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

[needfx]

The EU does not tax companies. Individual countries tax companies. What the Eu does is to ensure a fair playing field and make sure that individual countries treat all companies in the same way and that one country does not set up sweetheart deal at the expense of others. Apple is not the only company to have suffered this fate and they will not be the last and while many of these companies are American not all of the are.

to be fair, that is not entirely accurate, while my example is peculiar due the economic situation in Greece, but even before this ****storm that has befallen this land, companies in Greece paid more taxation (or at least they were obliged to) + a 55% advance payment of next year's taxation based on the previous fiscal year's tax calculation. I am quite sure this doesn''t happen elsewhere in the EU. And now, they wan't to raise this advance payment to 95%. So EU having a fair playing field doesn't sound realistic.

 

[cube]

I suppose I have to read the ruling, which hopefully has enough references for a non-eu follower to understand.

If they really were against the rules, why did it take the EU this long to rule on the deals? And again, how will this affect other "ad-hoc" deals, if that's indeed how the commission categorized Apple's tax deals.

In the US that would be a difficult ruling to uphold, especially since the double irish has been around for so long. Did the EU commission basically say "oh that thing that's been common for 20 years was actually illegal?" After all, they bothered to regulate everything else, like beer, cheese, and chocolate. They somehow overlooked the tax laws? And yeah, those were done by a different department, but still.

How long did it take the EU to go after Intel and Microsoft for antitrust? Only to give them a slap on the wrist.

The ruling is not about international transfer of profits.

 

[Thunderhawks]

world war III won't involve bombs - its going to be a war of taxes. So I assume the European union wants the U.S. to raise taxes on European companies doing business here. Who ultimately will be the ones hurt - us the consumers. Thank you EU for another of your moronic decisions. No wonder England left.

You can set your clock when the (USA) Empire strikes back.

Anything done retro actively is bad anyway, as there is no defense.

I think EU has a much bigger battle to fight to convince Ireland that what it allows is illegal.

They have no major industry to speak off, but have a lot to offer in well educated engineers etc.

In the end Apple will get a slap on the hand, pay a few million to make the EU look good and then it's on to business as usual.

My guess is that both Apple and Ireland will exhaust this until there is no higher court.
[doublepost=1472500075][/doublepost]

How much tax dollars do countries really need?

Unlimited, as most of them waste more than they do good, by not moving their people into this century. (Greece etc.).

 

[VulchR]

Hope the UK gets its cut before Brexit.

 

[jimbobb24]

How many other ad-hoc deals are there? And what's considered an ad-hoc deal? The Double-Irish methodology isn't an Apple exclusive, as far as I know, and it existed long before Apple.

It'll be fascinating how this plays out over time.

For example, to whom does Apple owe tax? The EU? The member nations? Ireland?

If Ireland - what an AMAZING scam they set up. Invite companies to country under completely legal special tax deals that everyone in Ireland thinks are legal. A decade later have the EU sue Apple for billions and rule arbitrarily that the deal was illegal. Final step - get windfall millions. Now, amatuer politicians of America (except Hillary) THAT is how you do graft. That is how you capriciously screw companies trying to operate within the law for millions. That is pro level.

 

[carrrrrlos]

Can’t Innovate my ars!

 

[apolloa]

How long did it take the EU to go after Intel and Microsoft for antitrust? Only to give them a slap on the wrist.

The ruling is not about international transfer of profits.

Your memory serves you poorly, the EU very very very neatly ripped microsoft apart. They certainly did not give them a slap on the wrist!

 

[VulchR]

...
Unlimited, as most of them waste more than they do good, by not moving their people into this century. (Greece etc.).

Greeks taxpayers were forced to pay for the bad investment decisions of German banks. The German (and other northern European banks) gave loans to Greek banks, and the Greek government was forced to cover the losses of those private sector banks. It's hard to modernise a country when you're being slapped around by larger economies.

 

[jimbobb24]

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.

Unfair is that wonderful sort of amorphous term which greedy politicians can turn into whatever they need. How would you like a tax code that said - just pay whats fair? Its just trouble and lawlessness waiting to happen.

 

[morcutt11]

So, consumers should pay it instead of shareholders?

Uh - consumers always pay and shareholders always receive.

 

[cube]

Your memory serves you poorly, the EU very very very neatly ripped microsoft apart. They certainly did not give them a slap on the wrist!

Memory does not serve me poorly. The fine was chump change for Microsoft. And asking for Windows N seemed pretty pointless.

 

[a.gomez]

They didn't avoid taxes. Someone gave them a cheapest price, so they went for it. They'd have been stupid not to.

That excuse would only work if not for the fact that it is only a small part of bigger scheme. One that involves intellectual property, off shore companies and yes Ireland. Stupid is to think all these global financial events happened by pure chance.

"One area of focus is Apple's tax arrangements for its intellectual property assets, which is "a hotly disputed area likely to lead to a large claim for back taxes."

https://visualeconomics.creditloan....how-google-apple-facebook-avoid-paying-taxes/

 

[nebo1ss]

I suppose I have to read the ruling, which hopefully has enough references for a non-eu follower to understand.

If they really were against the rules, why did it take the EU this long to rule on the deals? And again, how will this affect other "ad-hoc" deals, if that's indeed how the commission categorized Apple's tax deals.

In the US that would be a difficult ruling to uphold, especially since the double irish has been around for so long. Did the EU commission basically say "oh that thing that's been common for 20 years was actually illegal?" After all, they bothered to regulate everything else, like beer, cheese, and chocolate. They somehow overlooked the tax laws? And yeah, those were done by a different department, but still.

I do not believe this is anything to do with the double Irish. I believe there are three different things going on with Apple in Ireland.

1. This issue which is a sweetheart deal that reduces the corporate tax from 12.5 percent to 2 percent.
2. Booking income in ireland from the rest of Europe that has nothing to do with ireland.
3. Having a Caribbean registered company be the operating company in Ireland so they can then transfer the profits offshore and avoid the 2 percent on the majority of their profits.

I believe the last one is the double Irish.

 

[jimbobb24]

So Ireland moved into the modern era by creating a tax haven for corporations that are actually based elsewhere? So essentially Ireland siphoned legal and fair tax revenues away from other countries in order to "move into the modern era"?
I guess Ireland can leave the EU if it doesn't want to deal with EU tax laws. Otherwise, they (and Apple) will have to deal with this situation.

Think of it more like this - say Samsung makes a phone that is so amazing lots of iPhone users switch. Here - Ireland is Samsung and Apple the EU. Apple/EU don't have a right to Iphone buyers (companies/taxation). If they cannot compete, others will take away their customers. Ireland outcompeted the others. Nothing was stopping the other EU countries from being as competitive in their tax laws. In the US cities and states do this all the time. Countries do to. Just like countries compete for lots of resources just like US states and cities compete (some have sunshine that can compensate for high taxes, some offer better parks) etc. No country/state/city has a right to customers or citizens or corporations or anything.

 

[BaldiMac]

That excuse would only work if not for the fact that it is only a small part of bigger scheme. One that involves intellectual property, off shore companies and yes Ireland. Stupid is to think all these global financial events happened by pure chance.

"One area of focus is Apple's tax arrangements for its intellectual property assets, which is "a hotly disputed area likely to lead to a large claim for back taxes."

https://visualeconomics.creditloan....how-google-apple-facebook-avoid-paying-taxes/

What a dishonest graphic! The Double Irish doesn't affect US taxes. And Apple doesn't pay 0.7%.

 

[ssgbryan]

And only around 30% want a second referendum. Many hated the EU but thought it'd be too risky to vote Leave. Now we have vote Leave they'd sooner respect the result than throw a tantrum like the pro-EU people.

The UK is going to be a haven as the EU sinks. Apple, or anyone, should make their investments now while its cheap.

Not while the pound is propped up the way it is.

 

[apolloa]

Memory does not serve me poorly. The fine was chump change for Microsoft. And asking for Windows N seemed pretty pointless.

Well they were fined 1.4 billion dollars for not complying with a EU ruling
http://news.bbc.co.uk/1/hi/business/7266629.stm

This was on top of the 497 million euro fine which at the time must of been close to a billion dollars, and MS lost its appeal, so it depends if you think 2 billion dollars plus in fines is chump change. Plus being forced to let your competitors be at the forefront of your platform for web browsing.

 

[ssgbryan]

This is why I don't understand why countries remain in the EU. Why should a governing body in another country dictate the tax rates in another country?

Because the benefits outweigh the costs. Not to mention everyone agreed to it.

1 level of taxation - free movement within borders, just to name a couple.

 

[cube]

Well they were fined 1.4 billion dollars for not complying with a EU ruling
http://news.bbc.co.uk/1/hi/business/7266629.stm

This was on top of the 497 million euro fine which at the time must of been close to a billion dollars, and MS lost its appeal, so it depends if you think 2 billion dollars plus in fines is chump change. Plus being forced to let your competitors be at the forefront of your platform for web browsing.

Decades of ruthlessness.

 

[JLL]

i thought we were talking about Ireland and the infrastructure Apple has there in relation to the taxes they pay in Ireland. Yes it is a rounding error in Ireland based on the amount of taxes they pay there.

YOU said they didn't manufacture anything. YOU said that 4,000 jobs is a rounding error.

Don't change your argument.

 

[apolloa]

Decades of ruthlessness.

????? That's the American way though.

 

[Plutonius]

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.

It doesn't affect it at all and they will not be anymore focused on design after losing some tax money.

 

[cube]

????? That's the American way though.

Sun Microsystems showed the right way.

 

[Plutonius]

If they were not sure of or didn’t like the law Apple had two choices;

1. Get it clarified by those that wrote it, do not skirt your way around it with sweetheart deals.
2. Go back to America and deal with storing your money there under their legal system.

Obviously, they had a team of lawyers that agreed with Ireland. It's not hard after 12 years to find someone that interprets the laws differently.

 

[unobtainium]

Think of it more like this - say Samsung makes a phone that is so amazing lots of iPhone users switch. Here - Ireland is Samsung and Apple the EU. Apple/EU don't have a right to Iphone buyers (companies/taxation). If they cannot compete, others will take away their customers. Ireland outcompeted the others. Nothing was stopping the other EU countries from being as competitive in their tax laws. In the US cities and states do this all the time. Countries do to. Just like countries compete for lots of resources just like US states and cities compete (some have sunshine that can compensate for high taxes, some offer better parks) etc. No country/state/city has a right to customers or citizens or corporations or anything.

It's quite simple. Ireland chose to join the EU (for good reason). The EU forbids sweetheart tax deals for major corporations that would disadvantage the little guy (for good reason). Apple wants to avoid paying its legal share of taxes in the country where it's actually based, so it tried to take advantage of a loophole in Ireland and got swatted by the EU -- again, for good reason.

The EU, by the common consent of all its sovereign member states, including Ireland, has a right to regulate these kinds of shenanigans.