Apple refuses Irish finance committee meeting for second time
Apple has declined a second invitation to a meeting with a finance committee in Ireland over the European Commission's $14 billion tax ruling, while Irish Finance Minister Michael Noonan has accused the regulator of making a politically motivated decision.
A letter sent by Apple to the Oireachtas all-party Finance Committee advised the company was refusing to meet and answer questions about its European tax affairs, according to the Irish Examiner, but no reason was provided for the lack of attendance.
This is the second time Apple has rejected invitations to attend hearings. High-ranking Apple executives including CEO Tim Cook were asked in the first invitation to attend by committee chairman John McGuinness, but Apple refused citing advice from legal counsel to avoid conduct that could compromise the appeals process.
In the letter, Apple director for EMEIA government affairs Claire Thwaites reiterated the iPhone producer's stance on the ruling, that its tax affairs were above board, and attacked the European Commission's decision.
"Apple abides by the law and we pay all the taxes we owe wherever we do business," writes Thwaites. "We believe Apple is the largest corporate income taxpayer in Ireland and we never asked for, nor ever received, any special deal on the taxes we pay."
"We believe Apple is subject to exactly the same laws as every other business in the country, and Irish Revenue has confirmed many times that they provided no special deal."
The Commission's ruling is compared in the letter to changing the rules of a game halfway through a match, if it is allowed to stand. While taxes "play an important role in our society," Thwaites claims the European Commission "got it wrong," and that the "attack on Irish sovereignty is dangerous."
"If the Commission's opinion is allowed to stand, Apple would pay 40 percent of all the corporate income tax collected in Ireland - this is unprecedented and, far from leveling the playing field, selectively targets Apple." The company is still confident the ruling had "no basis in fact or law," and will be overturned on appeal.
The letter also highlighted investments made in Ireland, with approximately 6,000 people now employed by Apple in the country, with 93 percent classed as EU citizens, and 44 percent as non-Irish nationals. Overall operations in Ireland are claimed to support a total of 18,000 jobs, with Apple spending close to 200 million euro ($215.8 million) with Irish companies in the last year.
Irish Finance Minister Michael Noonan advised to the Oireachtas Finance Committee the demand for Apple to repay the back taxes is an attempt by the Brussels-based regulator to extend the reach of its powers, according to the Irish Independent.
"There's a mix of tax law and politics being operated here," replied Noonan to the committee's questions. "I don't like to attribute motives to the Commission but there is a general move in the Commission as a whole to extend their power, to extend their remit, and I see this as part of that."
While the decision applies against Apple, Noonan suggests the political aspects of the move wasn't against the company, more one designed to isolate Ireland from the rest of Europe.
Noonan's comments echo similar sentiments from Irish tax advisor Feargal O'Rourke, who suggested the Commission's ruling was an ill-judged "land grab." The advisor to the government is also confident that Apple and Ireland can prevail in their appeals to the European Court of Justice, a process that could take up to five years to complete.
A letter sent by Apple to the Oireachtas all-party Finance Committee advised the company was refusing to meet and answer questions about its European tax affairs, according to the Irish Examiner, but no reason was provided for the lack of attendance.
This is the second time Apple has rejected invitations to attend hearings. High-ranking Apple executives including CEO Tim Cook were asked in the first invitation to attend by committee chairman John McGuinness, but Apple refused citing advice from legal counsel to avoid conduct that could compromise the appeals process.
In the letter, Apple director for EMEIA government affairs Claire Thwaites reiterated the iPhone producer's stance on the ruling, that its tax affairs were above board, and attacked the European Commission's decision.
"Apple abides by the law and we pay all the taxes we owe wherever we do business," writes Thwaites. "We believe Apple is the largest corporate income taxpayer in Ireland and we never asked for, nor ever received, any special deal on the taxes we pay."
"We believe Apple is subject to exactly the same laws as every other business in the country, and Irish Revenue has confirmed many times that they provided no special deal."
"We believe Apple is subject to exactly the same laws as every other business in the country" - Apple director for EMEIA government affairs Claire Thwaites
The Commission's ruling is compared in the letter to changing the rules of a game halfway through a match, if it is allowed to stand. While taxes "play an important role in our society," Thwaites claims the European Commission "got it wrong," and that the "attack on Irish sovereignty is dangerous."
"If the Commission's opinion is allowed to stand, Apple would pay 40 percent of all the corporate income tax collected in Ireland - this is unprecedented and, far from leveling the playing field, selectively targets Apple." The company is still confident the ruling had "no basis in fact or law," and will be overturned on appeal.
The letter also highlighted investments made in Ireland, with approximately 6,000 people now employed by Apple in the country, with 93 percent classed as EU citizens, and 44 percent as non-Irish nationals. Overall operations in Ireland are claimed to support a total of 18,000 jobs, with Apple spending close to 200 million euro ($215.8 million) with Irish companies in the last year.
Irish Finance Minister Michael Noonan advised to the Oireachtas Finance Committee the demand for Apple to repay the back taxes is an attempt by the Brussels-based regulator to extend the reach of its powers, according to the Irish Independent.
"There's a mix of tax law and politics being operated here," replied Noonan to the committee's questions. "I don't like to attribute motives to the Commission but there is a general move in the Commission as a whole to extend their power, to extend their remit, and I see this as part of that."
While the decision applies against Apple, Noonan suggests the political aspects of the move wasn't against the company, more one designed to isolate Ireland from the rest of Europe.
Noonan's comments echo similar sentiments from Irish tax advisor Feargal O'Rourke, who suggested the Commission's ruling was an ill-judged "land grab." The advisor to the government is also confident that Apple and Ireland can prevail in their appeals to the European Court of Justice, a process that could take up to five years to complete.
Comments
Yes!
However, this is stating the obvious. This is how they try to paint themselves as a victim in this process.
The reality is that they were 'selectively targeted' but along with a whole host of other companies. This should surprise no one. If you think tax evasion is being practised, you single out the biggest offenders first. It's the same all over the world. I may be wrong but I think there are around 300 companies currently under investigation.
Apple wasn't even the first in line.
http://europa.eu/rapid/press-release_IP-15-5880_en.htm
Apple says it paid all tax 'legally due' but ignores one of the key complaints aimed at them by the EU: that Apple's accounting setup allowed it to decide how much it would make available for taxation. So if they decided to make $100 out of $100,000,000 available for taxation they would pay all tax legally due on that sum.
We will see how things play out.
While I can believe either half if this, I can't believe both, and I'm more prone to believing the first half is true than the 2nd; either Ireland's tax code has loopholes bigger than Trump's ego or Apple did get some special treatment.
i'm not a tax lawyer, but IIRC you can incorporate a company in Ireland (so it can trade there ), but if it's HQ is not in Ireland , Irish tax law basically shrugs its shoulders and goes "I don't know where you should pay tax.". It effectively assumes tax will be paid where the HQ is. Most other countries assume you pay tax where you are incorporated. Combine that with transfer pricing used with other subsidiaries , and Apple can build up cash internationally from revenue made outside the US and not pay much tax on it until it moves that cash back into the US.
Almost any multi-national can structure to take advantage of it, and Apple has been set up that way since about 1979 or so
As for stamps of approval I would say if you are declaring and paying your taxes, that is the end of the story, until an investigation is launched and finds otherwise.
And as for bending over backwards, what are you referring to? If you have read the investigation summary you will know that, if anything, Apple bent over backwards to move money away from taxation.
unfortuately, in a lot of countries, tax agencies are allowed to reach back into the past and change the law (particularly when dealing with tax minimisation/evasion methods that might take years to properly investigate).
i think 10 years is just the EU cap, on how far back they are allowed to reach.
For me it's all 'corporate crap' and to say "hey, we provide employment to 6,000 people" almost as if it were a favour, just annoys me even more.
I'd much rather they just said we don't agree with the ruling and will appeal and let the courts decide.
My personal thinking is that mega corporations should be setting examples, not abusing their power.
Assuming that Apple has been following the law with its taxes, the ultimate problem lies in the tax laws that allow them to have such a sweet deal. It's not unlike Trump paying no taxes or Mitt Romney only paying 15% taxes - as far as I know, both were using the tax laws legally to minimize their tax liability. I am very jealous that they were able to do so, but I don't expect any person or corporation to voluntarily pay more than they have to. The issue is the laws that allow them to do this.
Perhaps the question is: Which law and how did he (and Apple) interpret that law?
Essentially the EU ruling is not so much directed at Apple as it is against Ireland saying that Ireland has broken EU laws by providing special tax breaks to Apple (and of course others). World wide there have always been tax havens. And, even within the U.S. there are states who provide tax havens -- in that case, corporations who do business and generate revenue in one state incorporate in a different state that has little or no taxation.
In the end, it's all about fairness, not laws... A good tax lawyer can always find a law to hide behind.
... OK, now that that's settled....
I guess everybody just wants a piece of the Apple pie...
In any case, this doesn't apply here since the law hasn't been changed, it just wasn't being followed.