"For hardware, the way I understand it Apple pays its tax in every EU countries then send the money into Ireland. So its a cash placeholder and it affects US Tax not EU tax. Ireland is a good place to hold cash because Apple can invest its cash and only pay 2% in tax to Ireland on the interest it makes.
For software and services, its another story, it looks like Apple is dodging EU taxes for everything itunes related.
The EU may have a case on itunes sales, but on hardware sales I dont see anything wrong with this."
It's not about hardware vs. software, nor is it "dodging" ...It's about physical location of sales. As far as VAT anyway, the following holds true (and I would imagine that other taxes would be similar) :
If the location of sales is a physical store within an EU country -- ie, a brick-and-mortar Apple Store or reseller, then the sale is booked in that country. If the sale is online, then it doesn't matter what country the buyer is in: the sale is made where the vendor has set up for the region (in this case, Ireland -- and the product is shipped from Ireland, anyway). It is not "dodging" to say that your online sales mechanism is based in and originates in Ireland. And of course, most of Apple's EU sales will be online sales, not made at physical stores.
I have a business in the Netherlands. I offer web services, and my business is conducted online. I have customers around the globe. If my customer is based in the EU, then I am obligated, as a Dutch resident, to charge him VAT -- at the Netherlands rate, for the Netherlands, not at my customer's national rate. My UK customer is contributing to VAT for the Netherlands. If my customer is outside EU, I do not add VAT. Just because Apple has an /nl online store doesn't mean it has anything to do with the Netherlands physically; whereas my "UK" services are subject to NL tax, because that is where I reside. Likewise, I file and pay corporate tax in NL, not in UK, even if I have customers there... because I do my work in the Netherlands, (even if I host a site in the UK -- in which case the host is subject to UK tax).
As an EU resident, you pay the VAT in the vendor's location. This is an EU wide agreement. Likewise, wouldn't the vendor pay corporate tax only in his location? It seems very simple.
Edited by krabbelen - 6/11/14 at 7:45am