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

[Gymgenius]

I bet the bill will be too thin and bend.

Bill Gate?

 

[tentales]

Certainly you know that Foxconn and Apple are different companies, right?

splitting hairs, eh ? it's pretty common knowledge that Apple's contract is directly responsible for 1+million workers there. Albeit, I hear 60000 are being replaced by robots.

 

[apolloa]

No, he is saying the taxes should be paid in the US not in Ireland!

No he is stating they did nothing illegal and did not ask for any special treatment, dispite they themselves setting up fake off shore company headquarters for the sole purpose of tax evasion. He is desperately trying to backtrack the inevitable public backlash this will cause.

 

[fischersd]

Keyword "any" companies. 1 law for all. Not one rate for Apple + other big players and a higher rate for everyone else.
Here in Canada (I'm in BC) most businesses are taxed to the hilt, the incentives all go to foreign investors and pipeline builders
but that's getting too much OT now.

Nope. Corporate tax rate in Ontario starts at 11%. And that's before loopholes.

You're never going to get corruption out of politics. There's always going to be wheeling and dealing. You could try to blame capitalism, but there's fat cats in communist countries too. Money and power have a habit of attracting each other. Now if we could somehow abolish money?

More info (only Canadians would care about) - starting tax rate for Canadian corps are going even lower!
For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%. This rate will decrease to

• 10.5% effective January 1, 2016
• 10% effective January 1, 2017
• 9.5% effective January 1, 2018
• 9% effective January 1, 2019

Source:http://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/rts-eng.html

9% - wow! (again, that's before deductions).
This is also good:
http://www.tradingeconomics.com/canada/corporate-tax-rate
It shows the mean corporate tax rate in Canada in 2014 was 26.5%. Also shows comparable corporate tax rates around the world.

 

[LovingTeddy]

Apple not only did this, but they entered into an agreement to not hire employees from other tech companies so as to not raised wages.

Apple supports Hillary for good reason. Hillary will give them all the H1B Visas.

Buffett also supports Hillary and look what he did with Kraft foods. They let go thousands of American workers and Buffett made a bundle off the deal.

It's hard to imagine that Hillary is bought off by these people and says she's for the middle class. Apple should just add in the tax rate to the price of the product.

These other nations need to be more competitive in their tax rates so that it's not so harsh.

The Dems love Apple and Buffett, yet look what they do to their workers, don't see many talking about this in the media. People need to wake up.

However, Trump is wrose than Hillary. For one reason or other, I cannot support Trump, hence the only choice I have is Hillary. If anyone other than Trump, I will vote for that person.

Though, I am Canadian. What do I care.

 

[tentales]

Yes, the US Treasury and yourself are both correct - the EU is a supranational regime. EU member states are not the highest power over what happens within their borders; in fact, their borders are basically just for show anyway.

That's not new or controversial. That is what the EU is and was always intended to be, and it makes no attempt to disguise it. And yes, that is why the UK voted out.

This is actually a natural fact of the single market. If your company can be anywhere in Europe and sell goods to the whole rest of Europe, why would you incorporate in the UK or Germany when you can incorporate in Ireland or Luxembourg and still sell your goods and services to the whole of Europe? It creates a race-to-the-bottom, with nations competing with each other for the lowest corporate tax rates in order to steal taxation revenue caused by economic activity across the entire EU. That is what Ireland did; they cut a special deal with Apple so all EU activity would get taxed there. The real scandal is that they are only being reprimanded for the arrangement; IMO the Irish government should also be fined and those taxes should be distributed to the member states who their policies harmed.

The EU has a single underlying problem: its politicians don't know how to do politics. They believe that stamping aspirations, like "freedom of movement", the single currency or open-door refugee policy in to law, regardless of the reality of life on the ground, is politics. That is completely wrong. Politics is the art of finding compromise, of tempering your aspirations based on what is achievable today and having humility when your policies fail.

All of these policies have been failures.

- Freedom of movement allowed Poles (with an average salary 1/4 of the UK) to become the single biggest country-of-origin for immigrants - overtaking generations of Indian and Irish immigration in only 12 years. As the recent Burkini fiasco demonstrates, the UK is probably the least-racist country in Europe. Even they thought it was too much change, too quickly, and wanted caps on the numbers.
- The single currency almost broke Europe's economy. Most countries have a form of Länderausgleich, as we say in Germany, which means money from rich areas (such as Munich) flows to areas with poor finances (such as Berlin). People are generally okay with it, because they're all Germans/French/Brits/whatever. That level of solidarity simply does not exist across EU states. Germans are not happy supporting Greece, because "they're all Europeans". Now the Greeks (of all people) have had their democracy reduced to a joke as they hold referendums and reject austerity packages dictated by Berlin, and the PM is almost in tears as he tells the nation they have no choice but to do it anyway.
- The open-door refugee policy is the worst, because it's not even official EU policy. It's just Germany, being so powerful in the EU, who has created all the problems. Now we have growing right-wing and islamophobic sentiments all across Europe, and the EU are being held over a barrel by Turkey. I'm scared there will be riots if they allow Turks visa-free access to the EU. How does it look when they refuse to compromise with Britain, but lose their convictions about freedom of speech and give everything to an authoritative Muslim nation? The nationalists are going to see it as proof of some conspiracy. Meanwhile, 2/3 of Germans are against the policy and even the left-wing SPD are now calling for caps on the numbers (hmm... didn't they just kick Britain out of the EU for asking for something similar...?)

Now, the failures of the single market are laid bare for everyone to see. No control of your borders, no control of your economy, no control even over taxation. Just surrender all power to the short-sighted failure-artists in Brussels, who declare fantasy policies while presiding over some of the most racist nations and kicking out the most multicultural ones.

tl;dr and OT.
EU policies are by no means perfect today, but it sure beats 20th century's policies and their outcomes.
Even the US is a work in progress, or do you see equality across every state ?

 

[leroypants]

Per Tim Cook's letter this is Apple's argument:



Essentially he's saying there's only a few countries where design, engineering and product ideation and creation happen and that's where the profits should be taxed.

That country would be the United States, where Tim Crook is refusing to pay taxes on 180 billion dollars, funny how that hypocrite wants to have to both ways.

 

[AdonisSMU]

Their argument is that they would have paid taxes on it eventually when they brought it home after they negotiated a deal with the US government on a low corporate tax rate.

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.

The assumption that this money was ever going anywhere shouldn't play a role in how it's treated. Tim Cook said it's coming home when a corporate tax change occurs that has not occurred ever. So, it's basically just European corporate income.

And you could give a company the benefit of the doubt, but when their own CFO had to resign after being investigated by the SEC and Steve Jobs was found backdating stock options but wasn't found guilty of criminal activity because he "didn't know what he was doing". . . Steve Jobs is thought to have been the singular investor that nearly brought Apple to the brink by selling all his Apple shares at once in 1997 in order to oust Gil Amelio. Someone that clever knows what he's doing when he dates a stock option.

TBQH I am against these tax deals. However, I think 14.5 billion sounds like way too much....it may be totally correct. Apple should just return the tax dollars to the US. We all know that the Ireland stuff only exists to avoid paying taxes.

 

[Pilgrim1099]

Part of Tims apparent 'open letter' to the people of Europe:

The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don't owe them any more than we've already paid.

Off the front of Apples website. I think this just shows he has no clue about the general populous feelings, he has severely underestimated the fact normal people have to pay taxes, we don't pay 0.005% tax on out incomes!

The arrogance and disjointed reality shown by Apple and Tim Cook here is pretty unbelievable. I think he's just cost them some sales with this rubbish.
I'm pretty sure few people are going to believe for a second the worlds richest corporation putting 90% of ALL ITS FORIEGN PROFITS, yes not just profits made in Europe, through two companies with headquarters that did not exist in order to not pay taxes, as anything else BUT ILLEGAL, as proved and stated by this investigation.

This is why Tim Cook needs to shut up and stop using the company as a political or defensive soapbox platform. He should be leaving this defensive talk or commentary to the company's attorneys. It's their job to speak on the company's behalf on these kinds of cases. The BoD needs to tell him to leave his post ASAP. He can't afford to 'fight' the EU and drag it out, just like he did with the FBI incident. I don't think the keynote next week is going to make this problem go away, nor the ' touch disease ' lawsuit as well.

 

[Carlanga]

6000 people are employed in Ireland.

In Ireland hq?
Not stores/retail/distribution

 

[djcerla]

In Ireland hq?
Not stores/retail/distribution

today we employ nearly 6,000 people across Ireland. The vast majority are still in Cork

 

[tentales]

Nope. Corporate tax rate in Ontario starts at 11%. And that's before loopholes.

You're never going to get corruption out of politics. There's always going to be wheeling and dealing. You could try to blame capitalism, but there's fat cats in communist countries too. Money and power have a habit of attracting each other. Now if we could somehow abolish money?

"Starts at", yep and then rises much higher: http://www.ey.com/Publication/vwLUAssets/Tax-Rates-Corporate-2016/$FILE/Tax-Rates-Corporate-2016.pdf

I'm with you on corruption. Made that point earlier. Doesn't matter which system.
The overlords are already getting rid of cash. Money is digital now, so it can be manufactured more easily and help disguise debt thru fractional reserve banking.

Money is "abolished" on a regular cycle. #Fiatcurrency

 

[apolloa]

This is why Tim Cook needs to shut up and stop using the company as a political or defensive soapbox platform. He should be leaving this defensive talk or commentary to the company's attorneys. It's their job to speak on the company's behalf on these kinds of cases. The BoD needs to tell him to leave his post ASAP. He can't afford to 'fight' the EU and drag it out, just like he did with the FBI incident. I don't think the keynote next week is going to make this problem go away, nor the ' touch disease ' lawsuit as well.

Couldn't agree more, they need to remember just who the European Commision are and has taken to court before, they won't be afraid of Apple or let them bully them and get away with it. Good luck to Apple appealing the decision, both it and Ireland will most certainly need it!
[doublepost=1472561003][/doublepost]

today we employ nearly 6,000 people across Ireland. The vast majority are still in Cork

'We employ' ?? The only reason you would phrase your response like that is because you work for Apple. So have you just let slip that you are an Apple employee.

 

[Pilgrim1099]

Couldn't agree more, they need to remember just who the European Commision are and has taken to court before, they won't be afraid of Apple or let them bully them and get away with it. Good luck to Apple appealing the decision, both it and Ireland will most certainly need it!

The EU will kick their asses hardcore and it would be stupid for Cook to keep defending their stance acting innocent. The more he talks, the more he embarrasses me.

 

[username:]

Absolutely ridiculous. What gives this commission the right to make this decision? Are they trying to start a world war? It seems they have decided they are the ultimate financial power in the world to tell all companies everywhere how to operate. crazy.

 

[Abazigal]

splitting hairs, eh ? it's pretty common knowledge that Apple's contract is directly responsible for 1+million workers there. Albeit, I hear 60000 are being replaced by robots.

Sadly, that seems to be the future. Whatever jobs can be replaced with robots will eventually be done by robots.

 

[fischersd]

"Starts at", yep and then rises much higher: http://www.ey.com/Publication/vwLUAssets/Tax-Rates-Corporate-2016/$FILE/Tax-Rates-Corporate-2016.pdf

I'm with you on corruption. Made that point earlier. Doesn't matter which system.
The overlords are already getting rid of cash. Money is digital now, so it can be manufactured more easily and help disguise debt thru fractional reserve banking.

Money is "abolished" on a regular cycle. #Fiatcurrency

Yep, see the link I added after another edit. Appear what you posted is also reflecting the mean corporate rates.

Heh...regarding abolishing currency - I mean to erase the relationship you would have to entirely abolish the practice of currency and come up with a new system (whereby people could no longer accumulate wealth) - don't know how you'd be motivated to get out of bed in the morning, but hey.
I still wonder if one day China won't call in all of the trillions in US$ they've bought over the years. Is there an end to how much money can be created?

 

[Alenore]

All true. And all legal within Ireland. And maybe the EU can make Ireland change what they've decided are unfair tax laws. But you need to explain how Apple broke the law and should have to pay taxes retroactively. If a member state has been chugging along with unfair lax law, then it's obviously the EU's fault for taking their eye off the ball, not Apple's or any other corporation's for exploiting existing law.

Suppose they now close a lot of tax loopholes in the US, or any other country for that matter. Should everyone affected now have to pay back taxes on what they should fairly owe now? This is a bloody dangerous precedent to set.

This is not a loophole per se. It's illegal state aid. Considering the contract between Ireland and Apple has been voided, it's just like it never existed and thus they should pay the difference they owe.

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.

You're wrong. There's double taxation in the US, so Apple was required to pay both taxes in the US and in the EU.
The way you explain it is, they didn't pay in the EU because they were going to pay in the US : it's just not how it works.

 

[vmistery]

Well Ireland is welcome to join us Brits in leaving the EU! We could start some new Union, perhaps based on trade and mutual respect...

 

[Gasu E.]

If I have to pay my fair share of tax, then so should everyone else. How is it fair otherwise?

I'm against corporate tax loopholes such as the one Apple plowed through, but your position doesn't make sense. You are an individual that pays taxes. A corporation is a legal fiction that is subject to an entirely other tax regime. The individuals that manage the corporation, the employees and the stockholders are all individuals, and should pay taxes as you do. But a corporation is a thing, like a chair, except a corporation is intangible. Your argument could just as well be about chairs not paying their fair share. What a corporation pays or doesn't pay is not comparable to what individuals pay.

 

[tentales]

I'm pretty sure few people are going to believe for a second the worlds richest corporation putting 90% of ALL ITS FORIEGN PROFITS, yes not just profits made in Europe, through two companies with headquarters that did not exist in order to not pay taxes, as anything else BUT ILLEGAL, as proved and stated by this investigation.

This!!

Few people indeed. I've seen this 1st hand at a large corporation I used to work for. I sat next cubicle to the CFO that used to brag about his structuring of shell companies and how we effectively paid 0% tax in the US. "Borrowing" for R&D from our own offshore companies (where the profits were stashed) could be used as an expense to lower tax burden. I'm not an accountant but it just feels wrong when I'm paying a 35%+ income tax, unable to even deduct my commute cost, while "corporate citizens" get all the breaks.

 

[kodos]

'We employ' ?? The only reason you would phrase your response like that is because you work for Apple. So have you just let slip that you are an Apple employee.

In fairness, I think he was quoting Tim Cook.

 

[Huntn]

0.005% - that is just disgusting.

What a morally bankrupt outfit.

Uh, don't confuse me with someone who knows much about this, but who gave them the sweetheart tax deal to begin with? BTW, this is not making excuses for not paying taxes. The fact that Apple has $200 BILLION in cash stashed overseas disturbs me greatly. I heard on TV this morning that Ireland is pissed, that Apple is saying the situation is they are being forced to pay taxes to a country who is not asking for the taxes to be paid. Seems strange to me.

 

[gnipgnop]

It has always been assumed that Apple would eventually repatriate much of the $200b it currently holds overseas, and that point it would be taxed by the US. Of course it already pays a high rate of tax on all goods sold in the US, which is why it is already the biggest tax payer in the US.

First of all, Apple doesn't even need to repatriate that money due to the fact that federal interest rates are so consistently low. That allows them to have bond sales that are guaranteed to be risk free, as the rate of return on the bond is higher than the interest rate on borrowing. In effect, the U.S. government is paying them to borrow, not the other way around.

Secondly, the U.S. corporate tax relative to GDP has been plummeting since 1950. It used to be around 4% and individual tax at 6%, but now it's more like 2% for corporate tax and 8% for individual. U.S. corporations have nothing to complain about. Being the largest taxpayer means that you're the most successful company. It's not actually a burden at all. For example, if you asked the average U.S. citizen if they would prefer to have an income so low that they didn't have to pay federal income tax OR an income so high that they paid the maximum federal income tax, which do you think they would choose?

 

[cohibadad]

Should be pretty simple. If Ireland granted Apple tax breaks that were illegal, that's Ireland's problem. I wonder how much of this has to do with Brexit. EU squeezing as much out of the UK before the exit.