European Commission Rules Apple Received Illegal State Aid From Ireland, Owes Billions in Back Taxes

[iSee]

Woah, that's a lot of money.

Assuming the inevitable appeals don't make a huge difference, I think our European friends can look forward to some nice price increases.

 

[dragje]

Good job EU, I sincerely hope it is in the 21B neighbourhood, even though I am an apple fan.
2% taxation is ridonculous

Very true. I love Apple products, but I'm no iSheep and this is a no brainer, Apple should, like other companies within the EU, pay as much taxes as any other company. It's not even about Apple, it's about ethics .

 

[Z400Racer37]

will the iPhone 7 be $300 more to compensate?

Yeah, let's hope that damage is confined to the countries who earned that collectivism inflicted collateral damage. I'm already paying their massive sales tax here in the States.

View attachment 647304 Time for Apple to pay the Taxman.

I hope you're in one of the countries where the price of the phone goes up $100 in your face. #Consequences

 

[JLL]

The only reason Apple is paying taxes in Ireland is because they are using them as their tax base. Apple has no manufacturing plants there...

Their tax base: https://www.google.dk/maps/@51.905249,-8.5134001,292m/data=!3m1!1e3

 

[t76turbo]

So, consumers should pay it instead of shareholders?

Consumers ALREADY pay.

Companies look for minimum profit margins. When expenses eat into those margins the price goes up.

Do you think ANY company will just eat the extra expenses out of the kindness of their hearts????? No. They are in business to make money and if they don't, they go out of business.

 

[shk718]

If you don't have a large pile of cash to rely on if you have a slow year/quarter/whatever...you kind of have to be a bit more focused. Right now Apple isn't worried. They don't really have to worry about product flops or low demand. They have plenty of money to carry them in case of a misstep. If they loose that money...well....now we actually have to pay a bit more attention. No more fashion shows for Ive...he will actually need to design a product and not spend his days picking colors of wood for shelving in the office.

You're upset because he didn't change the shape of the iPhone this year? The silicone they're developing isn't innovative or best in class? Whatever they have planned for the camera isn't innovative, the fact that they need half as much memory to run the OS as android isn't innovative. The fact that they're doing AI on the phone (because its silicone is so superior) and not the cloud isn't innovative? Yes you're right - the shape of the phone, Jony's area, is where all of Apples innovation energy should be focused on. The posts here crack me up.

 

[Waxhead138]

Good job EU, I sincerely hope it is in the 21B neighbourhood, even though I am an apple fan.
2% taxation is ridonculous

Question is though...who broke the law? Was it Apple or the govt of Ireland that allowed these lower tax rates?

 

[Kaibelf]

What is the punishment for the officials in Ireland who signed off on this arrangement in the first place, and what about the many layers of government there that this went through for so many years? Any sanctions against the tax officials in that country who signed off and approved things for all these prior years? What about the officials in Brussels who are not taking responsibility for an EU member nation doing this for an extended period?

 

[needfx]

I hope it is both, so they can both get slapped on the hand, in the face or elsewhere

 

[threesixty360]

So, you think 2% is a fair tax for a company while I personally pay close to 40%?

But every member of staff or shareholder in Apple pays 40% just like you. It's not like no one is paying tax. I'm not sure corporation tax should be similar to personal income tax. Corporations are not people, they do not need medical care or a police force, they are just entities on paper.

In fact, I wonder why any corporation should be paying any rate of tax if their staff are paying tax anyway. You might as well have it all at zero so that no company can offer breaks or incentives and everything is actually fair.

 

[coldsweat]

Uh, this is a rule change, not a criminal act on the part of Apple.

I know it's hard to understand, but I'll put it in football terms. Before, a receiver could catch a ball with only one foot in-bounds. This is like the NFL saying "well, no, both feet have to be in-bounds for a catch" and then changing every game result to comply with that new rule.

No idea what you're talking about - can you clarify to us europeans your 'Football terms' please ??

Whats a receiver - is that like a goalkeeper?
What's 'one foot in-bounds' - is that the offside rule?

Sorry couldn't resist!

 

[apolloa]

You can get a glimpse of the allegations here.

To Ireland, but Ireland cannot do special deals which would be "unfair" to other companies and "unfair" with other state members. "Unfair" is obviously the key issue here, at least from the Commission's point of view.

It's called s comfort letter I believe and it states a company gets special tax rules, and if it gives said company a distinct advantage over its competitors it is under EU legislation illegal. It is NOT a tax loophole to exploit from my understanding.

 

[justperry]

So the Irish government isn't responsible? Didn't they set the tax rate? I wonder what sort of penalty they will have to pay.

They are partly to blame too.

 

[shk718]

Their tax base: https://www.google.dk/maps/@51.905249,-8.5134001,292m/data=!3m1!1e3

now now now - link to the entire article please - 4,000 people - hardly significant - more like a rounding error.

http://www.cultofmac.com/324445/inside-apples-secretive-imac-plant-in-ireland/

 

[LizKat]

will the iPhone 7 be $300 more to compensate?

Show me the dumbphone again?

 

[BoxerGT2.5]

This is a WR

 

[ucfgrad93]

What is the punishment for the officials in Ireland who signed off on this arrangement in the first place, and what about the many layers of government there that this went through for so many years? Any sanctions against the tax officials in that country who signed off and approved things for all these prior years? What about the officials in Brussels who are not taking responsibility for an EU member nation doing this for an extended period?

As always, no government is ever held to account. The Irish government will face no penalty.

 

[needfx]

But every member of staff or shareholder in Apple pays 40% just like you. It's not like no one is paying tax. I'm not sure corporation tax should be similar to personal income tax. Corporations are not people, they do not need medical care or a police force, they are just entities on paper.

In fact, I wonder why any corporation should be paying any rate of tax if their staff are paying tax anyway. You might as well have it all at zero so that no company can offer breaks or incentives and everything is actually fair.

while in theory, this is the only counter opinion I respect until now in this thread, other companies still pay up to 40% despite their "shareholders" paying personal income tax on those earnings when distributed. So tough **** APPL

 

[ericwn]

And people wonder why so many countries are considering leaving the EU. Countries can't even set their own tax rates without meddling from big big brother EU. Ultimately this shakedown will be negotiated way lower than the atttention grabbing headline rate.

Yes, how terrible that they call out when some country within their ranks pulls of illegal state aid.
Job well done EU. Lousy job, as so often, for Ireland.

 

[unobtainium]

The only reason Apple is paying taxes in Ireland is because they are using them as their tax base. Apple has no significant manufacturing plants there, they have no huge infrastructure in Ireland - and can pick any country they want as their tax base. Both Ireland and Apple (and other companies) benefited greatly from this. Ireland will be the one hurt the most by this decision. If the tax rates there are the same as anywhere in Europe then there is no reason to use Ireland.

If someone is benefitting, then someone else is losing.
In that case, it may be the U.S. Since most of Apple's work happens here, they probably owe far more in taxes here than they're actually paying.
Either way, I'm glad to see loopholes like this getting closed.

 

[Cineplex]

You're upset because he didn't change the shape of the iPhone this year? The silicone they're developing isn't innovative or best in class? Whatever they have planned for the camera isn't innovative, the fact that they need half as much memory to run the OS as android isn't innovative. The fact that they're doing AI on the phone (because its silicone is so superior) and not the cloud isn't innovative? Yes you're right - the shape of the phone, Jony's area, is where all of Apples innovation energy should be focused on. The posts here crack me up.

If you are happy with your uninspired overpriced iPhone, good for you. I am not. I hope that you enjoy your bland aluminum slab with ugly bands on it. Clearly you think Ive should be picking shelving colors instead of design...so good luck with that.

Seeing the people liking my post.....I am not alone here.

 

[gnasher729]

Consumers are demanding the protection money anyway aren't they? Besides, you don't really think that companies pay the corporate tax, do you? Like Walmart would enjoy 30% profit margins instead of 2-3% if we just got rid of the corporate tax? Like no competitors would come in and undercut that kind of margin, to the point where people would end up saving exactly as much as the corporation is being charged in tax?

Profit margins wouldn't change from 2% to 30% if corporate tax was removed, because corporate tax is paid on profits. Let's say a company makes 30% profit before taxes, and the corporate tax rate is either 5% or 40%. In the first case, they pay 5% of 30% = 1.5% tax, leaving 28.5% profit. In the second case, they pay 40% of 30% = 12% taxes, leaving 18% profit. Sure, a huge difference, but not 2% to 30%. If a company with 2% profit after taxes could completely avoid corporate tax, they would still have less than 3% profit.

Most likely Apple and Samsung are the only two phone manufacturers paying corporate taxes on the profits in the phone market (I read that together they make 105% of all profits in that market - meaning someone else must lose a lot of money to get the total to 100%).

 

[shk718]

What is the punishment for the officials in Ireland who signed off on this arrangement in the first place, and what about the many layers of government there that this went through for so many years? Any sanctions against the tax officials in that country who signed off and approved things for all these prior years? What about the officials in Brussels who are not taking responsibility for an EU member nation doing this for an extended period?

punishment to Ireland - aren't they an independent country? Can't they determine their own fate? Is the EU their overlord? Sounds very George Orwell 1984 to me.

 

[BaldiMac]

while in theory, this is the only counter opinion I respect until now in this thread, other companies still pay up to 40% despite their "shareholders" paying personal income tax on those earnings when distributed. So tough **** APPL

Apple does pay 35+% on income from the Americas, so I'm not sure what your comparison is here.

 

[justperry]

Now Apple amongst others even start to meddle in Dutch/EU politics.

http://www.dutchnews.nl/news/archiv...n-investment-silicon-valley-firms-warn-rutte/