Apple Could Owe More Than $8 Billion in European Tax Probe

[MacRumors]

Apple could owe more than $8 billion in back taxes if the European Commission finds issue with the iPhone maker's corporate tax policies in Ireland, according to analysis by Bloomberg Intelligence.

Apple is one of several multinational corporations that have been scrutinized for corporate tax avoidance in Europe over the past few years. The European Commission began Apple's tax probe in June 2014, and formally accused the iPhone maker of receiving illegal state aid from Ireland three months later.

The company's $64.1 billion in profit generated from 2004 to 2012 could be subject to a 12.5% tax rate, compared to its current foreign tax rate of about 1.8%, depending on the outcome of the investigation. A decision in the probe is expected in Brussels by March, possibly after the 2016 Irish election.

Apple's tax breakdown in Ireland (Image: Bloomberg Intelligence)​

Apple operates multiple subsidiary companies in Ireland to pay significantly less tax outside the U.S., where it earns about 55% of its revenue. Apple continues to deny any wrongdoing, and both the company and Ireland vow to take the European Commission to court over any negative verdict.

Last month, Apple agreed to pay 318 million euros in Italy to settle an investigation that accused the company of booking profits generated in Italy through an Irish subsidiary, in an effort to lower its taxable income base and save 879 million euros between 2008 and 2013. Italian regulators concluded that tax probe in March.

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: Apple Could Owe More Than $8 Billion in European Tax Probe

 

[Crosscreek]

That could ruin your whole day.

 

[Codyak]

So are they breaking some sort of law, or just using Ireland's specifically low tax rate?

 

[unlinked]

The EU should really stick to what it does well and keep its hands off countries tax policies.

 

[apolloa]

Interesting to see the EU commission clamping down, have they closed the loopholes in the law now then?

 

[d0minick]

If they are breaking the law, make them pay. If they aren't, then fix the damn tax laws so they can bring the money home.

 

[BarmyGnome]

Just some clever business.

 

[apolloa]

The EU should really stick to what it does well and keep its hands off countries tax policies.

So the European Commission should not do its job and investigate issues in European countries? Ok..

 

[justperry]

The EU should really stick to what it does well and keep its hands off countries tax policies.

No, Apple should pay fair taxes in countries where they operate, now they don't.

 

[SoAnyway]

Why does anyone defend a multi-billion dollar company from paying their taxes considering how much they benefit from the rest of society?

I'll never ever understand the conservative mindset, it's rather nutty.

 

[Populism]

That's more money than some people see in a lifetime.

 

[apolloa]

Why does anyone defend a multi-billion dollar company from paying their taxes considering how much they benefit from the rest of society?

I'll never ever understand the conservative mindset, it's rather nutty.

Because they are blinded by Apples clever marketing.

 

[TallManNY]

So are they breaking some sort of law, or just using Ireland's specifically low tax rate?

They are using Ireland's specifically low tax rate. Ireland set itself up as a tax haven for U.S. and to a lesser extent English companies. It works well. The populace speaks English and is highly educated. They aren't on a completely different time zone like India and Australia. So many U.S. companies set up shop in Ireland to take advantage of this. Ireland likes this because of all the high paying jobs it brings into their country. That is why Ireland is helping with Apple's defense.

 

[username:]

They are not breaking any laws. If they are fined that will be insane. The laws need to change. Up to this point Apple has not done anything illegal. It's not the fault of business that countries tax laws are always so greedy and short sighted.

Who honestly thinks taxes are "for the people" and "for the greater good"? Governments are just as scheming and corrupt as the corporate world.

 

[Gasu E.]

The EU should really stick to what it does well and keep its hands off countries tax policies.

If countries join the EU, which is a free-trade zone, the EU has an interest in establishing consistent tax policies. Due to membership in the EU, a country such as Ireland is protected from having tariffs imposed on it by other EU countries; the EU gets those regulatory rights, in return. It's only fair and reasonable. If Ireland doesn't like it, they can leave the EU.

 

[Orlandoech]

Why does anyone defend a multi-billion dollar company from paying their taxes considering how much they benefit from the rest of society?

I'll never ever understand the conservative mindset, it's rather nutty.

I am a "conservative mindset' and I don't agree with it at all. I agree with you.

 

[TallManNY]

If they are breaking the law, make them pay. If they aren't, then fix the damn tax laws so they can bring the money home.

The interesting thing is that the more taxes Apple pays overseas, the less additional tax they will have to pay to the U.S. when they bring the money back here. So if they lose this case it actually might result in them bring back cash to U.S. for a fat dividend to shareholders.

 

[unlinked]

No, Apple should pay fair taxes in countries where they operate, now they don't.

That is up to the countries they operate in to decide and implement. Italy wanted to tax Apple , they setup the law to do so and then enforced it. Trying to reclassify tax polity as state aid is wrong and presumably just an attempt to bypass the different rules for agreeing tax policy changes in the EU.

 

[Orlandoech]

They are not breaking any laws. If they are fined that will be insane. The laws need to change. Up to this point Apple has not done anything illegal.

You honestly believe we live in a world that truly believes "innocent until proven guilty" lol?

 

[sransari]

Why does anyone defend a multi-billion dollar company from paying their taxes considering how much they benefit from the rest of society?

I'll never ever understand the conservative mindset, it's rather nutty.

What I'll never understand is why it is considered greedy to want to keep money that you've earned, but it's NOT considered greedy for someone to take someone else's money that the earner has earned and the taker hasn't.

 

[Rigby]

"current foreign tax rate of about 1.8%" ... that's not a tax, but a hidden subsidy for a multi-billion dollar company.

 

[Orlandoech]

What I'll never understand is why it is considered greedy to want to keep money that you've earned, but it's NOT considered greedy for someone to take someone else's money that the earner has earned and the taker hasn't.

I agree with this as well. Man, which side am I on? Talk about a double entendre.

 

[guzhogi]

I'll never ever understand the conservative mindset, it's rather nutty.

It's actually quite simple: why pay $10 billion in taxes when you could just as easily set up shop in Ireland and pay $2 billion and get the same services? (I'm making up the numbers, but you get the gist)

 

[Gasu E.]

They are using Ireland's specifically low tax rate. Ireland set itself up as a tax haven for U.S. and to a lesser extent English companies. It works well. The populace speaks English and is highly educated. They aren't on a completely different time zone like India and Australia. So many U.S. companies set up shop in Ireland to take advantage of this. Ireland likes this because of all the high paying jobs it brings into their country. That is why Ireland is helping with Apple's defense.

Having a low tax rate to encourage businesses to actually operate there (building plants or establishing engineering centers, for example) is perfectly fine. But in Ireland's case, the laws essentially allow money earned elsewhere to be passed through Ireland in order to get a lower tax rate. Structurally, it's kind of like money-laundering. It's legal under Irish law; but the contention is that it violates EU regulations that Ireland has agreed to as a condition of their EU membership. Ireland is free to leave the EU and not be subject to EU rules, if they so choose.

 

[TallManNY]

Why does anyone defend a multi-billion dollar company from paying their taxes considering how much they benefit from the rest of society?

I'll never ever understand the conservative mindset, it's rather nutty.

Well in the U.S. conservatives generally seem to not feel like the government should get any money. Or at least they feel like the government should get a lot less money to use.