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

[SarcasticJoe]

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.

Sure, if it wasn't for the fact that the hustle is now officially kaput so companies aren't going to be setting up shop for this reason and all of those that have are (probably) either in the process of packing their bags or figuring out how to do it with as little noise as possible.

A nice hustle while it lasted, but now it's over and Ireland has not only ruined it's reputation with the rest of the EU member states, it's also set in motion some pretty broad efforts to curb corporate tax planning. There's even been talk of having big companies like Apple, Google and Facebook with histories of this taxed based on revenue rather than profit.

This whole thing may sound awfully alien to americans who are used to states bidding for companies setting up shops with massive tax incentives, but you at least have separate state and federal taxes and that allows them just to avoid state taxes. In the EU don't have EU-wide taxes and with the free trade across the EU, if a company gets to operate essentially tax-free from a particular country, it gets to operate tax free across the whole of the EU.

 

[Tech198]

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

nosy ain't ya

 

[Glideslope]

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

Too funny. Nice “selective editing” of my quote. Quality work.

 

[nebo1ss]

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

The problem started in 1991 but the ruling did not go back to 1991. It only went back ten years from 2014. That was made not made clear in the MR piece.What will also be interesting is to see if Ireland is forced to share this with the rest of Europe since part of the problem is that all revenue and profit was diverted to Ireland from every location in Europe. The effective rate they were paying in ireland varied between .005 and 1 percent.

 

[bsolar]

Too funny. Nice “selective editing” of my quote. Quality work.

What I quoted are complete sentences you wrote, not altered in any way. From the sentences you wrote it seems clear to me you are under the misguided impression that the concept and regulation of "state aid" in the EU has been somehow changed or interpreted in novel ways in the case involving Apple and Ireland compared to the past, and that's the misconception I wanted to address in my reply.

The Treaty of Rome clearly demonstrates the concept of state aid being already officially defined and regulated in the EU since more than 60 years, long before Apple's taxes in Ireland were an issue.

 

[nebo1ss]

What you are discussing is a valid discussion.. and is unique and particular to the EU. Where else in the world do you have a country telling any other country what tax laws they're allowed to enact, or tax breaks to give. Now... you have countries trying to impose Tariffs and Duties in an attempt to accomplish some of the goals that you touched upon... but that's a different argument for a different day.
The important point I think is that companies should not have to be political experts and tax law experts... and decide if they think any current law in any country could later be changed. If a company is told by country X that if they choose to do business there they will have tax rate Y... they need to reasonably be able to rely on that. They make important, and long term decisions based on those factors. And it erodes trust. Do you think Apple, going forward, is gong to be as likely to want to do business in any EU country, if it can at all be avoided?

What you are either ignoring or not aware off is the the EU is a Financial union with a single currency and common laws. The EU is more akin to the US Federal Govt while the individual countries are akin to the US states.

 

[Glideslope]

What I quoted are complete sentences you wrote, not altered in any way. From the sentences you wrote it seems clear to me you are under the misguided impression that the concept and regulation of "state aid" in the EU has been somehow changed or interpreted in novel ways in the case involving Apple and Ireland compared to the past, and that's the misconception I wanted to address in my reply.

The Treaty of Rome clearly demonstrates the concept of state aid being already officially defined and regulated in the EU since more than 60 years, long before Apple's taxes in Ireland were an issue.

Alright. I apologize. IMO, the EU is fast approaching another 1968 period. It will be interesting to how State Aid is used, and for what.

 

[0837990]

The problem started in 1991 but the ruling did not go back to 1991. It only went back ten years from 2014. That was made not made clear in the MR piece.What will also be interesting is to see if Ireland is forced to share this with the rest of Europe since part of the problem is that all revenue and profit was diverted to Ireland from every location in Europe. The effective rate they were paying in ireland varied between .005 and 1 percent.

Europe is a continent
EU is a union of European countries that voted to become member of EU
EU is not Europe
There are many European countries that are NOT members of the EU:

Switzerland
Norway
Iceland
Ukraine
Belarus
Bosnia-Herzegovina
Serbia
Kosovo
Albania
Macedonia
Moldova
Channel Islands
The Isle of Man
Monaco
Andorra
Lichtenstein
San Marino
Vatican City
And soon England

And also western Russia, which is on the European continent, which is also where most Russians live, and Turkey, which has 3% of it's country on the European continent.

Seems like a lot of non-EU/European people are getting this consistently wrong.

 

[NoNothing]

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.

The fundamental error of the EU's case, however, is Apple has no special deal. It is the same tax "deal" offered to all companies wanting to setup shop there. But don't let facts get in the way of a good robbery.

 

[Omega Mac]

Yea, Apple aren't the only ones, posted this before but this is probably one of the most in-depth insider-like sources you'll find on the net. It's murky, political, backwater tax haven stuff, finanacial acrobatics far beyond mere mortal - even the opening post will give a flavour of how things go:

Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, CCCTB

Src: http://www.thepropertypin.com/viewtopic.php?f=4&t=66347

 

[NoNothing]

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.

My problem with the EU's finding is it is capricious and has no specific codification as to what constitutes "illegal state aid". For a bureaucracy that creates tombs detailing pillows, this is surprising.

 

[Gilligan's last elephant]

Europe is a continent
EU is a union of European countries that voted to become member of EU
EU is not Europe
There are many European countries that are NOT members of the EU:

Switzerland
.
.
.
And soon England


Seems like a lot of non-EU/European people are getting this consistently wrong.

Like you thinking that England is a sovereign state!!!!

 

[NoNothing]

Again., I find it hard to believe that Apple would not know the EU tax laws. Probably expected to get a slap on the wrist when it all came out in the wash.

I find it hard to believe you can't see how the EU interprets many of their tax laws in an unpredictable and inconsistent way since they are so open ended on how they are written.

 

[dilbert99]

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

If I buy a stolen car and the police find it, it will be taken away from me even though I have done everything legally while purchasing the car, so I lose the money i paid to the thief.

 

[pika2000]

"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.

When you filed your own taxes, would you take any advantages of any tax credit, or would you pay your taxes in full without any deductions? If you did the former, then by your definition, you’re doing tax evasion as well.

And for people living in California, how many of you pay back your taxes when buying stuff from Amazon? You’re supposed to.

 

[Baymowe335]

If I buy a stolen car and the police find it, it will be taken away from me even though I have done everything legally while purchasing the car, so I lose the money i paid to the thief.

Worst analogy ever.

 

[MacinDoc]

There's a lot of misinformation out there about this case, and that's reflected in a lot of the comments here.

In fact, there was no "special agreement" between Apple and Ireland. Apple set up a "stateless head office" in Ireland based on several Irish tax court rulings that apply equally to any company set up in this manner (and there are currently many such companies). Apple set up this stateless head office in accordance with all applicable Irish laws and the Irish tax court's explicit interpretation of them. This was no back-room or exclusive deal. The problem that the EU has is that such a stateless head office doesn't declare its income in any state, and is not subject to the same tax rate as local Irish businesses, and therefore in its opinion constitutes a subsidy. Many of the largest multinational companies in the world followed Apple's example, because they were of the view that this tax law could apply to any company set up in this manner, and did not constitute a subsidy of any one company, therefore not being in violation of EU law.

The question here is whether Ireland as a member of the EU (that receives a subsidy from the EU) can have a law that allows multinational companies to have stateless head offices based in Ireland and are not subject to local taxes. This is a much larger issue than Apple, because it is a significant cog in Ireland's policy for attracting tech investment to the country, and that is why Ireland is fighting against this decision in spite of that fact that it gets a large financial windfall from the EU ruling.

 

[bollman]

Yea, Apple aren't the only ones, posted this before but this is probably one of the most in-depth insider-like sources you'll find on the net. It's murky, political, backwater tax haven stuff, finanacial acrobatics far beyond mere mortal - even the opening post will give a flavour of how things go:

Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, CCCTB

Src: http://www.thepropertypin.com/viewtopic.php?f=4&t=66347

Read this everyone, please do. Then come back here and comment. Then perhaps people will realize Apple has not only used the EU, but also damaged the US economy, badly. This might get bigger than we think.

 

[wschutz]

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

I am not wrong, sorry. Ireland (and Apple) is bound by EU law. Apple benefited (presumably) from illegal tax state aid. That state was Ireland and Ireland is bound to EU laws (reason for Apple not to be double taxed as per the single EU market).
Ireland offered such tax aid to Apple (among others probably) and Apple took it.

Apple did right according to Irish law but not according to EU law. And that's why Apple will have to return every single cent it didn't pay (plus interest I do hope).
Ireland may not want the money but has to collect it according to EU law because other countries may demand it but as per EU law, it is Ireland the one who has to fix the issue, and so request it to Apple.

Pity... but this is how the EU works (and very proud of it). No tax aids, and hopefully soon no more tax loop holes.

 

[bsolar]

My problem with the EU's finding is it is capricious and has no specific codification as to what constitutes "illegal state aid". For a bureaucracy that creates tombs detailing pillows, this is surprising.

Sure they do? https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E107&from=EN

That’s the currently valid codification, which is basically the same as the codification in the original Treaty of Rome being its evolution.
[doublepost=1524641879][/doublepost]

In fact, there was no "special agreement" between Apple and Ireland. Apple set up a "stateless head office" in Ireland based on several Irish tax court rulings that apply equally to any company set up in this manner (and there are currently many such companies).

This is incorrect. Apple’s organisation in Ireland was an evolution of the Double Irish arrangement, not the “standard” Double Irish other companies use.

The key issue of Apple’s organisation in Ireland are the the special agreements made by Apple and Ireland in 1991 and updated in 2007. These agreements were suggested and negotiated by Apple with the Irish government, they were confidential and applied only to Apple, not to all companies.

The EU has never opened a case against any company for using the standard Double Irish arrangement.

 

[Khedron]

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

How has this person engaged in bribery when they've paid what the police officer agreed upon at the time?

How has that organisation engaged in corruption when they've paid what the politician agreed upon at the time?

Newsflash. You can't just make agreements to ignore laws.

 

[0837990]

How has this person engaged in bribery when they've paid what the police officer agreed upon at the time?

How has that organisation engaged in corruption when they've paid what the politician agreed upon at the time?

Newsflash. You can't just make agreements to ignore laws.

Another newsflash, when someone gets caught being engaged in bribery, BOTH parties are judged and sentenced.
Why is only Apple being judged and sentenced, while the Irish government is getting off completely free?
Are governments free of responsibilities these days or what? In that case, what does anyone actually need the governments for?

 

[weckart]

Another newsflash, when someone gets caught being engaged in bribery, BOTH parties are judged and sentenced.
Why is only Apple being judged and sentenced, while the Irish government is getting off completely free?
Are governments free of responsibilities these days or what? In that case, what does anyone actually need the governments for?

The Irish government is being obliged to collect the tax Apple owes including interest. This will significantly boost the Irish tax coffers. In return, Ireland will be able claim much less in the way of subsidies from the EU and will probably become a relatively significant contributor until this tax repayment works its way through. The Irish budget will not change, just the source of its funding from the EU to Apple's tax receipts.

This impacts upon the EU budget including how much Norway ends up paying for its access to the Single Market. You, me and everyone else have been subsidising Apple's shareholders for a long time.

Neither Apple nor Ireland is being 'sentenced'. Both are being instructed to ensure that tax liabilities are settled just the same as if you had underpaid your income tax. You pay what is outstanding. You would only get 'sentenced' if a criminal act had occurred, like fraud or money laundering.
[doublepost=1524647319][/doublepost]

Yea, Apple aren't the only ones, posted this before but this is probably one of the most in-depth insider-like sources you'll find on the net. It's murky, political, backwater tax haven stuff, finanacial acrobatics far beyond mere mortal - even the opening post will give a flavour of how things go:

Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, CCCTB

Src: http://www.thepropertypin.com/viewtopic.php?f=4&t=66347

That is a really nice précis and a good follow up to the Irish forum board that proved so informative when this tax fiddle first blew up in the public sphere. I do wish some of the US commentators would take the time to read this before chiming in with their EU=evil comments.

 

[PinkyMacGodess]

"We paid ALL NECESSARY taxes!" - Tim Cook

And he's got a private meeting with the chimp in chief today? Let me guess, taxes will be the topic, and it will be about clawing this money back from those 'evil doers' in Europe.

Yep. They pay 'all' taxes alright... *cough*

And his bleatings about not using tax shelters and hiding money are blatant lies...

 

[s2mikey]

If I buy a stolen car and the police find it, it will be taken away from me even though I have done everything legally while purchasing the car, so I lose the money i paid to the thief.

Which is a HORRIBLE law and way to do things. You arent punishng the criminal in this situation. So stupid.