Report Says U.S. Government Filed to Intervene in Apple's Tax Appeal in Europe

[MacRumors]

The U.S. government has filed an application with the General Court of the European Union to intervene in an ongoing tax-related case between Apple and the European Commission, according to Reuters.

"I can confirm the United States filed an application with the European Union General Court to intervene in the case involving the retroactive application of state aid rules to Apple," said the source, who declined to be named because of the sensitivity of the matter.

The report did not specify when the application was submitted, so it's unclear if it occurred under the Barack Obama or Donald Trump administrations.

Last August, following a three-year investigation, the European Commission found Apple received illegal state aid from Ireland. The iPhone maker allegedly paid between 0.005 percent and 1 percent in taxes in Ireland between 2003 and 2014, compared to the the country's headline 12.5 percent corporate tax rate.

The European Commission ordered Apple to pay up to 13 billion euros to Ireland in back taxes as a result of its decision.

Apple has not paid the amount and appealed the case in December, arguing that the European Commission made "fundamental errors" by failing to recognize that its "profit-driving activities," in particular the development and commercialization of intellectual property, were controlled and managed in the United States.

Ireland has also appealed the case, denying that it gave any favourable tax treatment to Apple. In a statement, the Irish government said the full amount of tax in the case was paid by Apple, adding that no state aid was provided. "Ireland does not do deals with taxpayers," the country said.

Apple's top lawyer Bruce Sewell earlier said the company is a "convenient target" because it "generates lots of headlines," allowing European commissioner Margrethe Vestager to become "Dane of the year" for 2016.

The report, citing a source with knowledge of the matter, said the General Court is expected to hear the case in late 2018.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Report Says U.S. Government Filed to Intervene in Apple's Tax Appeal in Europe

 

[VulchR]

Not sure what the US government can say to help Apple. The arrangement Apple has with Ireland is ludicrous, and it is little wonder the EU are taking action.

 

[unlinked]

The arrangement Apple has with Ireland is ludicrous, and it is little wonder the EU are taking action.

As long as the same arrangement was available to all companies it is nothing to do with the EU. They don't get to set countries tax rates.

 

[H2SO4]

As long as the same arrangement was available to all companies it is nothing to do with the EU. They don't get to set countries tax rates.

Yes it does. You are in the EU, you agree to abide by their rules. Don't like it, get out.

 

[justperry]

Apple's top lawyer Bruce Sewell earlier said the company is a "convenient target" because it "generates lots of headlines," allowing European commissioner Margrethe Vestager to become "Dane of the year" for 2016.

What a lotta crock.

 

[unlinked]

Yes it does. You are in the EU, you agree to abide by their rules. Don't like it, get out.

Tax policy requires unanimous consent for all countries.
This is clearly just an attempt to bypass the treaties that define the EU.

 

[robeddie]

Apple found a loophole. Close the loophole, raise the taxes on them going forward, but don't penalize them for something that was previously agreed to by the Irish government.
If the Ireland violated the EU by making the agreement with Apple, they should be penalized.

 

[mazz0]

Isn't there a big fuss about Apple not paying its fair share of tax in the US either though?

 

[bladerunner2000]

Apple's a great company to take note for ethics and morals....

 

[GubbyMan]

Apple found a loophole. Close the loophole, raise the taxes on them going forward, but don't penalize them for something that was previously agreed to by the Irish government.
If the Ireland violated the EU by making the agreement with Apple, they should be penalized.

Exactly! I don't understand people who are against Apple on this case.

Let's say that you find a good deal, a brand new iPhone for only $400! You buy it and use it. A year later, the seller contacts you to tell you that the price was wrong and that you should have payed $700 in total so you have to pay him an additional $300. Then, people will start calling you a theif because you didn't pay the full price of the iPhone that you found for a cheaper price...

 

[justperry]

Apple found a loophole. Close the loophole, raise the taxes on them going forward, but don't penalize them for something that was previously agreed to by the Irish government.
If the Ireland violated the EU by making the agreement with Apple, they should be penalized.

Believe me, Apple will lose this case.

State aid: Ireland gave illegal tax benefits to Apple worth up to €13 billion

Exactly! I don't understand people who are against Apple on this case.

Let's say that you find a good deal, a brand new iPhone for only $400! You buy it and use it. A year later, the seller contacts you to tell you that the price was wrong and that you should have payed $700 in total so you have to pay him an additional $300. Then, people will start calling you a theif because you didn't pay the full price of the iPhone that you found for a cheaper price...

You're so wrong.
See above link.

 

[cube]

Of course the US government sides with Apple because then they will have to pay more to the IRS.

 

[wigby]

Isn't there a big fuss about Apple not paying its fair share of tax in the US either though?

No. That misconception is part of the problem. Apple pays more taxes than any U.S. company based on their earnings. Should they pay even more simply because they're the most successful?

 

[Gutwrench]

https://www.reuters.com/article/us-eu-apple-tax-idUSKBN19P220

WASHINGTON (Reuters) - The U.S. government has sought to intervene in Apple's appeal against an EU order to pay back up to 13 billion euros ($14.8 billion) in Irish taxes, a source familiar with the matter said on Tuesday.

iPhone maker Apple took its case to the Luxembourg-based General Court, Europe's second-highest, in December after the European Commission issued the record tax demand saying the U.S. company won sweetheart tax deals from the Irish government which amounted to illegal subsidies.

The decision was criticized by the Obama administration which said the European Union was helping itself to cash that should have ended up in the United States.

The Trump administration, which has tentatively proposed a tax break on $2.6 trillion in corporate profits being held offshore as part of its tax reform, has not said anything in public about the case.

...


Ireland, the Netherlands, Luxembourg, Starbucks , Fiat Chrysler Automobiles and several other companies that were also ordered to pay back taxes to other EU countries have similarly challenged their EU rulings.

 

[deany]

Apple stuck a very good tax deal with our Irish friends and this created jobs.

Who cares that it <1% tax

They are all up to it Google, Amazon and Facebook etc

 

[LordVic]

Just want to clarify for my own head:

Ireland claims they have the right to negotiate taxes Independantly of the EU with international organizations. Even despite their own corporate flat tax rate.

Apple is claiming that the revenues that Apple claims in Ireland aren't taxable in Ireland because the Revenues are only earned because of invention / R&D that is created in the US.

Apple claims on their US tax forms most of their money is earned internationally, and they don't need to pay taxes on their full profits in the US.


Am I missing something? I know creative accounting is the name of the game, But how does Apple believe that they can claim profits / revenues in areas, not paying taxes in those areas and then claiming it's fine because they run businesses elsewhere.
[doublepost=1499192769][/doublepost]

No. That misconception is part of the problem. Apple pays more taxes than any U.S. company based on their earnings. Should they pay even more simply because they're the most successful?

The question is, how much of their earnings based on percentage is Apple paying?

Taxation needs to be progressive in nature to be able to afford all the industry and infrastructure we all require. Companies who make a lot less than Apple, who cannot afford the international manipulations of tax load that major corporations can, are the ones who inevitably end up paying a higher percentage of their own profits to taxes than the larger companies

While Apple might be the #1 payer of tax, if they're paying at a rate that is far lower than companies who make less than them, this is the problem

In addition, Apple likes to report all their profits / earnings in their US balance sheets, but only pay taxes on money earned in the US. While I agree that you should only be paying taxes on Profits in a region, if you're going to claim all your international profits are your US corporate profits, than thats what you pay tax on.

Apple should be forced to break their books up by nationality that they participate in, and should be forced to file taxation on a per country basis.

 

[deany]

Just want to clarify for my own head:

Ireland claims they have the right to negotiate taxes Independantly of the EU with international organizations. Even despite their own corporate flat tax rate.

Apple is claiming that the revenues that Apple claims in Ireland aren't taxable in Ireland because the Revenues are only earned because of invention / R&D that is created in the US.

Apple claims on their US tax forms most of their money is earned internationally, and they don't need to pay taxes on their full profits in the US.


Am I missing something? I know creative accounting is the name of the game, But how does Apple believe that they can claim profits / revenues in areas, not paying taxes in those areas and then claiming it's fine because they run businesses elsewhere.

Its because Ireland are a part of the European Union, since 1973

 

[Zarniwoop]

"Dear country of Europe! Your women leaders are ugly, wouldn't touch em! If you make Apple pay, I make you pray!
- D. Trump"

 

[LordVic]

Exactly! I don't understand people who are against Apple on this case.

Let's say that you find a good deal, a brand new iPhone for only $400! You buy it and use it. A year later, the seller contacts you to tell you that the price was wrong and that you should have payed $700 in total so you have to pay him an additional $300. Then, people will start calling you a theif because you didn't pay the full price of the iPhone that you found for a cheaper price...

While that makes sense for you and I from a consumer basis, this isn't how government and taxation law works in most countries.

in Business and consumer law, you and I have a contract with the company we are buying from. So when you or I purchase an iPhone, we are establishing a contract between yourself and Apple for the purchase. The laws/rules surrounding contract law are much different, in that there's a lot more leeway as to whats allowed

for government and tax law, there are significantly harder rules and far more scrutiny required. Private entities and governments generally are not allowed to negotiate individual exceptions to taxation policies. I'm not 100% certain myself, but in this case, As being part of the EU, the EU is claiming that Ireland does not have the legal right to negotiate such a deal with Apple. Thus, the deal itself that Apple claims it has with Ireland is deemed illegal from the day it was negotiated and no contract can upheld or honoured that contains illegal terms.

 

[Zarniwoop]

While that makes sense for you and I from a consumer basis, this isn't how government and taxation law works in most countries.

in Business and consumer law, you and I have a contract with the company we are buying from. So when you or I purchase an iPhone, we are establishing a contract between yourself and Apple for the purchase. The laws/rules surrounding contract law are much different, in that there's a lot more leeway as to whats allowed

for government and tax law, there are significantly harder rules and far more scrutiny required. Private entities and governments generally are not allowed to negotiate individual exceptions to taxation policies. I'm not 100% certain myself, but in this case, As being part of the EU, the EU is claiming that Ireland does not have the legal right to negotiate such a deal with Apple. Thus, the deal itself that Apple claims it has with Ireland is deemed illegal from the day it was negotiated and no contract can upheld or honoured that contains illegal terms.

Every EU state can set their taxations as they want, but it has to be fair, same for every enterprises within the state. If Apple alone receives a special regime, that is unfair for Apple's competitors. Therefore illegal.

 

[cube]

Apple stuck a very good tax deal with our Irish friends and this created jobs.

Who cares that it <1% tax

They are all up to it Google, Amazon and Facebook etc

- Other countries in the EU care because without a forbidden special deal, Apple might have chosen to establish elsewhere.

- Other companies care because special deals are unfair discriminatory competition.

 

[Glideslope]

Tax policy requires unanimous consent for all countries.
This is clearly just an attempt to bypass the treaties that define the EU.

Precisely. The EU as it stands is unsustainable. It's simply what the trigger will be, and when.

 

[cube]

Tax policy requires unanimous consent for all countries.
This is clearly just an attempt to bypass the treaties that define the EU.

Ireland agreed to the rules and would be bypassing them.

 

[LordVic]

Every EU state can set their taxations as they want, but it has to be fair, same for every enterprises within the state. If Apple alone receives a special regime, that is unfair for Apple's competitors. Therefore illegal.

better way of saying it than I.

 

[KALLT]

As long as the same arrangement was available to all companies it is nothing to do with the EU.

The arrangement was not available to other companies. That is precisely the point.