EU Competition Chief on Apple Tax Probe: 'Don't Hold Your Breath'

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A decision in the European Commission's probe of Apple's tax affairs in Ireland may not be reached soon, according to EU competition chief Margrethe Vestager (via Bloomberg).
"Don't hold your breath," she told reporters in Brussels on Monday about the timing of decisions targeting Apple and online shopping giant Amazon.com Inc, whose tax affairs in Luxembourg are also under intense scrutiny. "I'm just warning you."
Apple is one of several multinational corporations, alongside Amazon, McDonald's, Starbucks, and others, that have been targeted for possible corporate tax avoidance in Europe. Brussels launched the probe in June 2014, and it formally accused the iPhone maker of receiving illegal state aid from Ireland three months later.

If Apple's $64.1 billion in profits generated from 2004 to 2012 are subjected to a 12.5% tax rate, compared to its current foreign tax rate of about 1.8%, the company could owe more than $8 billion in back taxes. Apple continues to deny any wrongdoing, and vows to appeal any decision that goes against the company.

Apple operates multiple subsidiaries in Ireland to pay significantly less tax outside of the U.S., where it earns up to 60% of its revenue. A decision in the tax probe was originally expected in late 2015, but the European Commission's request for additional information has pushed the investigation into 2016.

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Article Link: EU Competition Chief on Apple Tax Probe: 'Don't Hold Your Breath'
 

nebo1ss

macrumors 68030
Jun 2, 2010
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Many of the companies that have been exploiting the tax situation by using Ireland have been settling in individual countries. For example both Google and Facebook have settled in the UK paid some back tax "Though hardly enough" and will comply going forward. Apple will have to bite the bullet eventually. Of course it is possible for Europe to ignore the settlements negotiated in individual countries and impose heavy fines.
 
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iSRS

macrumors 6502
Mar 2, 2010
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I don't have a problem with them finding the setup to be unfair, or need to be changed. What I have a problem with is that they want to go back 12 years (and counting - as they continue to drag this out) and collect back taxes for a new rate.

Change it, pick a recent date (1-Sept-2014 (when they formally accused), 1-Jul-2015 or 1-Jan-2016 seem reasonable) to collect the now considered back taxes and move on.

Because to let this go on for over a decade, allow a company to legally operate, and then change your mind about it, again, a decade later, is not just.
 

vmistery

macrumors 6502a
Apr 6, 2010
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Europe talks tough but its economy is not in great shape, and its politics are not that stable. Chasing away American companies will not help either.
Apple won't stop selling stuff in Europe even if it does have to start paying more tax, all that will happen is prices will go up, the aim is to level the playing field. There is no doubt that these companies should be paying fair tax in every country the same as local businesses otherwise competition suffers which is the bone I have with the current tax arrangements. The problem is really with the tax systems themselves though and not the companies and Europe with the rest of the world needs to start ensuring that global players and smaller players are all able to play on a fair field which isn't currently the case.
 

kidaje

macrumors regular
Mar 6, 2012
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What about Google and Microsoft?

Do they use the same tax avoidancy policy?
 

acegreen

macrumors regular
Jun 25, 2015
170
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I don't have a problem with them finding the setup to be unfair, or need to be changed. What I have a problem with is that they want to go back 12 years (and counting - as they continue to drag this out) and collect back taxes for a new rate.

Change it, pick a recent date (1-Sept-2014 (when they formally accused), 1-Jul-2015 or 1-Jan-2016 seem reasonable) to collect the now considered back taxes and move on.

Because to let this go on for over a decade, allow a company to legally operate, and then change your mind about it, again, a decade later, is not just.
Thats unfortunately not how it works. If EU charges from any of your dates onwards, the first thing Apple will do is say "hey, so its not illegal before but from this point onwards it is?" And it will have the whole thing thrown out in an appeal.

Listen, its either they are guilty or not. With your logic, Allies should have only prosecuted Nazis for war crimes, ONLY following their invasion onwards. Because technically they "let it run" until they came and said enough is enough. Also EU didn't let them run legally for a decade. Sometimes big organizations just don't have the resources or mandate to deal with such issues. The EU spent the last decade reforming/refining its organizations, giving them more power under a more consolidated EU policy. They are now just reaping those benefits.
 
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aaronvan

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Dec 21, 2011
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Europe talks tough but its economy is not in great shape, and its politics are not that stable. Chasing away American companies will not help either.
Europe is enfeebled and unable the compete on the global stage. Hence, legal action against innovative, ground-breaking American corporations.
 
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2457282

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Dec 6, 2012
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blame the law not the player and change said law
I agree. If the EU says the Ireland law is invalid (or the one in Luxemburg) then the law needs to be changed in that country. However, the company that has been following the law on the books should not be held liable for all the years they were FOLLOWING THE LAW. If the law is changed, we should expect the company to then follow the new law or move countries. Anything outside of this seems punitive and not reasonable.
 

winston1236

macrumors 68000
Dec 13, 2010
1,895
318
What about Google and Microsoft?

Do they use the same tax avoidancy policy?

Yes and many others do as well and they are all being investigated. It's not just Europe that is cracking down on this though, most governments are going after large companies for tax avoidance and are increasingly sharing info with each other to find it.
 

H2SO4

macrumors 601
Nov 4, 2008
4,578
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But;
"We don't use tax gimmicks," Cook said. "We pay all the taxes we owe, every single dollar. We don't just comply with the law, we comply with the spirit of the law.”
No Tim - nice but dim, you don’t. You’re a disingenuous liar. Disgusting.
 
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GadgetDon

macrumors 6502
May 11, 2002
315
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Why would it take long? I regularly hear that the situation is cut and dried, Apple definitely owes 8 billion, there's no discussion, no question.

Maybe it's NOT so cut and dried, maybe there are issues to be resolved. Weird.
 
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nebo1ss

macrumors 68030
Jun 2, 2010
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Europe is enfeebled and unable the compete on the global stage. Hence, legal action against innovative, ground-breaking American corporations.
Seem to remember the US jumping all over BP and exacting hugh fines, when in fact it was American company Halliburton hired by BP that totally messed up. Also look at the fines on European banks in the last two years and then come back and tell me about Europe bias.
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I agree. If the EU says the Ireland law is invalid (or the one in Luxemburg) then the law needs to be changed in that country. However, the company that has been following the law on the books should not be held liable for all the years they were FOLLOWING THE LAW. If the law is changed, we should expect the company to then follow the new law or move countries. Anything outside of this seems punitive and not reasonable.
If you check what Apple is really doing you would be horrified. The corporate tax in the UK is 25 percent in Ireland it is 12.5 percent. You would think they are actually paying the 12.5 percent in Ireland. Facts show they pay next to nothing because the income from Ireland is then sent to some Caribbean offshore tax structured company.

I think it should be called Racketeering.
 
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whooleytoo

macrumors 604
Aug 2, 2002
6,571
654
Cork, Ireland.
I don't have a problem with them finding the setup to be unfair, or need to be changed. What I have a problem with is that they want to go back 12 years (and counting - as they continue to drag this out) and collect back taxes for a new rate.

Change it, pick a recent date (1-Sept-2014 (when they formally accused), 1-Jul-2015 or 1-Jan-2016 seem reasonable) to collect the now considered back taxes and move on.

Because to let this go on for over a decade, allow a company to legally operate, and then change your mind about it, again, a decade later, is not just.
From my understanding of it - they're coming at it from a slightly different tack. Ireland is free to set its own tax rate, so the EU can't (or won't) yet interfere with that. Instead, they're claiming Ireland offered a unique tax deal to Apple - effectively a form of subsidy, which they can punish. If Apple had paid the 12.5% Irish corporate tax rate, or if every company had paid the same lower rate as Apple, then there would be no case.

It was particularly farcical when - within the space of a few days - Cook commented that Apple had a special deal in Ireland, while the Irish Taoiseach denied any such deal existed.
 

thermodynamic

Suspended
May 3, 2009
1,340
1,192
USA
But;
"We don't use tax gimmicks," Cook said. "We pay all the taxes we owe, every single dollar. We don't just comply with the law, we comply with the spirit of the law.”
No Tim - nice but dim, you don’t. You’re a disingenuous liar. Disgusting.

I think you have a typo in there, somewhere (misspelling "Tim" to form a derogatory epithet). But, yeah, it is disingenuous spin on his part. But not surprising, nor simplistic. If only everyday citizens can get away with the stunts our corporate countrymen can... Imagine the bank robber or murderer pulling those sorts of lines in getting around a crime.

Still, this company has in the past has a history of embracing people who openly admit they're criminals. From "Good artists copy, great artists steal" with a big grin to not telling the customer base about a known defect then trying to pin the blame on them for when the problem exhibits itself (e.g. iPhone 4 antenna). Why would the present bunch of folks be any different, especially if the predecessor chose them?
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Europe talks tough but its economy is not in great shape, and its politics are not that stable. Chasing away American companies will not help either.
Multinational companies, otherwise they wouldn't have moved jobs or taxes offshore to begin with. They have zero loyalty to one country despite taking every form of corporate welfare/entitlement from us. Consider that.
 
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