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

[Nuno Lopes]

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.

Thank you. Either put import taxes back up or change the EU constitution regarding issues of sovereignty or leave it is it is. What the German and French want is not constitutional and is anti competitive between EU countries.

There is another way. For these countries to buy commercial quotas of these small countries out in this context like they did with everything else. But of course they do not want it and there is a chance the country will refuse.

 

[phpmaven]

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

That may be true, but if the "scheme" is legal, why shouldn't Apple or any other company avail themselves of the benefits?

 

[Nuno Lopes]

That may be true, but if the "scheme" is legal, why shouldn't Apple or any other company avail themselves of the benefits?

There is no scheme. The laws were done this way as tax is one of the tools a country has to control their finances And attract businesses as they need. That is all the Irish did.

 

[Veinticinco]

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.

Sorry but this is nonsense. In what way are "the rest of the EU" paying for those avoided taxes? The likes of France and Germany (under the guise of the EU in this case) are perfectly at liberty to alter their own corporation tax rates and offer other incentives to attract corporate clients to their respective countries. Instead they're whining and bringing this legal challenge indirectly against one of their own member states.

Don't get me wrong. Is what Apple (along with Amazon etc) were/are doing to avoid taxes morally repugnant? Absolutely. But what "the EU" is attempting here, and in doing so arrogantly overstepping their powers, is no less shameful.

 

[Glideslope]

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

I thought so.

Can’t argue with these entitlement people. Most have never taken a business class let alone own their own corporation. I’m confident Apple will win a significant reduction in the amount perceived owed.

 

[G4DPII]

As the EU are going to have a huge hole in the budget, you can bet this will be faught to and nail. They need all the money they can get.

 

[TobiWahn_Kenobi]

Since it was not yet posted in this thread:
Apple/Ireland weren't found guilty because of how little corporations pay in taxes but because APPLE payed less (much less) in taxes compared to all the others because of some laws made specifically for that purpose. And the EU takes anti-competitive behavior very seriously.
It's not very good for the EU in my opinion for one country to ask for almost no tax on corporations who benefit most from infrastructure. But as long as every corporation gets the same benefits I think you can call it "fair"

 

[Gutwrench]

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

All that matters is whether they’re following the law. How much or little they pay in taxes is entirely irrelevant.

 

[NBAasDOGG]

I don’t care what Apple claims...
This company charges an extra $200 for every iPhone sold in Europe, let alone the more expansive Macs.

Now it’s payback time!

 

[LukeWorm]

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?

VAT is not a corporate tax, it's a consumption tax. Paid by consumers to the shop where they buy the product.

 

[danny842003]

I don’t care what Apple claims...
This company charges an extra $200 for every iPhone sold in Europe, let alone the more expansive Macs.

Now it’s payback time!

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View attachment 858944

So why exactly is Apple at fault here? If anything the EU should go after Ireland.

 

[Audigy]

(...) If they see this through they will be able to do whatever with local tax laws, and cook them to their advantage. (...)

Oh the bad big European countries escapegoat...

Surely you have the same opinion regarding the Portuguese tax breaks on pensioners from abroad, right?

Undercutting the other EU countries to lure elderly foreigners with money to spend, move along, nothing to see here, those big bad wolfs up in the north...

 

[lkrupp]

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.

The people who call Apple “criminals” actually hate ALL corporations as well as ALL wealthy people. It’s their thing.

 

[Cybbe]

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 a rather wilful misrepresentation of this case. Allow me to make two points

• The issue is not the Irish tax system per se. It is the selective application of it to specific companies, giving them a leg-up over competitors. The headline tax rate in Ireland is 12.5 %, while Apple in some cases paid 0.005 %. The Irish authorities essentially gave Apple a benefit so that it could pay substantially less taxes than other companies. I.e. Ireland gave Apple a better treatment than other companies. This is illegal state aid, quite obviously designed to attract a large company to Ireland. Ireland is free to offer all it's companies a tax rate of 0.005 % if it so wishes.
• Your claim that Germany and France have "cooked" the state aid and competition policy regime has no basis in facts and borders on a conspiracy theory. Siemens-Alstom springs to mind. In fact, those countries are so unhappy with the system that the seek a national veto over it.

 

[MacLawyer]

Surprised globalist T. Cook objects to EU usurping a member's sovereign right.

 

[1345873]

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

Disagree, a retailer pays up to 50% taxes, apple only 1,5% seems hardly fair.

 

[imom]

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.

Oops, it seems that Apple forgot that Ireland isn't really a sovereign state any more. They need to agree tax breaks with the EU in future.

Of course the German, the French and the soon to leave the British, don’t like this. Their view is anti competitive.

Totally agree. They are impudent enough to suggest that any state which levies taxes lower than theirs is guilty of "unfair competition". No, you dingbats, you are absolutely free to compete but that would interfere with your socialist agenda.

 

[H2SO4]

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.

Tax at a rate that's a little lower? Yes.
At a rate that's almost zero? No.

Even if it was a bit cheaper there's a good chance that bigger companies may invest there. But to negotiate a rate like that.....makes me think of a saying I hear quite regular and that Apple really should have considered.
If it sounds too good to be true, it usually is.

 

[Jeremy3292]

I don’t care what Apple claims...
This company charges an extra $200 for every iPhone sold in Europe, let alone the more expansive Macs.

Now it’s payback time!

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You do realize that graphic you posted is literally how LEGAL tax minimization works? There are so many companies that have a "global operations" office building in Ireland (including the company I work for) that flow all sales through that LEGAL company in Ireland in order to minimize taxes. I mean you can Google "Ireland tax haven" and find many articles on this topic lol.

I'm a CPA here in the USA and I'm very confident Apple followed and complied with all laws as this type of setup is literally commonplace. The EU only cares that Apple does it because they are a cash cow. If you want to argue "Apple should pay more taxes" as a general principle, that is an entirely separate political discussion.

 

[Romeo_Nightfall]

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 show a complete lack of understanding, Ireland has been moved from the poor house to the riches BY the big European countries, allowing them to construct the double Irish, Dutch.

BUT I think it was never meant to be a free ticket for huge American corporations. Less then 1 percent tax is ridiculous and anti-European.

your Post just Shows an anti European anti friendship attitude, when we Europeans would show that against Ireland it would become very poor again!

and Greece should have sold us some Ireland’s, we poured money in them like never before. They lived the socialist dream where already dead people got huge state pensions, and so on. A completely corrupt and nepotistic government.
Normally Greece would have been defaulted if they weren’t a geopolitical site and in the euro!

 

[ani4ani]

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.

Given these small countries like Ireland owe the likes of Germany, France and Britain €trillion+ then they should be recovering tax from the likes of Apple and co if they ever imagine a way of paying their way in the EU.

By “attracting” (subsidise) the likes of Apple, they destroy their indigenous business who are often paying 20-30 times the tax proportionately that Apple (and others do) pays or basically not.

 

[SarcasticJoe]

...

Judging by your response you're obviously not familiar with the specifics of this case.

What happened here was that the Irish government made secret deal with Apple where they promised to locate their operations in Ireland in return for charging Apple next to nothing in taxes. The Irish corporate tax rate at the time was already lower than that of most other European countries at about 20% IIRC, but the secret deal they gave Apple was one of a measly 0.005%! Apple then used their Irish subsidiary to do business across Europe paying next to no tax, giving them a significant advantage over their competitors.

Not only was this essentially giving Apple the ability to do business in Europe with effectively no taxes on their profits, this deal was also illegal under the basic articles of the EU. Hence the secrecy and the fact that it had to be leaked before the EU did anything about it. These kinds of special deals are very much illegal under the basic laws of the EU, which Ireland ratified under when they joined the EEC, the predecessor of the EU, way back in the 1970s. Under EU law these kinds of deals very clearly qualify as illegal state aid meant to skew the market and are hence highly illegal.

So in other words Apple went into a no-tax deal with Ireland knowing full well that this was illegal under EU law and tried to hide this by having this deal be secret. However this deal leaked and the EU has mandated that the Irish need to collect their standard business taxes as this very clearly qualifies as illegal state aid under EU law. If Ireland or Apple doesn't like this they're completely free to leave the EU, but as long as they are in the EU they need abide by it's laws.

TL;DR Ireland gave Apple illegal state aid by letting them operate effectively tax-free within the EU and now they they got caught they're both sour over the EU forcing Ireland to follow EU law and collect their standard business taxes on Apple's previously tax-free EU profits.

 

[ani4ani]

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?

Business do not pay VAT, consumers pay VAT. Business pays corporation tax which is anything between 12.5 and 25% in the EU. Apple “paid” less than 1% corporation tax.
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Sorry but this is nonsense. In what way are "the rest of the EU" paying for those avoided taxes? The likes of France and Germany (under the guise of the EU in this case) are perfectly at liberty to alter their own corporation tax rates and offer other incentives to attract corporate clients to their respective countries. Instead they're whining and bringing this legal challenge indirectly against one of their own member states.

Don't get me wrong. Is what Apple (along with Amazon etc) were/are doing to avoid taxes morally repugnant? Absolutely. But what "the EU" is attempting here, and in doing so arrogantly overstepping their powers, is no less shameful.

Germany, France and the UK are significant net contributors to the EU, that is they pay far more in than they get out. Ireland is a significant net beneficiary (like Greece, Spain etc). When Ireland does not collect the right amount of tax (to lay their way) then by implication the rest of Europe is paying. The EU has laws on setting taxes so they are not at liberty to set what they like. That is why Brexit is such a big deal to the EU; they fear a tax haven across the English Channel.

 

[Jeremy3292]

Apple then used their Irish subsidiary to do business across Europe paying next to no tax, giving them a significant advantage over their competitors.

This is literally commonplace tax minimization for numerous corporations. It is entirely legal.

 

[Baymowe335]

All that matters is whether they’re following the law. How much or little they pay in taxes is entirely irrelevant.

Obviously. It was a response to a post acting like Apple weasels their way out of tax bills through illegal activity. They pay their taxes and follow the law. There is zero evidence to the contrary and we'll see what the decision in this case will be. I predicted long ago they won't end up paying this.