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Apple Loses Major Tax Dispute in Europe, Must Pay Ireland €13 Billion

"In the third quarter of fiscal year 2024, Apple reported a net income of around 21.45 billion U.S. dollars."
Statista, Aug 2024


"... $14.34 billion (13 billion euro) in back taxes to Ireland... for 11 years."
The settlement amount owed is less than 1 Qtr's profit for Apple.
Now watch Apple increase the prices of its products and services, slowly, to consumers to make up for that settlement expense.
 
WarmWinterHat said:
Ireland agreed to follow the EU's rules when they joined. If a member country doesn't like the EU's rules, they are free to leave. That's what the UK did.
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And I agree with that as well. Just saying in general. I think that feature of the EU makes no sense to me. How one nation chooses to levy taxes should be solely up to that nation IMHO.
 
AppliedMicro said:
The European Union is a common market with (to some degree) harmonised taw law. Companies - just as well as countries like Ireland - benefit hugely from that common market. But it does require them to give up some sovereignty.
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I get it. And there are certainly benefits in being in the union. Just this this particular feature of it. Makes no sense. How you tax any corp or individual should be left up to that nation. Which in turn will attract or "not" individuals or corporations to your nation.
AppliedMicro said:
It’s not dissimilar to the Union of States in North America with its capital Washington D.C.
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Yes. However, each US state can tax (or not) how they choose. So some states like Florida have no "state" level income tax. You still pay federal income tax (everywhere), but unlike say New York where there is state income tax. And it can be even tricker within the same state for county, village, or city specific taxes. People complain about this all the time, but they still live and work there. As to businesses. So say Greece wanted to be more business friendly. They can't use the tax code to do so. I'm not saying this can't work. I just don't like the idea of it. But, being American with the culture we have. It makes sense that it doesn't to me. :)
AppliedMicro said:
If Ireland doesn’t want to be part of it, they can leave - their neighbor's just did.
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This is what happened with Brexit. I'm sure there are facets of the EU they don't or could not live with. Hence voting to leave. But, there are plenty of things they surely wanted to have. Access to the Union, free trade, freedom of movement etc. Just giving up control of immigration, cost to be paid back to the EU, etc wasn't their cup of tea. There may have been some kind of mechanism to maybe limit or more properly address some of those issues. But time is always in short supply and the mob isn't going to wait.
 
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bLackjackj said:
Its not illegal Tim, you're right,..but it most definitly is immoral.

Since Tim took over, Apple has become a money hungry slave to its shareholders and lost every ounce of the innovation that Steve himself brought to Apple.
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Truth
 
SnarkyBear said:
Not entirely true. Costs are passed on to three groups: The shareholders (in the form of reduced profits = lower stock prices), the employees (as in reduced raises and/or layoffs) and to the consumer (in the form of raised prices). It is not an automatic that only the consumers suffer increased costs to corporations.
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Fair. But,
1) Shareholders will push for ways to make up for that loss in any other way except it costing them.
2) Loss of employment is generally another way to make up for the loss. But, generally Apple stores are busy so...
3) Its easiest to just raise the price. OR cut the costs on what they currently sell for the same price.

I'll go with option 3.
 
NightFox said:
Given that the Irish government don't offer companies like Apple tax incentives, I can't help wondering why so many multinationals push much of their global finances through the country.
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I think most companies have stopped doing so, including Apple.

Jersey, Isle of Man and Bermuda seem to be better options these days. Also Luxembourg, Netherlands and Liechtenstein might be feasible for certain transactions.
 
DaveN said:
So when I file my personal USA income tax return I get to deduct $1 in the USA income tax owed for each $1 in foreign income tax paid. Is the same true for corporations so Apple will now be able to reduce their USA income tax by $14.5 billion?
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Yes, probably since that's the default. It does really depend on the tax agreement between Ireland and the US.
 
Chet-NYC said:
Not quite sure why they will take a charge of up to $10 billion for this ruling. The money to pay has been set aside in an escrow account for years, and has actually accrued quite a bit of interest.

Anyway, while there's no doubt the Irish government made a nice deal with Apple years ago as a way of getting a large corporate presence from Apple in the country, I think the decision on the part of the EU is wrong. It can easily be seen as morally wrong, but not illegal. The EU forcing Ireland to stop the deal is fine, but not make the change in law ex post facto.

In any event, with Apple having something like $160 billion in cash and as I said, the money for this decision already set aside, it will be just a blip in the larger story that is Apple.
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As of June 2024 Apple has $61.80 Billion in CCE. The $120 Billion days are long gone......
 
GrayFlannel said:
You might thoroughly read the ruling. Apple sought a selective advantage which Ireland granted.

CURIA - Documents

curia.europa.eu curia.europa.eu
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Tax agreements between a country's tax authority and a company of that country isn't subject to EU approval. It's an internal matter.

In this specific case, it was found to be a violation of state aid which do come under EU regulations. These regulations only applies to EU members, not companies.

Basically, Ireland violated its duty to EU to follow EU regulations, while Apple didn't do anything illegal or break any EU regulation which pertained to them.
 
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hans1972 said:
Tax agreements between a country's tax authority and a company of that country isn't subject to EU approval. It's an internal matter.

In this specific case, it was found to be a violation of state aid which do come under EU regulations. These regulations only applies to EU members, not companies.

Basically, Ireland violated its duty to EU to follow EU regulations, while Apple didn't do anything illegal or break any EU regulation which pertained to them.
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Aside from Apple asking for the selective advantage requiring IRE‘s agreement, what is the point of mentioning Apple being a company? This action was against IRE not Apple.
 
hans1972 said:
I think most companies have stopped doing so, including Apple.
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I’m not so sure. Apple’s global tax filings are significantly lower for this quarter 2024 than the same period in 2016.

It will be interesting to see if the European Commission scrutinizes Apple agreements with other member states.
 
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Krizoitz said:
Apple doesn’t tax anyone
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Not technically - but it works the same. They’re acting as a sort of quasi-government over the country (platform) they’re governing, claiming to protect users and businesses, unilaterally deciding what content is morally or acceptable or not, setting its laws (applications developer agreement) and tax rates (commissions), with third-parties only being able to accept or leave. In essence similar to how government and taxation works.
I7guy said:
Nope. Tax strategy is not tax evasion. More spin.
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I didn’t say they (illegally) evaded tax.

They tried to legally dodge (avoid) tax with their “strategy”, as you call it: a base erosion and profit shifting scheme that was ultimately deemed illegal, contravening EU law.

Given that it was initially approved by the country’s tax administration, Apple isn’t “guilty” of violating the law, and that’s why they’ll just be paying up the back taxes plus interest. But Apple and their tax advisers devised and sought approval for the tax-edging scheme that was ultimately deemed illegal (state aid).

To reiterate:
  • Apple’s scheme was explicitly designed for (nothing else than) avoiding (dodging) tax
  • The tax administration’s initial approval means Apple could in good faith believe that it was legal - which exculpates them from violating the law
  • Nevertheless, the scheme was ultimately deemed illegal (not conforming with EU law)
 
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The EU changed the rules to suit their own purposes. They're allowed to do that.

But then they made the changes RETROACTIVE

All you idiots complaining about morality ..... the EU is the criminal here.

Apple didn't force Ireland to create certain laws.

Ireland intentionally created the laws to bring in companies like Apple, Google, etc and those companies chose to embrace that opportunity.

This was an EU Legislative shakedown, including a shakedown of Ireland.

-
 
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