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

[k995]

This is not the case,

This is what apple is being challenged on.

Its tax rate was 2%.

http://www.informationweek.com/gove...axes-and-why-tim-cook-is-wrong/a/d-id/1323729
"AOI itself hadn't had any employees in 33 years, other than its three board members. It paid no taxes in either the US or Ireland, despite earning a total of $30 billion in income during the years 2009-2012, according to the Business Insider summary of the Senate Subcommittee report."

is what actually set it off:

http://ec.europa.eu/competition/state_aid/cases/253200/253200_1582634_87_2.pdf

preliminary view

DECISION In the light of the foregoing considerations, the Commission’s preliminary view is that the tax ruling of 1990 (effectively agreed in 1991) and of 2007 in favour of the Apple group constitute State aid according to Article 107(1) TFEU. The Commission has doubts about the compatibility of such State aid with the internal market. The Commission has therefore decided to initiate the procedure laid down in Article 108(2) TFEU with respect to the measures in question

there are those in power in the EU who believe that to be so but the probe is ongoing. And again, I said explicit law, where there is a set standard for "wasn't fair to other companies" which doesn't seem to be the case.

The law is explicit here : you cant give unfair advantages(in this case taxation) to companies . You seem to have the strange notion that everything has to be clearly set in text in a law as in "apple shouldnt pay any less taxes as the standard rate" that is never the case.

Laws are created in general and its up to judges or commision in this case to see if its being upheld.

EU thinks that apple/ireland didnt do this, ireland/apple now has a change to justify itself, but seeing the facts I doubt they can do anything about it.

And again, I fully agree the EU has the right to tell Ireland and Apple, you can't do that any more. It being too good is a judgement call and the EU gets to make the judgement call. What I say the EU shouldn't have the right to do, and shouldn't do, is say "We've made our judgement now and it applies to all those past years so pay up."

The rule the EU uses here is from 99. The EU has every right to go back up until that time. Laws usualy have a set years in which they should be enacted, I dont know the number of years in this case but it is perfectly normal and actually happens quite a lot .

 

[beanbaguk]

So, if it's legal, where's the problem?

It's a question of morality. Something that is severely lacking with many people these days.

An example. I work in Dubai. A tax free haven. My kids are British living in Scotland therefore they are entitled to UK education subsidies and they get a free ride at university.

Is that right? It might be a legal loophole but does it make it the moral thing to do?

How would you feel if you've worked your entire life. Paid your taxes and earn just a fraction of the chap in Dubai....

The point I'm trying to make is just because it's legal, doesn't make it right.

Apple are right to cut back their tax bills where possible but to deliberately circumvent them (which is what they are doing by exploiting numerous loopholes), is wrong).

I hope Apple will pay and I'm sure it'll eventually happen.

 

[AFEPPL]

The legality is what's been question.
The EU will decide if that lines been crossed.

Most object people believe this type of practice by large corporates is both immoral and illegal.
The less people like Apple and Amazon pay, the more we have to pay as individuals. Personal I hope the EU goes after ever cent that should have been paid as well as fine apple a very sizeable amount to discourage other corps from attempting the same.

 

[Mildredop]

It's a question of morality. Something that is severely lacking with many people these days.

An example. I work in Dubai. A tax free haven. My kids are British living in Scotland therefore they are entitled to UK education subsidies and they get a free ride at university.

Is that right? It might be a legal loophole but does it make it the moral thing to do?

How would you feel if you've worked your entire life. Paid your taxes and earn just a fraction of the chap in Dubai....

The point I'm trying to make is just because it's legal, doesn't make it right.

Apple are right to cut back their tax bills where possible but to deliberately circumvent them (which is what they are doing by exploiting numerous loopholes), is wrong).

I hope Apple will pay and I'm sure it'll eventually happen.

Multi-national companies don't have morals, they have shareholders. I actually partly agree with you - companies with billions in turn over should be paying hundreds of millions in taxes (after all, it's the country's education system etc. that supplies their workforce that then produce these products that everyone wants to buy). However, you can't blame the companies - you need to point the finger at the law makers around the world.

In the UK, the government have attempted to close loopholes (Witholding Tax is an example), but then other countries just create workarounds. It needs everyone to work together to stop these big companies understandably finding ways to reduce their tax liability.

 

[AFEPPL]

But it also needs apple owners to stand up and say this is wrong.
Do the right thing apple or we stop buying your stuff should be the united stance.

While i agree apple is run for the shareholders, the share holders will quickly back down if it means profits stop.

 

[sransari]

see you have yet to give an example of where your "mutual co-operation system with no taxes" has actually been employed at any analogous level to what is currently provided by the State? Actually there is one, it's called Somalia. Yep a country with virtually no Government and hence taxes, the mantra of development via mutual co-operation isn't working out too well there.

Love this argument. Somalia prior to 1991 was run by a fascist dictatorship, i.e., the polar opposite of a free society. Since so called "anarchy" in Somalia has taken over (although there is not complete anarchy in Somalia), the growth in prosperity of the country has been unparalleled, particularly due to the relative non-existence of state interference. So thank you for pointing out the virtues of a stateless society. Of course, Somalia has a long way to go, but their prosperity and quality of life is is on strong trajectory upwards.

You also argue that the state is required to provide healthcare, schools, etc. to the poor. That's an interesting perspective, since state involvement invariably increases the costs of such things. If the poor can't afford healthcare, for example, they're certainly not going to once the state gets involved and increases costs even more. While there may be a few positive cases of the ACA in which individuals obtained health insurance when they were not able to before, in a short time, the costs will escalate to the point where the state will be unable to continue to subsidize their coverage.

On the other hand, markets have a clear, established history of reducing costs, and improving quality in various industries, including healthcare and education. Only the economically illiterate and the politically gullible believe that the state is needed to provide such needs of society.

You asked for an example in which mutual cooperation (i.e., free markets) work (although you mischarcterized my statement by putting the words "no taxes" when I never said that). I'd like to direct your attention to the United States, in which free markets (not state interference) is the reason why the economy became so strong in the from the 19th-20th centuries. Only after excessive government did the economy start to suffer, as the government's principle role has been to stand in the way of progress, and misallocate resources to the benefit of the politically well-connected, at the expense of the common man.

 

[k995]

Love this argument. Somalia prior to 1991 was run by a fascist dictatorship, i.e., the polar opposite of a free society. Since so called "anarchy" in Somalia has taken over (although there is not complete anarchy in Somalia), the growth in prosperity of the country has been unparalleled, particularly due to the relative non-existence of state interference. So thank you for pointing out the virtues of a stateless society. Of course, Somalia has a long way to go, but their prosperity and quality of life is is on strong trajectory upwards.

Are you for real? SInce then somalia has gone to nr 1 in the failed states index.

Its GDP dropped the following years sometimes with double digits.

Crime rate is simply not measured anymore, famines,...

Its only in recent years with a coalition of somali federal gouvernement and african union support the country has very slowly recovering.

You also argue that the state is required to provide healthcare, schools, etc. to the poor. That's an interesting perspective, since state involvement invariably increases the costs of such things. If the poor can't afford healthcare, for example, they're certainly not going to once the state gets involved and increases costs even more. While there may be a few positive cases of the ACA in which individuals obtained health insurance when they were not able to before, in a short time, the costs will escalate to the point where the state will be unable to continue to subsidize their coverage.

Thats absolute BS.

Economies of scale are a reality. No profit , shareholder demands,... As well.

Just check in the rest of the world or just OESO countries . A lot of simular level of health care and costs a lot less in total. US actually has the most expensive system in the world and thats mainly because of the private part cost.

On the other hand, markets have a clear, established history of reducing costs, and improving quality in various industries, including healthcare and education. Only the economically illiterate and the politically gullible believe that the state is needed to provide such needs of society.

Private sector is to make profit, in any way. They will always choose for the most profit, not whats best for the patients. And of course the patients will pay, after all its their health.

The normal rules of supply and demand dont work in health care, never have never will.

You asked for an example in which mutual cooperation (i.e., free markets) work (although you mischarcterized my statement by putting the words "no taxes" when I never said that). I'd like to direct your attention to the United States, in which free markets (not state interference) is the reason why the economy became so strong in the from the 19th-20th centuries. Only after excessive government did the economy start to suffer, as the government's principle role has been to stand in the way of progress, and misallocate resources to the benefit of the politically well-connected, at the expense of the common man.

The boom the US had was because europe shot itself to pieces twice. Its easy growing the industry when you are almost the only one producing and there is a huge demand.

 

[jnpy!$4g3cwk]

Apple may owe Ireland $19 billion, but Ireland doesn’t want the money. Here’s why.

Depending on the outcome of an official investigation, Apple may face a bill that is estimated at between $8 billion and $19 billion for underpaid taxes to the Irish government. The Irish government really, really doesn’t want to get this money and is fighting as hard as it can to avoid receiving it. That may sound weird to ordinary people, who assume that governments want to squeeze individuals and businesses for as much taxes as they can get. But if you understand the politics of international corporation tax, it all makes sense.

Apple wants to avoid paying U.S. taxes

As Gabriel Zucman argues in his book on international tax evasion and avoidance, “The Hidden Wealth of Nations,” many U.S. firms locate as much of their activities as possible in low-tax jurisdictions like Ireland to minimize their tax bills.

https://www.washingtonpost.com/news...y-heres-why/?tid=hybrid_experimentrandom_1_na

Corporate taxation needs to be part of the WTO, with rules that eliminate the offshoring of profits.

 

[GadgetDon]

Apple may owe Ireland $19 billion, but Ireland doesn’t want the money. Here’s why.



https://www.washingtonpost.com/news...y-heres-why/?tid=hybrid_experimentrandom_1_na

Corporate taxation needs to be part of the WTO, with rules that eliminate the offshoring of profits.

If Apple is taking these actions to avoid paying taxes on money earned in the US (as opposed to the US's attitude of "any money earned anywhere in the world is taxable by us"), they're doing a really lousy job at it. Yes, Apple (among others) is paying way too low taxes in European countries and that should change (though I have and would argue it shouldn't be retroactive), but it's paying taxes properly on money earned in the US.

And the US government shouldn't have a dog in this fight. Because no, the taxpayer is not worst off when big companies pay their taxes in other countries. It's only when they try to do the money grab saying "all the money in the world is OURS!" that money paid to other governments means less money for them.

 

[thekev]

Apple may owe Ireland $19 billion, but Ireland doesn’t want the money. Here’s why.



https://www.washingtonpost.com/news...y-heres-why/?tid=hybrid_experimentrandom_1_na

Corporate taxation needs to be part of the WTO, with rules that eliminate the offshoring of profits.

I'm not sure their assertions hold much water. How would they apply foreign tax credits if those funds are still declared as being perpetually invested overseas? I read their reference. It doesn't really detail how that would work out without Apple repatriating those revenues.

 

[jnpy!$4g3cwk]

I'm not sure their assertions hold much water. How would they apply foreign tax credits if those funds are still declared as being perpetually invested overseas? I read their reference. It doesn't really detail how that would work out without Apple repatriating those revenues.

My apologies, but, I'm not really following you.

 

[thekev]

My apologies, but, I'm not really following you.

Foreign tax credits mean that foreign tax liabilities on specific revenues are effectively subtracted from US tax liability. Apple probably had these funds declared as permanently reinvested overseas, meaning they wouldn't have paid tax in the US on those earnings. It would reduce their future liability, but if they claim that Apple could claim a credit back on past untaxed (at least in the US) earnings. This sounds overblown unless they can provide detail of their reasoning. Even if they can, this is silly. If Apple was willing to sell bonds for a stock buyback, they are unlikely to repatriate funds in the near future.

 

[opeter]

The UK just wants to keep out, Eastern European freeloaders out of the UK tax credit.
That is why the UKIP is against the EU eastern Europe.

David Cameron insisted his proposal to ban new Eastern European migrants to Britain from claiming benefits was still on the table after a bruising Brussels summit.
Key European leaders lined up to tell the Prime Minister he could not discriminate against European migrants without breaching EU rules and Ukip leader Nigel Farage said Mr Cameron had been 'hammered'.


Read more: http://www.dailymail.co.uk/news/art...ns-four-year-curb-migrants.html#ixzz3xQXZ5Hpq
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Why is UK still in the EU?

 

[sim667]

Why is UK still in the EU?

Because despite the fact that some people in the UK dislike free movement across europe (despite the fact that studies show migrants to the UK pay more in taxes than they receive in benefits), there are also benefits with regards to trade, and some laws.

However, unfortunately it does sound like we're on our way out of the EU.

 

[VulchR]

Because despite the fact that some people in the UK dislike free movement across europe (despite the fact that studies show migrants to the UK pay more in taxes than they receive in benefits), there are also benefits with regards to trade, and some laws.

However, unfortunately it does sound like we're on our way out of the EU.

Well,, at least some parts of the UK would leave if the Brexit side wins. I think that Scotland would vote for independence under those circumstances.

 

[macfacts]

... But until I see proof that Apple broke any laws, the cynic in me will see it as reeking of political grandstanding.

...

Investigations take time, in Sept or Oct, you'll see ... https://www.macrumors.com/2016/07/13/eu-apple-tax-probe-decision-by-october/


Take a look at the Samsung vs Apple court cases, still on going, takes time.
[doublepost=1469820623][/doublepost]

So the country of Ireland decided that 1.8% was fair and Apple has paid that. Where does the argument go from here?

That is fine, so Apple should move its HQ and engineers to Ireland. But that's not what Apple is doing, Apple only has shell companies in Ireland to do nothing but own patents. The patents are invented in USA, using resources in USA, but shift ownership to Ireland. Apple then pays royalties to the Irish subsidiary company. All the profit goes to Ireland, even tho the iPhone gets sold in USA/Europe.