Apple Wins Backing of EU General Court Over 13 Billion Euro Tax Bill

[SidricTheViking]

You may want to learn your history and understand that Ireland today, transformed from poor farmers in an outpost island. is a result of decades of EU investment - in other words paid for by taxes from ordinary citizens and companies in other EU countries.

Just on a moral basis it’s unconscionable for Irish politicians to “repay” Europeans by offering rich companies an inside-EU tax loophole.

While it’s true that Ireland continues to benefit from EU membership in many ways, the process started in the ‘60s. The government of the day offered special deals to foreign (mostly US) companies to set up in ireland. Direct Foreign Investment as it’s called here. After joining the EEC (as it was then) in 1973 that process continued. Other EU countries offer similar special arrangements to foreign companies, Luxembourg and France among them, where the tax paid by many companies is a lot lower than advertised. Basically, each member of the EU is free it’s eat it’s own tax laws in many areas. So, the 27 nations both cooperate and compete. It’s a strange system, to be fair. Also, in recent years Ireland has become a net contributor to the EU central fund, a notable change from its status over several decades. (full disclosure: I have no background in tax law, Irish or EU legislation or any other related field, but I have lived in Ireland all my 61 years and have followed most of what happens here quite closely).

 

[malkovich87]

Every law student could’ve seen this coming. All Apple’s arrangements were in agreement with local law at the time the agreements were made. Other corporations could do the same, so there is no state aid here.

Any law student with any kind of legal knowledge about the EU would know that EU tax law supersedes local tax laws.

 

[SidricTheViking]

Every law student could’ve seen this coming. All Apple’s arrangements were in agreement with local law at the time the agreements were made. Other corporations could do the same, so there is no state aid here.

Exactly!

 

[malkovich87]

While it’s true that Ireland continues to benefit from EU membership in many ways, the process started in the ‘60s. The government of the day offered special deals to foreign (mostly US) companies to set up in ireland. Direct Foreign Investment as it’s called here. After joining the EEC (as it was then) in 1973 that process continued. Other EU countries offer similar special arrangements to foreign companies, Luxembourg and France among them, where the tax paid by many companies is a lot lower than advertised. Basically, each member of the EU is free it’s eat it’s own tax laws in many areas. So, the 27 nations both cooperate and compete. It’s a strange system, to be fair. Also, in recent years Ireland has become a net contributor to the EU central fund, a notable change from its status over several decades. (full disclosure: I have no background in tax law, Irish or EU legislation or any other related field, but I have lived in Ireland all my 61 years and have followed most of what happens here quite closely).

Again, tax incentives are allowed to a certain degree - but 0.05% corporate tax is not.

 

[Carnegie]

the only problem: EU has anti-tax-haben rules and Ireland violated them. They can’t just set their taxes to almost zero to attracted business away from other regions within the EU.

Ireland could set really low tax rates if it wanted to. EU rules allow it to decide its own tax policies. What it can't do is create special deals for certain entities which are contrary to those tax policies.

Ireland didn't set a lower tax rate for Apple. The applicable rate was still 12.5%. But when it comes to income taxes, a tax payer (or taxing authority) has to determine what is taxable - what's the amount the rate is applied to. Ireland didn't tax the income of non-Irish branches of Irish corporations. That was a quirk of Irish tax law, but it was quiet intentional. And, such a policy was allowed under EU rules. The issue here was what methods were allowed when it comes to determining profit allocation between different branches. Ireland claimed that the cost plus method Apple used was allowed. The European Commission claimed that Ireland was wrong about its interpretation of its own tax policies. But the Commission never demonstrated how the method Apple was allowed to use was contrary to Ireland's generally-applicable tax policies.

 

[jlc1978]

Nope, it doesn't work like that. What they did is basically this: As long as jlc1978 resides in Ireland, jlc1978 will pay only sales tax of 0.05% on any purchase while the rest of the residents pay 23% That's not how subsidies and tax breaks work.

Sure it is: If jlc1978 agrees to reside in Ireland and brings in X billions you only have to pay an effective rate of .05% based on our tax laws; often include is plus we'll exempt all you real estate from taxes if you employ Y; and throw in a discount on energy prices as well. Happens everywhere.

Ireland simply used it's existing tax laws to benefit Apple in order to get Apple to locate there. My Irish ancestors would be proud.

 

[malkovich87]

Again: 0.05% isn’t taxation, it’s free beer. And again: the final ruling won’t be in favor of Apple’s and Ireland’s attempt at tax evasion - that’s as certain as the pope is catholic.

 

[Glideslope]

So to sum up, the EU reckoned not taxing someone is a subsidy. On that logic anything less than 100% tax is a subsidy. The place is stuffed.

Beyond stuffed. No surprise here. Never had a chance. Time for the EU to move on from their overzealous regulatory exercises in futility.

Too bad Apple will simply move on without much comment. Brussels could really use a a nice slap across the face.
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Again: 0.05% isn’t taxation, it’s free beer. And again: the final ruling won’t be in favor of Apple’s and Ireland’s attempt at tax evasion - that’s as certain as the pope is catholic.

Good luck.

 

[iPadified]

Next time Ireland needs an economic bailout form EU, we should simply decline and let them sink...

Apple is not at fault but close to zero in tax mean that they are not paying its way for services and infrastructure in the EU or Ireland.

Back to the drawing board for the EU commission and this time no loop holes.

Note: VAT is payed by the customers (not Apple) and personal tax only cover services for that person in question and not the company they work for.

 

[Abazigal]

the only problem: EU has anti-tax-haben rules and Ireland violated them. They can’t just set their taxes to almost zero to attracted business away from other regions within the EU.

Then take it up with Ireland, not Apple.

 

[alexgowers]

come on now Apple. This is why we can't have nice things. You gotta pay your tax bills. This isn't illegal state aid, it's the tax rate within the EU. You don't get to pay 0.01% of what is due by ALL other companies! I hate this action by the court, clearly someone was paid off. The EU is in the right and Apple is in the wrong. EU should ban Apple imo and i love Apple products. The company suck though.

 

[gnasher729]

Any law student with any kind of legal knowledge about the EU would know that EU tax law supersedes local tax laws.

That's an interesting opinion. Not necessarily a correct opinion, but an interesting opinion.
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come on now Apple. This is why we can't have nice things. You gotta pay your tax bills. This isn't illegal state aid, it's the tax rate within the EU. You don't get to pay 0.01% of what is due by ALL other companies! I hate this action by the court, clearly someone was paid off. The EU is in the right and Apple is in the wrong. EU should ban Apple imo and i love Apple products. The company suck though.

1. Apple paid its tax bill to Ireland. Exactly what Ireland demanded.

2. "Clearly someone was paid off". So you are saying, without any evidence, that Apple bribed someone in the EU court, which would be a serious crime both according to US law and to EU law. If you have evidence, you should send that to the authorities, and someone (at least two people) will go to jail for it for a long time.

 

[mannyvel]

It's always pleasant to see bureaucratic overreach slapped down by judges.

 

[gnasher729]

the only problem: EU has anti-tax-haben rules and Ireland violated them. They can’t just set their taxes to almost zero to attracted business away from other regions within the EU.

And this court ruling says that Ireland didn't violate anything.

 

[malkovich87]

Next time Ireland needs an economic bailout form EU, we should simply decline and let them sink...

Apple is not at fault but close to zero in tax mean that they are not paying its way for services and infrastructure in the EU or Ireland.

Back to the drawing board for the EU commission and this time no loop holes.

Note: VAT is payed by the customers (not Apple) and personal tax only cover services for that person in question and not the company they work for.

Amen to that.

 

[Kabeyun]

That's what happens when you have all the best lawyers working for ya 🤣

The same lawyers who were on staff for the EC decision, right? Maybe the EUGC ruling is just consistent with the law.

You may want to learn your history and understand that Ireland today, transformed from poor farmers in an outpost island. is a result of decades of EU investment - in other words paid for by taxes from ordinary citizens and companies in other EU countries.

Just on a moral basis it’s unconscionable for Irish politicians to “repay” Europeans by offering rich companies an inside-EU tax loophole.

Whether you’re right or not, this has nothing to do with what johannn posted.

the only problem: EU has anti-tax-haben rules and Ireland violated them. They can’t just set their taxes to almost zero to attracted business away from other regions within the EU.

I’m so impressed with all the legal scholars here who are more informed and knowledgeable than the entirety of the EU’s second highest court. Looks like your personal ruling is different, then?

 

[malkovich87]

The same lawyers who were on staff for the EC decision, right? Maybe the EUGC ruling is just consistent with the law.

Whether you’re right or not, this has nothing to do with what johannn posted.

I’m so impressed with all the legal scholars here who are more informed and knowledgeable than the entirety of the EU’s second highest court.

I’m so impressed with the iPhone users at the EU’s second highest court that are so much better than the ones sitting in the previous one. Let’s see how much better the ones in the next one are.

 

[Osamede]

While it’s true that Ireland continues to benefit from EU membership in many ways, the process started in the ‘60s. The government of the day offered special deals to foreign (mostly US) companies to set up in ireland. Direct Foreign Investment as it’s called here. After joining the EEC (as it was then) in 1973 that process continued. Other EU countries offer similar special arrangements to foreign companies, Luxembourg and France among them, where the tax paid by many companies is a lot lower than advertised. Basically, each member of the EU is free it’s eat it’s own tax laws in many areas. So, the 27 nations both cooperate and compete. It’s a strange system, to be fair. Also, in recent years Ireland has become a net contributor to the EU central fund, a notable change from its status over several decades. (full disclosure: I have no background in tax law, Irish or EU legislation or any other related field, but I have lived in Ireland all my 61 years and have followed most of what happens here quite closely).

That's nice - but the bottom line is they would be cows and potato fields if not for the EU taxpayer money donated to invest in their infrastructure. Having out a profit-laundering pass to the world richest company is NOT paying it forward to the next countries who need to climb up the ladder - rather it is robbing them.

 

[SarcasticJoe]

Ireland made a deal to get Apple to locate there, something to that is very common, even in the EU whether via tax breaks or subsidies. It's only bad when someone else does it. Other EU states were upset and tried to undo the deal and the court said no.

That may be commonplace in the U.S where states compete for business with each other, but it's actually banned by the Treaty of Rome, i.e one of the founding documents of what would later evolve into the EU. If a company sets up in the country then they're supposed to have the same tax rate apply to them as every other company that's set up in the country.

At the time the Irish corporate tax was 16% (now 12.5%), but Apple got a special classified deal that gave them a tax rate of 0.05% and Ireland being in the EU common market they then routed all of their sales in the EU trough Ireland with this deal. Thus with the help of this classified deal, which was later leaked to the media, Apple was allowed to make profits in the billions in the EU and pay next to no tax on this profit.

As for what happened here Apple's extremely pricey lawyers were able to muddy the waters enough that there wasn't an absolute certainty in the eyes of the court that this gave Apple an absolute advantage over their competition in under what the Treaty of Rome prohibits. In other words they muddied the waters and convinced the court to apply a very narrow interpretation of the government assistance rules in the Treaty of Rome.

 

[GadgetBen]

Greedy EU racketeering. Trying to fill the Brexit hole.

 

[WannaGoMac]

I came to the comments to learn what really went on and what the laws were... unfortunately all I see is contradicting statements.

guess time to look for a legal overview news source

 

[jayducharme]

Ireland made a deal to get Apple to locate there, something to that is very common

Exactly. This is common practice all over the world (though I don't agree with it). For example, the city where I live wanted to have Target build a distribution facility here. To attract them, the city promised a 20 year tax abatement. Think about that -- for two decades, Target (a multibillion dollar corporation) would pay nothing in taxes. The reasoning was that the facility would create local jobs, but in fact many of the employees would have come from outside the city, as other similar facilities have demonstrated. In the end, it was never built. But those kind of deals happen all the time.

 

[Mr. Dee]

Margrethe Vestager was in over head on this one. Tim is doing the funky chicken right now.

 

[madmin]

I came to the comments to learn what really went on and what the laws were... unfortunately all I see is contradicting statements.

guess time to look for a legal overview news source

Hi, I thought this article in the Guardian was quite good in that respect:

Apple does not need to pay €13bn Irish tax bill, EU court rules

European commission failed to prove Apple had benefited from arrangement, court finds

www.theguardian.com

 

[Jago]

A victory for common sense. Apple and Ireland made a mutually beneficial deal and Ireland is trying to build a strong economy for itself.

Completely false. The entire point of this ruling is to show the EXACT OPPOSITE: there was no sweetheart deal for Apple. They simply took advantage of what was legally available to any other business entity.

Now if there was a sweetheart-deal, EU regulators would rightly prevail over Ireland and Apple as that would be against EU-rules.