Apple FAQ responds to investor queries about $14.5B EU tax edict
Apple has posted a series of answers to questions about the European Commission's tax ruling, and appears to be unconcerned about any potential financial fallout.
As a result of the $14.5 billion ruling doled out by the E.U. regulatory agency, Apple notes in its posting that it not expecting any impact on its financial results, or will need to alter previous results. Apple also claims that it will not see any impact on its tax rate in the future.
Apple also notes that U.S. taxes related to the income in question have already been accrued.
The E.U. tax penalty is not expected to alter Apple's cash balance for the foreseeable future. It will deposit "some amount of cash" in an escrow account to hold for the ruling, but expects that it will be listed as "restricted cash" in quarterly earnings reports.
Both Ireland and Apple have announced intentions to file an appeal against the commission's ruling. While saying that it wants a speedy resolution to the matter, Apple expects that the appeal process will take several years.
On Tuesday, the European Commission handed down a record tax penalty, ordering Apple to pay 13 billion euros ($14.5 billion) to Ireland in back taxes, offset if other E.U. countries seek part of the pay-out. In its investigation, the regulatory group claimed that tax rates on European profits were illegally low at 0.005 percent in 2014, and 1 percent in 2003.
"The European Commission has launched an effort to rewrite Apple's history in Europe, ignore Ireland's tax laws and upend the international tax system in the process," Apple said in a statement about the ruling made early Tuesday. "The Commission's case is not about how much Apple pays in taxes, it's about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe."
As a result of the $14.5 billion ruling doled out by the E.U. regulatory agency, Apple notes in its posting that it not expecting any impact on its financial results, or will need to alter previous results. Apple also claims that it will not see any impact on its tax rate in the future.
Apple also notes that U.S. taxes related to the income in question have already been accrued.
The E.U. tax penalty is not expected to alter Apple's cash balance for the foreseeable future. It will deposit "some amount of cash" in an escrow account to hold for the ruling, but expects that it will be listed as "restricted cash" in quarterly earnings reports.
Both Ireland and Apple have announced intentions to file an appeal against the commission's ruling. While saying that it wants a speedy resolution to the matter, Apple expects that the appeal process will take several years.
On Tuesday, the European Commission handed down a record tax penalty, ordering Apple to pay 13 billion euros ($14.5 billion) to Ireland in back taxes, offset if other E.U. countries seek part of the pay-out. In its investigation, the regulatory group claimed that tax rates on European profits were illegally low at 0.005 percent in 2014, and 1 percent in 2003.
"The European Commission has launched an effort to rewrite Apple's history in Europe, ignore Ireland's tax laws and upend the international tax system in the process," Apple said in a statement about the ruling made early Tuesday. "The Commission's case is not about how much Apple pays in taxes, it's about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe."
Comments
This is where Tim shines. "Nope. Not paying a dime. We'll tie them up in appeals for years. We'll set aside some money, but you won't even notice it on the balance sheet."
What an absolute disgrace.
Check out how Spain, Portugal, Ireland, the Central european countries fared before entering the EU and look at their situation now.
You're in complete denial or a fool if you think they were better off without the EU
Like so many americans, you don't know what you're talking about
The UK is the "United Kingdom of Great Britain and Northern Ireland", with Great Britain being England, Wales and Scotland...
Put the EU pronouncement -- and all the joyous clapping -- into the category of "If wishes were horses....."
Move along. Nothing to see here.
No own currency, so much less tourist (main income) because no currency advantage. And in the end Germany (our schreckliches Merkel) has bought a lot of the last assets of Greece (airports / ports) for a very low price.
I think Apple/Ireland made lots of profit based on braking that law. Apple is rich as f**ck and I am getting sick when big corporations want more and more while the world goes to hell, rich become richer and middle class is disappearing. We are lucky for strong middle class and all the working-benefits in EU and most of that we have to thank to EU and I would like to keep that... So yes Apple you need to pay what you owe and please keep doing great products.
Does anyone believe this statement? The truth is that Apple needs Ireland as much as Ireland needs Apple. Apple don't reside in Ireland out of the goodness of their hearts. They do so because it's a great base to make money out of the European market.
If this is handled in a way that leaves the impression of Apple doing a money grab at any cost there will no doubt be even some long-time dedicated Apple consumers who modify their views on Apple. Then there are those who dislike Apple for whatever reason handled ammunition supporting claims of greed, perhaps increasing the number of "Apple-haters". What will Joe and Minnie think about it? Will the voices be loud enough to make any impact? I wouldn't have a clue, but the possibility of saving a penny to lose a pound should certainly be considered. It could be wiser in the long run just to pay up.
In any event this is going to be a balancing act, and the gymnasts better be really good.
The guy clearly doesn't control the situation, juggling with issues, creating non-existant amalgams, ...
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Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.
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The US may agree on the principle but still, but they also want to tax Apple when repatriating money earned and taxed in other parts of the world than the US
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In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.
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Value does not only come from R&D. In any case, Apple was not taxed on R&D but on some imaginary cost
Specifically, it's interersting to ltice that depending on the tax breaks that patents are taxed differently. In that case the EU is right to claim that tailored taxing has been ruled.
They always favor larger corporations which creates an unfair advantage over the smaller companies
In short: 0,005% is not 12,5%.
How about explaining that, in full, Mister Cook
What wealthy country, in their right mind, would want to stay in the EU if businesses operated in their country may suddenly be slammed with gigantic, retroactively calculated tax bills? I can't imagine any of the large EU economies feeling safe to take on foreign investment.
This doesn't even get into the precedent of large European firms that have a significant bases in the USA. Imagine if the USA levied such tax bills against BMW, Airbus or any number of significant european businesses with massive investments in the USA.