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

[Mailia]

I'm assuming the Irish tax law that apple lawyers had a help in making.

Not really sure what congressmen have to do with Irish tax law.

 

[Baymowe335]

Not really sure what congressmen have to do with Irish tax law.

It's a euphemism for don't like it, tell the people who makes the laws.

 

[justperry]

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.

You might have overlooked the post from SarcasticJoe, it describes perfectly what many people don't seem to understand.
I like Apple stuff but in this case they were wrong, watch the EU, they will win this case, as with former cases like Google and Microsoft.

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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.

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It seems like a lot of people on this forum needs to understand that Europe does not equal EU, and vice versa.

Also, there are no "states" in the EU or Europe. There are sovereign countries. And within the countries are states, regions and municipalities.

I'm glad my country (Norway), that is in Europe, is not a member of the EU (which has turned into a pile of corrupt and over-administrative crap).

You're lucky to be Norwegian, a country with one of the highest incomes, I bet you would have a different opinion if you were Irish, a country that benefitted greatly from being a EU member.

 

[macfacts]

Not really sure what congressmen have to do with Irish tax law.

I'm not sure why you are bringing up American politicians.
[doublepost=1568664627][/doublepost]Apple has 0 retail stores in Ireland but potentially has to pay $15 billion in back taxes. This doesn't sound fishy?

 

[justperry]

"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."

Need to rethink that logic. That's not how it works. While Ireland still has any sovereignty, the money that Ireland collects in taxes from Apple goes to Ireland, not the rest of the EU. That's why Apple has paid the money into Ireland's account, not the EU's. If your logic was correct, the rest of the EU would now be $13 Billion dollars richer, not the Irish people.

It's not as black and white as you say, If this case is over and Apple has to pay the money (They already did/escrow) Ireland will be €13 Billion richer, the EU will definitely lower subsidies to Ireland.

 

[Rob_2811]

No one said that was the logic. The logic is Apple follows all tax law AND so happens to be the largest taxpayer. Apple pays their tax bills and does nothing nefarious to circumvent them. Every public company has a fiduciary responsibility to shareholders to optimize tax.

Don't like the law? Call you congressman.

Im genuinely starting to wonder.. You know there are other countries outside the US right?

 

[Baymowe335]

Im genuinely starting to wonder.. You know there are other countries outside the US right?

LOL!! You're not genuinely wondering...you're being snarky. And my guess is I've traveled a lot more than you. I only think this because I travel internationally quite a bit more than the average person, but think what you want.

Again, it was a euphemism for blaming the people that make the laws, not the people who follow them and the result is unintended. Apple wasn't just willfully breaking laws here. Now the courts decide who is right.

 

[Rob_2811]

LOL!! You're not genuinely wondering...you're being snarky. And my guess is I've traveled a lot more than you. I only think this because I travel internationally quite a bit more than the average person, but think what you want.

Again, it was a euphemism for blaming the people that make the laws, not the people who follow them and the result is unintended. Apple wasn't just willfully breaking laws here. Now the courts decide who is right.

I honestly don't give a second thought to how much you travel, honestly couldn't give a toss.

 

[ani4ani]

Define the term as related to taxes.

How about the same as the rest for a start?
[doublepost=1568667650][/doublepost]

"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."

Need to rethink that logic. That's not how it works. While Ireland still has any sovereignty, the money that Ireland collects in taxes from Apple goes to Ireland, not the rest of the EU. That's why Apple has paid the money into Ireland's account, not the EU's. If your logic was correct, the rest of the EU would now be $13 Billion dollars richer, not the Irish people.

You don’t know what you’re talking about.

 

[Baymowe335]

I honestly don't give a second thought to how much you travel, honestly couldn't give a toss.

Then probably shouldn't post ridiculous assumptions about me. Just stick to the content.

 

[I7guy]

And many millions of people thought those thousands of people waiting in line were dorks.

I dont know how many of those waiting in line really gave a you know what, what other people thought of them.

 

[Bigsk8r]

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.

I'm curious as to how the rest of the EU is "pay"ing for this?

We have a much smaller scale issue with Apple here (Austin, TX) due to them buying a 133 acre ranch and planning to make it their second biggest global presence behind Cupertino. The city approved of the plan, the county approved a 10 year 85% tax abatement. Locals who are not well read, and not accountants, got up in arms about the "tax break" being given to Apple.

As it turns out, the Robinson Ranch was largely stagnant and producing the lowest per acre tax possible due to it being zoned for agriculture. With very little income and minimal zoning, the county was not collecting even $1000 an acre. Now that it is zoned commercial, and Apple definitely is profiting from it's use, the taxes are many magnitudes higher. Even at the 85% abatement, the county will make 3 - 5x per year on what they were getting. As well, 6,000 - 7,000 new families will be moving in and paying taxes in the county too.

So laying this over Ireland and the EU...

If Ireland is making something by giving Apple a break, and Apple wouldn't be operating there without the break, how is this hurting the EU? And... if it isn't illegal in Ireland, how is it illegal in the EU?

Answer... it isn't. The EU just wants more money they did nothing to create.

 

[phpmaven]

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.

I agree, that's why I put scheme in quotes. Apple simply used the laws of the land to pay the least possible tax. Just the same as any sane business would do.

 

[laz232]

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.

I run my own business within the European economic area.

There are two separate issues that are being conflated here. The first is that the ruling is based on unfair competition effectively extended by the Irish government,

The second is the moral position especially from a company headed by Tim Cook that seems to espouse "fairness" Continuously as long as it behooves them. Smaller companies just do not have the opportunities available to them that the larger companies do in order to set up tax structures that effectively avoid paying a majority of taxes. The same for the richest part of society - Or has everyone suddenly forgotten about the exposition in the panama papers? The richest part of society both corporate and personal do not pay a proportional share of their income in taxes - I'm not even arguing for a progressive tax system, which I don't necessarily think is morally justifiable, but even a flat tax system where all the loopholes or removed would be fairer.

All in all apple's claims are extremely disingenuous and further my opinion of Tim Cook as a very opportunistic, unprincipled and in charismatic non-visionary corporate accountant elevated through Peter principle to the position of CEO.

 

[macfacts]

If Ireland is making something by giving Apple a break, and Apple wouldn't be operating there without the break, how is this hurting the EU? And... if it isn't illegal in Ireland, how is it illegal in the EU?

Apple has zero apple retail stores in Ireland. Apple isn't operating there.

 

[Plutonius]

But allegedly not EU laws

Then it's Ireland's problem.

 

[I7guy]

I run my own business within the European economic area.

There are two separate issues that are being conflated here. The first is that the ruling is based on unfair competition effectively extended by the Irish government,

The second is the moral position especially from a company headed by Tim Cook that seems to espouse "fairness" Continuously as long as it behooves them. Smaller companies just do not have the opportunities available to them that the larger companies do in order to set up tax structures that effectively avoid paying a majority of taxes. The same for the richest part of society - Or has everyone suddenly forgotten about the exposition in the panama papers? The richest part of society both corporate and personal do not pay a proportional share of their income in taxes - I'm not even arguing for a progressive tax system, which I don't necessarily think is morally justifiable, but even a flat tax system where all the loopholes or removed would be fairer.

All in all apple's claims are extremely disingenuous and further my opinion of Tim Cook as a very opportunistic, unprincipled and in charismatic non-visionary corporate accountant elevated through Peter principle to the position of CEO.

In other words, as I see it...Apple is working within the system and Tim Cook is doing the job he should be doing.

 

[RicD]

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.

What”...moving money to the allready wealthy shareholders ...” a very large percent of stockholders are people holding less than 100 shares of stock. Obviously you are undereducated about stockholders. Also, companies are responsible to stockholders not to governments nor social programs. I do not understand your comment “tax evasion scheme”, not any more than you claiming all the deductions legally available to you. To pay only the taxes required by law nothing more is what you should do for yourself and your family; paying more taxes than required by law is not a moral obligation. Corporations have the obligation for making profits for the folks investing their money into said corporation, not to anyone else. Also, for not handling tax obligations according to the law, a corporation and its officers can get into deep trouble; accused of malfeasance, misfeasance, and nonfeasance. Paying taxes is not a moral obligation it is a legal one. Question, do you pay more of your income in taxes over and above what is required by law? When you travel out of state and purchase something gas, food, anything, do you declare those purchases on your state of residence tax forms as a tax obligation; most states require residence do that.

 

[truthertech]

It's not as black and white as you say, If this case is over and Apple has to pay the money (They already did/escrow) Ireland will be €13 Billion richer, the EU will definitely lower subsidies to Ireland.

Please provide the citation for this.
[doublepost=1568681385][/doublepost]

There is no moral equivalency here. If he claimed his salary as a tax exempt income then this would be repugnant. But the tax laws are not as flexible for individuals as hey are for corporations.

Every tax deduction converts a portion of your salary to "tax exempt income." And no, when the USA's government or Ireland's, passes a law to create the deduction, it is not "morally repugnant" for people to then use that deduction to pay less taxes. Indeed, it's the purpose of the law! LOL.

 

[Glavin]

This tax law became onerous once the EU found a big fish, then they revealed their flexible deference to the rule of law.

 

[tabilo]

I'm curious as to how the rest of the EU is "pay"ing for this

First, a competition on big corporate tax rates is a race to the bottom, even some US states have figured this out when Amazon was looking for a place for their new offices.

Second, the EU is redistributing money based on the competitiveness and financial situation of certain regions. If Ireland now decides that they purposely break EU law by giving a single corporate a next to nothing tax rate, then they obviously reduce their tax income, which will increase the likelihood of being subsidized by other EU countries.

Third, giving tax breaks to single corporations is not only against EU law, it is also short sighted. This would in theory allow inferior products to win over competitors just by having a different tax framework - the opposite of a free market idea. Just imagine if VW or Toyota would get a 0% tax in the US, what would happen to Ford and GM and their workers?

 

[Da_Hood]

From the actual article:

"It will tell the court that the bulk of its taxes are owed to the United States because the majority of the value in its products including design, engineering and development, is created there."

So, register Apple International Sales in Delaware, route all non US sales through AIS as usual and pay the US taxes.

Apple looks so dodgy here.
And why question EU ruling, they should wait for Ireland to lose their appeal, and then contest the tax bill with the Irish. Their case should be thrown out.

As for abiding with laws, they have on multiple occasions failed to file reports with Securities in a number of markets, why? Because they think they know better, just as they do here.

 

[laz232]

Every tax deduction converts a portion of your salary to "tax exempt income." And no, when the USA's government or Ireland's, passes a law to create the deduction, it is not "morally repugnant" for people to then use that deduction to pay less taxes. Indeed, it's the purpose of the law! LOL.

And those laws are effectively paid for by lobbyists. Many people here seem to be under the impression that because something is legal it is therefore moral, there are plenty of obvious examples from history that will refute that idea.

Irish society, and EU society is general, is built on a welfare system, paid for by both the corporations and individuals.

By avoiding tax liability in that region, Apple is not part of a sustainable economy. Despite doing a large amount of business in the EU they don't pay the "fair" share at anywhere near the rate that I have to pay for my business.

 

[Da_Hood]

The personal income comparison is releveant. The majority of people lie on their returns at some point, FACT.
Might only be by a couple of dollars, but fraud is fraud no matter the value.

 

[truthertech]

Irish society, and EU society is general, is built on a welfare system, paid for by both the corporations and individuals.

By avoiding tax liability in that region, Apple is not part of a sustainable economy. Despite doing a large amount of business in the EU they don't pay the "fair" share at anywhere near the rate that I have to pay for my business.

"Apple is not part of a sustainable economy." Tell that to the 1.7 million people who wouldn't have a job, but for Apple. Their salaries and benefits that are then multiplied throughout the EU economy. Tell that to the 4300 EU suppliers that Apple pays over 10 BILLION Euros a year that can then employ hundreds of thousands more and keep their businesses thriving, and are sustaining and building tech expertise in Europe, because of Apple. Tell that to the developers who wouldn't have received tens of billions of Euros from Apple.

I could go on, but you see the point, again, that it's more appropriate for the EU to celebrate all that Apple has done for them to help them sustain and hopefully grow their economies to not have to subsist on the welfare system you point out, rather than to retroactively try to extort money from them after they have been following Irish law for the past decade.