Apple Turns Down Invite to EU Hearing on Tax Evasion Because it Could Be 'Detrimental' to Appeal Process

[rafark]

I'm with on this one. The EU is a pain in the ass with their almost-religious taxes. have you read the gdpr penalties? A % of the worlwide sales is ridiculous, talk about self entitlement.

 

[AndyMacAndMic]

I'm with on this one. The EU is a pain in the ass with their almost-religious taxes. have you read the gdpr penalties? A % of the worlwide sales is ridiculous, talk about self entitlement.

I can't follow your logic here. Because you don't like EU's 'religious' taxes you are on Apple's side breaking the law? Most other US companies are fine with following the EU tax rules and still make a hefty profit. If Apple wants to play the game they need to play it by the rules, just as everybody else.

 

[Alenore]

I'm with on this one. The EU is a pain in the ass with their almost-religious taxes. have you read the gdpr penalties? A % of the worlwide sales is ridiculous, talk about self entitlement.

And what should be the max fine for the GDPR then ? 10 million ? 10 billions ?
The current max amount in france is 3 millions IIRC, google or Facebook wouldn't even bat an eye and pay while still mining datas, if it came to this.

 

[miniyou64]

As if corporations spent every dollar wisely, never paid mediocre executives tens or hundreds of millions annually, never poured huge sums into projects that never got off the ground, never owned corporate jets that sat idle for days or weeks on end, never built lavish headquarters buildings with gourmet executive dining rooms, never spent fortunes on ineffective advertising, never acquire other businesses for much more than their true value (all while failing to adequately fund their pension plans)...

Capitalist theory is that businesses will do the right thing, spend wisely, etc., due to the profit motive. By definition, that means operating very conservatively. Meantime, the stock market wants to see the kinds of capital appreciation that comes from aggressive and risky business practices. Investors pay 50-100 times earnings (or more, if the business is still in the aggressive growth/constant-loss stage - which can go on for decades, as we see in the case of Amazon) in hopes there will be huge profits down the road. If there are not, the investment value plummets, and the last investors holding the stock take a bath. The bubble pops; a total waste of investment capital.

Now, some will say that this aggressive, wasteful behavior is part of healthy competition - the weak will fail, leaving the survivors as far stronger businesses than they would have been otherwise. And all of that waste and destruction is tax-deductible. Wasteful behavior is rewarded with a lower tax bill. "Gee, Harry, if we don't spend it, it's just going to the tax man anyway!"

When you scratch the surface, is it any less "wasteful and destructive" than "wasteful" government programs? People ignore the many benefits we get from government, from roads and bridges to universal education, police and fire protection, parks, clean air and water; and as much as people hate rules and regulations they don't like, society would crumble entirely without a body of laws. People can't "do the right thing" unless there is a system in place to determine what the right thing is.


My proposition is that neither business nor government are inherently superior or inferior to the other. Either can be wasteful, either can be efficient. It depends on management. So, if you have government of the people, by the people, and for the people, then it's up to the people to manage it efficiently.

Of course, if you want no government at all, then efficient management is the last thing you want. Gum up the works, under-fund as many programs as possible, do your best to ensure that government can't succeed. If it wasn't ours to destroy, one might even call that treasonous behavior.

However, there has yet to be an example of a case where, after self-government failed, another form of government didn't take its place. Only those other forms of government exist only for the benefit of those in charge, and will be far less interested in the well-being of the population they rule.

You’re conflating capitalism with corporatism. The only thing government is good for is centralizing stupidity and destructive power. Every benefit you named only addresses government created problems and free markets would be far more efficient at sorting out problems with effective solutions.

 

[dotnet]

If Ireland wants give Apple a sweet deal by charging 0.005%, then Ireland has to give that deal to ALL foreign companies. Ireland only gave that deal to Apple, so that is considered "state aid."

The line is clear.

All those expensive lawyers are obviously a waste of money. They should have just asked you for clarification on this matter.

 

[ApfelKuchen]

You’re conflating capitalism with corporatism. The only thing government is good for is centralizing stupidity and destructive power. Every benefit you named only addresses government created problems and free markets would be far more efficient at sorting out problems with effective solutions.

Since what we have now can effectively be considered Corporatism, then wishing for a Capitalist nirvana is about as naive as hoping for a Dictatorship of the Proletariat.

 

[rafark]

I can't follow your logic here. Because you don't like EU's 'religious' taxes you are on Apple's side breaking the law? Most other US companies are fine with following the EU tax rules and still make a hefty profit. If Apple wants to play the game they need to play it by the rules, just as everybody else.

They didn't break the law, the made a legal deal with the irish gov.

And what should be the max fine for the GDPR then ? 10 million ? 10 billions ?
The current max amount in france is 3 millions IIRC, google or Facebook wouldn't even bat an eye and pay while still mining datas, if it came to this.

If there's a penalty then the fine should be according to the revenue made within the EU, not worldwide. That's more than absurd, and well beyond their jurisdiction.

 

[bwillwall]

I don’t think a EU country is legally allowed to give any special tax deals if I am not mistaken so the issue would be with Ireland allowing it and Apple for taking it.

Yet Apple and many other companies did it for years before they did anything about it, and suddenly it's a problem and they owe a bunch of money.

 

[AndyMacAndMic]

They didn't break the law, the made a legal deal with the irish gov.

Nope, the Irish government and Apple made a shady deal. Why would Apple agree in paying the penalty when they did nothing wrong? Apple knew on forehand there was a risk, but they took it and now they have to pay the price.

Edit: As I was pointed out. Apple did agree to pay backward taxes (so technically not a penalty).

 

[bsolar]

They didn't break the law, the made a legal deal with the irish gov.

The deal cannot be legal if it violates EU regulations.

If there's a penalty then the fine should be according to the revenue made within the EU, not worldwide. That's more than absurd, and well beyond their jurisdiction.

Actually you are missing the (bigger) point.

The GDPR protects EU residents worldwide, not merely for the business they do in the EU with EU companies. An EU resident on holiday in the US, doing business with an US company from the point of view of the EU is protected by the GDPR and the US company is required to comply with the GDPR.

How they plan to enforce it is a different issue, but from the point of view of the EU it's absolutely a worldwide protection.
[doublepost=1527970568][/doublepost]

Why would Apple agree in paying the penalty when they did nothing wrong? Apple knew on forehand there was a risk, but they took it and now they have to pay the price.

Technically it's not a penalty, it's tax recovery. Not Apple nor Ireland got fined by the EU for the illegal state aid.

 

[Alenore]

If there's a penalty then the fine should be according to the revenue made within the EU, not worldwide. That's more than absurd, and well beyond their jurisdiction.

So if Facebook sells my informations to another american company, making money out of it, they should be fined for their EU revenue even though they just made money totally outside of Europe?

 

[bsolar]

Yet Apple and many other companies did it for years before they did anything about it, and suddenly it's a problem and they owe a bunch of money.

All other companies were using the Double Irish arrangement and the EU never went after companies using the "standard" Double Irish.

Apple was the only company operating with a different, specific arrangement made possible by the special deal with the Irish government.

 

[AndyMacAndMic]

The deal cannot be legal if it violates EU regulations.

Actually you are missing the (bigger) point. Op

The GDPR protects EU residents worldwide, not merely for the business they do in the EU with EU companies. An EU resident on holiday in the US, doing business with an US company from the point of view of the EU is protected by the GDPR and the US company is required to comply with the GDPR.

How they plan to enforce it is a different issue, but from the point of view of the EU it's absolutely a worldwide protection.
[doublepost=1527970568][/doublepost]
Technically it's not a penalty, it's tax recovery. Not Apple nor Ireland got fined by the EU for the illegal state aid.

Yes, mea culpa, technically you are right. But, penalty or not, it is a helluva lot of money ;-)

 

[apolloa]

They are allowed to do this, but there isn't a clear line between a special tax rate and an illegal state aid. The so called head office of Apple, which existed only on paper due to a weird irish special deal from 1991, made it possible to lower Apples tax rate in 2014 to 0.005% on global profits. It seems that the EU has a point when they call this a huge financial advantage. If this is an illegal state aid is now up to the court to the decide.

Pretty much this, plus Ireland let’s not forget received all the benefits of the EU and it’s tax paying public, whilst allowing Aplle to virtually launder its entire operating profits outside the US through it’s shores for that 0.005%. But of course fans will defend that behaviour... Apple won’t win this one no matter what they try.
[doublepost=1527984507][/doublepost]

Yet Apple and many other companies did it for years before they did anything about it, and suddenly it's a problem and they owe a bunch of money.

Actually the EU has been investigating this special deal for several years.. It’s not something that popped up last year, they just had enough evidence and put a case together to confront both of them with. Google and Amazon are also being targeted along with anyone else. You break the law you suffer the penalties.

The EU started in Apples case after the US Senate grilled Cook in 2013 over its tax avoidance, so you can blame them for bringing it to the EUs attention, and rightly so!

http://www.ft.com/content/cc58c190-6ec3-11e6-a0c9-1365ce54b926

 

[usarioclave]

Has the European court ruled on the legality of the competitoon commission's ruling? It seems a little out of the comission's jurisdiction. Can some unelected bureacrats upend a nation's tax policy? What's to stop them from saying that tax breaks favoring the rich are anti-competitive to poor people?

 

[FrankieTDouglas]

Basically Ireland gave special tax deals to Apple in exchange for Apple opening more infrastructure in Ireland. The EU doesn't allow special deals and therefore forced Ireland to collect the unpaid taxes Apple should have owed.

Is Ireland not its own country, free to do as it so chooses?

Apple's hypocrisy is amazing on this issue and encryption. While bellyaching that everyone else needs to pay more taxes and that everyone else needs to be regulated more, they want to exempt themselves from their publicly stated wishes on those two issues. Don't get me wrong, Apple is right on encryption, but they are so inconsistent that I am not sure how they can take themselves seriously.

Of course authoritarians of all stripes seem to want more regulation for everyone else while exempting themselves from it.

Fighting against the government wanting access to encrypted devices, IS fighting back against government regulations.

When you scratch the surface, is it any less "wasteful and destructive" than "wasteful" government programs? People ignore the many benefits we get from government, from roads and bridges to universal education, police and fire protection, parks, clean air and water; and as much as people hate rules and regulations they don't like, society would crumble entirely without a body of laws. People can't "do the right thing" unless there is a system in place to determine what the right thing is.

Doesn't matter. They're a private company, they are free to be as "wasteful" as they want. When the government is wasteful, they're wasting money they took from citizens.

The deal cannot be legal if it violates EU regulations.

Actually you are missing the (bigger) point.

The GDPR protects EU residents worldwide, not merely for the business they do in the EU with EU companies. An EU resident on holiday in the US, doing business with an US company from the point of view of the EU is protected by the GDPR and the US company is required to comply with the GDPR.

How they plan to enforce it is a different issue, but from the point of view of the EU it's absolutely a worldwide protection.
[doublepost=1527970568][/doublepost]
Technically it's not a penalty, it's tax recovery. Not Apple nor Ireland got fined by the EU for the illegal state aid.

When someone visits another country, their country of origin's rules don't travel with them. It's ridiculous to think otherwise. The EU is basically saying that their laws govern over the whole world.

 

[bsolar]

Is Ireland not its own country, free to do as it so chooses?

Actually, no it's not. Joining the EU means being subject to its directives and regulations. Basically from this point of view Ireland is similar to an US state which has to comply with federal law.

When someone visits another country, their country of origin's rules don't travel with them. It's ridiculous to think otherwise. The EU is basically saying that their laws govern over the whole world.

Depending on the relationship between the two countries, sure it does, as long as their country can enforce these rules e.g. with help of the other country.

"While we don’t yet have U.S.-EU negotiated civil enforcement mechanisms for the GDPR (and it is unknown whether we ever will), there is still the application of international law and potential cooperation agreements between U.S. and EU law enforcement agencies, which have been increasing in recent years."

The bottom line: EU regulators can fine U.S. companies for violating GDPR, and they can do it with the help of U.S. authorities.

Note that one country trying and more or less managing to impose "worldwide" regulations is nothing new, nor specific of the EU. As example the FATCA is an US federal law which applies to all non-US financial institutions, even those without a presence in the US.

How actually enforceable these worldwide regulations are depends on many factor like the influence of the promoting country, international law, bilateral agreements etc... but if you think it doesn't work or it's something new, that's not the case at all.
[doublepost=1528014013][/doublepost]

Has the European court ruled on the legality of the competitoon commission's ruling? It seems a little out of the comission's jurisdiction. Can some unelected bureacrats upend a nation's tax policy? What's to stop them from saying that tax breaks favoring the rich are anti-competitive to poor people?

The issue is not with the tax policy itself, it's with the tax policy providing what is effectively state aid to Apple. The tax policy is merely the "mean" which delivers the state aid to Apple.

State aid is defined as an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities.

The EU has rules which regulate the internal market which all State Members must comply with. One of these rules is that a State Member cannot provide state aid to a company except in very specific circumstances and with the consent of the EU Commission.

In the case of Ireland and Apple, Ireland provided Apple with a special deal, only valid for Apple, which allowed Apple to implement a special corporate arrangement in Ireland to greatly reduce their taxation. That's clearly a selective advantage given to Apple by Ireland, which is the reason the EU Commission considers it state aid.

 

[charlituna]

I never really understood this story, and every time I try doing some research on it, I get bored really quickly.

The gist of the story is the Apple is being accused of tax evasion, but all the parties involved, Ireland and Apple, says that they are paying the appropriate taxes. Ireland gave Apple a special tax deal that works out great for both parties, but the European Commission says it isn't fair?

View attachment 763975

The EU agreements don’t allow ‘special tax deals’ by members. That’s what they claim this was. But Ireland and Apple say no it’s not. That the deal is available to any company spending the money Apple was in Ireland, just not other company was interested in spending that money.