Ireland Agrees to Appeal European Commission's Apple Tax Ruling

[Bigsk8r]

In court Apple has no chance to prove anything useful, and they know it very well (and now it is just about how much they may lose if they fight vs how much they have to pay now). And there are few reasons for this:

• The amount given is based on the minimal data that the EU commission has managed to get access to as Apple is extremely opaque on this.
  In court... Apple will have to open its accounting books and show a big reality of numbers that the whole world will get disgusted at. Interesting enough, Apple hasn't complained at all about the quantity the commission has pictured...
• Apple has been doing business for long in Ireland but the whole point of the commission (and the tax laws) is that you cannot make so much money in one single place (Ireland) and barely have employees. The existing laws in each country of the EU and the EU laws say that you should pay taxes where you generate your revenue. And yes... Ireland has better numbers and some extra laws that Apple (and other companies) are using in collaboration with the Irish government to actually pay almost 0% as the EU commission pointed out.
  In court Apple will have to show that it would have an infrastructure big enough to support putting all that money thru Ireland, and this is rather complex. The EU commission hasn't spent more than 2 years investigating Apple and issuing a 130 pages report just to say that Apple owes a lot of money to many EU countries.
• The EU commission cannot force any country to change its tax laws because we have freedom for that in the EU. However, there are some other laws in the EU that although they are not fiscal, they are quite tight to the tax scheme and Ireland and other EU and EEA members are abiding to which makes them liable to the EU commission (gladly for everyone). The EU commission has been complaining for years on these schemes played by companies and tried the EU parliament to change and harmonize the tax scheme in the EU and slowly we are getting there but not yet.
• The EU commission will see all this money (and likely more) because it is not the EU nor the EU commission benefiting from this money. It is all EU members where Apple has made business that will see a cut of the money and they all want taxes to fund those things like free and high quality healthcare for everyone regardless of income or social status, good roads, pensions systems, proper and almost free education, etc...
• And last, but not least, it is Apple's fault playing this game. Apple is putting all its machinery for environmental crap after it got a lot of criticism. The same applied for the people manufacturing its expensive stuff... and this matter of taxes will be the same.
  No one that has a reasonable amount of neurons can agree this it is fair to pay almost 0% taxes when you make billions.

I just can't wait for the day that Apple loses the ruling in the court...

I think you are uniquely unacquainted with the facts...

http://www.wsj.com/articles/europes-apple-tax-ambush-1472599362
[doublepost=1472848436][/doublepost]

Yeah nice to see that you'd rather crawl up Apple's butt, but thank god Europe isn't that stupid.
"The EU got greedy" without even mentioning Apple's greed. Made my day.

When I state the EU got greedy, I am simply stating that they reached for what they think they might win in court in order to drive Apple into a negotiating position. This is a very common legal strategy. The problem is, it only works on persons, groups, or companies that are in doubt of their legal standing, or the outcome of the actual trial.

It does not work on people, groups, or companies that know they are standing on the legal high ground. Apple stood firm and made the FBI blink, and they could write a check for this "penalty" if they had to, do you really think the EU is going to see a fraction of this money?

Apple's greed is a straw man in this discussion and a completely different topic. You also need to acquaint yourself with the facts...

http://www.wsj.com/articles/europes-apple-tax-ambush-1472599362

 

[weckart]

I think you are uniquely unacquainted with the facts...

http://www.wsj.com/articles/europes-apple-tax-ambush-1472599362
[doublepost=1472848436][/doublepost]

When I state the EU got greedy, I am simply stating that they reached for what they think they might win in court in order to drive Apple into a negotiating position. This is a very common legal strategy. The problem is, it only works on persons, groups, or companies that are in doubt of their legal standing, or the outcome of the actual trial.

It does not work on people, groups, or companies that know they are standing on the legal high ground. Apple stood firm and made the FBI blink, and they could write a check for this "penalty" if they had to, do you really think the EU is going to see a fraction of this money?

Apple's greed is a straw man in this discussion and a completely different topic. You also need to acquaint yourself with the facts...

http://www.wsj.com/articles/europes-apple-tax-ambush-1472599362

The only fact I gleaned from this was that you linked to a paywall.

PS: an opinion piece from the WSJ is not 'facts'.

 

[Bigsk8r]

The only fact I gleaned from this was that you linked to a paywall.

PS: an opinion piece from the WSJ is not 'facts'.

Yes, you're right. I am sure an Editorial Board Member of the Wall Street Journal is just lying through his teeth.

Not sure why you got the paywall though... When I refreshed and did a Google search for it, it came up again and I could read it.

 

[cube]

I understand the fact part of the WSJ is still OK, but the opinion section is Murdoch ops.

 

[justperry]

Yes, you're right. I am sure an Editorial Board Member of the Wall Street Journal is just lying through his teeth.

Not sure why you got the paywall though... When I refreshed and did a Google search for it, it came up again and I could read it.

I got the paywall as well!

 

[bxs]

Quoted from https://surlysubgroup.com/2016/08/30/ireland-apple-and-state-aid/

"Apple and Ireland aren’t alone in their opposition to this ruling, it turns out. The U.S. Treasury agrees that the ruling is wrong; it bases its opposition to the use of state aid to collect back taxes on three assertions:

• The Commission’s approach is new and departs from prior EU case law and
  Commission decisions;
• The Commission should not seek retroactive recoveries under its new approach; and
• The Commission’s new approach is inconsistent with international norms and
  undermines the international tax system.

There’s something to these objections, especially the first and second together. Arguably, taxing authorities shouldn’t collect retroactive taxes on novel legal interpretations. On the other hand, why would the U.S. Treasury Department care about that?

Professor Ed Kleinbard says that it doesn’t. He convincingly argues that Treasury’s primary concern is the third issue:

Treasury’s concern is that if Apple or other affected firms are required to disgorge to Ireland or Luxembourg the taxes they should have paid, but didn’t, then those firms will turn around and claim those disgorgements as foreign tax payments that reduce their U.S. tax bills.

Specifically, Treasury is concerned that Apple will claim a foreign tax credit for the $14.5 billion (under the current exchange rate) it owes."

If you read this link there's more than what I posted above...

The positions on all this are going to be fought out in the courts for sure. Even if the EC convinces the EU Court their assertion about illegal State-aid there could be a backlash such as US boycotting EU manufactured cars from being sold in USA or raising the import taxes on such autos. The US imports EU goods as well as exports US goods to EU. However, the US Imports more than it Exports to the tune of $155B (139B Euro) in 2015 (according to the US Census Bureau). In fact, US has bought more goods from EU compared to what is sells to EU since 1997. Thus the US has a fairly large stick to wave at the EU if it wishes.

Yes, this case, if upheld by the EU will hasten global financial war for sure... and of course the world's population will suffer because of these tax ruling. There's simply no end to this as all countries want their pound of flesh.

 

[cube]

The US basically wants to keep for itself taxes on profits from around the world.

Let Ireland have its 12.5% and the rest try to claim from there.

The US can still get 22.5%.

How much truly belongs where I don't know. But the US courts could determine that the IP payments were below the proper price, so less profits would be assigned to Ireland. The EU commissioner clarified this.

The approach is not new. One case for example is about tax reductions for Spanish companies owning 5% of foreign firms. This is now at the highest EU court level after an appeal was successful. This case could very much define what happens to Apple next.

 

[Ciclismo]

Whilst most are squabbling about whether Apple owes anything or why the EU is such a beaurocratic pile of idiots, I feel sorry for all the people who try to start a company - basically Ireland is helping the big boys by ensuring that the little fish go hungry as they have to pay 1250% more in taxes than the chosen few. Ergo, Ireland is helping these chosen companies maintain a dominance in the market by ensuring others are nowhere near as profitable.

It would be like watering the grown trees, whilst leaving the seedlings to try to survive on the rainfall alone.

 

[cube]

You just gave a perfect example of why this belongs with the EU competition commissioner.

 

[bxs]

The 'squabble' that the EU has here is that the EC asserts Ireland has abused the State-Aid tax ruling Ireland presumably agreed to some time ago. Thus Apple is actually not really involved beyond being used as the basis of the EC's assertion. Apple has simply been making use of what Ireland setup up for them with respect to taxes owed to them. Apple has not broken any laws by this reasoning. If the EU decides in favor of the EC's assertions they can easily (not sure about how easy this would be) reduce their EU subsidies to Ireland to extract the taxes owed to them and its member states.

 

[cube]

http://fortune.com/2016/09/02/apple-tax-game-ireland/

 

[Mailia]

If the EU decides in favor of the EC's assertions they can easily (not sure about how easy this would be) reduce their EU subsidies to Ireland to extract the taxes owed to them and its member states.

That makes absolutely no sense.

The entire issue here is that EU is accusing Ireland of preferential state aid where they're basically subsidizing Apple in order to get Apple to stay in Ireland. And what would Ireland paying Apple's 13 billion euros in taxes be but preferential state aid where Ireland subsidizes Apple in order to get them to stay.

 

[bxs]

That makes absolutely no sense.

The entire issue here is that EU is accusing Ireland of preferential state aid where they're basically subsidizing Apple in order to get Apple to stay in Ireland. And what would Ireland paying Apple's 13 billion euros in taxes be but preferential state aid where Ireland subsidizes Apple in order to get them to stay.

Yes, I do accept your "That makes absolutely no sense." and absolutely disagree about that. Who has violated the EU's State-Aid law ? Not Apple but Ireland, as it's the EU Member state. Surely it's the party at fault who's broken the law that should pay.

If you favor me (preferential treatment if you will) and give me a ride in your car where I offer to pay for some of your petrol, and you then travel faster than the posted speed limit and then are stopped by the police (the EC/EU if you will) for breaking the speed limit, you're (Ireland if you will) liable for the speeding ticket fine, not me (Apple if you will).

 

[Ciclismo]

Yes, I do accept your "That makes absolutely no sense." and absolutely disagree about that. Who has violated the EU's State-Aid law ? Not Apple but Ireland, as it's the EU Member state. Surely it's the party at fault who's broken the law that should pay.

If you favor me (preferential treatment if you will) and give me a ride in your car where I offer to pay for some of your petrol, and you then travel faster than the posted speed limit and then are stopped by the police (the EC/EU if you will) for breaking the speed limit, you're (Ireland if you will) liable for the speeding ticket fine, not me (Apple if you will).

But that's not what happened. The more correct analogy would be that Ireland is a bus company that decides certain passengers are so important that they don't need to pay, unlike everyone else. And because they therefore lose money because they are giving away their services to some for free, they are subsidised with public funds.

 

[sudo1996]

Retroactive tax laws. Wow. Apple was paying the legal tax rate to Ireland all this time. IDK whether Ireland's laws were against EU law, and I personally would call 1% too low of a corporate tax rate, but that's strictly on Ireland. I don't see why the EU thinks they can hit Apple with a bill suddenly.

People in Ireland, are you thinking you should leave the EU if Apple/Ireland loses this? I have no opinion in that area.

 

[MH01]

Quoted from https://surlysubgroup.com/2016/08/30/ireland-apple-and-state-aid/

"Apple and Ireland aren’t alone in their opposition to this ruling, it turns out. The U.S. Treasury agrees that the ruling is wrong; it bases its opposition to the use of state aid to collect back taxes on three assertions:

• The Commission’s approach is new and departs from prior EU case law and
  Commission decisions;
• The Commission should not seek retroactive recoveries under its new approach; and
• The Commission’s new approach is inconsistent with international norms and
  undermines the international tax system.

There’s something to these objections, especially the first and second together. Arguably, taxing authorities shouldn’t collect retroactive taxes on novel legal interpretations. On the other hand, why would the U.S. Treasury Department care about that?

Professor Ed Kleinbard says that it doesn’t. He convincingly argues that Treasury’s primary concern is the third issue:

Treasury’s concern is that if Apple or other affected firms are required to disgorge to Ireland or Luxembourg the taxes they should have paid, but didn’t, then those firms will turn around and claim those disgorgements as foreign tax payments that reduce their U.S. tax bills.

Specifically, Treasury is concerned that Apple will claim a foreign tax credit for the $14.5 billion (under the current exchange rate) it owes."

If you read this link there's more than what I posted above...

The positions on all this are going to be fought out in the courts for sure. Even if the EC convinces the EU Court their assertion about illegal State-aid there could be a backlash such as US boycotting EU manufactured cars from being sold in USA or raising the import taxes on such autos. The US imports EU goods as well as exports US goods to EU. However, the US Imports more than it Exports to the tune of $155B (139B Euro) in 2015 (according to the US Census Bureau). In fact, US has bought more goods from EU compared to what is sells to EU since 1997. Thus the US has a fairly large stick to wave at the EU if it wishes.

Yes, this case, if upheld by the EU will hasten global financial war for sure... and of course the world's population will suffer because of these tax ruling. There's simply no end to this as all countries want their pound of flesh.

Yeah....the people around the world who are forced to pay their taxes are going to support this financial war where companies get away with 0.005% tax....

I somehow doubt this will play out that way....the longer this crap plays out there more public outrage there will be. We pay , so the damn big coperations that lobby our corrupt government can also pay their share!

Of course the US treasury agrees...that lobbying is not free...

This is not US v EU. This is tax avoidance . US companies operating in EU, PAY your taxes, EU companies operating in US, PAY your taxes.

 

[Ciclismo]

Retroactive tax laws. Wow. Apple was paying the legal tax rate to Ireland all this time. IDK whether Ireland's laws were against EU law, and I personally would call 1% too low of a corporate tax rate, but that's strictly on Ireland. I don't see why the EU thinks they can hit Apple with a bill suddenly.

People in Ireland, are you thinking you should leave the EU if Apple/Ireland loses this? I have no opinion in that area.

It's not a retroactive tax law, it's a correction for a practice that gives Apple an unfair advantage over other companies. If you were to start a business, would you be OK with your competition not having to pay taxes whilst you do?

 

[swajames]

I think you are uniquely unacquainted with the facts...

http://www.wsj.com/articles/europes-apple-tax-ambush-1472599362

Opinion pieces written on this topic are, of course, just that. This one plainly wasn't setting out to be any kind of factual or objective analysis. The clue to what it is should have been clear from the title, "Europe's Apple Tax Ambush", and from the bylines before the main copy - "EU rolls over the US Treasury and Irish tax law to punish an American company" and what is described as an "antitrust raid". The actual issues in play here are deep, complex and profound, to my mind this particular editorial was none of those things.

 

[simonmet]

This is only the first step for the EU. If they lose against Ireland/Apple they will modify other laws enforceable within other member states that will prevent the sort of profit shifting to Ireland that is occurring. They will also require Ireland to give up its tax-haven status in order to stay in the EU.

Ireland has been playing the EU for decades and the EU is now sick of it. Ireland have been big beneficiaries of EU funding over the years, funds that could (and should) have been offset by these taxes.

We could see a situation where Ireland will be forced to choose between Apple and the other multinationals and Europe. Britain's exit has only strengthened Europe's resolve in this regard. They are no longer going to play Mr Nice Guy to member states that are not pulling their weight.

I think Ireland would be foolish to think they're better off trusting corporations that can leave for a greener patch whenever they want anyway and find since they turned their backs on Europe that they're all alone. UK is big enough to go it alone but I'm not sure about Ireland.

 

[draugminaion]

12.5% is way undertaxing already.

Less desirable places have lower rent. Ireland is an out of the way place on the edge of Europe.

 

[Abazigal]

I know right! I won't be surprised if Apples share price dips a bit now, because almost everyone, who gets this ruling, knows Apple and Ireland don't stand a chance, taking on the EU competition commission is an increadibly brace and stupid thing to do.
Can't wait for the trial but I bet Apple and Ireland will wrap it up in legal proceedings for years before it does get to court.

Honestly, I would like to see Apple fight it out to the very end.

I really can't see the EU winning on this one. Their entire lawsuit is based on the premise that "Yeah, we know the laws work like this, but we feel they should have worked like that instead. So let's pretend the law has always been the other way from the start."

On the other hand, I am also interested in seeing just how powerful Apple has become. We are now at a point where there is nothing Microsoft and Google can do to threaten me as an Apple product user. Apple has moved on to a juncture where its opponents are the FBI and the US government. Would Apple be able to prevail against the EU as well?

It will be interesting to watch.

 

[draugminaion]

Yeah....the people around the world who are forced to pay their taxes are going to support this financial war where companies get away with 0.005% tax....

Corporations don't pay 0.005% tax, Apple pays 26%, total global tax is 26% of total global profits. Microsoft, Google and Facebook pay a bit less. Samsung, to name one notable Apple competitor, pays 18% or so. But they are not paying much in Ireland, or elsewhere in the EU, because that's the way Ireland likes it. Or in the case of Samsung, that's what they can get away with in South Korea.

I somehow doubt this will play out that way....the longer this crap plays out there more public outrage there will be. We pay , so the damn big coperations that lobby our corrupt government can also pay their share!

Of course the US treasury agrees...that lobbying is not free...

This is not US v EU. This is tax avoidance . US companies operating in EU, PAY your taxes, EU companies operating in US, PAY your taxes.

The taxes that the EU wants Ireland to collect has to come from the profits sitting in the bank. These are taxable in the US, some 40% belongs to the US.

EU: Ooh look at those fat profits sitting in the bank doing nothing. Someone aught to tax those, would be nice if that someone was us.
US: Hey! That's ours!
EU: Well, you're not using it. It's just sitting there!
US: We're saving it for later. Hands off, it's ours!

 

[weckart]

Corporations don't pay 0.005% tax, Apple pays 26%, total global tax is 26% of total global profits. Microsoft, Google and Facebook pay a bit less. But they are not paying much in Ireland, or elsewhere in the EU, because that's the way Ireland likes it.
The taxes that the EU wants Ireland to collect has to come from the profits sitting in the bank. These are taxable in the US, some 40% belongs to the US.

That 26% is a fiction, since it assumes tax paid on repatriated profits - most of which are sitting untaxed in tax havens. Apple has as much intention of paying the US rate of 35% on those profits as it had the Irish rate of 12.5% on them. Cook lied. Not merely obfuscated but flat out lied to the press.

It is all very well for Ireland to eschew tax payments except that it accepts a net annual contribution from the EU coffers based on its GDP. A GDP artificially supressed due to its arcane tax loopholes. It got to play a tax haven subsidised by the tax payers of the rest of the EU. It will be very interesting for Ireland to prove in court that that does not amount to state aid by the back door.

 

[alexgowers]

Government corruption at its best. The lot of them are crooks! The shame they must bring to their families.
[doublepost=1472884622][/doublepost]

First Brexit. Now this.

It's not even about Apple any more…. the narrative has changed to "Can Ireland assert its sovereignty? Or does the EU manage to assert its domination and lordship over (supposedly) sovereign EU states?"

Pass the popcorn, with plenty of butter please!

Please this has nothing to do with sovereignty. If you think states make political decisions in a vacuum you are wrong. The simple issue is Ireland is not playing by the rules. I'm glad the EU exists to right that wrong. There are no rights Ireland has when the money has come from Europe! Not Ireland. it's not like ireland is dealing with 13billion tax bill from,Ireland, it's Europe's tax bill.

If you think some semblance of rights are being eroded you are wrong. Ireland will have funding issues from Europe if they fail to comply, Ireland shouldn't have offered the deals in the first play 12.5% is the tax rate end of.

EDIT: WTF? Why was this reported? Don't game the system.

 

[nocturnum]

Honestly, I would like to see Apple fight it out to the very end.

I really can't see the EU winning on this one. Their entire lawsuit is based on the premise that "Yeah, we know the laws work like this, but we feel they should have worked like that instead. So let's pretend the law has always been the other way from the start."

On the other hand, I am also interested in seeing just how powerful Apple has become. We are now at a point where there is nothing Microsoft and Google can do to threaten me as an Apple product user. Apple has moved on to a juncture where its opponents are the FBI and the US government. Would Apple be able to prevail against the EU as well?

It will be interesting to watch.

Captain America your thing? Action movies? Easy reads?
[doublepost=1472892578][/doublepost]

Corporations don't pay 0.005% tax, Apple pays 26%, total global tax is 26% of total global profits. Microsoft, Google and Facebook pay a bit less. Samsung, to name one notable Apple competitor, pays 18% or so. But they are not paying much in Ireland, or elsewhere in the EU, because that's the way Ireland likes it. Or in the case of Samsung, that's what they can get away with in South Korea.
The taxes that the EU wants Ireland to collect has to come from the profits sitting in the bank. These are taxable in the US, some 40% belongs to the US.

EU: Ooh look at those fat profits sitting in the bank doing nothing. Someone aught to tax those, would be nice if that someone was us.
US: Hey! That's ours!
EU: Well, you're not using it. It's just sitting there!
US: We're saving it for later. Hands off, it's ours!

It might serve you well to pick on topics that are more suitable to your levels of comprehension. I mean, right now you are just reinforcing certain stereotypes about Americans.