Convoluted rules regarding corporations and taxation and trade that don't appear to be fair (or even that sensible) are nothing new or unique to Apple or Ireland. It probably wouldn't be very hard to find examples of lower tax rates for companies in the EU that weren't American tech corporations with large hoards of cash to pay penalties with. And that's the primary problem: what the EU is attempting to do now is something that has no previous precedent. There are no prior successful rulings against other companies operating in the EU, and that's part of the U.S. Treasury's argument against it. Basically, the EU has just invented this retroactive power over individual countries tax rates out of thin air, and it seems to be mainly targeting specific types of companies with specific levels of ready cash.
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Report Says U.S. Government Filed to Intervene in Apple's Tax Appeal in Europe
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Convoluted rules regarding corporations and taxation and trade that don't appear to be fair (or even that sensible) are nothing new or unique to Apple or Ireland. It probably wouldn't be very hard to find examples of lower tax rates for companies in the EU that weren't American tech corporations with large hoards of cash to pay penalties with. And that's the primary problem: what the EU is attempting to do now is something that has no previous precedent. There are no prior successful rulings against other companies operating in the EU, and that's part of the U.S. Treasury's argument against it. Basically, the EU has just invented this retroactive power over individual countries tax rates out of thin air, and it seems to be mainly targeting specific types of companies with specific levels of ready cash.
I think they are looking back 10 years. Kinda strange since I think tax changes are usually limited to 4 or maybe 5 years. Or maybe that is just limited to tax free allowances.
The EU is just making it up as they go along. They've never previously claimed retroactive power over tax rates and can't provide any examples of precedent for this type of action. And I think that's the main complaint: it's not that Apple or the U.S. Treasury think that the EU can't create new rules regarding tax rates, but rather they're arguing against the ability to BOTH create new rules AND apply them retroactively.
Couldn't agree more. This is all about money.
If Apple wasn't as successful as they are, we would have never heard a peep.
BUT, it would be a fair thing to TRY to eliminate all of these "deals" going forward.
That unfortunately will never happen. Tax deals are being made world wide everywhere. Be it to entice employment,
development, factory locations etc.
Anybody who understands money, knows it's like vapor. The slightest wind and it goes where it is not being disturbed by any turbulence.
Just here in the US pro football clubs pack up and go to other cities where they get tax breaks to build new stadiums.These breaks don't always come directly towards the venue, so the clubs can say: We are paying for all of it!
Casinos get deals, chip factories and if Foxconn ever gets here, you know what they'll get...........
The Commission disagrees:
The Commission has the power to order recovery, this has been the case for decades.
Surely it should be paying a significant rate on the profit earned from all that R&D that's done in the US which is used as an excuse for not paying more tax abroad?
How is the mom & pop shop organized? Are we talking about a sole proprietorship, a partnership, an LLC, an S corporation, or a C corporation? If it's any of those other than the last one, then the taxation we're talking about (on the likes of Apple) represents an extra layer of taxation which the mom & pop shop doesn't pay at all. The owners of Apple would, for the most part, love to only have to pay a comparable (to the typical mom & pop shop) amount of taxation on Apple's profit.
The owners of that mom & pop shop are likely only paying ordinary income taxes on the profits from their business at whatever their marginal rate is. That depends on, among other things, how much income they have. It might be 10% or it might be 40%.
Apple is paying tax on its profits which varies depending on where those profits are, in effect, coming from. For profits coming from U.S. sales (and those in some other countries) it's effectively paying nearly 35%. For profits from sales in other parts of the world it pays, in the aggregate, considerably less. But when those profits are distributed to Apple's owners (or when those owners otherwise realize profits from Apple), they are taxed again.
If we're going to try to compare apples to apples - which isn't particularly easy to accurately do in this situation - then Apple's profits are taxed at a higher level than those of most mom & pop shops. There are reasons for that, of course; but it is the reality of the situation. Mom and pop shops generally don't face a kind of taxation that can be equated to what (C) corporations face. Speaking practically, their comparable rate is 0%.
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Speaking of which - can't the country selector work automatically based on my IP? It's a pain having to change it on every visit.
Other companies having the same deal doesn't mean the deal is not granted ad-hoc. The point is that even if you were correct and other companies had the same deal as Apple, many still doesn't equal all and this is enough to make it illegal. Either it's available to all or it's clearly discriminatory.
And no, it was not available to all companies.
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They do to some extent. Apple actually pays more than 35% of the profits from its U.S. sales (and net investment income) in U.S. taxes, and that's even with the (modest) domestic production and R&D credits that it takes.
That said, a lot of that value creation is attributed to Irish subsidiaries because they contribute to the cost of that R&D (based on a structure that was set up nearly 4 decades ago). Ireland certainly has (or had) very accommodating policies when it comes to avoiding taxation on certain corporate profits. I don't think anyone should deny that, or that that is a big part of why some corporations set up shop there (physically or, effectively, on paper). That's Ireland's prerogative, or at least should be. It sees such policies as net beneficial to it.
For my part, I don't agree with how most of the world does profit allocation for tax purposes. I'd prefer a model that allocated more of the profit where goods or services are sold - more sales oriented than value creation oriented. Nations could change their policies in such regards if they wanted to, but they don't. France could try to claim income taxes on the bulk of profits stemming from sales made in France. But, for whatever reasons (which I won't get lost in now), they choose not to. Often, instead, they just implement a sales or value added tax in order to realize tax revenues from those transactions.
Just wa
When I go on via Germany it takes a little longer, but will connect. Even via a VPN
Maybe from the UK, just let it do it's connecting thing?
When I go on via Germany it takes a little longer, but will connect. Even via a VPN
Maybe from the UK, just let it do it's connecting thing?
Could you please let us know other Companies that get a "special deal"
Well, that's fairly juvenile. I assume that was supposed to be funny, but it wasn't. The idea that one man somehow is in control of everything the government does that you don't like is fairly ludicrous and biased. I doubt he had anything to do with this at all. In reality, the president only has as much to do with the goings on in the government as he chooses to and is able, which is naturally limited.
Seems like you didn't read the post I replied to, see his post below.
I know what's going on here, I even linked to an article earlier in this thread.
Edited for: Fixed quoting
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It didn't create any jobs, either. Maybe one accountant's post, if even that. Divide the €billions Apple diddled between the jobs Apple actually created in Ireland altogether and it is a pisspoor return. However, since pretty much all that tax was actually earned in other EU countries it didn't actually hurt the Irish Exchequer. Especially as all that forgone tax was made up by EU largesse.
The EU has regulated tax within the EU member states for yonks. Try doing something with VAT for instance.
Not a penny was earned in the US and consequently does not belong to the US. Apple is a multinational.
But it is NOT a special deal. Any company can set this up with the existing laws (as they have been written for decades and decades) though it might not work as well for Company A as it would for Company B. Saying this is a "special deal" is an out lie by the EC and not based on fact or law. It is a money grab and nothing else. The EC is simply making up "law" as they go and applying the new "laws" retroactively.
If the EC/EU does not like the current tax code of member states then do this:
1) Fine Ireland. A $14 billion USD fine will get them to change their laws.
2) Change the existing laws.
Is this not how it works? Someone please explain:
Apple sells an iPhone in the US for $700. Apple buys that very same iPhone from Apple of Ireland for $650. Apple's gross profit in the US is $50, their net profit is somewhere closer to $0 and they pay very little US income tax. Apple Ireland receives tremendous amounts of money in foreign earned profits, which are not subject to taxation in Ireland.
If that is the case, then how do you solve the problem?
Apple sells an iPhone in the US for $700. Apple buys that very same iPhone from Apple of Ireland for $650. Apple's gross profit in the US is $50, their net profit is somewhere closer to $0 and they pay very little US income tax. Apple Ireland receives tremendous amounts of money in foreign earned profits, which are not subject to taxation in Ireland.
If that is the case, then how do you solve the problem?
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There is no "special deal". That's the point.
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That isn't the case. Your example is based on a false assumption. Apple sells a $700 iPhone in the US from Apple Inc (Incorporated in the US) and pays 33 some odd % for the profit of that phone. Apple paid over $6 billion in US corporate taxes in the US in 2012 and it has been much higher in the following years. Don't believe the brightbart of the left rags like the Huffington Post...
So here are the facts that matter.
1. Apple appealing this tax case.
2. The US government requesting to intervene this tax case in Apple behalf.
3. Ireland themselves are also appealing this tax case.
Sounds like this European Commission wants this money to be paid to Ireland. But why? Could this European Commission somehow benifit from Ireland gaining over a billion dollars in taxes from Apple?
1. Apple appealing this tax case.
2. The US government requesting to intervene this tax case in Apple behalf.
3. Ireland themselves are also appealing this tax case.
Sounds like this European Commission wants this money to be paid to Ireland. But why? Could this European Commission somehow benifit from Ireland gaining over a billion dollars in taxes from Apple?
EU is acting like a bratty child here. A country set tax laws and a company benefited. Now the EU is sad. People this this guy don't seem to understand business, politics or logic...
But look what happens, there was NO loop hole. They should have paid 12.5% but paid less than 1%. EU steps in and can't even nail them for failing to pay up! I mean if you can't get Apple to pay their fair share, a company with loads of cash and massive profits to pay up on their DUE TAX for profits entirely inside the EU then what hopes do governments have of getting money owed from every company?
If there was a loophole then fair enough, but there was none, they JUST DIDN'T PAY! I love apple products but the company is a big FAT turd.