Apple Facing European Commission's Tax Ruling Without a Lobbying Presence in Brussels

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Following the European Commission's ruling that Apple must pay 13 billion euros ($14.5 billion) in back taxes because of its "undue tax benefits" in Ireland, The Wall Street Journal reported over the weekend that Apple is facing the EC "without the army of lobbyists and public relations campaigners typical in such fights."

The company's lack of a lobbying presence in Europe isn't new, however, as it spent less than EUR900,000 lobbying European institutions in 2015. According to public filings, in total Apple "doesn't employ any full-time lobbyists" in Brussels, and only five people work part-time. In contrast, Google spent "at least" EUR4.25 million in 2015, and employs more than ten people in lobbying positions in the European capital.

Apple's retail location in Brussels


Sources familiar with the matter stated that Apple's "lack of a presence in the EU capital" led to it being unsuccessful in gathering information over the past few years about the impending tax evasion ruling from the European Commission. Still, a source close to the commission's competition office theorized that a heavier lobbying presence might not have been all that helpful for Apple in the end, since the lobbying tactics of a company like Google have not gotten it out of "many antitrust investigations" over the past few years.
Google's experience with the commission's many antitrust investigations over the years may suggest a bigger Apple lobbying presence in Brussels wouldn't have had a meaningful impact on the regulator's decision.

People familiar with the directorate say there is limited leeway for influencing the outcome of any competition investigation. The regulator can't stray too far from previous case law in its decisions to ensure the ruling is upheld in court when the companies inevitably appeal it.

Still, "I don't know what [Apple] would have done differently," said a person close to the commission's competition office. "It's not a question of behavior; it's a question of what's in the numbers and what's on the table."
Many other America-based companies have a large presence in Europe, including Alphabet and Amazon, "which have built a European lobbying presence to try to sway investigations and potential legislation." The two companies have also tried to advertise the benefits that Europe gains from their presence, with Google launching a digital journalism initiative and Amazon highlighting its storefronts that facilitate the livelihood of small European businesses.

On the Apple side of things, Tim Cook has called the EC's ruling "total political crap" and described the lower end 0.005% tax rate as a "false number." Ultimately, the Apple CEO believes that the decision will be reversed, and most recently Ireland's coalition government agreed to appeal the ruling. Cook has stated that he has "faith in humanity" and "faith in what is just and right will occur."

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 Facing European Commission's Tax Ruling Without a Lobbying Presence in Brussels
 
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sp3k0psv3t

macrumors regular
Jun 3, 2013
165
149
Miami, FL
I really don't understand how this is possible. How does a company like Apple, finding itself in this situation NOW, yet having known for "years in advance that this was a more-than-likely probability," find itself without ANY lobbying representation or local "help" to assist in this matter?

Stunning to me really.....


USVet
 

Zarniwoop

macrumors 65816
Aug 12, 2009
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714
West coast, Finland
Corruption works differently in Europe, and because of the openness of business and government relations, lobbying isn't really that popular - it can be bad publicity, and so in the end you don't need an army of lawyers to do it. Instead, you need to have a friends in the government directly, have a "membership card" of the ruling party and be the insider.

What comes to Apple tax deal in Ireland, there could be a person, or a political party, that is in good ties with Apple. Nothing comes for free. Money is a good oli for the machine, but that is not lobbying... it's pure corruption, hidden somewhere in the machine.
 
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I have a large investment in Apple shares so I'm clearly disappointed with any news that adversely affects Apple.

However as a European I am dismayed at the way that Luxembourg, Netherlands and Ireland have cheated their fellow EU members by offering low tax regimes. These have encouraged US companies such as Apple, HP, Dell, Starbucks, eBay, Amazon, Google (and the list goes on and on) to dishonestly book their sales not in the country where they were made, but in the low-tax haven.

The UK has lost billions in lost tax over the last decade or more.

A sign in a local independent bookstore proudly states that it has paid more tax in the UK than the whole of Amazon.
 

Jsameds

Suspended
Apr 22, 2008
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Apple: "We'd like to come and set up in your country, can you sort out a tax break for us in exchange for guaranteed jobs and economic income?"

Ireland: "Yes, here you go, we've written this up. Don't worry it's all legal. Please sign here."

Brussels: "That's illegal and also all of the fault lies with Apple so they alone have to cough up $14,500,000,000. Ireland, you're good to leave and you face no penalty as this is all Apple's fault."

Apple: "Wat?" o_O
Ireland: "Wat?" o_O
 

69Mustang

macrumors 604
Jan 7, 2014
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13,637
In between a rock and a hard place
Apple: "We'd like to come and set up in your country, can you sort out a tax break for us in exchange for guaranteed jobs and economic income?"

Ireland: "Yes, here you go, we've written this up. Don't worry it's all legal. Please sign here."

Brussels: "That's illegal and also all of the fault lies with Apple so they alone have to cough up $14,500,000,000. Ireland, you're good to leave and you face no penalty as this is all Apple's fault."

Apple: "Wat?" o_O
Ireland: "Wat?" o_O
An explanation drawn with crayons.:D
 

masteroflondon

macrumors regular
Sep 17, 2007
228
161
London, UK
I remember reading, some time ago, about different views on corporate tax. I understood the EU view was that it is a bad idea. Tax on corporations is a tax on jobs. In a real sense there is no such thing as corporate tax because all companies pass taxes onto consumers. By definition they must do this or go broke trying.

I understood that the EU, for this reason, allowed member states to set their own taxes in order to create competition among members for the business of taxation. I thought they encouraged this competition specifically because they thought it would be goor for business, and ultimately for the EU.

Naturally there would be different views on corporate tax, I'm not arguing for the position stated here. I just want to know, is this how the EU felt? Did I get that bit wrong? Or did the EU just feel that way until they saw an opportunity to grab at a large amount of cash?
 

jayducharme

macrumors 68040
Jun 22, 2006
3,530
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The thick of it
I don't see how what happened in Ireland is any different from what legally happens all the time in the US. For instance, I live in a town that wanted to bring in a Target distribution facility. Target is worth billions, but in order to get them to choose our town, the Mayor and City Council offered Target a 20-year tax abatement. So a corporation with billions to spend wouldn't have to pay any taxes to the town for the first decade, and then pay minimal taxes for the next ten years. Meanwhile, property taxes for residents continued to increase. (Target eventually decided not to build there.) This seems to be a common practice with big businesses. In order to attract them, cities hold a carrot in the form of lower taxes. Why is Ireland (and Apple) being punished for such an arrangement?
 
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twietee

macrumors 603
Jan 24, 2012
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Apple: "We'd like to come and set up in your country, can you sort out a tax break for us in exchange for guaranteed jobs and economic income?"

Ireland: "Yes, here you go, we've written this up. Don't worry it's all legal. Please sign here."

Brussels: "That's illegal and also all of the fault lies with Apple so they alone have to cough up $14,500,000,000. Ireland, you're good to leave and you face no penalty as this is all Apple's fault."

Apple: "Wat?" o_O
Ireland: "Wat?" o_O
Ireland: "Yes, here you go, we've written this up. Don't worry it's all legal*. Please sign here."

*Except that it probably wasn't legal.


Maybe Ireland didn't read the fine print when signing the EU treaty - which I doubt but that woulnd't matter either way.
Maybe Apple also didn't read the fine print, which I also doubt but that also doesn't matter.


The moral of this story, which isn't over yet, eventually is this: Do read the fine print before you sign a deal.

And yes, I haven't read the fine print when signing into itunes store too! :(
 
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Zarniwoop

macrumors 65816
Aug 12, 2009
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West coast, Finland
Why is Ireland (and Apple) being punished for such an arrangement?
Because it is clearly stated in the EU common rules, and Ireland has agreed to follow them. Rules that state for example that giving any enterprise a special tax regime is illegal state aid. Ireland is abusing the system and driving profits from other states. You cannot join to 500 million people common market without rules.
 
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Zirel

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Jul 24, 2015
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The company's lack of a lobbying presence in Europe isn't new, however, as it spent less than EUR900,000 lobbying European institutions in 2015. According to public filings, in total Apple "doesn't employ any full-time lobbyists" in Brussels, and only five people work part-time. In contrast, Google spent "at least" EUR4.25 million in 2015, and employs more than ten people in lobbying positions in the European capital.
Tim Cook, you're not doing your job.

You should have known that you need to buy the politicians, they are all the same.
 

rp2011

macrumors 68000
Oct 12, 2010
1,513
1,256
Lobbying? Just pay your taxes!

I love Apple but their shady tax dealings are shady tax dealings.

Exxon previously the most profitable company world wide has incredibly shady tax dealings and even gets subsidies from the US via lobbyists.
Legal?
Yeah!
Because of lobbyists?
Yeah!
Shady corrupt politicians?
Hell yeah!!

Does that make it right?
**** no!
 

macfacts

macrumors 68040
Oct 7, 2012
3,716
4,436
Cybertron
I don't see how what happened in Ireland is any different from what legally happens all the time in the US. For instance, I live in a town that wanted to bring in a Target distribution facility. Target is worth billions, but in order to get them to choose our town, the Mayor and City Council offered Target a 20-year tax abatement. So a corporation with billions to spend wouldn't have to pay any taxes to the town for the first decade, and then pay minimal taxes for the next ten years. Meanwhile, property taxes for residents continued to increase. (Target eventually decided not to build there.) This seems to be a common practice with big businesses. In order to attract them, cities hold a carrot in the form of lower taxes. Why is Ireland (and Apple) being punished for such an arrangement?
1. When you steal something and have to return it, that is not punishment. Apple or Ireland has not been fined yet. Having to pay taxes owed is not punishment.

2. What is legal in the States might not be legal in the EU.
 

thermodynamic

Suspended
May 3, 2009
1,340
1,192
USA
I have a large investment in Apple shares so I'm clearly disappointed with any news that adversely affects Apple.
Then sell, since Apple doing what it did caused the problem that made you lose money from your handful of shares. Imagine how bigwigs who own more shares feel? ;)

However as a European I am dismayed at the way that Luxembourg, Netherlands and Ireland have cheated their fellow EU members by offering low tax regimes. These have encouraged US companies such as Apple, HP, Dell, Starbucks, eBay, Amazon, Google (and the list goes on and on) to dishonestly book their sales not in the country where they were made, but in the low-tax haven.

The UK has lost billions in lost tax over the last decade or more.
Those companies also call themselves "multinational", they are not just "US" companies. At least on the days there is good news. On bad news days, rest assured that the MSM will refer to them as "US companies" once again.

A sign in a local independent bookstore proudly states that it has paid more tax in the UK than the whole of Amazon.
Wow. On many levels.
 

flottenheimer

macrumors 65816
Jan 8, 2008
1,187
166
Up north
I do not suspect that Apple is doing anything that other multinationals aren't doing (it might even be legal).

But I do think that tax ought to be paid in the countries where the money are being earned. At the 'local' rate. That is not what is happening. International/multinational tax-law is seriously broken. We need a new system.
 

macduke

macrumors G4
Jun 27, 2007
10,827
14,452
Central U.S.
The EU is a sham that is doomed to failure. You can't have a bunch of sovereign nations in a union, because you end up with members that take advantage of their position within the union. The whole thing was incredibly ill-conceived. Otherwise we wouldn't end up with stupid situations like this, as well as other members "free loading" and dragging down the entire EU with them, or other members who never adopted the monetary system, etc.
 

danckwerts

macrumors regular
Jun 7, 2008
141
88
Richmond upon Thames
The irony is the the EU Commissioner in charge of competition policy, Margarethe Vestager, who is responsible for this attack on Apple, was appointed by the truly appalling Jean Claude Juncker who, in his time as Prime Minister of Luxembourg, turned his country into a major centre of corporate tax evasion. The only thing Ireland did wrong, as far as the European Commission is concerned, is taking business away from Luxembourg.
 

mossy

macrumors regular
Sep 11, 2013
157
47
Ireland
I have a large investment in Apple shares so I'm clearly disappointed with any news that adversely affects Apple.

However as a European I am dismayed at the way that Luxembourg, Netherlands and Ireland have cheated their fellow EU members by offering low tax regimes. These have encouraged US companies such as Apple, HP, Dell, Starbucks, eBay, Amazon, Google (and the list goes on and on) to dishonestly book their sales not in the country where they were made, but in the low-tax haven.

The UK has lost billions in lost tax over the last decade or more.

A sign in a local independent bookstore proudly states that it has paid more tax in the UK than the whole of Amazon.

As an Irish citizen (first and foremost) and European citizen, I recognise and accept that Tax regimes are sovereign for all member states in the European Union (EU). Some European citizen's are not willing to recognise and accept this point of European law (cherrypicking) and instead prefer to cast slurs and insults at their neighbours.

This case will be decided in the European Court of Justice. It will take years for a judgment and appeals process to conclude and, by that time the UK will be long, long gone out of the European Union.

If a judgment comes in favour of the European Competition Commission, the UK (and any other countries) can then put a claim in to get any taxes owed. A line will be drawn under it and we will all move on.
 
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