Apple Must Repay $14.5 Billion in Back Taxes, EU Commission Rules

[Abazigal]

So let me see if I get this straight.

Apple paid the low taxes it did because of a deal it negotiated with Ireland. There was no under-the-table dealings. Everything was in black and white and complete aboveboard.

Then another organisation can just come in, override what was agreed between Ireland (a sovereign country in its own right) and Apple, and order Apple to retroactively pay back taxes?

Whether the amount of taxes Apple has paid so far is besides the point. Imagine if you have always abided by the law, then the government suddenly changes that, and something you have been doing all along is suddenly deemed illegal. The next thing you know, the police are at your doorsteps to arrest you for something you did while under the impression that it was legal all along.

How is this fair?

The best the EU can do, IMO, is to close the tax loophole and rule that henceforth, Apple must pay the newer, higher tax rate, but I don't see why Apple should have to pay back taxes at all. You can argue that what Apple has done might be considered unethical, but it was by no means illegal.

 

[4jasontv]

How different is tax dodging and paying 0.005% from terrorism?

How different is government taxes and organized crime?

"Yo. You wanna sell on in our territory you going to have to pay the boss. I'll tell you what you owe, but first tell me how much you make."

 

[weckart]

[

Apple's tax evasion (which is legal) in cooperation with Ireland...

Tax evasion is by definition illegal. Tax avoidance is legal, until deemed evasion as the EU has ruled in Apple's case.

 

[tentales]

0.005% Tax rate would love to see the fan boys for capitalists try to defend that!

b..but think of all the jobs they created.... in China!

 

[MrNomNoms]

Good news.

Tax havens, non-resident companies, "licensing fees" are all tools used by companies and Governments to reduce their tax burden while the Average Joe has no chouce but to pay their dues.

It's good to see steps towards putting fairness back into tax payments.

What I love hearing from these corporates is how they'll create more jobs if they can pay less tax, yeah, sure. Corporates already avoiding most of their taxes with zero job creation so maybe a few more bucks saved might create more jobs - hope spring eternal! The only solution to this problem though is a standardisation of tax systems for corporations - whether you operate in the United States, New Zealand, UK etc. there is a uniform set of taxes and deductions so then there is no incentive to move money from point A to point B but unfortunately due to the nature of politics and the zero sum game you'll always see countries get played off against each other by corporates for the sake of lower taxes so a few greedy shareholders and executives can buy an extra ivory back scratcher.

 

[apolloa]

Everyone is saying this is illegal but it is not. It could be speculated as being state funded aid but you cant prove that. Apple invested in Ireland and the country negotiated a tax rate with the company. It is Ireland that received the lower tax income before Europe ever gets their hands on it, so it is up to them to have said no to Tim and that he must pay them more. But they decided securing jobs and investment with one of the worlds biggest companies for their people was more important that lining the wallets of a Eurocrat.

And have no mistake, this is not a strike for social justice, this is not our law makers sticking it to tax dodgers or giant faceless corporations.... this is all about getting as much money as they can for themselves.

That money should come in and I would say at least 70% should go to the Irish to invest and do with as they deem fit. and Just to spite the EU I would put it all in to developing new research and construction plants for Apple. That way all the EU has done is made Apple increase its presence in Europe and provide more jobs to the Irish people.

However I do hope Apple gets the repeal on one condition. I hope they have the sense to re-evaluate their public standing now with tax laws and decide they will pay a fairer rate. But they need to squash this for the dangerous precedent it sets for EU meddling in the economic affairs of individual nations.

Apple needs to pay more but this is now about more than Apple it is about how the law in Europe works and the standing of countries within the EU to manage their own finances.

Brexit...not looking such a bad thing at the moment....Apple come here we will be cheap =)

Spin it anyway you want, it was illegal what they have done, and all the other corporations that have been or are under investigation.
Being investigated by a team of tax experts and lawyers and officials for several years kinda gives a more reliable verdict then your opinion I feel.

 

[adamneer]

Great, I can't wait to see "articles" about Apple paying the EU $14bn in pennies shared on Facebook for the next 5 years.

 

[tentales]

[


Tax evasion is by definition illegal. Tax avoidance is legal, until deemed evasion as the EU has ruled in Apple's case.

LOL !! Yea, tax "avoidance". That's what the swiss bankers said, but the US didn't see it that way: http://www.usatoday.com/story/money/2016/01/27/us-slaps-13b-penalties-swiss-banks/79399262/

Can't have it both ways.

 

[DCIFRTHS]

For everyone saying they paid 0.005% in taxes. Yes, but as the current set up stands, they are expecting to pay 15 - 25%, the moment it arrives on US shores.

It's like you earn $100k in a year and your accountant appeals your tax payment (deductions etc) so you are in negotiations with the tax authority for over a year. Well, anyone can say at any point until you pay the tax "come on you have paid 0% tax, that's outrageous", but the point is you are expecting somewhere in the region of 15 - 25% at some point in the future. And indeed that is precisely what is happening now! They are not spending the money, they are fully expecting to pay taxes at some point.

Apple were never intending not to pay the tax. Remember they are still the biggest tax payer in the US. It was just a question of whether they would pay the remaining taxes to the US, Ireland, or the original EU countries (UK, France etc) where product sales were made. They used the "double Irish" loophole offered by the Irish govt to delay paying their taxes and to obfuscate their IP tax residency.

Meanwhile the EU are going after Ireland, not Apple. The EU commissioner has just said on TV that Apple did nothing wrong. It is Ireland, which is effectively offering state subsidies, that is at fault here.

According to Forbes and USA Today, Apple is the third largest taxpayer in the US.

 

[gctwnl]

It is interesting to read this from the press release

Following an in-depth state aid investigation launched in June 2014, the European Commission has concluded that two tax rulings issued by Ireland to Apple have substantially and artificially lowered the tax paid by Apple in Ireland since 1991. The rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality: almost all sales profits recorded by the two companies were internally attributed to a "head office". The Commission's assessment showed that these "head offices" existed only on paper and could not have generated such profits. These profits allocated to the "head offices" were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force. As a result of the allocation method endorsed in the tax rulings, Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014 on the profits of Apple Sales International.​

In short: Irish tax law makes the 'head office' excempt for paying taxes. Apple created fake "head offices" an attributed all its profits there. As far as I'm concerned: legal? Very maybe under Irish law. But the head offices were fake, so it definitely looks fraudulent.

Morally bankrupt? Certainly.

 

[apolloa]

b..but think of all the jobs they created.... in China!

Well actually yes and no, remember Foxcon is actively replacing as many human workers with robots as possible, already replacing thousands with a target I believe of 1 million. So it isn't even providing jobs in China like it used to, which means more money and profit for everyone.

 

[Mildredop]

According to the BBC, it's not all that bad. Apple only owe 13 Euros...

 

[alexgowers]

They'll appeal it down but.. Good! Stop dogging taxes. Goes for all companies.

Yep about time a company that does something illegal like tax dodging is forced to pay. Apple always claims it pays what it legally owes but them appealing the decision is hypocritical. What they did was illegal and apple has NO high ground to stand on.

The moment a company can pay less than anyone else's one man company that is tax dodging and illegal. There is no reason it should be any other way.

 

[ratzzo]

If this is true then I am appalled. This isn't just about Apple not paying their taxes it's about competitiveness. Think about all the businesses that didn't have this sweetheart tax situation that found it harder to compete against Apple?

Business should be a level playing field where taxing is regarded. You can't have the biggest player in the world at Phones and Computers paying nothing and all their competitors paying 11% etc that's just ridiculously unfair.

You are appalled? He did the math wrong. For every million, Apple gave $50 in taxes, not $500. Still absurd, so silly I find myself almost giggly.

 

[DCIFRTHS]

Agreed. No government deserves that much in taxes. Did Irland subsidize the development of assisted features? Access to unexploited materials? Advanced recycling technologies?

Oh. I see what you did there... You must be proud of that one

 

[aristobrat]

What I love hearing from these corporates is how they'll create more jobs if they can pay less tax, yeah, sure

FWIW.

Apple to create 1,000 jobs in Cork

APPLE HAS ANNOUNCED that it will expand its Cork campus and make room for 1,000 additional employees by 2017.

These new jobs come on top of 1,000 additional jobs already created at Apple in the past 12 months, which brought the workforce in Ireland to over 5,000 in 2015.

http://www.thejournal.ie/apple-jobs-announcement-ireland-2437069-Nov2015/

 

[tentales]

According to Forbes and USA Today, Apple is the third largest taxpayer in the US.

Which article? How many taxes ? All I see are stories about how they are the #1 avoider of taxes: http://www.huffingtonpost.ca/2015/10/07/apple-tax-evasion_n_8258170.html

 

[swingerofbirch]

So let me see if I get this straight.

Apple paid the low taxes it did because of a deal it negotiated with Ireland. There was no under-the-table dealings. Everything was in black and white and complete aboveboard.

Then another organisation can just come in, override what was agreed between Ireland (a sovereign country in its own right) and Apple, and order Apple to retroactively pay back taxes?

Whether the amount of taxes Apple has paid so far is besides the point. Imagine if you have always abided by the law, then the government suddenly changes that, and something you have been doing all along is suddenly deemed illegal. The next thing you know, the police are at your doorsteps to arrest you for something you did while under the impression that it was legal all along.

How is this fair?

The best the EU can do, IMO, is to close the tax loophole and rule that henceforth, Apple must pay the newer, higher tax rate, but I don't see why Apple should have to pay back taxes at all. You can argue that what Apple has done might be considered unethical, but it was by no means illegal.

I understand what you're saying, but that was always a liability for Apple for as long as Ireland has been a member to the EU. If you were to buy stolen jewels from a thief, you wouldn't get to keep the jewels when the thief was caught by the police just because the thief wasn't breaking his own moral code. Ireland may not have been breaking its own code, but the European Commission is saying Ireland's code was illegal under EU law.

 

[Schranke]

So let me see if I get this straight.

Apple paid the low taxes it did because of a deal it negotiated with Ireland. There was no under-the-table dealings. Everything was in black and white and complete aboveboard.

Then another organisation can just come in, override what was agreed between Ireland (a sovereign country in its own right) and Apple, and order Apple to retroactively pay back taxes?

Whether the amount of taxes Apple has paid so far is besides the point. Imagine if you have always abided by the law, then the government suddenly changes that, and something you have been doing all along is suddenly deemed illegal. The next thing you know, the police are at your doorsteps to arrest you for something you did while under the impression that it was legal all along.

How is this fair?

The best the EU can do, IMO, is to close the tax loophole and rule that henceforth, Apple must pay the newer, higher tax rate, but I don't see why Apple should have to pay back taxes at all. You can argue that what Apple has done might be considered unethical, but it was by no means illegal.

Well no... No country in EU can negotiate a lower tax for 1 company and not for others, making the deal not aboveboard.
And EU can and should punish companies and member states doing this. Ireland, as a part of EU were not in the right to do this.

Being a member of the EU comes with a big pile of advantages, but also some rules.
In the long run Ireland would cut apple off instead of letting go of EU.

 

[RightMACatU]

Ouch! Non US iPhone 7 are gonna go up in price on what's to be known as the Irish-Rub

 

[Carlanga]

Lol 'poor' apple

 

[freediverx]

Everyone is saying this is illegal but it is not.

This deflection is Tim Cook's favorite response. The core issue is not the legality of the tax avoidance, but the tax avoidance itself. In some cases some laws may be broken. But in many others the laws are ineffective and unjust. Corporations must be forced, globally, to pay their fair share in taxes.

 

[ratzzo]

Tim Cook: " Apple pays every tax dollar we owe. "

Yes, you do Tim. For every dollar you pay, you make 20,000 USD in profits.

That's 0.005% tax. Bazinga!

 

[tmanto02]

Apple must repay 13 billion euros ($14.5 billion) in back taxes dating back to 2003-2014, the European Commission has ruled (via BBC)

How much is that in potatoes?

 

[alexgowers]

I'm not a tax expert, but when Tim Cook says that it sounds to me like someone burying their income in their backyard and saying they'll pay their taxes when the government comes down on the tax rate that everyone else is already paying.

This line here sums up what apple is doing, it's straight up blackmail. Give me a good rate of tax on my money or you'll never see any of it. Well that's not legal in my eyes. I couldn't do that if i were a company or individual living in the states so any big company that uses off shore holdings is fair game to be plundered by their greed.