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

[MacRumors]

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

 

[I7guy]

Seems like it’s best to grab a bag of popcorn and watch the proceedings. With some folks here calling Apple “criminals” for tax evasion, will be interesting to see how this turns out.

 

[lkrupp]

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.

 

[Sathinator1]

Apple should pay its fair share of tax in any part of the world that it operates. These tax minimization schemes are a disgrace.

 

[Nuno Lopes]

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.

 

[BigBoy2018]

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]

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.

 

[BigBoy2018]

Seems like it’s best to grab a bag of popcorn and watch the proceedings. With some folks here calling Apple “criminals” for tax evasion, will be interesting to see how this turns out.

Kill me now. Another lame 'popcorn' reference whenever there's a topic that's likely to spur some debate.

 

[apolloa]

Good luck Apple, you’ve got absolutely no hope of winning but good luck all the same.
Personally I think you should pay your taxes like everyone else and stop milking it of society but that’s just me.

 

[mrklaw]

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?

 

[1345873]

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]

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.

 

[4jasontv]

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?

 

[Baymowe335]

Apple should pay its fair share of tax in any part of the world that it operates. These tax minimization schemes are a disgrace.

Apple follows the law and is also the biggest tax payer.

 

[danny842003]

Apple should pay its fair share of tax in any part of the world that it operates. These tax minimization schemes are a disgrace.

Why is it a disgrace, tax minimisation is paying your fair share it’s not tax evasion they’re doing. The Irish government is very happy with Apple and is in their corner.

 

[snek]

Apple should pay its fair share of tax in any part of the world that it operates. These tax minimization schemes are a disgrace.

Why? You get cheaper products, better allocated money, less money to politicians.

 

[mrklaw]

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]

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.

 

[The Mercurian]

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.

 

[4jasontv]

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?

 

[danny842003]

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]

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.

 

[Nuno Lopes]

Well, when I can’t collect more money I spend less. Have they tried that?

That is for the consumers to do.

 

[thisisnotmyname]

@mods, no PRSI? This is going to get ugly. :-(

 

[az431]

Apple should pay its fair share of tax in any part of the world that it operates. These tax minimization schemes are a disgrace.

So you don’t take any tax deductions that you are entitled to because it would be a “disgrace”?

I thought so.