate markets in favour of a supranational body. Ireland used public money to persuade Apple to come/stay and invest in Ireland. That is prima facie illegal.

Apple is not innocent in this. They should have refused to accept the deal and reported it to the European Commission, if they believed that competitors would benefit from it. Instead, they accepted it and that risk is on them.
 
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KALLT said:
No, it would be a problem for other EU countries and Apple’s competitors. The whole point of the Internal Market is that EU Member States relinquish a lot of their authority to regulate markets in favour of a supranational body. Ireland used public money to persuade Apple to come/stay and invest in Ireland. That is prima facie illegal.

Apple is not innocent in this. They should have refused to accept the deal and reported it to the European Commission, if they believed that competitors would benefit from it. Instead, they accepted it and that risk is on them.
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Am I the only one who feels like this wouldn't be a terrible thing if apple does wind up being forced to pay a large sum in back taxes? It is clear that companies like apple and Starbucks use these countries as tax havens having 0 benefit to the everyday consumer, it's not like the current way they are using tax havens makes their products cheaper or more affordable because they are using a tax haven, if anything I feel like apple should pay those back taxes to the US.
 
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Gasu E. said:
I quite agree. It's also a bit disingenuous. The EU allowed one of its member states to strike this deal so Apple could avoid US taxes; now they turn around and say "Ireland, we want our piece too".

If they feel Ireland was wrong, they should allow Apple to go back and restate their prior-year finances according to whatever the EU seems to think is the proper reading of EU law. Or they should fine Ireland for the difference.

I'm not defending Apple here. But this seems a sleazy move by the EU to get in on the action. If anything, those Apple tax dodge savings should get repatriated to the US treasury, where they should have gone in the first place.
[doublepost=1472242493][/doublepost]


Note it's the US Treasury, which ostensibly is the entity that Apple "ripped off", that is protesting the EU action.
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You have no idea what you are talking about. This is nothing to do with the US treasury being ripped off. This has everything to do with France, Germany, UK, and many other European Countries Financial authority being ripped off.

Apple books sales of its iPhones, computers software etc that is sold in these countries in Ireland. They are not the only ones doing it Amazon, Starbucks etc. are all up to the same game and they are all going to have to pay eventually. Ireland facilitates this because this brings jobs to Ireland but it is a Tax fraud pure and simple.

Apple chose to set up a structure that is dishonest and illegal. There is a separate issue that you may be confusing with this in that they do not repatriate profits to the US but keep them overseas thereby avoiding US corporate tax.

Ireland is a tiny market for Apple in Europe. The majority of their sales are in the big economies like Germany, France the UK, italy etc. By booking 100 percent of the sales in Ireland they make zero or little profit in these countries by diverting it to Ireland and paying 2 percent tax.

Apple is just greedy if they paid the correct tax due in every European country they would not have as many Billions sheltered overseas and the concerned countries would get more tax to build the roads and the hospitals and the rest of the infrastructure that the apple employees need and use every day.
 
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apolloa said:
It's pathetic Starbucks is fighting a 30 million dollar tax bill! That's probably chump change to them, these corporate giants really do think they can ignore international tax laws, because if they are appealing they have already been found guilty. I have to pay taxes, so should the rich!
[doublepost=1472245150][/doublepost]

This and many fail, or choose not to understand this.
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This is ONLY about retroactively changing the agreement in order to collect more money. Apple's had offices in Ireland since 1980 and hoards of cash there for decades. Why wasn't this disputed during all that time? Oh, that's right, now that Apple's the biggest company in the world the EU suddenly want their money by conveniently claiming it's illegal. Can't wait until Apple pulls out of there, cash, products and all. Losing EU sales would be like losing sales in one US state anyway.
 
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