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H2SO4

macrumors 603
Nov 4, 2008
5,631
6,926
I understand what you are saying in general, but not how it pertains to the Apple situation. They aren't getting any "tax breaks" that aren't available to smaller companies. What's stopping you from setting up your own double Irish? :)
Not specifically Ireland as regarding tax breaks, (although I’m sure they are). I can’t really blame them for taking advantage of a good deal when offered but I find it irritating when large companies are given incentives that smaller ones would not be.
 

BaldiMac

macrumors G3
Jan 24, 2008
8,745
10,845
Not specifically Ireland as regarding tax breaks, (although I’m sure they are). I can’t really blame them for taking advantage of a good deal when offered but I find it irritating when large companies are given incentives that smaller ones would not be.
Again, there has been no evidence that Apple is given incentives that smaller companies are not in this case.
 

swajames

macrumors regular
Jan 29, 2003
163
257
Again, there has been no evidence that Apple is given incentives that smaller companies are not in this case.

The EU case against Ireland broadly focuses on that very point...

"Commissioner Margrethe Vestager, in charge of competition policy, said:

"Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."
 

BaldiMac

macrumors G3
Jan 24, 2008
8,745
10,845
The EU case against Ireland broadly focuses on that very point...

"Commissioner Margrethe Vestager, in charge of competition policy, said:

"Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."
That's certainly the EU's argument. It's use of made up tax rates to influence public sentiment doesn't bode well for their confidence in their case.
 

ActionableMango

macrumors G3
Sep 21, 2010
9,612
6,907
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.

As a publicly traded company the effective tax rate is published and known. It is 26.4% worldwide, but not broken down on a country-by-country basis. So we don't know what the rate in Ireland is. I'd like to see that breakdown myself.

For what it's worth, the EU Commission is hiding the numbers and methodology that they used to come up with the 0.005% figure. So if you really believe in transparency, instead of just company-bashing, you should be calling on both sides to pony up the data.
 
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swajames

macrumors regular
Jan 29, 2003
163
257
That's certainly the EU's argument. It's use of made up tax rates to influence public sentiment doesn't bode well for their confidence in their case.

Why would they be made up? The effective tax rates applicable to revenues routed through this particular Irish structure and mentioned in the EU press release are more likely than not a statement of fact - it's simply a function of actual tax paid as a percentage of revenue/profit recorded in the entities that utilized the structure in question.

What is at issue is the extent to which the arrangement that leads to these tax results constituted state aid. Time will tell either way.
 

wschutz

macrumors 6502
Jun 5, 2007
295
106
As a publicly traded company the effective tax rate is published and known. It is 26.4% worldwide, but not broken down on a country-by-country basis. So we don't know what the rate in Ireland is. I'd like to see that breakdown myself.

For what it's worth, the EU Commission is hiding the numbers and methodology that they used to come up with the 0.005% figure. So if you really believe in transparency, instead of just company-bashing, you should be calling on both sides to pony up the data.

Are you sure the EC is hiding anything? Check this: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373 (You are welcome btw... the EU has decent transparency laws, and so everything is made public as required).

Moreover, the EU doesn't care what is the global effective tax rate of Apple. It does (and should) only care about the effective tax rate in its jurisdiction, the EU. If Apple does want to be transparent, they would have given all the information the EU has demanded a long time ago to Apple while this case was under investigation (it took 2 years I believe as the EC took the matter very seriously and with extreme preciseness).

This will be challenged in court anyways, and whatever the outcome is, the message is clear: you can do business in the EU, but do so paying your taxes. The EC will crack you down sooner or later :)
 
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ActionableMango

macrumors G3
Sep 21, 2010
9,612
6,907
Are you sure the EC is hiding anything? Check this: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373 (You are welcome btw... the EU has decent transparency laws, and so everything is made public as required).

I have to rely on the articles I've read that state the 0.005% rate is impossible to verify because neither the EU Commission nor Apple will provide the information, which is why I'm supportive of transparency on both sides.

If international tax experts have looked at that and say information is missing, I as a layman am not going to be able to look at it and tell otherwise, so I have to take their word for it.
 

Wondercow

macrumors 6502a
Aug 27, 2008
559
365
Toronto, Canada
Apple denies any wrong doing in these tax matters like Samsung denies copying apple.
You do realize that Apple has not been accused of any wrongdoing, right? The EC has been very clear that Apple hasn't done anything wrong, is not under investigation, and will not receive a judgement nor punishment.

This is about Ireland and if Ireland has engaged in wrongdoing.
[doublepost=1487737778][/doublepost]
The scale or size is entirely irrelevant here. Either you have the decency to comply with the rules laid out for everybody or you don't.
And would you agree that "the rules laid out for everybody" are called laws? Apple has followed the law--complain to your representatives, don't bitch and moan about someone/something obeying the law.
 

MH01

Suspended
Feb 11, 2008
12,107
9,297
You do realize that Apple has not been accused of any wrongdoing, right? The EC has been very clear that Apple hasn't done anything wrong, is not under investigation, and will not receive a judgement nor punishment.

This is about Ireland and if Ireland has engaged in wrongdoing.
[doublepost=1487737778][/doublepost]
And would you agree that "the rules laid out for everybody" are called laws? Apple has followed the law--complain to your representatives, don't bitch and moan about someone/something obeying the law.

It's just take plain avoidance . And Samsung borrowed a few ideas ....

Some would argue that both morally are on sketchy ground , but legally looking great :)
 

MH01

Suspended
Feb 11, 2008
12,107
9,297
Nice deflection :rolleyes: Care to actually address that you are wrong?

Ummm I stated apple denies any wrong doing , which I'm 100% right about .

You are the one who decided to move the goal posts and decide that it's about "accusation" . I'll stick to the "denial" as part of my original post. :)
 

macs4nw

macrumors 601
Apple's given us loads of cool teach and directly and indirectly created hundreds and thousands of European jobs.

What's the EU done for us? Turned the continent that drove the modern world into one of the few places on the globe in rapid decline with virtually no growth, with EU fatcats fiddling away while Rome burns, borders unable to cope with a stampede, 50% youth unemployment in parts of the South, and caused the rise of the far-right due to their top-down dictatorial, centralised control (something that never works).

The EU can go do one.
Without commenting on your assertions one way or the other, Ireland certainly was happy to have Apple there, and they most certainly resent having the EU dictate to them how far they can go in attracting foreign corporations in establishing some sort of presence in their country.

Wouldn't surprise me if, in addition to some other European nations, now Ireland too is having second thoughts about the EU, and their country's newfound lack of autonomy and self-determination. IRexit?
 

dilbert99

macrumors 68020
Jul 23, 2012
2,193
1,829
As a publicly traded company the effective tax rate is published and known. It is 26.4% worldwide, but not broken down on a country-by-country basis. So we don't know what the rate in Ireland is. I'd like to see that breakdown myself.

For what it's worth, the EU Commission is hiding the numbers and methodology that they used to come up with the 0.005% figure. So if you really believe in transparency, instead of just company-bashing, you should be calling on both sides to pony up the data.
Not really, EU posted the result first and Apple didn't counter with a figure, so I tend to believe the EU
[doublepost=1487752626][/doublepost]
Does the exact amount matter?
No, but something needs to be fixed.
[doublepost=1487752753][/doublepost]
So if you say you don't do tax avoidance, that means you are right and everyone should believe you. But if Apple says that they don't do it, then you shouldn't believe them... OK, got it.
1 - I am not a public company.
2 - I am not the one trying to muddy the waters stating that we don't pay as little as 0.005% tax

Apple needs to pay its fair share of tax so that I don't have to pay on their behalf
 

TallManNY

macrumors 601
Nov 5, 2007
4,727
1,580
Not really, EU posted the result first and Apple didn't counter with a figure, so I tend to believe the EU
[doublepost=1487752626][/doublepost]
No, but something needs to be fixed.
[doublepost=1487752753][/doublepost]
1 - I am not a public company.
2 - I am not the one trying to muddy the waters stating that we don't pay as little as 0.005% tax

Apple needs to pay its fair share of tax so that I don't have to pay on their behalf

I think the key tax loophole in play here was closed in 2015 and companies using it can take advantage of it until 2020. So this may be getting fixed. Of course Apple will look for another loophole. And since the phones are made in the U.S. and China, it probably isn't going to be very hard to come up with another structure.

I'm not sure if this effects the collection and charging of VAT though. That is kind of the primary E.U. tax, I think. So there might be some decent amount of tax collected on iPhone sales.
 
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Carnegie

macrumors 6502a
May 24, 2012
833
1,982
As much as the European Commission tries to frame this as something other than an indictment of Ireland's tax policies, as much as it tries to frame it as only being an indictment of favorable treatment given to a particular company, at its essence this decision is the former. The European Commission doesn't want to acknowledge that this is really about the differences between Ireland's tax policies and those of many other EU nations creating unfairness (and believing that those differences themselves amount to illegal state aid) because in doing so it would be acknowledging that it had no authority to do anything about those tax policies. So it frames this as Ireland giving special treatment to Apple that isn't available to other companies.

When it's all boiled down, the European Commission is hanging its hat on the notion that these practices which are allowed under Ireland's interpretation of its own laws are preferential because the rules that apply to non-resident companies aren't the same as those that apply to resident companies. That's correct, the rules aren't the same as between non-resident and resident companies. But that's a fairly broad distinction for tax policies to make, and it's the kind of broad distinction that most all tax policies make. The reality is that tax policies don't (and for practical purposes can't) apply to every entity the same way. Situations are different and tax policies necessarily treat different situations differently. That's quite different then having tax policies that single out particular entities for preferential treatment. Whatever the rules are, some entities will be able to take advantage of them while others won't. Often those other entities will be able to take advantage of other rules while the first group of entities won't.

The European Commission is also, in effect, insisting that Ireland has to apply the arms length principle when implementing tax policy in this area - when it comes to how earnings can be apportioned between related parties. But best I can tell, Ireland is under no such obligation. As much as the European Commission and other members of the EU may not like that, as much as they may think that not applying the arms length principle leaves Ireland's tax policies open to abuse (i.e. creates opportunities for some, but not all, companies to get around paying most of the taxes they might otherwise owe), it is rightfully Ireland's choice whether to apply the arms length principle in such contexts. If Ireland's laws (and its interpretations of its laws) don't require it to be applied, then that's that.

Part of the problem here is that the members of the EU effectively want it both ways. They want the advantages of having the single market and the free flow of goods and services - e.g., the ease of doing business across borders and the flexibility of where to operate from - in order to encourage greater economic activity. But the individual states also want the autonomy to make many of their own rules - e.g., when it comes to their own tax policies. That's a recipe for creating opportunities for (legal) exploitation. If EU members want the economic benefits of the open market and at the same time want to keep certain policy autonomy, then that - those opportunities for (legal) exploitation - are part of the cost. They get the perceived benefits, they have to pay the price for those perceived benefits. They are in effect competing with each other at the same time that they are cooperating with each other. It's a tricky balance to maintain and it will naturally create these perceived unfairnesses. The individual nations either have the autonomy in question or they don't. It can't be (or it shouldn't be)... well they do, but when we don't like the result we get to say that they don't.


EDIT: I meant to add, the European Commission's assertion of preferential treatment for Apple should be easy to test. The question is: Can the European Commission identify other non-resident companies that have tried to use the same structure that Apple uses, and thusly apportioned most of their earnings so as to avoid Irish taxes, that have been told by Ireland that they aren't allowed to do it that way? There's another step to that test, but it only matters if the answer to the first question is yes.
 
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Wondercow

macrumors 6502a
Aug 27, 2008
559
365
Toronto, Canada
Ummm I stated apple denies any wrong doing , which I'm 100% right about
Another deflection; you actually stated a comparison of Apple to Samsung--specifically that they deny copying Apple. And, since we know that Samsung has actually copied Apple, the implication is, by design, that Apple is lying, like Samsung.

I have no doubt you know exactly how a comparison works.
 

BaldiMac

macrumors G3
Jan 24, 2008
8,745
10,845
For what it's worth, the EU Commission is hiding the numbers and methodology that they used to come up with the 0.005% figure. So if you really believe in transparency, instead of just company-bashing, you should be calling on both sides to pony up the data.
It's not really hidden, it's just a made up number. They are taking the amount Apple pays in Irish taxes and dividing it by all of the money that flows into Ireland. However, Apple attributes most of that revenue to the U.S., not Ireland, since the value of that revenue was created in the U.S. That's normal under international tax law.

Effectively, the EU is taking Apple's Irish revenue, and pretending that it's income to come up with a made up tax rate for shock value.

Why would they be made up? The effective tax rates applicable to revenues routed through this particular Irish structure and mentioned in the EU press release are more likely than not a statement of fact - it's simply a function of actual tax paid as a percentage of revenue/profit recorded in the entities that utilized the structure in question.
See above.
 

swajames

macrumors regular
Jan 29, 2003
163
257
It's not really hidden, it's just a made up number. They are taking the amount Apple pays in Irish taxes and dividing it by all of the money that flows into Ireland. However, Apple attributes most of that revenue to the U.S., not Ireland, since the value of that revenue was created in the U.S. That's normal under international tax law.

Effectively, the EU is taking Apple's Irish revenue, and pretending that it's income to come up with a made up tax rate for shock value.


See above.

Thats not what these arrangements do. They did not attribute most of ASI's revenue to the US. They relied on the majority of ASI's profit becoming stateless.
 

BaldiMac

macrumors G3
Jan 24, 2008
8,745
10,845
Thats not what these arrangements do. They did not attribute most of ASI's revenue to the US. They relied on the majority of ASI's profit becoming stateless.
That's somewhat true. However, Apple still attributes most of the revenue to the U.S. They simply hold it in a stateless corporation, so that they can defer payment of the U.S. taxes (as specifically allowed by the tax code) until they need the funds or changes in tax law make it more advantageous to repatriate the funds. The deferred U.S. tax payments are even listed on Apple's financial statements.
 

MH01

Suspended
Feb 11, 2008
12,107
9,297
Another deflection; you actually stated a comparison of Apple to Samsung--specifically that they deny copying Apple. And, since we know that Samsung has actually copied Apple, the implication is, by design, that Apple is lying, like Samsung.

I have no doubt you know exactly how a comparison works.

Well this is pointless.

We also know Apple got a favourable tax rate......geez.... spin it some more! What ireland did was not right!!! do you understand that?
 
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BaldiMac

macrumors G3
Jan 24, 2008
8,745
10,845
We also know Apple got a favourable tax rate......geez.... spin it some more! What ireland did was not right!!! do you understand that?
They did not get a favorable tax rate. They pay the same tax rate as anyone else in Ireland. The disagreement is about how much of their European revenue should be booked in Ireland. Apple, in accordance with international tax law, believes that most of the money should be taxed in the U.S. where the value is generated. They use their "stateless" corporation to hold the money until it is repatriated. The deferred payments for U.S. taxes on these funds are included in their financial statements.
 

MH01

Suspended
Feb 11, 2008
12,107
9,297
They did not get a favorable tax rate. They pay the same tax rate as anyone else in Ireland. The disagreement is about how much of their European revenue should be booked in Ireland. Apple, in accordance with international tax law, believes that most of the money should be taxed in the U.S. where the value is generated. They use their "stateless" corporation to hold the money until it is repatriated. The deferred payments for U.S. taxes on these funds are included in their financial statements.

0.005% ? Who else gets this rate?
 
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