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

[0837990]

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.

Oh great, so the Irish government agreed to something that was illegal in the union that they're a part of, and Apple is the one to blame. Wow.

I mean I'm all for supporting the commonwealth, but calling this agreement tax avoidance on Apple's part is mind-boggling. I live in one of the tax-heaviest countries in the world (Norway), and I know what high taxes can give back in regards to health care and infrastructure. But in this case Apple has followed the laws, signed the papers, business as usual. The Irish government however, have done a really poor job, broken EU regulations (a parliament they have chosen to be a part of), and most important of all, made a really bad deal which hurts the people they are supposed to govern.

The Irish government are the one's that should be in the bad spotlight here. Not Apple.

 

[tridley68]

Apple CEO Tim Cook previously called the decision "total political crap"
its only Crap when it doesn't go your way right Tim.

 

[apolloa]

Good, glad to see the money getting paid, and I predict Apple will fail miserably at its appeal attempt.

 

[Glideslope]

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.

Please, Brussels manipulates EU State Aid (AKA subsidies) daily. The monies doled out to the lesser Nation States cooperation in the “Union.” The EU changed the rules Mid stream on Apple. If Apple ends up paying all of the monies back it will atone to nothing other than a prolonging of the failed EU experiment. As for Jersey, I’m good. The bigger the Tax Shelter the better.

Cooperate tax rates should be 15% permanently.
[doublepost=1524590256][/doublepost]

Oh great, so the Irish government agreed to something that was illegal in the union that they're a part of, and Apple is the one to blame. Wow.

I mean I'm all for supporting the commonwealth, but calling this agreement tax avoidance on Apple's part is mind-boggling. I live in one of the tax-heaviest countries in the world (Norway), and I know what high taxes can give back in regards to health care and infrastructure. But in this case Apple has followed the laws, signed the papers, business as usual. The Irish government however, have done a really poor job, broken EU regulations (a parliament they have chosen to be a part of), and most important of all, made a really bad deal which hurts the people they are supposed to govern.

The Irish government are the one's that should be in the bad spotlight here. Not Apple.

Careful. Posting reality checks can be dangerous in here.

 

[Onexy]

Incredible. Ireland and Apple. They want EU money but they don't want to pay proper taxes for the state, security, roads and welfare of EU countries.

Meanwhile Apple is the richest company on the earth. Yet they steal the money from hard working people which have to pay more because of Apple.

 

[Defthand]

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

It’s counterproductive to tax profits per se. A better approach is to tax monies that companies simply hoard and don’t reinvest. I’d rather have companies recirculate their profits—buying supplies and services and creating jobs—than to let the government redistribute it. The latter has a reputation for bad investments.

 

[bsolar]

Please, Brussels manipulates EU State Aid (AKA subsidies) daily. The monies doled out to the lesser Nation States cooperation in the “Union.” The EU changed the rules Mid stream on Apple.

The rules basically date back from the Treaty of Rome, 1957, Article 92 1:

Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.

 

[FrenchRoasted]

All this bickering between States and on this forum shows there is no fair and equitable way to steal.

 

[diipii]

Hey Fan-Boys. This is who Apple really is. Wake up and smell the tax bill and the rotting reputation.

 

[jozero]

But in this case Apple has followed the laws, signed the papers, business as usual. The Irish government however, have done a really poor job, broken EU regulations (a parliament they have chosen to be a part of), and most important of all, made a really bad deal which hurts the people they are supposed to govern.

What laws? Who were the laws created by? Oh look, by combining this specific set of laws across borders our army of accountants have found a "legal" perfectly normal looking simple idea of setting up the worlds richest corporation in this country of 6 million people, to service the entire needs of 700 million people.

All laws are simple and created purely for the benefit of the people right? It is never overwhelmed government workers fed bills by corporations and their lobbyists in their own benefit.

But don't worry about Apple, Google, etc. Soon the citizens will rise up and defend these companies. Look how many ordinary citizens and small businesses of Ireland set up shell in Bermuda, to transfer money to Netherlands, and then processed and taxed in Ireland. Yup seems like normal standard everyday fair business. I am sure the Irish government will feel the backlash when their citizen rebels because their triple international shell companies are no longer allowed when they do their taxes.

Please Grandma O'Rielly Bakery Stand cries, don't take away my triple shell Double Irish tax write offs! How else will employ these 3 bakers and 400 lawyers?

 

[shplock]

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?

Or more likely the money will be spent on giving tax breaks to multi millionaire rich elites who donate money to the politicians and their parties. That is how it tends to go. The things that need money being spent on them hardly ever get the money needed.
Here in the UK mental health services in the NHS have bene neglected for decades and finally the government decided to spend about £300 million on them. However about 10% ended up getting to mental health services. The rest spent on other things, including balancing the books of some health trusts who had gotten themselves into financial trouble because of over paid mangers who could not it seems manage a p*** up in a brewery!

 

[gavroche]

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

What is good about it?
[doublepost=1524594196][/doublepost]

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!

You clearly dont know what the term tax evasion means.
[doublepost=1524594763][/doublepost]

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.

And your point is the valid debate.... and frankly it's one I don't think anyone that's not a citizen of the EU really has a dog in the fight... so to speak. Let the people actually impacted by these policy issues be the ones to debate the pros and cons and decide. It's frustrating to see the typical knee-jerk reactions on here by people that are quick to throw around terms like tax evasion or theft... those people clearly have no idea what the actual issues of this case are about.

 

[RogerWilco]

$20B here, $15B there, pretty soon we're talking some real money.

$275B Apple's widely-quoted cash "hoard"
-$95B debt
-$45B various EU taxes & fines
-$25B USA taxes due on repatriation
___________
$110B actual cash hoard

 

[wschutz]

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

Luckily, on this one, it seems no.

 

[gavroche]

$20B here, $15B there, pretty soon we're talking some real money.

$275B Apple's widely-quoted cash "hoard"
-$95B debt
-$45B various EU taxes & fines
-$25B USA taxes due on repatriation
___________
$110B actual cash hoard

haha... they might have to take a few Billion out of Timmy's bonus this year

 

[elppa]

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

EU economy is some stupidly large size (€14,600 billion) and one of the three largest in the world (China, EU, US).
Apple can't just leave it without significant harm.

 

[Gilligan's last elephant]

Oh great, so the Irish government agreed to something that was illegal in the union that they're a part of, and Apple is the one to blame. Wow.

I mean I'm all for supporting the commonwealth, but calling this agreement tax avoidance on Apple's part is mind-boggling. I live in one of the tax-heaviest countries in the world (Norway), and I know what high taxes can give back in regards to health care and infrastructure. But in this case Apple has followed the laws, signed the papers, business as usual. The Irish government however, have done a really poor job, broken EU regulations (a parliament they have chosen to be a part of), and most important of all, made a really bad deal which hurts the people they are supposed to govern.

The Irish government are the one's that should be in the bad spotlight here. Not Apple.

Ireland gave Apple a preferential LOW rate of I presume it was corporation tax. This rate was not the same rate that other companies all pay. This is illegal under EU rules, so Apple have been ordered to pay the correct rate of tax they should have paid all along.

 

[wschutz]

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

Sure... no. The case from the EU is pretty strong, and this is surprising considering that they could not access a lot of information. I would not be surprised if the amount goes up after all

 

[thisisnotmyname]

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

and if 160 countries around the world all start demanding their 0.5-35% share of all global profits what does that look like?

 

[gavroche]

Good, glad to see the money getting paid, and I predict Apple will fail miserably at its appeal attempt.

I really really can't understand why anyone can be "happy" about this... other than just because they dislike Apple. All it results in is instability in the global economy, and more difficulty for ANY corporation to do business globally without fear/risk that the rules of the game will get changed after the fact.
It's beyond question that these costs will be passed on in the price of future products. So you and I and everyone that buys Apple products will pay. I don't want to pay more simply because member EU states want to change the rules of the game.

 

[thisisnotmyname]

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.

Although I agree that a company abiding by the laws of the countries they do business in shouldn't face punitive measures by other governments it's not quite as simple as you've laid out. In an industry that relies heavily on intellectual property is really easy to shift the costs and profits from one region to another. So for example, I could create a subsidiary company in Ireland and transfer ownership of my patents and software to that company. Then I could have a second subsidiary sell physical product in France that licenses my software and patents. Company A in Ireland charges Company B in France license fees that effectively wipe out the profit of Company B in France (and thus negating most or all of its tax liability to France). The now highly profitable Company A in Ireland is paying a lower tax rate on all those license fees. This isn't magic though, my profits are effectively embargoed in Ireland, if I want to repatriate that cash to France to do something with it now I need a mechanism to bring it back and likely France will get their piece as I do.

Make sense?

 

[gavroche]

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

Lol... what a ridiculous statement. I guess you are saying that you like every decision your government makes then.. because, I mean, if you thought anything that happened in your country was political crap... you would have left and stopped being there.
Thankfully the grown-ups are in charge.

 

[thisisnotmyname]

I really really can't understand why anyone can be "happy" about this... other than just because they dislike Apple. All it results in is instability in the global economy, and more difficulty for ANY corporation to do business globally without fear/risk that the rules of the game will get changed after the fact.
It's beyond question that these costs will be passed on in the price of future products. So you and I and everyone that buys Apple products will pay. I don't want to pay more simply because member EU states want to change the rules of the game.

There is rationale for laws and treaties preventing state aid though too. A government could allow a company to operate at an effective loss and undercut competitors in other jurisdictions as a way to drive out the competition and then raise prices once they've taken over the market. For example, China could offer grants and tax breaks to their steel industry allowing Chinese producers to sell at a much lower cost on the global market than steel producers in other countries thus driving them out of business. Once the competition has gone under (or had to significantly scale back to no longer be nearly as competitive) they could then raise prices again (and remove the aid) and the host country's economy has significantly benefited.

Classifying what constitutes state aid can be very difficult however. And in this case it isn't even in the traditional model of trying to undercut competitors in the industry but rather attracting employment opportunities and tax revenue (even if lower than other host country's options) to their people. So the question becomes, does tax policy to encourage existing foreign business to expand to your region constitute illegal state aid? It's certainly not the in keeping with original intent of those policies.

 

[fairuz]

So Ireland broke EU's tax laws, got Apple to set up business there just to avoid taxes, then ended up getting the tax revenue anyway? Dang, sweet deal for them.

 

[Baymowe335]

Sure... no. The case from the EU is pretty strong, and this is surprising considering that they could not access a lot of information. I would not be surprised if the amount goes up after all

You're wrong. Apple has done everything legally required and Ireland doesn't even want the money. This is far from done.