Apple face HUGE tax bill (1 Viewer)

[Beaudreaux]

Not if it hurts other companies in said country.. which it has. Do you know how many Apple employees there are.. at least on paper in Ireland? 4000 and a huge chunk of them "appeared" suddenly after the EU opened up an investigation 5 years ago.

The EU investigated what a sovereign nation is doing within their own borders... and you seem to think that's not just okay, but needed and required?

How on earth is this in the best interest of Ireland? 4000 low paying jobs (mostly call centre jobs) that only recently poped up? Paying next to no taxes on 10s of billions in income, where as other companies in the same industry had to pay full taxes or far more than Apple (in %)? Who pays for this lack of income? Oh yea, the people of Ireland.

You'd have to ask the Irish government. They made that choice for a reason.

Yes and it is just as wrong.. it is basically corruption on a massive scale and spits in the face of the free market.

For you in the EU? Maybe. For us here in the US where we still have freedom and liberty? No, it's not bad at all. It's called competition between states. There's no corruption, and it's the very foundation of a free market - competition. I understand fully why socialists wouldn't be comfortable with this, because it puts at risk the gravy train of tax revenues to pay for the enormous government and all it's programs, and the nations that charge outrageous taxes cannot compete with other nations if the other nations aren't forced to impose the same level of outrageous taxes.

Yes, so now the UK can screw over its own taxpayers even more... right?

If you call reasserting their right to their individual freedom and liberty being screwed, then I guess so.

 

[Kal'Stang]

Boy the ruling is damaging to Apple and which ever baffon in Ireland that approved the deal..

The IRS in the US, should start their own investigation, but as far as I have heard the US will also fight this ruling... for the love of god....

European Commission - PRESS RELEASES - Press release - State aid: Ireland gave illegal tax benefits to Apple worth up to ?13 billion



Effective tax rate of 0.005% in 2014?!

And it is not like Ireland knew that this was wrong.. both Ireland and Apple stopped the arrangement last year.. if it was legal, then why stop it?

The quote in your post gave me an idea.

What could any government do if one, or even several major corporations teamed up to put a boat in international waters, where no country has control, and made it their headquarters? Hell, they could even build floating, or submerged, facilities out there.

 

[Beaudreaux]

The quote in your post gave me an idea.

What could any government do if one, or even several major corporations teamed up to put a boat in international waters, where no country has control, and made it their headquarters? Hell, they could even build floating, or submerged, facilities out there.

Or, they could do like China is doing, and make their own island.

 

[Lafayette]

The Guardian: "Apple hit by EU tax ruling"

Apple hit by EU tax ruling

Excerpt:

Apple is facing a $14.5bn fine from the European commission over unpaid back taxes, stemming from arrangements it made over nearly 25 years with the Irish government. The ruling found that Dublin afforded Apple illegal state aid, allowing the US tech company to pay as little as 1% corporate tax rate on two-thirds of its global earnings, and levies a heavier fine than expected. The result of the Irish arrangement was that Apple avoided tax on almost all profits from sales of its products across the EU’s single market by booking the profits in Ireland rather than the country in which the product was sold. Ireland’s finance minister said Dublin would appeal against the ruling, which columnist Owen Jones calls a vindication of protest.

It's about time the EU got around to Ireland's "case", which has been going on quite some time with not only Apple but a number of hi-tech American countries.

It is altogether far too facile a "come on" to offer lower taxation to foreign countries wishing to open up an EU "tax platform" in the country offering the best tax-break. This has been going on long-enough, and not only in Ireland. Luxembourg is another country that has been offering such enticing tax-cuts.

I mean no disrespect to the Irish people, having worked with them in the Irish offices of an American IT company. They are a hard-working people.

But the free ride is over. European countries pay for both the primary, secondary and tertiary Education as well as all National Health Care costs. These are fixed costs that no country can escape - so it seems unfair that any foreign company can pay lower corporate taxes in any given EU-country (in which it benefits from market commercialization of its products/services) whilst it is also paying pittance-taxes in Ireland. In most European countries, for example, companies like Apple will pay very little corporate taxes because it is not "officially" resident in the country - it is officially resident in Ireland for corporate taxation purposes.

Thus giving them an enormous tax-break since they pay no corporate taxes in Ireland either. Ireland is taking advantage of a "hole" in the EU common taxation-agreements.

Which is how, precisely, a good many American companies are suspected of "hiding/harboring" substantial funds in the EU. From Reuters: Big U.S. firms hold $2.1 trillion overseas to avoid taxes - excerpt:

The 500 largest American companies hold more than $2.1 trillion in accumulated profits offshore to avoid U.S. taxes and would collectively owe an estimated $620 billion in U.S. taxes if they repatriated the funds, according to a study released on Tuesday.​

The study, by two left-leaning non-profit groups, found that nearly three-quarters of the firms on the Fortune 500 list of biggest American companies by gross revenue operate tax haven subsidiaries in countries like Bermuda, Ireland, Luxembourg and the Netherlands. Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund used the companies' own financial filings with the Securities and Exchange Commission to reach their conclusions.

Technology firm Apple was holding $181.1 billion offshore, more than any other U.S. company, and would owe an estimated $59.2 billion in U.S. taxes if it tried to bring the money back to the United States from its three overseas tax havens, the study said.

 

[PeteEU]

The EU investigated what a sovereign nation is doing within their own borders... and you seem to think that's not just okay, but needed and required?

That sovereign nation agreed to trade regulations that include no state aid to individual companies. It is a fundamental part of the EU/EEC. The EU is within its right to investigate if said rules were broken, which they were. It is not the first country to get busted and not the last.

You'd have to ask the Irish government. They made that choice for a reason.

Yes and I would expect that the Irish government would investigate how such a deal could be put in place in the first place... I suspect bribes were involved. Reminds me of the LA County school board that bought massively expensive iPads instead of cheaper alternatives, only to find out that Apple could not deliver on their promises... sadly I suspect there was never an investigation into why they board chose that, but I again suspect massive bribes.

For you in the EU? Maybe. For us here in the US where we still have freedom and liberty? No, it's not bad at all. It's called competition between states. There's no corruption, and it's the very foundation of a free market - competition. I understand fully why socialists wouldn't be comfortable with this, because it puts at risk the gravy train of tax revenues to pay for the enormous government and all it's programs, and the nations that charge outrageous taxes cannot compete with other nations if the other nations aren't forced to impose the same level of outrageous taxes.

It is utter corruption and has nothing to do with competition.. it is in fact anti-competition. It has to do going to the lowest common denominator at the cost of the consumer and tax payer. You have seen it in the US many times, where companies have bullied themselves to massive bribes so to stay in a city.. and then after a few years changed their minds and moved to someone that was willing to include something even better. Hell you saw it in my own country 4 decades ago (and yes it pisses me off to this day), when Maersk bullied it self to a great tax deal with the Danish government under threat of moving the whole company to Hong Kong. It was disgusting then and it is now.. it is pissing up and down on the taxpayer and the competition.

If you call reasserting their right to their individual freedom and liberty being screwed, then I guess so.

And where are the rights and freedom/liberty of the people in general? They are being screwed big time by having their tax money go to subsidize big corporations that are massively profitable. Only winners here are the stock holders... which ironically until recently did not include Apple stock holders.

 

[PeteEU]

The quote in your post gave me an idea.

What could any government do if one, or even several major corporations teamed up to put a boat in international waters, where no country has control, and made it their headquarters? Hell, they could even build floating, or submerged, facilities out there.

Nationalise them or sink the facility. It has been tried before, and failed every time. Tax evasion like Apples, has to stop... but as long as the US and UK defend these disgusting leeches on society then not much will happen. Thank god we have the EU around to put some sense of justice back into the system. One thing people hate in Europe... tax dodgers.

 

[PeteEU]

But the EU needs to show its power and the large countries are envious of the commerce. So Ireland will bleed.

How on EARTH will Ireland bleed? They are looking at a 14 billion windfall!

The rules that made this possible have already been changed.. or did your biased sources forget to mention that to you? Yes they changed because of the investigation... It is time that these companies pay their fair share of taxes across Europe, instead of hoarding them in tax havens.

 

[Ikari]

If a country, say Ireland in this instance, wants to attract a large corporation to create jobs and revenues, long term, in their jurisdiction then they should have the power and ability to offer whatever incentives that they feel give them the competitive edge over other jurisdictions.

IMHO, that's why the EU is wanting to fine Apple and Ireland - to punish Ireland for doing what was on the best interest of Ireland.

We do the same thing here in the US, in that the individual states have the power to create whatever incentives they feel would attract businesses to open in their jurisdiction to create jobs and revenue for the state, including special tax rates, land deals, public money used as financing for the company, and many other incentives.

I see nothing, as far as what's been discussed here, that justifies being upset with Apple or Ireland. Maybe that's because I'm neither a Progressive, or Socialist, or believe in false and forced equality of outcome schemes like those the EU seems to love.

It's been stated already in this thread, but at the risk of repeating others, this is a perfect example of why the UK probably made the right choice with Brexit.

It would depend. Generally, yes a sovereign nation can make the deals it wants to attract the businesses it wants. but if that country signed treaty or contract with another country or governing body and agreed to a set of rules, then they are beholden to those rules. It's a two way street. They do have the right to make the decisions they want, but they are held to those decisions.

I don't know the nitty-gritty here. But if Ireland signed an agreement with the EU when becoming a member to obey rules and regulations as it relates to taxation on corporations and such, then they are beholden to those rules and the rulings of the EU. Ireland would have voluntarily ceded some of its power to the ruling body and promised to follow the rules there of. The EU has all sorts of crazy rules, I can't claim to know them, but this could be why the EU has legal footing in this case.

I suppose this will be appealed and then Europe will work it out in the courts.

 

[Kal'Stang]

Nationalise them or sink the facility. It has been tried before, and failed every time. Tax evasion like Apples, has to stop... but as long as the US and UK defend these disgusting leeches on society then not much will happen. Thank god we have the EU around to put some sense of justice back into the system. One thing people hate in Europe... tax dodgers.

Bold: Got any links?

And how would you nationalize em? By treaty law things in international waters are not able to be nationalized. And afaik governments sinking anything in national waters is also against treaty law and doing so can actually start wars.

And personally I see nothing wrong with "dodging" taxes in a legal way. Which technically isn't considered dodging taxes. I don't know of a single person that won't try to pay less in taxes if they can. Are all these people really "tax dodgers"?

 

[Henrin]

This is garbage and provides just another reason the EU should be disbanded.

 

[Henrin]

Nationalise them or sink the facility. It has been tried before, and failed every time. Tax evasion like Apples, has to stop... but as long as the US and UK defend these disgusting leeches on society then not much will happen. Thank god we have the EU around to put some sense of justice back into the system. One thing people hate in Europe... tax dodgers.

So you endorse people be attacked and have their property destroyed by governments for building in international waters to avoid tax policy? That's pretty insane, imho.

 

[Beaudreaux]

That sovereign nation agreed to trade regulations that include no state aid to individual companies. It is a fundamental part of the EU/EEC. The EU is within its right to investigate if said rules were broken, which they were. It is not the first country to get busted and not the last.



Yes and I would expect that the Irish government would investigate how such a deal could be put in place in the first place... I suspect bribes were involved. Reminds me of the LA County school board that bought massively expensive iPads instead of cheaper alternatives, only to find out that Apple could not deliver on their promises... sadly I suspect there was never an investigation into why they board chose that, but I again suspect massive bribes.



It is utter corruption and has nothing to do with competition.. it is in fact anti-competition. It has to do going to the lowest common denominator at the cost of the consumer and tax payer. You have seen it in the US many times, where companies have bullied themselves to massive bribes so to stay in a city.. and then after a few years changed their minds and moved to someone that was willing to include something even better. Hell you saw it in my own country 4 decades ago (and yes it pisses me off to this day), when Maersk bullied it self to a great tax deal with the Danish government under threat of moving the whole company to Hong Kong. It was disgusting then and it is now.. it is pissing up and down on the taxpayer and the competition.



And where are the rights and freedom/liberty of the people in general? They are being screwed big time by having their tax money go to subsidize big corporations that are massively profitable. Only winners here are the stock holders... which ironically until recently did not include Apple stock holders.

Maybe we'll see Irexit next. Sure would be cheaper than paying the frigging fine to stay in the EU. It has to make sense to be a member where the benefits outweigh the costs. From the sound of it, the cost for Ireland to play with the kids across the way may just be too high.

 

[Beaudreaux]

Apple: You can have taxes or you can have jobs, but you can't have both

Apple's official statement on the European Union ruling against its Irish tax arrangements tells you all you need to know about what is at stake: You can have taxes or you can have jobs, but Apple is in no mood to deliver both.

After learning Tuesday morning that the EU expects Apple to pay €13 billion (£11 billion, $14.5 billion) in back taxes, the company said, "It will have a profound and harmful effect on investment and job creation in Europe."

That is not a threat, technically. But it will be seen as one by EU politicians who want to attract new companies to their countries.

Back in 1991, Apple struck a tax deal with Ireland that was completely aboveboard and legal. The Irish government provided Apple with a "comfort letter" that said the company would pay very low rates of tax if it based its European operations in Ireland.

[...]

Kind of goes against the general tone of some in this thread.

 

[joG]

How on EARTH will Ireland bleed? They are looking at a 14 billion windfall!

The rules that made this possible have already been changed.. or did your biased sources forget to mention that to you? Yes they changed because of the investigation... It is time that these companies pay their fair share of taxes across Europe, instead of hoarding them in tax havens.

You really do not understand that? That would explain some of your professed opinions, but I really would have believed you might see such things as multi-period models. You see, if there is no more reason to be in Ireland it is not really good for the place. Why invest there, if they are as greedy as the EU. Why even Holland knew that and did similar deals with foreign companies.

Now Europeans want to betray the investors, who thought the commitments by national states were binding under rule of law. It is the typical EU sleaze, don't you think?

 

[jimbo]

That sovereign nation agreed to trade regulations that include no state aid to individual companies. It is a fundamental part of the EU/EEC. The EU is within its right to investigate if said rules were broken, which they were. It is not the first country to get busted and not the last.



Yes and I would expect that the Irish government would investigate how such a deal could be put in place in the first place... I suspect bribes were involved. Reminds me of the LA County school board that bought massively expensive iPads instead of cheaper alternatives, only to find out that Apple could not deliver on their promises... sadly I suspect there was never an investigation into why they board chose that, but I again suspect massive bribes.



It is utter corruption and has nothing to do with competition.. it is in fact anti-competition. It has to do going to the lowest common denominator at the cost of the consumer and tax payer. You have seen it in the US many times, where companies have bullied themselves to massive bribes so to stay in a city.. and then after a few years changed their minds and moved to someone that was willing to include something even better. Hell you saw it in my own country 4 decades ago (and yes it pisses me off to this day), when Maersk bullied it self to a great tax deal with the Danish government under threat of moving the whole company to Hong Kong. It was disgusting then and it is now.. it is pissing up and down on the taxpayer and the competition.



And where are the rights and freedom/liberty of the people in general? They are being screwed big time by having their tax money go to subsidize big corporations that are massively profitable. Only winners here are the stock holders... which ironically until recently did not include Apple stock holders.

Just a guess, but it would not surprise me if Ireland was the next country to leave the EU.

 

[joG]

Fair few other companies will be quaking in their boots if this bill is enforced on Apple. Who else would you prefer to see pay up unpaid taxes first?

IT will certainly be interesting to follow.

The aftermath is stimulating too.
- Apple had a firm commitment from a sovereign county and invested on the belief that countries in the EU were bound by contract and rule of law.
- Ireland and other members are not sovereign in fiscal matters under this court ruling.
- A number of members were only allowed to sign the EU treaties under the assumption that they maintained their sovereignty.
- Dealing with member states will lose attraction for international investors, if the rule of law does not refer to the member state's jurisdiction.
- Ireland (as well as Luxemburg and Holland and probably Austria) all maintained that they were bonafides partners in the tax negotiations in their countries. They did this with international counterparts, whom they seem to have defrauded of the taxes to now be paid.
- Countries without reliable rule of law must be treated as such by outside investors. This means they are less attractive as places of investment and thus require higher returns on investment id est only higher margin business can be invested in.

 

[joG]

It would depend. Generally, yes a sovereign nation can make the deals it wants to attract the businesses it wants. but if that country signed treaty or contract with another country or governing body and agreed to a set of rules, then they are beholden to those rules. It's a two way street. They do have the right to make the decisions they want, but they are held to those decisions.

I don't know the nitty-gritty here. But if Ireland signed an agreement with the EU when becoming a member to obey rules and regulations as it relates to taxation on corporations and such, then they are beholden to those rules and the rulings of the EU. Ireland would have voluntarily ceded some of its power to the ruling body and promised to follow the rules there of. The EU has all sorts of crazy rules, I can't claim to know them, but this could be why the EU has legal footing in this case.

I suppose this will be appealed and then Europe will work it out in the courts.

They are then no longer sovereign. That is the definitional consequence. There will be further consequences, however.

- The Bundesverfassungsgericht judged the EU treaties legal only under the assumption that the Bundestag remained sovereign in its decisions. That would no longer be a working hypothesis.
- Outside investors can no longer rely on contracts and deals negotiated with members of the EU reducing the relevance of member states.
- Investments in EU member states require higher ROIs than before, when rule of law was better.
- In an international court of arbitration an investor should be able to sue for the damages with a nation claiming to be a bonafides partner to a deal as that amounts to fraud.

 

[Ikari]

They are then no longer sovereign. That is the definitional consequence. There will be further consequences, however.

- The Bundesverfassungsgericht judged the EU treaties legal only under the assumption that the Bundestag remained sovereign in its decisions. That would no longer be a working hypothesis.
- Outside investors can no longer rely on contracts and deals negotiated with members of the EU reducing the relevance of member states.
- Investments in EU member states require higher ROIs than before, when rule of law was better.
- In an international court of arbitration an investor should be able to sue for the damages with a nation claiming to be a bonafides partner to a deal as that amounts to fraud.

Honestly, yes, in the EU the member-states aren't fully sovereign. Particularly any State foolish enough to have given up its own currency for the Euro.

But in general, this exists with every nation. The US makes treaty and contract and we are bound to that. We are free to engage in the treaty and contract we wish, but when we agree to the rules and oversight we have bound ourselves to the system. So too here. Ireland made the agreements, accepted the contracts, and now they are bound to them.

 

[PeteEU]

Just a guess, but it would not surprise me if Ireland was the next country to leave the EU.

What makes you think that the Irish people have the same opinion as their government?

 

[PeteEU]

Maybe we'll see Irexit next. Sure would be cheaper than paying the frigging fine to stay in the EU.

What fine?

It has to make sense to be a member where the benefits outweigh the costs. From the sound of it, the cost for Ireland to play with the kids across the way may just be too high.

You do understand that Ireland are owed 14 billion by Apple right?

 

[PeteEU]

So you endorse people be attacked and have their property destroyed by governments for building in international waters to avoid tax policy? That's pretty insane, imho.

Their property is only theirs because government allows it. Break the law, and the government can seize said property. What is insane, is that you seem to be defending tax cheats...

 

[Henrin]

Their property is only theirs because government allows it. Break the law, and the government can seize said property. What is insane, is that you seem to be defending tax cheats...

Facepalm.

 

[PeteEU]

Facepalm.

What you deny this? If the government comes and says, your land is now ours.. how exactly are you going to stop them? Through legal means?... legal means that government can control? Yea... grow the **** up.

So why do you support tax dodging scum?

 

[Henrin]

What you deny this? If the government comes and says, your land is now ours.. how exactly are you going to stop them? Through legal means?... legal means that government can control? Yea... grow the **** up.

So why do you support tax dodging scum?

Sigh. Your argument is really dumb. You're basically saying that I only own something until a thief comes and takes it from me. Of course in your case the thief is government and they can go out into international waters and destroy ****.

 

[PeteEU]

IT will certainly be interesting to follow.

The aftermath is stimulating too.
- Apple had a firm commitment from a sovereign county and invested on the belief that countries in the EU were bound by contract and rule of law.

Wrong. Apple does not have a firm commitment if you bothered to read the news. Ireland has said that it will appeal the decision because it wants to defend Irish corporate tax law.. not Apple.

- Ireland and other members are not sovereign in fiscal matters under this court ruling.

First off.. what court ruling? Again you have no clue on any matters.
Secondly,... yes they do. You do realize that they broke their own laws on subsidies right? Yes.. Irish law was broken.

A number of members were only allowed to sign the EU treaties under the assumption that they maintained their sovereignty.

What on earth are you babbling about now?

Dealing with member states will lose attraction for international investors, if the rule of law does not refer to the member state's jurisdiction.

LOL are you ****ing serious? Yes the rule of law is being enforced!. Apple got favourable tax benefits than any of its competitors. Investors will be glad that now the playing field is more level. I would not be surprised if there are going to be lawsuits starting up from pissed off Apple investors. You forget one thing... Apple stock is based in part on the money it has at hand.... which we now know is padded with illegal state aid.

Ireland (as well as Luxemburg and Holland and probably Austria) all maintained that they were bonafides partners in the tax negotiations in their countries. They did this with international counterparts, whom they seem to have defrauded of the taxes to now be paid.

Ireland broke EU law on illegal state aid.

Countries without reliable rule of law must be treated as such by outside investors. This means they are less attractive as places of investment and thus require higher returns on investment id est only higher margin business can be invested in.

Eerr investors like countries where the rule of law is enforced and no one or no company has special benefits.