European Commission Made 'Fundamental Errors' in Irish Tax Ruling, Says Apple

[MacRumors]

Apple has claimed that the European Commission made "fundamental errors" when it ruled last year that the company owed Ireland 13 billion euros ($13.7 billion) in unpaid taxes plus interest.

Apple appealed the commission's decision in December, but on Monday the company published a piece in the Official Journal of the European Union detailing 14 pleas in law to support its action, according to The Irish Times.

The European Commission argues that Irish revenue commissioners 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.

Apple and the Irish government, which has also appealed the commission's decision, argue that the bulk of those profits are due in the U.S.

"The Commission made fundamental errors by failing to recognize that the applicants' profit-driving activities, in particular the development and commercialization of the intellectual property (Apple IP), were controlled and managed in the United States," Apple said, according to the Official Journal. "The profits from those activities are attributable to the United States, not Ireland."

Apple maintained that the commission had "failed to recognize that the Irish branches carried out only routine functions and were not involved in the development and commercialization of Apple IP, which drove profits".

Cupertino also said that the commission failed to conduct a diligent and impartial investigation, and "exceeded its competence" as it relates to the Treaty on the Functioning of the European Union, by "attempting to redesign Ireland's corporate tax system".

Apple CEO Tim Cook has called the EC's ruling "total political crap" and described the lower end 0.005% tax rate Apple is accused of paying as a "false number". The Apple CEO believes that the decision will be reversed.

Appeals by Apple and the Irish government have been made to the European Union's General Court, where proceedings may take up to two years to complete, after which the case is likely to go all the way to the European Court of Justice.

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: European Commission Made 'Fundamental Errors' in Irish Tax Ruling, Says Apple

 

[dilbert99]

Apple CEO Tim Cook has called the EC's ruling "total political crap" and described the lower end 0.005% tax rate Apple is accused of paying as a "false number".

Instead of trying to cloud the waters Tim, how about coming clean on what tax rate you actually pay?
No, didn't think so...

EDIT: For clarification, when I say "you" I am referring to Apple. Not Tims personal tax rate.

 

[lowendlinux]

I don't think this will be resolved before he retires, the players are just too big.

 

[Jsameds]

Instead of trying to cloud the waters Tim, how about coming clean on what tax rate you actually pay?
No, didn't think so...

You publish your tax return first, please.

 

[meaning-matters]

EU is "total political crap".

 

[Spectrum]

What are the "routine functions" that are carried out in Ireland? Isn't this where all of Apple's EU sales are derived? - i.e. it's a shop, and if so, shouldn't the tax rate be equivalent to any other shop trading in Ireland?

I should perhaps add: I don't know if the above scheme would result in more or less tax than Apple currently pays in Ireland. Does anyone here have any information on that?

 

[bladerunner2000]

Apple is happy to benefit from them though. Anything not to pay it's fair share in taxes in USA.

What a lovely company... such integrity.

 

[Three141]

Until I see western world agree a rate of tax across the board, I begrudgingly somewhat agree with Tim that this is political crap.

Tax specialists will continue to do what they are paid to do.

 

[bsolar]

If the profits were attibuted by Apple to the U.S. and accordingly taxed in the U.S. I side with Apple on this point. If the profits were originally attributed to Ireland it's a different story but it would be like Apple telling U.S. tax autorithies they need to get taxed in Ireland and EU authorities they need to get taxed in the U.S...

 

[andyjam]

I'm happy to see Apple being called out on this sort of thing...but I don't see why Ireland should be the ones getting a $13b bonus when they are effectively co-conspirators!

Back taxes should be paid across the countries where Apple derived the income. "Profit-driving activities" is not R&D, it's selling the results of that R&D. You can do all the US-based R&D you want, it's selling those products to customers all around the world that results in a profit.

 

[ILikeAllOS]

If I have to pay my taxes then so do you Apple.

 

[skinned66]

Of course it did.

 

[niun]

You publish your tax return first, please.

eh?

 

[Jsameds]

eh?

"You publish your tax return first, please."

 

[alexgowers]

Instead of trying to cloud the waters Tim, how about coming clean on what tax rate you actually pay?
No, didn't think so...

Apple is a **** of a company but makes great products I don't know why people can't separate the two.

Apple makes money off apple sales in the EU, all of those sales are taxed by the EU for all the member countries to share out. Ireland actually has nothing to do with that. Ireland can't agree for apple to pay anything other than the actual tax rates of each member country. It has ZERO to do with the USA.

If apple are looking to shortchange the EU of tax other companies pay day in day out. I'm afraid no amount of accountancy logic is going to change that outcome.

 

[niun]

"You publish your tax return first, please."

Is the other poster
a. A huge tech corporation with dodgy tax dealings in Ireland?
b. Currently under investigation by the EU?

No? Didn't think so..

I'd also like to see Tim come clean on Apple's tax in Ireland and around the world for that matter.

 

[MacGizmo]

Instead of trying to cloud the waters Tim, how about coming clean on what tax rate you actually pay?
No, didn't think so...

Apple's tax rate is a matter of public record. Look it up if you really want to know. Tim's PERSONAL tax rate on HIS income is irrelevant here, and I think you darn well know it.
[doublepost=1487680164][/doublepost]

If I have to pay my taxes then so do you Apple.

You realize that there is no debate that Apple paid their taxes, Right? Nobody is questioning that they paid their taxes... except idiots who don't read past headlines and subheads.

 

[niun]

You realize that there is no debate that Apple paid their taxes, Right? Nobody is questioning that they paid their taxes... except idiots who don't read past headlines and subheads.

Sweet.. If Apple gets to pay 0.005% tax then....

Oh I'd also like to point out that if Apple are claiming that the profits should be taxed in the U.S. then they ARE NOT paying their taxes as the cash is being held overseas!

 

[thekeyring]

Apple is happy to benefit from them though. Anything not to pay it's fair share in taxes in USA.

What a lovely company... such integrity.

Don't Apple pay their fair share of taxes in the US?

I was under the impression that everything it sold in the US was taxed there. Everything sold abroad was taxed abroad - unless Apple brings its offshore cash to the US.

Not trying to start an argument - honestly asking if there's something I've missed.

 

[BvizioN]

What a lovely company... such integrity.

As you would be any more decent if you had your own company operating at this scale!

 

[thekeyring]

Is the other poster
a. A huge tech corporation with dodgy tax dealings in Ireland?
b. Currently under investigation by the EU?

No? Didn't think so..

I'd also like to see Tim come clean on Apple's tax in Ireland and around the world for that matter.

Yes - it must be a relatively simple setup. I don't buy that Apple aims for simplicity in everything but then overly complicats it's tax returns.

Amazon's practices can be summed up with 'they moved profits abroad so their U.K. company officially made no profit, and therefore didn't owe any tax'.

Apple's practices seem more complicated - or perhaps no one here knows the full story? I'm not sure which, and if it's the latter I'm not trying to suggest that means Apple is in the right.

 

[Starflyer]

Apple is happy to benefit from them though. Anything not to pay it's fair share inSource where Apple has not paid all the taxes that they owe?

Apple is happy to benefit from them though. Anything not to pay it's fair share in taxes in USA.

What a lovely company... such integrity.

Source where Apple has not paid all the tax that they owe in the US?

What is Apple's tax rate in the US right now?

In your opinion, how much is their fair share? 50%? 80%? 100%?

 

[Rocketman]

Great Britain (England, Scotland, Wales, one of the Irelands) exited EU. Italy and France are likely to vote on it. Ireland says they are committed to stay in the EU, but since it is not a fiscal union, but only a monetary and trade union with essentially no border control, it will be increasingly pressured to dissolve or fail.

The solution is a fiscal union with strong border control. Not happening.

This ruling is intended to extract the billions from the US Treasury and transfer it to the EU.

http://appleinsider.com/articles/17...nst-european-commissions-14-billion-tax-edict

 

[apolloa]

Yet more lies from Apple, they are never going to repair the damage to their public image when they pay 0.005% tax on billions, laundered through a European country taking aid for its citizens from all the tax paying citizens across the rest of Europe including the rest of the UK!
So forgive me when I see them as purely price gouging when they hike the price of the new MacBook Pro by £800.

 

[Gasu E.]

Instead of trying to cloud the waters Tim, how about coming clean on what tax rate you actually pay?
No, didn't think so...

I have to laugh at those who post imaginary conversations with people, and deride them for not responding within the context of that same post. They need medication!

For everyone who is not a narcissist with a shaky grasp of reality, what they pay in taxes, as well as their profits and revenues (so you can calculate the "rate" yourself) is stated in their public filings, such as their 10-Qs.