No, VAT is not always independent of profit. If your profit is low because your markup is low, your VAT liability will be correspondingly low, as the difference between VAT received and VAT paid will be less.
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European Union Accuses Ireland of Giving Apple Illegal State Aid with Tax Deals
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First off, a technicality: EC ≠ EU.
Second, I would have more sympathy for Apple if they stopped treating European citizens as second-class with respect to services like Siri, Maps, etc. Apple's Irish subsidiary is supposedly paid to do research that gets incorporated into iOS and OS X etc. Yet, in spite of the fact that this research supposedly occurs in Ireland, Apple's services in the EU countries are mediocre compared to the US. Thus, IMO Apple loses a certain amount of moral respectability by trying to scam the tax system (and by 'scam' I include 'tax avoidance'). To me it's not surprising that this is coming back to bite them in the backside.
As for Ireland, I have marvelled at how long they've gotten away with this. There are other areas in the EU that are just as poor, if not poorer. They get away with this bribery of Apple that costs all of us in the EU and the US, yet here in the UK as an academic I have to bend over backwards on grants with industry to confirm I am not 'subsidising' a private company's research. Outrageous....
Second, I would have more sympathy for Apple if they stopped treating European citizens as second-class with respect to services like Siri, Maps, etc. Apple's Irish subsidiary is supposedly paid to do research that gets incorporated into iOS and OS X etc. Yet, in spite of the fact that this research supposedly occurs in Ireland, Apple's services in the EU countries are mediocre compared to the US. Thus, IMO Apple loses a certain amount of moral respectability by trying to scam the tax system (and by 'scam' I include 'tax avoidance'). To me it's not surprising that this is coming back to bite them in the backside.
As for Ireland, I have marvelled at how long they've gotten away with this. There are other areas in the EU that are just as poor, if not poorer. They get away with this bribery of Apple that costs all of us in the EU and the US, yet here in the UK as an academic I have to bend over backwards on grants with industry to confirm I am not 'subsidising' a private company's research. Outrageous....
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Again, no is saying Ireland did nothing wrong. What people are saying is both parties would be guilty AND both parties would be penalized accordingly. You seem to want to assign total responsibility to Ireland and non to Apple. Similar to the e-book issue, there are no innocents here. I think that's where others are differing from you.
If proven true, what the punishment is for Ireland and Apple will ultimately be up to the EU. If guilt is proven, I'm pretty sure that tax savings (plus interest) will have to be paid back since Apple can't benefit from illegal activity. But don't worry, Ireland will receive their just punishment as well.
the problem is 60% of apples profit comes from sales overseas, why should the United States benefit from the taxes on those devices that never touch US soil?
Aye, the 2 questions come to mind:
Can the EU prove that they had already in writing, with zero vagueness, clear and concise laws that indicate Ireland was acting in violation of the (tax) laws of the EU?
And can the EU also prove that Apple, as a corporation which was directly dealing with the sovereign Republic of Ireland, was actually breaking the laws of Ireland?
I used to wonder why British politicians sometimes entertain the idea of leaving the EU. Now I'm beginning to understand why.
I'm not sure if punishment is the right term - from what I've read so far (and I'm open to correction) there's been little mention of fines/charges. Rather Apple may be found to have 'merely' underpaid taxes and will have to pay them retrospectively.
I'm still interested in who would receive these taxes. Given that it's Ireland who was collecting the tax, and is accused of undercharging, would those billions of euros go to the Irish Revenue?
The USA is broke, so the US politicians want to fleece Apple, one of the most profitable sons of America.
And likewise, many of the EU members are bankrupt or in austerity, and thus they need an excuse to suck a few billions from Apple.
I can't help but think this has to be Bono's fault.
Well U2 did this.
In 2006 the band moved its corporate base from Ireland to the Netherlands, where royalties on music incur virtually no tax.
http://www.pollstar.com/news_article.aspx?ID=772215
And why not if the company was getting away with something that turns out to be unfair at best and possibly illegal at worst? I hope the EC goes after Ireland as well....
Illegal, yes, if the EU can prove that either Apple or Ireland broke Union laws that were already clearly set in stone, then they should be punished. Or at least made to pay back what they owed.
But think for a moment. If what Apple and hundreds of other corporations did in Ireland was so clearly illegal, then why the hell did they get away with it for so long? And why was no one (in the EU) able to enforce it years ago?
Something tells me that: the EU is also partly to blame. How? Because the laws were poorly written, and therefore allowed vague interpretation. And in practice, everyone will take the path of least resistance.
This will be an interesting case to watch, actually. As IMHO the onus is on the European Union lawyers to prove that there were clearly established laws which already outlawed the things which Ireland and Apple did. They literally have to pore through the existing tax laws/codes of the EU, and then point out in court "It says right here! Right here, exactly right in this paragraph, this proves to the letter of the law, without a doubt, that what Ireland/Apple did were in violation of the laws of the Union!"
Its pretty pathetic that a government entity feels entitled to your hard work but what is more pathetic is people agreeing with a government body that it is entitled to the money because they hope to have to redistributed to themselves.
What about bribery? Coercion? Illegal state aid can be a form of corruption to the detriment of consumers and tax payers. Apple knew very well what it was getting into when it negotiated a tax deal with the Irish Government. There are procedures to be followed and Apple should have been at least suspicious of this.
Just my opinions, I guess we'll have to wait and see.
EU will not wipe out jobs and create unemployment in Ireland after their bank just got baled out.
And how the EU would wipe jobs? Are you saying that EU will close Apple jobs in Ireland? Are you saying that a company don't have to return illegal taxes because they can treat to leave the country?
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Have you read the letter?
Huh? VAT has zero to do with profit- you, as a business, collect VAT from each sale on behalf of the government. At the end of your relevant VAT period you do a balance of payments calculation to offset the VAT that you paid as a business purchasing whatever you purchase as business, and the VAT you collected on behalf of the government from your sales. If you collected more VAT than you spent on your VAT liability, then you pay the difference to the government; if you collected less VAT than you paid, then the government refunds you the difference.
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Where did you get those genius legal propositions from?
As I have said in my replies to other comments, if Apple did wrong, they should pay. But what is the penalty for Ireland. They clearly did wrong and as punishment they may get to collect back taxes from Apple? This seems wrong. I am trying to understand how the state gets punished. Do people go to jail? Does the money go to the EU and not Ireland? What?
No, taxes are too high as it is, in all reality there should be a flat sales tax of no more than 10% (total for state, federal,local, county and any other municipalities that exist) on everything the end consumer purchases and absolutely no other taxes.
The various governments should then be forced to live within this budget and never borrow money.
Bottom line is that 10% of the people's income is very doable for any government to work with and this system would eliminate all of these tax issues.
That would sound so much more convincing if the USA did own 17 Trillion dollars.
Your whole country is living on some else dime.
Pay you way moocher
It's not going to happen. Too many big $$ donors to the two political parties for either of them to think that doing this, or campaign finance reform is a good idea.
Not our country any more... we only get to vote on those candidates who have been vetted by the 1% you are so busily defending.
I can agree with that. I couldn't think of any other term to use at the moment. I was thinking the exact same thing regarding the repayment of taxes. Who gets it?
That would sound so much more convincing if the USA did own 17 Trillion dollars.
well going from 89% debt in 2008 to 111% in 2013 is an awful lot for sure ... even if the economy picks up nicely, it will take at least decade to pay back that much. Even for the US.
35% extra in 5 years is crazy considering the US size
in Austria the discussion is currently about the new federal debt calculation method which was just updated by the EU to included external companies/partly state own companies and their debt and assets, and science investments etc.
needless to say Austria's debt went from 74% to 81%
the data on all the EU countries should finished within october so we will se some good more realistic assessment
according to first comments a lot of surprises are incoming:
-Italy's actual debt actually is lower than with the older calculation
-Germany is dropping their debt at around 4% ... while the federal government pulled a slight gain, many communities and fed owned companies reduced the debt levels
-Austria's debt actually has been decreasing slightly over the last 4 years (going from 82,8% to 81,3% in small steps)
have any dutch newspapers reported on the new calculations ?
Better get busy with f*&$ing Luxembourg then, that place is Switzerland on steroids. It's disgraceful, you earn your profits here, you pay taxes on those profits here. You need us far, far more than we need you.
I don't get why our politicians don't do something about this? Starbucks paying to cooperation tax for three years? Shut them down, there's a dozen other coffee chains happy to pay taxes and do business. Amazon not paying tax? Shut them down and they'll be three companies up and running to replace them over night. No business is irreplaceable.
But silly me, I forgot our politicians are all bribed, sorry 'lobbied' to look the other way. God I hate the mainstream political parties in this country, they are scum!