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

Discussion in 'Politics, Religion, Social Issues' started by MacRumors, Sep 26, 2016.

  1. MacRumors macrumors bot


    Apr 12, 2001

    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.
    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
  2. sp3k0psv3t macrumors regular


    Jun 3, 2013
    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.....

  3. Zarniwoop, Sep 26, 2016
    Last edited: Sep 26, 2016

    Zarniwoop macrumors 65816

    Aug 12, 2009
    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.
  4. iLondoner macrumors 6502


    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.
  5. Jsameds macrumors 68040

    Apr 22, 2008
    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
  6. CFreymarc Suspended

    Sep 4, 2009
  7. 69Mustang macrumors 603


    Jan 7, 2014
    In between a rock and a hard place
    An explanation drawn with crayons.:D
  8. masteroflondon macrumors regular

    Sep 17, 2007
    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?
  9. jayducharme macrumors 68040


    Jun 22, 2006
    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?
  10. Abazigal macrumors G4


    Jul 18, 2011
  11. twietee macrumors 603


    Jan 24, 2012
    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! :(
  12. Zarniwoop, Sep 26, 2016
    Last edited: Sep 26, 2016

    Zarniwoop macrumors 65816

    Aug 12, 2009
    West coast, Finland
    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.
  13. Zirel Suspended


    Jul 24, 2015
    Tim Cook, you're not doing your job.

    You should have known that you need to buy the politicians, they are all the same.
  14. rp2011 macrumors 65816


    Oct 12, 2010
    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.
    Because of lobbyists?
    Shady corrupt politicians?
    Hell yeah!!

    Does that make it right?
    **** no!
  15. iMember, Sep 26, 2016
    Last edited: Sep 26, 2016
  16. macfacts macrumors 68030


    Oct 7, 2012
    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.
  17. thermodynamic Suspended


    May 3, 2009
    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? ;)

    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.

    Wow. On many levels.
  18. flottenheimer macrumors 65816


    Jan 8, 2008
    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.
  19. vmachiel macrumors 68000

    Feb 15, 2011
    Just pay your ***** taxes Apple. Stop with the Holier than thou attitude.
  20. macduke macrumors G3


    Jun 27, 2007
    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.
  21. Sandstorm macrumors 6502a


    Sep 27, 2011
    Riga, Latvia
    I fully support European Union in this case. The systematic tax evasion of Apple (and other large corporations) is deplorable.
  22. captain kaos macrumors 65816

    captain kaos

    Jan 16, 2008
    Come over to the UK, we're getting out of this EU mess.
  23. Jsameds macrumors 68040

    Apr 22, 2008
    I welcome this. No pesky EU overreach here soon enough.
  24. danckwerts macrumors regular


    Jun 7, 2008
    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.
  25. mossy macrumors regular


    Sep 11, 2013

    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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