Tim Cook Calls Apple's Irish Tax Avoidance Accusations 'Total Political Crap'

[MyopicPaideia]

I just find it funny that they purposely chose ireland because they knew they could manipulate their taxes there. And now that the loophole is closed and the EU wants the money Apple avoided by using those loopholes in Ireland, Apple screams foul.

listen, you may not like the decision Cook, but you had to know it was a possibility when you purposely chose a tax jurisdiction you knew to be questionable.

Purposely chose it 37 years ago before the EU was even a glint in anyone's eye? I find it quite amusing that people here are calling Apple and especially Tim Cook, criminals.

It seems to me the EU commission is trying to tell a sovereign nation that it does not have the right to govern its own tax rates as it sees fit, and it sets a dangerous precedent. It is similar (though not exactly the same, in fact even more severe) as the US government telling Nevada that it's income tax (there is no additional state income tax there, along with 6 other states) laws are illegal. Who are the EU commission to tell Ireland, I repeat, a sovereign nation, that the laws that they have ratified as a democraticly elected government are to be declared invalid.

This decision will be overturned eventually as it will never stand up when it comes down to choosing between Ireland leaving the EU (which they would be prepared to do over this, in all probability) and creating an even weaker membership, or the active decision for membership States to give up their sovereignty to this degree.

Just IMHO, of course, but people are jumping the gun here. It isn't like Apple just started operating in Ireland last year under Cook's leadership.

 

[bitslap47]

This whole thread is like the kook friend that has your email address.

He sends you an email claiming the postal service will start charging for emails next month to recover from loss of business.

You send him the Snopes link disproving/debunking his claim.

He never responds or addresses the issue, instead he changes arguments, next sending you an email claiming Mt. Dew has antifreeze in it.

 

[niun]

Purposely chose it 37 years ago before the EU was even a glint in anyone's eye? I find it quite amusing that people here are calling Apple and especially Tim Cook, criminals.

It seems to me the EU commission is trying to tell a sovereign nation that it does not have the right to govern its own tax rates as it sees fit, and it sets a dangerous precedent. It is similar (though not exactly the same, in fact even more severe) as the US government telling Nevada that it's income tax (there is no additional state income tax there, along with 6 other states) laws are illegal. Who are the EU commission to tell Ireland, I repeat, a sovereign nation, that the laws that they have ratified as a democraticly elected government are to be declared invalid.

This decision will be overturned eventually as it will never stand up when it comes down to choosing between Ireland leaving the EU (which they would be prepared to do over this, in all probability) and creating an even weaker membership, or the active decision for membership States to give up their sovereignty to this degree.

Just IMHO, of course, but people are jumping the gun here. It isn't like Apple just started operating in Ireland last year under Cook's leadership.

So you think it has nothing to do with the renegotiated tax benefits that Apple and Ireland "negotiated" over the past few years?
Remember this has been an investigation into some of Apple's shell companies in Ireland over the past 3 years. Not since the dawn of time.

And you think Ireland is going to leave the EU? Really? Over a tax bill?

This is creeping into the realms of Fantasy.

Apple and Ireland did a bad thing. They know it. TC needs to stop being a politician for once and just be a humble CEO trying to unplug that mythical pipeline.

I.E. his focus should be elsewhere.

 

[ENduro]

I get it... You're being singled out but you are for good reason - you're the big dog now and this system of Whack-a-Mole tax avoidance is really unsustainable. And to say "When you're accused of doing something that is so foreign to your values" it really makes you come off like a piece o' s... Values? Exactly what values are you bragging about here?

 

[BornAgainMac]

Tim is a crook. If I did that stuff I'll be put in jail by the IRS. So tired of these big companies getting all these breaks and the little guy getting screwed.

No. His name is Tim Cook. Not Tim Crook.

 

[bitslap47]

Purposely chose it 37 years ago before the EU was even a glint in anyone's eye...

Hey... settle down. We don't need your fancy facts and common sense in here. Take that crap elsewhere.

 

[Ironduke]

make apple bleed

 

[alex2792]

You don't get rich by paying taxes so of course Apple, just like every other corporation ever, utilizes all available loop holes to avoid paying taxes. Looks like this time they were finally caught red handed so time to pay up Tim!

 

[niun]

I get it... You're being singled out but you are for good reason - you're the big dog now and this system of Whack-a-Mole tax avoidance is really unsustainable. And to say "When you're accused of doing something that is so foreign to your values" it really makes you come off like a piece o' s... Values? Exactly what values are you bragging about here?

The Values of the Carphone Warehouse.. Stuart Lee...

 

[KALLT]

I don't think the EU has jurisdiction to demand Apple pay anything, since that was an agreement made with Ireland. The EU needs to recover that money from Ireland, since they are the ones who made the agreement. In this respect, Apple is the innocent party.

Why are people thinking that the EU has no jurisdiction? Ireland is a member of the EU and the EU has rules that supersede Irish laws. It is that simple. Ireland violated EU law in the eyes of the European Commission and is ‘punished’ by collecting taxes from Apple, the reason being that not collecting them was an infringement of EU competition law.

But Brussels knew about these tax arrangements for years and never complained until the public mood turned.

And you know this how? The EU is not omniscient and it has no resources to look into everything. In fact, it is a comparatively small organisation (even though people do not like to hear this). This case took more than three years to investigate! When the public became increasingly wary of the tax schemes, the EU finally decided to investigate and spend to resources on it. That’s it.

How safe is any business if entirely legal behavior can be subjected to retroactive antitrust enforcement a decade after the fact?

You can never be sure, that is the risk of doing business. Many competition infringements only become apparent many, many years after the fact. In the case of state aid, there are procedures to follow to notify the Commission when a company believes that the aid may not be compatible with the law. In any case, companies can also just refuse to accept the aid and notify the Commission if they believe that competitors benefit unfairly from this.

Margarithe Vestager, the EU Commissar, is turning the EU into a banana republic.

Vestager is a new Commissioner, with new priorities and different beliefs. Do you also complain when things are changing in your country after a new election? Like Neelie Kroes, she is tough on competition violations and simply enforces the law. Crimes don’t stop being crimes just because the punishment was late.

She is also doing her best to vindicate the British decision to leave the EU.

I applaud her for it. The decision was made and I no longer care what the British think of the EU. Ireland is not universally upset about this decision either, it is not even determined whether Ireland will appeal this decision at all. The Irish public and the governing coalition are split. My guess is that many people actually like this decision, because it takes the blame away from the Irish government.

IMHO, this case is a prime example of why so many European economies can’t seem to grow: a deadly combination of high taxes, legal uncertainties and political grandstanding. Britain should capitalize on this mess and pursue the corporate-tax-rate cuts proposed by MP George Osborne, which would turn Britain into a 15% tax mecca immune from Brussels’s antitrust BS. Take that, Margie!

Uhm... yeah, whatever.

 

[mossy]

And they did that. 12.5% to be precise. What they are not allowed to is to give tax benefits to selected companies. Which is argued that they did

They did not give tax benefits to selected companies. That is an allegation made by unelected technocrats with no mandate. Only a court can give a definitive verdict.

"Apple set up their sales operations in Europe in such a way that customers were contractually buying products from Apple Sales International in Ireland rather than from the shops that physically sold the products to customers. In this way Apple recorded all sales, and the profits stemming from these sales, directly in Ireland."

So 'International' starts and ends with Europe, or are we a tax collector for the world? Also, isn't there free movement of capital around Europe? Apple has a right to move its money around inside Europe.

The commission stated:

• The amount of unpaid taxes to be recovered by the Irish authorities would be reduced if other countries were to require Apple to pay more taxes on the profits recorded by Apple Sales International and Apple Operations Europe for this period.
• The amount of unpaid taxes to be recovered by the Irish authorities would also be reduced if the US authorities were to require Apple to pay larger amounts of money to their US parent company for this period to finance research and development efforts.

If an iPhone is sold in Rome for example - are we a tax collector for Italy now? Do you not think there is an onus on Italy to collect it's own taxes? According to the Commission statement it looks like it - no? How can Ireland be responsible for that. How is the failure of other countries not collecting their own taxes somehow twisted into a competition commission ruling of Irish 'state aid'? That is a failure of the tax system inside Europe and even around the world.

So I'd say, until proven otherwise, those sales are indeed directly linked to Ireland regardless where they occured.

That is not the argument. The argument is whether Ireland is liable to tax the monies transferred there - specifically to ASI. The commission contradicted itself. If other countries can put a claim in for some of the money - then why is it considered state aid from Ireland? That's because it is not state aid. In fact - it is nothing to do with the competition commission at all. It is a problem with:

• OECD tax system - and that is out of Irelands control. It is merely a member. One of many who decide these rules.
• The rules of free movement of Capital inside Europe.

 

[JeffyTheQuik]

Wake me up when Apple wants to pay 10% in taxes.

Currently to avoid 35% taxes, they're provisioning for 26.4%:
From Form 10-Q, they're paying $15,183B taxes on $57,453B, so I think they'd appreciate the tax cut, but after that, they'd probably appreciate even more of a cut.

At least I would, being a shareholder.

Source: http://files.shareholder.com/downlo...EBA9B7B826A/10-Q_Q3_2016__6.25.2016_FINAL.pdf

 

[Lone Deranger]

U mad bro?

 

[niun]

Interesting to see TC is now back peddling on bringing cash back to the US:
https://www.theguardian.com/busines...-repatriate-billions-to-us-treasury-next-year

Trying to divert attention?

Also, this:

"In its annual report, Apple does make large provisions for US taxes, which allows it to claim that it has an effective tax rate of 26% – much higher than many other tech firms.

However, behind these accounting provisions Apple has made clear it does not intend to repatriate funds and actually pay the taxes provisioned for while the US maintains its current high tax rate. For that reason, the group’s reported tax rate is regarded by experts as an accounting fiction."

The only defence for this is, every company does it..

Most companies will discreetly pay up, not throw all their toys out of the pram.

 

[Thunderhawks]

Not quite. It will reduce Apple's tax liability, but not eliminate it. The U.S. charges a higher corporate rate than most other countries. For example, if Ireland charges 12.5%, the U.S. can still collect the difference (35%-12.5%=22.5%).

Apple has no US tax liability until they bring that money to the US.

At 22.5% it is not coming.

 

[alex2792]

IMHO, this case is a prime example of why so many European economies can’t seem to grow: a deadly combination of high taxes, legal uncertainties and political grandstanding. Britain should capitalize on this mess and pursue the corporate-tax-rate cuts proposed by MP George Osborne, which would turn Britain into a 15% tax mecca immune from Brussels’s antitrust BS. Take that, Margie!

Yes, we should cut all corporate taxes to 0% and privatize everything (you're driving on ACME Inc. road, that would be $10 per mile (km for most of EU) please!). Do you know why 3rd world countries are 3rd world countries? Because they don't collect any taxes (the little they do collect goes to minsters' Swiss bank accounts). So essentially, what you're advocating for is making Europe a 3rd world country where 90% live in cardboard boxes across the street from million dollar high rises like they do in India.

 

[KALLT]

It seems to me the EU commission is trying to tell a sovereign nation that it does not have the right to govern its own tax rates as it sees fit, and it sets a dangerous precedent.

According to whom? Because Cook said that? There is no ‘dangerous precedent’. This is business as usual, just the magnitude of the recovery is larger. Ireland is still sovereign, but still a member of the EU. When Irish law and EU law conflict, then EU law must prevail. It is really not that hard. Ireland has the right to govern its own tax, but it cannot use it as an instrument to manipulate cross-border competition within individual sectors in its favour. That is the essence of the EU Internal Market. The whole point of joining the Internal Market is to join a larger market that is regulated by a supranational body. Competition law is an essential piece of market regulation.

It is similar (though not exactly the same, in fact even more severe) as the US government telling Nevada that it's income tax (there is no additional state income tax there, along with 6 other states) laws are illegal. Who are the EU commission to tell Ireland, I repeat, a sovereign nation, that the laws that they have ratified as a democraticly elected government are to be declared invalid.

You cannot come up with any other example where US federal law trumps State law?

This decision will be overturned eventually as it will never stand up when it comes down to choosing between Ireland leaving the EU (which they would be prepared to do over this, in all probability) and creating an even weaker membership, or the active decision for membership States to give up their sovereignty to this degree.

I don’t believe that the decision will be overturned. It is much more likely that the amount to be paid will be lower or higher depending on factual evidence. Ireland will not even consider leaving the EU for this, that is complete nonsense and wishful thinking among EU critics. The Irish public is as much annoyed by the tax schemes as people across the mainland are. Moreover, this tax scheme ended in 2014 and it does not even concern the future. Ireland is still a popular destination.

 

[alex2792]

Apple has no US tax liability until they bring that money to the US.

At 22.5% it is not coming.

Well in that case how about a $50 per iPhone tariff for Chinese imports Mr. Cook?

 

[SBlue1]

It may not be fair, but it is what it is.

Apple paid what the laws in Ireland said Apple should pay. We shouldn't be faulting Apple for following Ireland's laws.

Well that was not the tax rate that other companies had to pay at that time. Ireland was in a crisis and wanted to create jobs by any means. They lured companies to come there by paying way less tax than in Germany, Great Britain or France. Apple took that offer without asking why. Who would not? The thing is that this is not legal in the EU. There should be a fair competition between states to get those big companies. Not undercutting other states taxes.

You are right about Ireland being the real bad player. So now Ireland is forced to change back their taxes to a fair level and ask Apple to pay them back. In worst case Ireland may loose all the financial help they got from the EU during their crisis.

 

[MyopicPaideia]

So you think it has nothing to do with the renegotiated tax benefits that Apple and Ireland "negotiated" over the past few years?
Remember this has been an investigation into some of Apple's shell companies in Ireland over the past 3 years. Not since the dawn of time.

And you think Ireland is going to leave the EU? Really? Over a tax bill?

This is creeping into the realms of Fantasy.

Apple and Ireland did a bad thing. They know it. TC needs to stop being a politician for once and just be a humble CEO trying to unplug that mythical pipeline.

I.E. his focus should be elsewhere.

No, 18.5 billion EUR in back taxes is not from some shell companies from the last couple of years. Rather, 3 years has been how long the investigation has been ongoing, digging up as much as possible to go after. The main point is that Ireland is a sovereign nation and has the right to govern itself. This isn't some behind closed doors arrangement or a case shady corporate/political of corruption. It is the EU trying to assert itself on a sovereign member State. Ireland is going to stand its ground. The country stands to lose more money by losing Apple, who would be forced by their duty to their Shareholders to find a new place with a similar tax structure, and there would be no shortage of countries lining up for the business. Tim Cook is correct in that this is a political power play by the EU, and happens to following on the of having lost one of the largest economies in EU, the UK.

I wonder, what focus should the CEO of the world's largest company have when his company is hit by this judgement, and it is directly affecting stock price and brand perception, as evidenced by your simplistic interpretation of events and easy condemnation of a readily available scapegoat to an issue that only exists because a loose confederation government is trying to overextend its mandate...IMHO.

 

[niun]

I wonder, what focus should the CEO of the world's largest company have when his company is hit by this judgement, and it is directly affecting stock price and brand perception, as evidenced by your simplistic interpretation of events and easy condemnation of a readily available scapegoat to an issue that only exists because a loose confederation government is trying to overextend its mandate...IMHO.

Yeah in your opinion..

The focus of the CEO in this respect should maybe, just maybe stepping off his high moral ground and getting back some effin' respect rather than compounding the issue.

People will dig deeper into this the longer it goes on. It will overshadow everything Apple does. Unless the next product is a free cancer cure it'll take a long time for most people to a. believe any BS that falls out of TC, b. respect Apple when they talk about doing such great things for this planet.

The brand has been damaged. Better to not destroy it because you got caught doing something dodgy.

 

[SBlue1]

That doesn't give them the right to redefine Irish law. I hope Ireland abandons the EU for meddling in their internal affairs

First of all, EU law trumps nation laws in a lot of cases. Taxes is one of those areas as finances, businesses and economics are the core of the EU.

Second thing, Ireland was in a deep crisis and asked the EU for financial help a while ago. The EU helped Ireland under a few conditions, one of it was to get their financial situation back on track and close all tax loopholes and unneeded state aids. Offering Apple a special deal was a form of illegal state aid.

And third, just for your interest, the EU is more popular than your outside media may let you think. Especially in Ireland, where the people are thankful the EU saved them from bankruptcy. Of course they have the old and uneducated left behind people who think they should have gone bankrupt and be "free" instead but they are in a minority.

 

[DoctorKrabs]

I love how Tim says Apple "finds itself in an unusual position" in the matter. People who simply pay the taxes they're asked to pay don't fall into such a position. When you claim to be an Irish company for the sole reason of dodging taxes elsewhere in Europe, you may find yourself in an "unusual position".

 

[BaldiMac]

AOI DOES HAVE EMPLOYEES

...the Senate subcommittee report is all about these subsidiaries. This is how it describes AOI: “a 30-year old corporation that has no employees or physical presence, and whose operations are managed and controlled out of the United States.

 

[SBlue1]

Ireland is going to stand its ground. The country stands to lose more money by losing Apple, who would be forced by their duty to their Shareholders to find a new place with a similar tax structure, and there would be no shortage of countries lining up for the business.

Don't think so. The EU is trying hard to eliminate all of those tax havens one by one. Luxemburg caved in. Austria caved in. Ireland did so 3 years ago. There is no way to go if you want to have a headquarters within the EU.

Apple may move back to London though now that they have a similar tax rate. London was always the first choice for american companies to have their European subsidiary.