Apple denies dodging EU taxes, receiving special treatment from Irish authorities

Posted:
in General Discussion edited October 2015
As a European Union investigation into the tax arrangements of a number of multinational companies -- including Apple, Starbucks, and Fiat -- gets underway, Apple has issued a statement in which the iPhone maker categorically denied any wrongdoing.

European Commission HQ


"Apple pays every euro of every tax that we owe," the company told Bloomberg. "We have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland."

Together with the American coffee chain and Italian automaker, Apple is facing an investigation by the European Commission into whether the corporations' tax arrangements -- Apple's in Ireland, Starbucks's in the Netherlands, and Fiat's in Luxembourg -- comply with EU rules concerning state aid. According to the policy, tax agreements that selectively favor certain companies are incompatible with the "EU Single Market" and should not be allowed.

Wednesday's statement is similar to remarks made by Apple chief Tim Cook in advance of a hearing before the U.S. Senate last year. That hearing was called to investigate the process by which major U.S.-based corporations keep profits earned overseas offshore, avoiding the costly tax bill that would come with repatriation.

"I can tell you unequivocally," Cook said at the time, "Apple does not funnel its domestic profits overseas. We don't do that. We pay taxes on all the products we sell in the U.S., and we pay every dollar that we owe. And so I'd like to be really clear on that."
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Comments

  • Reply 1 of 59
    crowleycrowley Posts: 5,901member
    I wish they wouldn't make carefully phrased, weaselly comments like this, it just makes then seem sleazy.

    Of course they're dodging taxes, using legal means.
    Of course they are exploiting conditions in Ireland that allow me to pay minimal tax due to the "controlling domicile" rule, even if other companies can also exploit that loophole.
    And of course they can claim to not fund their domestic profits into tax havens, they do that to their much larger international profits.

    The fact is that all this is legal, so the attempt to deflect just makes it look more like they have something to hide, whether they do or don't.
  • Reply 2 of 59
    steven n.steven n. Posts: 1,120member
    Quote:

    Originally Posted by Crowley View Post



    I wish they wouldn't make carefully phrased, weaselly comments like this, it just makes then seem sleazy.



    Of course they're dodging taxes, using legal means.

    Of course they are exploiting conditions in Ireland that allow me to pay minimal tax due to the "controlling domicile" rule, even if other companies can also exploit that loophole.

    And of course they can claim to not fund their domestic profits into tax havens, they do that to their much larger international profits.



    The fact is that all this is legal, so the attempt to deflect just makes it look more like they have something to hide, whether they do or don't.

     

    Of course they are NOT dodging taxing because they are using 100% (so far) legal means.

     

    Of course Ireland offers great deals to companies using 100% legal means that many companies take advantage of.

     

    It is sad the EU has so little control over fiscal policies of the member states all they can do is makeup laws that don't exist and cry about things while trying to lay the blame for their general incompetence at the feet of others.

  • Reply 3 of 59
    crowleycrowley Posts: 5,901member
    "Dodge" does not imply illegality. "Evade" is the word that implies illegality.

    Dodging, or any other synonym for avoidance is exactly what Apple is doing.
  • Reply 4 of 59
    SpamSandwichSpamSandwich Posts: 31,180member

    Hit 'em hard Apple, or they'll invade your offices and invent charges and fraudulent laws to extract money you do not owe.

  • Reply 5 of 59
    crowleycrowley Posts: 5,901member
    steven n. wrote: »
    It is sad the EU has so little control over fiscal policies of the member states all they can do is makeup laws that don't exist and cry about things while trying to lay the blame for their general incompetence at the feet of others.
    Cry me a river and give me strength, the EU is doing none of this! If they had intimate control of the tax policies of member states that would make it an entirely different institution, and it's got nothing to do with incompetence. They aren't making up laws, they aren't crying about anything and they aren't blaming anyone; they're holding an investigation.

    But hey, companies can do no wrong and governments can do no right, right? Sheesh!
  • Reply 6 of 59
    rob53rob53 Posts: 2,042member
    Quote:

    Originally Posted by Crowley View Post



    I wish they wouldn't make carefully phrased, weaselly comments like this, it just makes then seem sleazy.



    Of course they're dodging taxes, using legal means.

    Of course they are exploiting conditions in Ireland that allow me to pay minimal tax due to the "controlling domicile" rule, even if other companies can also exploit that loophole.

    And of course they can claim to not fund their domestic profits into tax havens, they do that to their much larger international profits.



    The fact is that all this is legal, so the attempt to deflect just makes it look more like they have something to hide, whether they do or don't.

    Why do you feel this way? Dodging taxes using legal means is not dodging taxes, it's paying the amount of taxes the law says they have to pay. What you're saying is analogous to saying the military is committing murder during war. International law says this is not murder as long as it's done following the rules. 

     

    If the EU wants to change the rules then the EU can attempt to get all the countries in the EU to settle on new tax laws but until they do, Apple is not (as far as I know and from what Apple is saying) breaking the law. Follow the law and quit trying to say Apple dodging taxes. There are plenty of legitimate tax dodgers in the US and UK to fill plenty of jails, let the US and EU go after them.

  • Reply 7 of 59
    Quote:

    Originally Posted by Crowley View Post



    I wish they wouldn't make carefully phrased, weaselly comments like this, it just makes then seem sleazy.



    Of course they're dodging taxes, using legal means.

     

    To me, you're using carelessly phrased comments.  'Dodging' seems to imply illegal.  As others have noted, tax avoidance is different than tax evasion.

     

    Minimizing their tax burden is fulfilling their fiduciary responsibility to their shareholders.  Evading taxes would be illegal.  Apple's just stating they are doing the former and not the latter - that's all.

  • Reply 8 of 59
    physguyphysguy Posts: 915member
    Quote:

    Originally Posted by Crowley View Post



    "Dodge" does not imply illegality. "Evade" is the word that implies illegality.



    Dodging, or any other synonym for avoidance is exactly what Apple is doing.

    How can you 'Dodge' something you don't owe in the first place?  Dodge or evade imply the same intent.  Apple is not 'avoiding' taxes either they are simply structuring their business the way the various lawmakers have pushed them to do so to be efficient.  There is no difference between this 'financial' engineering and mechanical engineering, other than the laws are man-made rather than imposed by physics.

     

    This is the fundamental problem with trying to do social engineering with taxes - unintended consequences.  These unintended consequence are then 'patched' with more complexity leading to additional unintended consequences.  High tax/ Low tax, either way, the system should be kept simple.  

  • Reply 9 of 59
    crowleycrowley Posts: 5,901member
    physguy wrote: »
    How can you 'Dodge' something you don't owe in the first place?
    Err, what? When I ride the dodgem cars, I swerve to avoid something in my normal path, that's dodging. When I'm playing rugby I dodge a player trying to tackle me by changing my running path, that's dodging. I don't owe the other dodgem or rugby player anything. Apple are dodging taxes by structuring their company in a way that is viewing the tax authority as an opponent, and which doesn't represent true economic activity - their headquarters isn't really in Ireland, yet all their international profits are lodged there, and their European iTunes sales don't really occur in Luxembourg, but they are reported there.
  • Reply 10 of 59
    crowleycrowley Posts: 5,901member
    To me, you're using carelessly phrased comments.  'Dodging' seems to imply illegal.
    I disagree, but I take the point that it could be ambiguous. But I think that reinforces my point that Apple are using language to try and "dodge" the issue, rather than facing it head on.
  • Reply 11 of 59
    hydrogenhydrogen Posts: 223member
    Quote:

    Originally Posted by rob53 View Post

     

    <...>

     

    If the EU wants to change the rules then the EU can attempt to get all the countries in the EU to settle on new tax laws <..>.


     

     

    By "all", you mean "including the British" ?

  • Reply 12 of 59
    dasanman69dasanman69 Posts: 12,980member
    hydrogen wrote: »

    By "all", you mean "including the British" ?

    All means all that's all all means.
  • Reply 13 of 59
    hydrogenhydrogen Posts: 223member
    Quote:
    Originally Posted by dasanman69 View Post





    All means all that's all all means.

     

     

    It's all right. You need to be non-american to understand what is a private joke, in this context ...

  • Reply 14 of 59
    anantksundaramanantksundaram Posts: 19,221member
    Quote:

    Originally Posted by Crowley View Post



    Cry me a river and give me strength, the EU is doing none of this! If they had intimate control of the tax policies of member states that would make it an entirely different institution, and it's got nothing to do with incompetence. They aren't making up laws, they aren't crying about anything and they aren't blaming anyone; they're holding an investigation.



    But hey, companies can do no wrong and governments can do no right, right? Sheesh!

    Your logic escapes me. If you are saying that governments are -- in this instance, three EU member states -- doing the right thing, and Apple has paid every euro it owes to the government, what the heck is 'dodgy' or 'weasel-y' here?

  • Reply 15 of 59
    512ke512ke Posts: 782member

    Government at every level has known about and condoned Apple and other companies repatriating their billions.

     

    This investigation is just for public show.

  • Reply 16 of 59
    steven n.steven n. Posts: 1,120member
    crowley wrote: »
    Cry me a river and give me strength, the EU is doing none of this! If they had intimate control of the tax policies of member states that would make it an entirely different institution, and it's got nothing to do with incompetence. They aren't making up laws, they aren't crying about anything and they aren't blaming anyone; they're holding an investigation.

    But hey, companies can do no wrong and governments can do no right, right? Sheesh!

    Of course the EU is crying over this trying to put the blame of their utter incompetence on the evil corporations. So they hold a public inquiry to show the "poor and down-trodden" they are trying to do good by their constituents. "See. It's not our incompetence that keeps the coffers dry, it is the evil companies not being moral"

    The US did the same thing about 1-2 years back.

    If the EU does not like how companies are using the laws THEY WROTE, change them. Grow a pair and stop crying his it's the evil corporations fault, accept blame and fix their messed up laws.
  • Reply 17 of 59
    mac_dogmac_dog Posts: 688member

    i don't get anything nefarious or dodgy about apple's response at all.

    they're just doing a little pre-emptive pr—before the msm & trolls pick it up and make this about apple being the bad guy.

    apple's following the law if you have problems with that, change the law.

  • Reply 18 of 59
    gilly33gilly33 Posts: 254member
    crowley wrote: »
    Cry me a river and give me strength, the EU is doing none of this! If they had intimate control of the tax policies of member states that would make it an entirely different institution, and it's got nothing to do with incompetence. They aren't making up laws, they aren't crying about anything and they aren't blaming anyone; they're holding an investigation.

    But hey, companies can do no wrong and governments can do no right, right? Sheesh!

    Yeah you bet governments can do no right. All these politicians including the ones here at home mismanaging the taxpayers trust and then finding all kind of ways to whine and grab money from corporations and then do what? Mismanage it all over again. Pity the fool who thinks EU or Congress has their best interest at heart. I lost confidence in these jokers a longtime ago.
  • Reply 19 of 59
    dickprinterdickprinter Posts: 1,060member
    Quote:

    Originally Posted by Crowley View Post





    Err, what? When I ride the dodgem cars, I swerve to avoid something in my normal path, that's dodging. When I'm playing rugby I dodge a player trying to tackle me by changing my running path, that's dodging. I don't owe the other dodgem or rugby player anything. Apple are dodging taxes by structuring their company in a way that is viewing the tax authority as an opponent, and which doesn't represent true economic activity - their headquarters isn't really in Ireland, yet all their international profits are lodged there, and their European iTunes sales don't really occur in Luxembourg, but they are reported there.

    There are thousands of U.S. corporations who are incorporated in the state of Delaware for that very reason; they offer lower corporate tax rates. I understand this issue with Apple is at a federal level but it's really no different.

     

    And you as a citizen, I'm sure, do your best to pay as little tax as possible. The tax man always was, is, and always will be the opponent. Are you willing to pay more taxes than the tax code, the way it is written, requires?

  • Reply 20 of 59
    woodbinewoodbine Posts: 83member
    The thing is that all these big companies pay their VAT bills to the country of sale, so VAT is not being avoided. VAT is a far larger tax component than corporation tax, which is what is being investigated.
    An individual can lessen their personal tax bill in many ways and many people do just this. Corporations are no different, except for their size and their spread across many countries. The rules are more complex and some countries offer more favourable tax regimes. So companies take advantage of this. Same reasoning for the individual and paying income tax, if there was a rule that allowed that individual to lessen their tax burden they would be very stupid not to use that rule.
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