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

[tentales]

I can understand making Ireland change its tax laws so that moving forward, Apple pays the new tax rate from a certain date forward.

But suddenly changing the law and retroactively enforcing it? Imagine if the rules for tennis were suddenly changed overnight, the video playback of every past tennis tournament reviewed and medals and prizes already awarded were suddenly recalled to be redistributed to the new winners. How is that even logical?

This is what I don't understand and can't accept, even more so than Apple paying so little tax.

You don't get it. The law has not changed. Individual deals were struck with certain large companies, no doubt in exchange for jobs. All EU states are required to contribute a share of their tax income to the EU. The EU in turn sends the money back, in Ireland's case, MORE than they contribute.

So it's like you own a property and your manager's only been collecting a fraction of the rent (on your behalf) because he made a deal with the tenant. Then keeping some for himself and now that you've discovered it, you want the manager to ask the tenant to pay up.

 

[bxs]

The birth of the EU (instigated by Churchill I believe soon after WWII) was an attempt to tie the European countries financially; make their economies interlocked so to speak, to avoid future wars. By and large so far this has been achieved. However, The EU Government has slowly overreached this charter by creating treaties that give them the right to oversee and insist their member counties change the domestic laws. This is a far cry from the original EU charter (Common Market or whatever it was called way back). It's no wonder, along with the immigration crisis in Europe, that some countries are now just too wary and really fed up with Brussels (the EU Government) and want OUT/BREXIT. Countries simply don't like being told what to do especially when the internal/domestic laws are being trounced. The EU should butt out of what Ireland wants to do to secure business for itself.

Supposedly, the EU came up with a treaty (or whatever it was called) in 2003 that was to govern how member states gave out state tax incentives to companies. Well, the EU was amiss for not also at the same time providing guidelines for how each member state honors such a ruling. It's taken them 10 years and still counting to provide this 'transparency' for each member state to comply. Given this, it's immoral/improper IMO to now retroactively penalize member states for not abiding to the ruling made some 10 years ago when no proper guidelines were issued as well. To me, Ireland can claim since no guidelines were given 10 years ago by the EU Government the case they now bring is moot. Sure, now that the EU ruling (treaty) on member state tax incentives have been made more clear then now the EU can enforce that from now on and not go back to 2003 to amend their fault for not providing a clear set of instruction on how to manage state tax incentives to companies that do business with the EU.

 

[smallcoffee]

Finance has never stopped a war from breaking out

 

[tentales]

The Irish government has been colluding with big American corporations for years to help them avoid their tax liabilities across Europe and quite literally stealing money from other countries. And they have the bare faced cheek to expect the rest of us to bail them out when they nearly went bankrupt a few years ago. Makes my ****ing blood boil.

Yep, the luck of the Irish starting to run out.

 

[bxs]

Finance has never stopped a war from breaking out

Well it does seem to have had that result since 1945. Yes, other issues have arisen, but all out war has not arisen.

 

[tentales]

The birth of the EU (instigated by Churchill I believe soon after WWII) was an attempt to tie the European countries financially; make their economies interlocked so to speak, to avoid future wars. By and large so far this has been achieved. However, The EU Government has slowly overreached this charter by creating treaties that give them the right to oversee and insist their member counties change the domestic laws. This is a far cry from the original EU charter (Common Market or whatever it was called way back). It's no wonder, along with the immigration crisis in Europe, that some countries are now just too wary and really fed up with Brussels (the EU Government) and want OUT/BREXIT. Countries simply don't like being told what to do especially when the internal/domestic laws are being trounced. The EU should butt out of what Ireland wants to do to secure business for itself.

The FUD and misinformation is getting out of hand.
Yea, Churchill was part of it, but so was the rest of Europe:
https://en.wikipedia.org/wiki/Founding_fathers_of_the_European_Union

By the same token of your position, the United States should break up because individual states don't agree with Washington. Except in Europe with a multitude of languages and cultures, homogeneous rule is even more difficult than in the US.

The EU has not overreached this charter. If anything, they've been too laissez-faire over the years in not enforcing treaties and member-states agreed to policies. Remember PIGS ? Portugal, Ireland, Greece, Spain (and now Italy) all want the benefits (EU subsidies) but then make their own little backyard deals. Effectively Germany and France are paying for everybody else, with debt creation and their tax payers money, while US corporations are stealing from them.

Avoiding trade wars and hot wars IS what it's about. But the US hegemony doesn't allow fair trade talks. Hence, the EU is finally growing a pair and calling the US and it's companies out for playing foul.
Hence, trade-talks have failed: http://www.dw.com/en/france-to-call-for-an-end-to-eu-us-free-trade-talks/a-19512025

At least Canada has some mature leaders left to negotiate deals:
http://www.cbc.ca/news/politics/ceta-european-commission-ratification-mixed-competency-1.3664884
Although, the US is set to torpedo even that deal.

 

[Abazigal]

You don't get it. The law has not changed. Individual deals were struck with certain large companies, no doubt in exchange for jobs. All EU states are required to contribute a share of their tax income to the EU. The EU in turn sends the money back, in Ireland's case, MORE than they contribute.

So it's like you own a property and your manager's only been collecting a fraction of the rent (on your behalf) because he made a deal with the tenant. Then keeping some for himself and now that you've discovered it, you want the manager to ask the tenant to pay up.

Won't it also depend on what sort of deal was struck with the tenant?

By your logic, if the lower rent rates was set in black and white, on what basis would you use to get the extra rent from the tenant? "Yeah, I know you were quoted $300 a month. But I actually meant to charge $1000. Now pay up an extra $700 for each of the six months that you have been staying here. Because my boss says so."

See how ludicrous it is?

 

[Abazigal]

It's not retrospective. The law is 12.5%

If you are to pay 40% tax rate, but you pay 5% cause your tax agent gives you a deal I a scheme he sets up and your tax office asked you to pay the remaining 35% , it's no retrospective, you did it pay enough.

Forget Apple here for a sec . Ireland has been told they were not in a position to offer lower than 12.5%

And last of all..... These sales were from EU, not just Ireland....

As an EU citizen i am not going to subsidise Ireland , cause they are letting Apple Pay no tax on the items I buy in the eu and my taxes go to Ireland to support their infrastructure , it's taking the piss.

Then that's Ireland's problem, because Ireland was the one who let Apple get away with the lower tax rates in the first place. Nobody forced the Irish government into doing so, they likely thought that the benefits of attracting so many multinational companies outweighed the drawbacks of collecting lesser tax revenue.

So after all these years of having multinational companies operate in their company, now they try to get the tax revenue back. Notwithstanding the possibility that had the higher tax rate been in place from day one, Apple may very well have opted to not set up shop in Ireland.

Get Ireland to cough up the missing tax dollars, not Apple.

 

[bxs]

The FUD and misinformation is getting out of hand.
Yea, Churchill was part of it, but so was the rest of Europe:
https://en.wikipedia.org/wiki/Founding_fathers_of_the_European_Union

By the same token of your position, the United States should break up because individual states don't agree with Washington. Except in Europe with a multitude of languages and cultures, homogeneous rule is even more difficult than in the US.

The EU has not overreached this charter. If anything, they've been too laissez-faire over the years in not enforcing treaties and member-states agreed to policies. Remember PIGS ? Portugal, Ireland, Greece, Spain (and now Italy) all want the benefits (EU subsidies) but then make their own little backyard deals. Effectively Germany and France are paying for everybody else, with debt creation and their tax payers money, while US corporations are stealing from them.

Avoiding trade wars and hot wars IS what it's about. But the US hegemony doesn't allow fair trade talks. Hence, the EU is finally growing a pair and calling the US and it's companies out for playing foul.
Hence, trade-talks have failed: http://www.dw.com/en/france-to-call-for-an-end-to-eu-us-free-trade-talks/a-19512025

At least Canada has some mature leaders left to negotiate deals:
http://www.cbc.ca/news/politics/ceta-european-commission-ratification-mixed-competency-1.3664884
Although, the US is set to torpedo even that deal.

When the rules governing a treaty are not available or poorly constructed and open to interpretation what is one to do? My guess is that all EU member states have violated this member state tax incentive ruling for past 10 years. Don't tell me Germany and France have not done so.... (but of course I dunno...). I agree the EU member states are very different from the States that make up the USA. Many of the people that came to the USA to begin with did so to get away from Europe and its over reaching into people's lives. The USA does have its faults but I say the EU has far more serious issues and that the EU needs a serious overhaul or should simply be abandoned before disastrous events unfold.

 

[swajames]

You won't probably read this level of analysis of what is at play anywhere else, 6 steps to zero-tax heaven

Virtually from the inside of Ireland, a little hard to follow only because it's complex especially if you are not familiar with the EU setup. Interesting that Apple has no Apple store in Ireland (it has one in Northern Ireland, part of UK) and this is supposedly to do with this weird Tax arrangement!

That 6 steps analysis is excellent and well worth a read for anyone wanting to dig deeper into the real issues at play here. Thanks for posting.

 

[tentales]

Won't it also depend on what sort of deal was struck with the tenant?

By your logic, if the lower rent rates was set in black and white, on what basis would you use to get the extra rent from the tenant? "Yeah, I know you were quoted $300 a month. But I actually meant to charge $1000. Now pay up an extra $700 for each of the six months that you have been staying here. Because my boss says so."

See how ludicrous it is?

Ludicrous? Don't condescend, just make your point.

The EU treaties set the governing laws. Ireland has a set corporate tax, but outside of both the treaties and it's own publicized tax law, it made individual deals that are now considered illegal.

So, back to the rent analogy. The tenant KNEW it was $1000, but knew he could get away with paying less directly to the manager, without telling the landlord. Given how askew the tax payments were, instead of $1000, it was more like $1 and certain favours.

The implication is, that Apple (and the public in general) know the law and the 12.5% tax rate, but negotiated with Irish officials for a lower, *much* lower rate, essentially 0%, but they had to put some figure in the computer, hence 0.005%

Anyway, I'm done here. Go ahead, keep defending a super-sized corporation for not paying taxes all you like.

 

[Abazigal]

Ludicrous? Don't condescend, just make your point.

The EU treaties set the governing laws. Ireland has a set corporate tax, but outside of both the treaties and it's own publicized tax law, it made individual deals that are now considered illegal.

So, back to the rent analogy. The tenant KNEW it was $1000, but knew he could get away with paying less directly to the manager, without telling the landlord. Given how askew the tax payments were, instead of $1000, it was more like $1 and certain favours.

The implication is, that Apple (and the public in general) know the law and the 12.5% tax rate, but negotiated with Irish officials for a lower, *much* lower rate, essentially 0%, but they had to put some figure in the computer, hence 0.005%

Anyway, I'm done here. Go ahead, keep defending a super-sized corporation for not paying taxes all you like.

I defend what I think is right and speak out against what I perceive as wrong.

Same as everyone else here. That's all there is to it.

 

[5684697]

This is about the EU punishing Ireland for having a lower tax rate than the rest of the EU nations. Can't have that, it makes them more attractive for business than the rest of Europe.

What Ireland did was normal- give tax incentives to get a high value company to locate and hire employees, garnering more tax revenue than the would have without the corporation in country. It happens everywhere in the free world, and is a form of classic competition, which the EU hates and sees as unfair. They would rather have high taxes, less competition and the resultant higher consumer prices than let the market work.

This goes far beyond Apple, and the end result of these policies will be higher prices for consumers in the EU.

 

[bxs]

That 6 steps analysis is excellent and well worth a read for anyone wanting to dig deeper into the real issues at play here. Thanks for posting.

Yes, that made very interesting reading. However, for me it was difficult to completely understand. On the face of it says MNCs have been abusing the EU TP rules. My question is, is this abuse == illegal tax evasion. I simply dunno...

 

[MagnusVonMagnum]

It is not a change in the law. It is a belated enforcement. No rules were changed for this. Suppose you were not paying your taxes, because you were not disclosing your employment and salary fully. This will still get you into trouble years after and you will be liable to pay the taxes, maybe even pay a fine on top of it. It matters not that the scheme was legal in Ireland or Apple thought that it was OK, because the Commission considers that the scheme was never legal under EU law. The protection against ‘retroactive’ enforcement comes in the form of statutory limitations, which is 10 years in this case.

Horse crap. This is IRELAND'S FAULT and therefore THEY should be liable for the taxes to the European Union. They are the member of the European Union, not Apple. If Ireland makes a special deal with Apple then it should make up the difference if that is what their membership in the EU entails. In other words, it's not Apple's fault Ireland broke EU rules and thus it's Ireland that should be punished, not Apple.

The UK (or at least England; who knows if Northern Ireland and Scotland will make good on their threats to leave the UK, although they may find the grass is even less green in Europe than in Britain) should be wooing Apple to move there since they will soon have control of their taxes and borders once again and can make tax abatement deals with Apple without having some bureaucratic moron in Brussels decide for them what they can and cannot do.

Apple is only doing what's best for Apple. This is what corporations do. Period. Anyone who thinks a corporation can have a soul is kidding themselves (and precisely the reason that corporations should not be allowed "rights" as "people" when it is the individual that is a citizen and therefore the individual that should have the rights of a citizen, not a company that is owned by shareholders who can be from virtually anywhere on the planet including unfriendly countries). If you want Apple to pay a high tax rate, stop offering them deals (everyone). The problem is that some countries are richer than others and some would rather have something rather than nothing (e.g. Ireland here) and so they make deals. States and cities do this all the time in the US and that's why companies move around all the time (screw the employees; they can either move or find another job). If no one offered them better tax deals, they would never move at all. In short, corporations are soulless greedy entities that will never do the "right" thing when MONEY is their only purpose for existence.

 

[niun]

That 6 steps analysis is excellent and well worth a read for anyone wanting to dig deeper into the real issues at play here. Thanks for posting.

Second that, excellent stuff.
[doublepost=1472785497][/doublepost]

Horse crap. This is IRELAND'S FAULT and therefore THEY should be liable for the taxes to the European Union. They are the member of the European Union, not Apple. If Ireland makes a special deal with Apple then it should make up the difference if that is what their membership in the EU entails. In other words, it's not Apple's fault Ireland broke EU rules and thus it's Ireland that should be punished, not Apple.

The UK (or at least England; who knows if Northern Ireland and Scotland will make good on their threats to leave the UK, although they may find the grass is even less green in Europe than in Britain) should be wooing Apple to move there since they will soon have control of their taxes and borders once again and can make tax abatement deals with Apple without having some bureaucratic moron in Brussels decide for them what they can and cannot do.

If Apple does leave Ireland in the lurch then the comment from Tc:
"37-year-old marriage" between Apple and Ireland, a union that's "great for the community" of the country as it is for Apple and the people it employs there. Cook said that Apple will continue to focus on building a presence in the country", and his praise for the Irish people being the reason Apple stayed there through thick and thin would sound a tad hollow.

It'll be interesting to see how this goes.

 

[macUser2007]

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.

Yep, no personal liability, so who cares. Unless officers are held personally responsible, nothing will change.

As is, they have insurance and the companies generally have an obligation to defend them to the bitter end. It's hard to bring charges and make them stick.

So they'll lie and cheat if it gets the stock price up, the Board will give them hefty bonuses, the bankers will get their fees and the lawyers will stay gainfully employed....

When they get caught, they'll get indignant about "political crap," will spend millions on attorney fees and lobbyists, then the company will settle and the dumb money (the shareholders) will pay the penalties.

But Tim and everyone else will keep their bonuses and fees, and laugh all the way to the bank.

Duh.

 

[MagnusVonMagnum]

Second that, excellent stuff.
[doublepost=1472785497][/doublepost]

If Apple does leave Ireland in the lurch then the comment from Tc:
"37-year-old marriage" between Apple and Ireland, a union that's "great for the community" of the country as it is for Apple and the people it employs there. Cook said that Apple will continue to focus on building a presence in the country", and his praise for the Irish people being the reason Apple stayed there through thick and thin would sound a tad hollow.

It'll be interesting to see how this goes.

I personally don't believe the "ethical" or "moral" words of a CEO who has made business moves since he took over Apple that have put money first over technology. Jobs (like it or not) was more into creating technology THROUGH a company that makes money. In other words, even though he wasn't giving money away, his GOAL was to create a paradigm of change. Greatly or sadly he achieved this with the modern smart phone. It's utterly changed society, IMO and I can't say all for the better. But his reasons for controlling Apple weren't 100% compatible with what a corporation is and that is a money making device for the shareholders. That's its SOLE PURPOSE (as opposed to having a "soul" where it might actually care about something). I think Tim cares about issues important to him personally (e.g. supporting gay rights, for example) and that shows up in some of what Apple does, but first and foremost he cares about making money and that's what he did when listened to top 1% people and moved Apple's stock into dividends and buybacks, etc. that Steve Jobs didn't and wouldn't do (he wanted it all reinvested in the next big thing) whereas making money IS the next big thing with Tim Cook. He's worried about money making quarters and fiscal years not making the next big device that changes society or empowers it and THAT is the fundamental difference between him and Steve Jobs and I blame Steve Jobs for not finding someone more like himself to take over Apple than a traditional money-making business man.

In short, I don't think Apple gives a flying crap about Ireland. They're there because Ireland gave them a good deal and has given them good deals for a long time. If England suddenly comes up with a tax haven sweetheart deal once they're out of the EU for good, it's bye-bye Ireland. Because let's face it, if Apple really CARED about countries or people, they would have kept manufacturing in the USA. They're making such monster profits, they could easily have 100% of production here and still make a hell of a lot of money, but no, it's the corporations duty to make the MOST MONEY POSSIBLE and if that means using sweat shop labor (the closest legal thing to slave labor these days) then that's what they damn well will do and that's exactly what Apple has done (even before Tim came in and took over). They can say whatever they want to the press. Actions speak louder than words and Apple's actions have spoken of SHEER GREED FOR GREED'S SAKE (and the sake of the almighty shareholder). But then one would expect nothing less of ANY company if you buy into this whole Capitalism theology where MONEY IS GOD.

 

[KALLT]

Horse crap. This is IRELAND'S FAULT and therefore THEY should be liable for the taxes to the European Union. They are the member of the European Union, not Apple. If Ireland makes a special deal with Apple then it should make up the difference if that is what their membership in the EU entails. In other words, it's not Apple's fault Ireland broke EU rules and thus it's Ireland that should be punished, not Apple.

This has nothing to do with what I said. Also, that is your political opinion. EU state-aid law doesn’t have a penalty for the countries other than recovery, because – NEWS FLASH – the laws were made by the EU countries themselves. It turns out that these countries didn’t want to be held liable for these kinds of infringements.

 

[MH01]

Then that's Ireland's problem, because Ireland was the one who let Apple get away with the lower tax rates in the first place. Nobody forced the Irish government into doing so, they likely thought that the benefits of attracting so many multinational companies outweighed the drawbacks of collecting lesser tax revenue.

So after all these years of having multinational companies operate in their company, now they try to get the tax revenue back. Notwithstanding the possibility that had the higher tax rate been in place from day one, Apple may very well have opted to not set up shop in Ireland.

Get Ireland to cough up the missing tax dollars, not Apple.

Correct , this is Ireland's problem. They have been told to collect the missing amount, we will see how this plays out . Either was , this is going to be a massive reputation hit on Apple, even if they do not pay, cause the tax rate is so low.

Though it's also Apple problem, cause thier paying 0.005% just closed down ....

 

[Honumaui]

AHHH yes
you interject your political BS all the time !!!
fact is you are a crappy pres and seems many agree
also you are not apple anymore you are just a logo vs the word samsung no difference these days
from crappy support issues to lack of updates and often they are bad themselves !

fact is you owe taxes pay them !!!!

 

[jnpy!$4g3cwk]

Wow. That would be crazy unfair.

According to something I read today, it costs Apple < $250 for parts and labor to build an iPhone 6S that it sells for $750. ($USD). In my mind, the iPhone's brand, the patents, &etc. that make up the (ahem) "intellectual property" are therefore worth about $500 to the consumer. You could make an assertion that 100% of that came from "California". So, perhaps the U.S. government and the state of California should get all the taxes that get taken out of that $500? What internationally agreed formula is there that apportions taxes out of that markup? What if Apple had a design lab in Ireland -- would that affect the answer? I don't know that any formula is crazy or sane, unfair or fair. I think the fairest thing is for everybody to agree on how to do it.

 

[weckart]

Maybe the United Kingdom will give Apple a better deal in the future now that they've decided to give the European Union the Middle Finger and a big NO THANKS to letting Brussels control their security, safety standards and mandatory taxes. Move Apple from Ireland to Northern Ireland. Problem solved (unless they decide to leave the UK in which case, I prefer the pubs in England better anyway ).

What would be the point if/when the UK loses access to the Single Market? Might as well move to the Cayman Islands.

The EU is broken - and Broke - socialist always go broke - so all they are doing is stealing more money to try to keep it afloat. If I was Apple I would close all locations in the EUand open about 10 more locations in England and non EU nations in Europe

Most member state governments are right wing, including Germany. Your strategic suggestion shows why you are not the CEO of anything. So much emotion and so little logic. Access to the Single Market is the key for Apple.

 

[jnpy!$4g3cwk]

Because let's face it, if Apple really CARED about countries or people, they would have kept manufacturing in the USA. They're making such monster profits, they could easily have 100% of production here and still make a hell of a lot of money,

I always thought that Apple moved manufacturing to China because secrecy was easier to enforce. It worked for a while; not so much any more.

Anybody care to guess what an iPhone would cost to produce if assembled in the USA? An article I read today said it costs <$250 in China.

Actually, here is an article that asserts that it would be $30-$40 more for assembly, $60-$80 total for the entire supply chain.

http://www.businessinsider.com/how-much-iphone-would-cost-made-in-the-us-price-apple-2016-6

 

[apolloa]

Indeed, they haven't. They employ too many lawyers to help them avoid that.
But this isn't a trial or even an indictment. It's effectively an invoice. EU to Ireland: "Make Apple pay your standard corporate tax rate". Simple as that.

That rate is 12.5% NOT 0.005% !!!

Why does the EU bother? Coz they're subsidizing Ireland's economy. Ireland receives more money from the EU each year then they contribute to the EU, hence, EU says to Ireland, "you're writing checks you can't cash". Or in this case, "make your domiciled shell companies pay the official tax rate".
http://www.publicpolicy.ie/eu-budget-ireland/

Exactly, subsidy money that is given to them from the pockets of every European member, and people won't know that hence with Tims arrogant attitude, they may lose sales in Europe.
Why is it people in here STILL don't understand the EU and EC and who they are, they aren't some bully boy who believe they can impose thunder down at whim, they are regulations and laws. If you join the EU as a member state then your do try and ANY company or corporation operating in yir country MUST obide by these same laws and regulations, it is not a choice and has been this way for years.

Fortunately here in Europe it's not seen that laws and regulations are optional things to follow if you want to but don't have to, they are enforced laws and regulations and the competition commission is one of the most enforced, Apple will very likely lose any appeal it will make no matter the lawyers they hire.