Apple CFO Luca Maestri to Lead Challenge Against Irish Tax Ruling in Luxembourg Court This Week

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Apple this week is set to challenge the European Commission's order to repay 13 billion euros in Irish back taxes, according to Reuters.


The report claims Apple is expected to send a six-person delegation led by its CFO Luca Maestri to a two-day court hearing in Luxembourg on Tuesday and Wednesday. Apple will likely argue many of the same points that Apple CEO Tim Cook penned in a public letter about the tax ruling three years ago.

In a nutshell, Apple believes it follows the law and pays all the taxes it owes in every country where it operates, including Ireland. Apple has also said nearly all of its research and development takes place in the United States, so that is where the company should and does pay the majority of its taxes.

An excerpt from Cook's letter:
The Commission's move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe.
Ireland is also appealing the ruling, but Apple has finished paying back the 13 billion euros in the meantime, with the funds stored in an escrow account. If the order is overturned, the money would be returned to Apple.

In 2016, following a three-year investigation, the European Commission found Apple received illegal state aid from Ireland. Apple allegedly paid between 0.005 percent and one percent in taxes in Ireland between 2003 and 2014, compared to the the country's headline 12.5 percent corporate tax rate at the time.

Article Link: Apple CFO Luca Maestri to Lead Challenge Against Irish Tax Ruling in Luxembourg Court This Week
 
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Nuno Lopes

macrumors regular
Sep 6, 2011
117
147
Lisbon, Portugal
As an European I totally agree with Apple assessment. One of the ways small European countries have to compete and attract mass scale businesses such as the ones of Apple, against big countries like Germany and France is by negotiating better tax conditions.

Considering the small dimensions and population of these countries versus the massive scale of these companies businesses they can at a lower tax, supply financially their needs lawfully.

Of course the German, the French and the soon to leave the British, don’t like this. Their view is anti competitive. They want to have the advantages of being geographically big and large populations as well as tax advantages. They have cooked the European competition laws to their advantage but the issue of sovereignty has kept them from touching local / country tax laws. If they see this through they will be able to do whatever with local tax laws, and cook them to their advantage.

This is as ridiculous as small countries advocating that it’s unfair for them to be geographically small or not as well positioned in the flux of businesses in the map.

Mind you that all the loans given to smaller countries at better rates were for their development in exchange of commercial and production quotas towards the larger countries with plenty of agricultural fields and industrial capacity. So the lunch was not at all free. The all thing culminated with the Greek incident with the German suggestion for them to sell Islands in order to pay their dept.

Cheers.
 
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BigBoy2018

macrumors 6502a
Oct 23, 2018
816
1,422
The real issue is how much of Apple's work/production happened in Ireland compared to the U.S., China, and elsewhere. If a large bulk of their tax liability was paid in Ireland, but little or no real work was done there, then that's just a bad look, whether or not it's the law.

That said, the EU says they legally owed a lot more. So we'll see how things shake out.

And I agree with the poster right below me here, except they need to somehow change the law if indeed what Apple was doing was technically 'by the book'.
 

tabilo

macrumors newbie
Mar 15, 2012
28
32
As a European I disagree with Apple on this. The European idea can only work if there is a fair competition. Countries like Ireland, Luxembourg and partly UK and the Netherlands are using loopholes to attract international cooperations to avoid taxes, which the rest of the EU has to pay for.
 

mrklaw

macrumors 68020
Jan 29, 2008
2,364
744
The real issue is how much of Apple's work/production happened in Ireland compared to the U.S., China, and elsewhere. If a large bulk of their tax liability was paid in Ireland, but little or no real work was done there, then that's just a bad look, whether or not it's the law.

That said, the EU says they legally owed a lot more. So we'll see how things shake out.

Define 'work' though? I guess a bunch of this will be down to licensing and nonsense paper trading like that. Eg Apple Ireland charges franchisee stores a license fee to operate which is oddly specifically about exactly what their profit would be per year - so the individual retail stores etc don't actually make any profit.

No easy way around it although they could adapt things like sales tax so corporation or other taxes are based on revenues at source rather than profits?
 

Xtir

macrumors newbie
Dec 28, 2013
19
8
Why bother, Apple. This is a done deal. You think you can talk the EU out of $15B? They’re drooling over the prospect of getting their hands on that cash.
Like Apple was drooling over the remaining billions after the ireland-netherlands-bermuda tax evasionscheme. When doing business in europe, usa, or wherever, this is hurting the economies by moving money to the allready wealthy shareholders instead of governments for repairing/creating infrastructure, health, education.. Yes paying taxes does all that. Suggestion: restrict useage of these public services to tax-payed rato? Apple would not be able to deliver it on your doorstep with only 1,5% payed taxes.
 

Nuno Lopes

macrumors regular
Sep 6, 2011
117
147
Lisbon, Portugal
As a European I disagree with Apple on this. The European idea can only work if there is a fair competition. Countries like Ireland, Luxembourg and partly UK and the Netherlands are using loopholes to attract international cooperations to avoid taxes, which the rest of the EU has to pay for.
Your country is bigger and has more population (buyers) so its unfair competition to countries with the dimension of Ireland. Still I think the Irish buy a lot German and French production and they benefit for absolutely NO import tax.
 
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4jasontv

macrumors 68000
Jul 31, 2011
1,787
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Define 'work' though? I guess a bunch of this will be down to licensing and nonsense paper trading like that. Eg Apple Ireland charges franchisee stores a license fee to operate which is oddly specifically about exactly what their profit would be per year - so the individual retail stores etc don't actually make any profit.

No easy way around it although they could adapt things like sales tax so corporation or other taxes are based on revenues at source rather than profits?
I thought everyone in the EU used the VAT system. At some point Apple would have paid taxes on the value they added to their products. What other obligations would they have once they paid that?
 

mrklaw

macrumors 68020
Jan 29, 2008
2,364
744
I thought everyone in the EU used the VAT system. At some point Apple would have paid taxes on the value they added to their products. What other obligations would they have once they paid that?
Thats sales tax. We the consumer pay that - Apple just passes it along.

They make billions in profit operating in these countries. They should be paying corporation taxes on those profits. Standard practice in all/most countries. Unless you structure your holding companies and finances in such a way as to basically pay 0 tax
 

Nuno Lopes

macrumors regular
Sep 6, 2011
117
147
Lisbon, Portugal
I thought everyone in the EU used the VAT system. At some point Apple would have paid taxes on the value they added to their products. What other obligations would they have once they paid that?
The issue is not VAT but Commercial/Corporate tax. VAT is payed buy the consumer while Commercial/Corporate Tax is payed by the supplier according to sales and profits. The Germans and the French want to compete with commercial tax conditions against countries like Ireland, Greece, Portugal and others for businesses of the size of Apple. They cannot at the moment. As much as these countries cannot compete with the French and German agricultural fields and mining / industrial capacity due to the nature of the land.

They are upset with this deal. They want it all.
 
Last edited:

The Mercurian

macrumors 68000
Mar 17, 2012
1,821
2,051
Why bother, Apple. This is a done deal. You think you can talk the EU out of $15B? They’re drooling over the prospect of getting their hands on that cash.
Alas, this is not true for two reasons. 1. The EU doesn't get the money - Ireland does. 2. The Irish government doesn't want the money - they are trying to fight this too.
 
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4jasontv

macrumors 68000
Jul 31, 2011
1,787
1,477
Thats sales tax. We the consumer pay that - Apple just passes it along.

They make billions in profit operating in these countries. They should be paying corporation taxes on those profits. Standard practice in all/most countries. Unless you structure your holding companies and finances in such a way as to basically pay 0 tax
I thought with VAT everyone involved in production paid it. Income tax + sales tax is just a way to tax people twice for the same thing. Sure, more can be obtained by doing it to corporations but that doesn’t stop it from being double taxation.
[doublepost=1568638893][/doublepost]
The issue is not VAT but commercial tax. VAT is payed buy the consumer while Commercial Tax is payed by the supplier according to sales. The Germans and the French want to compete with commercial tax conditions against countries like Ireland, Greece, Portugal and others for businesses of the size of Apple. They cannot at the moment. As much as these countries cannot compete with the French and German agricultural fields and mining / industrial capacity.

They are upset with this deal. They want it all.
Gosh. Hmmm. Well, when I can’t collect more money I spend less. Have they tried that?
 
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danny842003

macrumors 6502a
Jun 6, 2017
888
847
As a European I disagree with Apple on this. The European idea can only work if there is a fair competition. Countries like Ireland, Luxembourg and partly UK and the Netherlands are using loopholes to attract international cooperations to avoid taxes, which the rest of the EU has to pay for.
The European idea will only ever work if there’s a European state and that’s where the entire idea falls over.
Here is a prime example, how much are nations expected to surrender? How much power should the EU have?
Brexit is only the start, I predict it won’t last 20 years in its current guise.
 

RickDEGH

macrumors member
Sep 15, 2018
54
65
Germany
As an European I totally agree with Apple assessment. One of the ways small European countries have to compete and attract mass scale businesses such as the ones of Apple, against big countries like Germany and France is by negotiating better tax conditions.

Considering the small dimensions and population of these countries versus the massive scale of these companies businesses they can at a lower tax, supply financially their needs lawfully.

Of course the German, the French and the soon to leave the British, don’t like this. Their view is anti competitive. They want to have the advantages of being geographically big and large populations as well as tax advantages. They have cooked the European competition laws to their advantage but the issue of sovereignty has kept them from touching local / country tax laws. If they see this through they will be able to do whatever with local tax laws, and cook them to their advantage.

This is as ridiculous as small countries advocating that it’s unfair for them to be geographically small or not as well positioned in the flux of businesses in the map.

Mind you that all the loans given to smaller countries at better rates were for their development in exchange of commercial and production quotas towards the larger countries with plenty of agricultural fields and industrial capacity. So the lunch was not at all free. The all thing culminated with the Greek incident with the German suggestion for them to sell Islands in order to pay their dept.

Cheers.
You, sir, just made the best comment on the internet today. As someone who studies European Competition laws I couldn’t agree more with you.