Apple Will Start Paying Back Taxes to Irish Government Next Month Amid Legal Battle With European Regulators

[MacRumors]

Apple will start paying 13 billion euros in back taxes to the Irish government from May, according to the Financial Times, nearly two years after the European Commission ruled that the company received illegal aid from the country that saw its tax bill significantly reduced over the past few decades.

As expected, the report states that Apple and the Irish government have reached an agreement to set up an escrow account to hold the money while both sides appeal the August 2016 ruling in Europe's highest court. Once the amount has been received in full, additional interest payments will be calculated.

Ireland's finance minister Paschal Donohoe today said the appeal process is likely to begin in the fall, according to Reuters.

Ireland is required to hold the funds in escrow until the legal process is completed, according to the report. Apple previously said the amount will be reported as restricted cash on its balance sheet once it begins making payments.

For background, the European Commission said the Irish government gave Apple unfair advantage between 1991 and 2007 by allowing the company to move income from the European market through two "non-resident" head office subsidiaries based in Ireland, but Apple says there are "fundamental errors" in the findings.

Apple CEO Tim Cook previously called the decision "total political crap" and said Apple pays all of the taxes it owes based on the laws of each country in which it operates. Likewise, the Irish government said it did not give favorable tax treatment to Apple and added that it "does not do deals with taxpayers."

Apple expects its appeal with the European Union's highest courts to take several years, but it is confident the European Commission's decision will be overturned, in which case the 13 billion euros would be returned to the company.

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 Will Start Paying Back Taxes to Irish Government Next Month Amid Legal Battle With European Regulators

 

[otternonsense]

Good. I wonder if Timmy will tweet anything inspirational about that.

 

[Fender2112]

Are there not limits to how far back Apple can be held accountable?
1991, that was over 25 years ago.

 

[tbobmccoy]

Are there not limits to how far back Apple can be held accountable?
1991, that was over 25 years ago.

Not every country has statutes of limitations, nor on every crime. Additionally, Apple has been a big tax evader; I hope they have to pay up for all the taxes they've tried to escape!

 

[lederermc]

Global companies can shift any profit to any country. We here need to tax global profits not just profits assigned to the US.

 

[Glideslope]

This will never leave Ireland. Keep Brussels away from it !!!

 

[bsolar]

Are there not limits to how far back Apple can be held accountable?
1991, that was over 25 years ago.

Yes, 10 years. That's why the taxes the EU Commission ordered to be recovered are from 2004 onwards, the case having been opened in 2014.

 

[MacLawyer]

I wonder how this money will be spent once it's turned over. I'm sure some worthy cause.

 

[alexgowers]

This will never leave Ireland. Keep Brussels away from it !!!

The EU are the ones forcing Ireland to take it? You can't give illegal state aid for kick backs under EU law and not expect the EU not to enforce the rules. But guess what Apple have picked Jersey as their TAX sinkhole backdoor now so Ireland won't have to deal with being a haven anymore.

 

[robinp]

This will never leave Ireland. Keep Brussels away from it !!!

Not sure what you're getting at here? Over the years Ireland has been a massive net beneficiary of the EU. Since 2014 it seems to have been a small net contributor but that's arguably the result of decades of investment by the EU.

 

[kagharaht]

Leave the country and stop doing services there if its political crap.

 

[kstotlani]

How ironic as there is another article about reducing the next iPhone’s price to 899 if Samsung reduces OLED prices. I think this tax will be passed on to us and the phone prices will remain the same.

 

[Baymowe335]

Apple will likely end up getting some or all of it back. This is FAR from over.

 

[mtneer]

Why not just straight up be based in Dubai - no taxes or EU regulators to worry about.

 

[Naraxus]

"Apple CEO Tim Cook previously called the decision "total political crap" and said Apple pays all of the taxes it owes based on the laws of each country in which it operates"

Good old Tim Cook, the Chairman and CEO of Doublespeak. Yes, you do pay all of what you're "legally obligated" to pay but when you intentionally shift money around and extort "concessions" that's not paying your fair share. It's called tax evasion & tax avoidance.

 

[djlythium]

Good. I wonder if Timmy will tweet anything inspirational about that.

Considering that comment, and your signature, it's pretty clear you're unhappy with Apple. I'd like to know your vision for their direction.

 

[alex2792]

Good. I wonder if Timmy will tweet anything inspirational about that.

Maybe they’ll release a new special edition iPhone with proceeds going to keep Tim from starving to death. How is he supposed to survive with only one yacht? That’s a violation of his human rights.

 

[Bigsk8r]

"Apple CEO Tim Cook previously called the decision "total political crap" and said Apple pays all of the taxes it owes based on the laws of each country in which it operates"

Good old Tim Cook, the Chairman and CEO of Doublespeak. Yes, you do pay all of what you're "legally obligated" to pay but when you intentionally shift money around and extort "concessions" that's not paying your fair share. It's called tax evasion & tax avoidance.

Tax evasion would be evading taxes legally applied. They have never been proven to have done that.

Tax avoidance is due diligence to structure the companies investments and cash flow for maximum gain and minimum expense. In other words... smart business.

 

[bsolar]

Tax avoidance is due diligence to structure the companies investments and cash flow for maximum gain and minimum expense. In other words... smart business.

Note that this is the case in the US, but not true in general. Some countries have enacted "anti-avoidance" rules which make operations done with the purpose of avoiding taxation illegal, even if the operation itself is legal if done with a proper business justification.

 

[0837990]

Not every country has statutes of limitations, nor on every crime. Additionally, Apple has been a big tax evader; I hope they have to pay up for all the taxes they've tried to escape!

How has Apple evaded tax when they've paid what the Irish government agreed upon all the time?

Apple is an international company. Which means they pay taxes based on where the business is done. The business done in the US is taxed for and paid in the US. The business done in the EU is taxed and paid for in the EU. The same applies to Asia. Should Apple be taxed in the US for their business outside of the US?

The Irish government and Apple made an agreement on the tax percentage that Apple would pay by operating a large part of their EU business from Irland. And Apple has paid on time all the time. If anything, it should be the Irish government who should be fined, simply because they made such a poor deal in the first place.

 

[jozero]

I wonder how this money will be spent once it's turned over. I'm sure some worthy cause.

Yup. Likely ridiculous things like free health care, hospitals, roads, food programs, schools, and services.

I like Apple as much as the next macrumor visitor but this junk the big companies pull turns my stomach.

If the tax scheme is a convoluted mess of techniques involving an army of accountant and lawyers does it seem right to you? Are you afforded the same tricks and schemes?

 

[Mousse]

Once again, the old idiom proves true: You can't fight City Hall. Even one of the world's biggest company has to play by the the bureaucrat's rules.
If the governments of the world doesn't want some backwater country getting rich off their teat, they should pressure that country instead of going after a company for taking advantage of a great offer. Lots of shell companies in tiny countries all around the world, the Bahamas being one of the more well known havens.

 

[bsolar]

The Irish government and Apple made an agreement on the tax percentage that Apple would pay by operating a large part of their EU business from Irland. And Apple has paid on time all the time. If anything, it should be the Irish government who should be fined, simply because they made such a poor deal in the first place.

The EU Commission evaluated the tax agreements made by the Irish government and Apple to be a form of state aid, which is illegal in the EU. They then ordered the state aid to be recovered, which they can do within 10 years from when the case was opened (so from 2004 the case having been opened in 2014).

I find actually surprising the Irish government had not been fined too.

 

[DeepIn2U]

Good. I wonder if Timmy will tweet anything inspirational about that.

Timmy is not an accountant and this proves he shouldn't have said diddley about this!

From now on this CEO should only comment about what he's directly responsible for and focus on corporate direction. There is a CFO to comment on this case.

Are there not limits to how far back Apple can be held accountable?
1991, that was over 25 years ago.

We're all accountable for our actions ... time is no excuse, not even for a corporation.

 

[yanksfan114]

Global companies can shift any profit to any country. We here need to tax global profits not just profits assigned to the US.

And how would you implement that? Who would get the money? People love to spit out simple solutions without working a day in international taxation. It’s not that easy.