No it didn't. Without the favourable tax rates here, probably most of the large corporations that have located here would have otherwise located to the UK. Ireland gained from employment and the income tax that the employees of foreign companies pay. The EU and OECD have got to wake up to the necessity for small countries and economies to offer better deals or economic gravity will just inevitably suck these companies to a common zone. Big cities in Europe are already too big, particularly London and Paris. You can only counter the trend for such great attractors to suck in all economic activity by skewing conditions in some way.
It's as well a question on proportions. Is it really worthwhile to relinquish a potentially earned tax of ca. $15 billion (or $30 if moved back to the U.S.) so that a few hundred jobs can get created in Irland. What would have been a fair tax rate considering the circumstances now? How good the deal really was for Irland vs. Apple. I guess the race to the bottom of the tax rate is real and this can't be the goal if you believe that taxes are a "necessary evil".
Apple is actually a bad example, but consider how a Starbucks imperium in Europe is basically not paying any taxes in Europe, while every little coffee shop is hit by relatively high taxes. Same is true for Amazon and bookstores. This is the anti-competitive element which has to be considered.
The FT article is incredibely shoddy, written with a very slanted point of view.
First the OECD has no power at all over the EC commission.
Second, the commission has been fighting so called state aids for at least 25 years, so it is not a new theory, it is one of the most important missions of the commission, free fut fair competition both between states and companies.
Third, the most fined countries over this have been France (often when trying to save near bankrupt companies to save employement) and Germany so they are hardly pushing for more.
Strangely, contrary to what the article state, Airbus was never fined, it is Boeing who alleged such misconducts over reimbursable research grants. Interestingly, WTO has found that Boeing was receiving illegal aids from US, especially over the military KC-767.
The truth is that Ireland (and Netherland for some extent) has been in hot waters for over 15 years for his tax policies, and the focus has been for the last 3 years on the internet giants. Apple had very very favorable agreements with Ireland in the past. Those were changed a bit when laws were changed around 2007, and the question is about if the new agreement is in fact legal. Apple risks to owe some backtaxes to Ireland, but the Irish governement would be fined at least twice the amount they will receive.
A point is clear about Apple though, they never redirected profits to a tax haven like Bermudas, unlike Google, Starbuck and al. The real fight is there, and EU has made some steps in that direction, even if it is still timid.
When I saw the Forbes title, I thought I had misread the publisher's name. Forbes (US) does not hesitate to rake Apple for sensationalist Web page hits. This article from a European Forbes author cleared away the purposefully sloppy, inaccurate reporting by the Financial Tines, Wall Street Jourbal, Business Insider and to some extent Apple Insuder.
Vladimir Putin has suddenly announced large financial sponsorship from 'secret American company' in order for new Soviet Union to complete it's work in the Ukraine and then swallow the rest of Europe shortly.
Since the EU hasn't yet released it's findings, including documents and details outlining Apple's tax negotiations in Ireland, it's a bit early to say no one did anything they perhaps should not have. Give it another couple of days for the details to be published.
No it isn't. Since no findings have been released, what it's actually too early for is to say that anyone did anything they should not have. That whole innocent until proven guilty thing.
No it isn't. Since no findings have been released, what it's actually too early for is to say that anyone did anything they should not have. That whole innocent until proven guilty thing.
You didn't read the post I was responding to did you.
Also note that the accusations aren't directed at Apple directly. The Irish government is in the crosshairs, altho they may then have a talk with Apple if things don't go their way. But as far as Apple and the EU this isn't about them specifically.
'Apple rode to riches totaling $137.7bn in offshore cash with the help of the Irish taxpayer'.
You do get the feel that the lucky Apple Irish deal shat on the whole economy of Europe.
When you get 3rd world tax incomes you become third world, which is maybe the way Europe will now head.
There is a call for lower corporate tax rates but when companies lie Apple pay something like 0.2%, that topic is smokescreen for the reality of this economic disaster.
Interestingly Obama's call for taxes would likely usefully repatriate EU earned money into US coffers.
Ireland has a very high tax income take, as it happens. So you don't get Third World services.
As it happens if Ireland is in the wrong here, it is either Ireland, or the US, which is owed the tax back. Not the EU - an entity which doesn't collect tax at all. ( It does get some remittances from countries after they apply tax but it doesn't directly get tax from any sovereign nation. There is no EU wide federal or income tax).
The FT article is incredibely shoddy, written with a very slanted point of view.
First the OECD has no power at all over the EC commission.
Second, the commission has been fighting so called state aids for at least 25 years, so it is not a new theory, it is one of the most important missions of the commission, free fut fair competition both between states and companies.
Third, the most fined countries over this have been France (often when trying to save near bankrupt companies to save employement) and Germany so they are hardly pushing for more.
Strangely, contrary to what the article state, Airbus was never fined, it is Boeing who alleged such misconducts over reimbursable research grants. Interestingly, WTO has found that Boeing was receiving illegal aids from US, especially over the military KC-767.
The truth is that Ireland (and Netherland for some extent) has been in hot waters for over 15 years for his tax policies, and the focus has been for the last 3 years on the internet giants. Apple had very very favorable agreements with Ireland in the past. Those were changed a bit when laws were changed around 2007, and the question is about if the new agreement is in fact legal. Apple risks to owe some backtaxes to Ireland, but the Irish governement would be fined at least twice the amount they will receive.
A point is clear about Apple though, they never redirected profits to a tax haven like Bermudas, unlike Google, Starbuck and al. The real fight is there, and EU has made some steps in that direction, even if it is still timid.
Yes, this is to investigate secret Government agreements between Ireland and Apple to avoid the tax rate of 12.5%. However as you said the same commission has investigated the larger countries of Europe and found that they have subsidised and allowed tax breaks for all their indigenous companies, without any fines.
Take for instance this report from PWC about France having an "effective tax rate" of 8.5% compared to it's headline tax rate of 33%.
In France the statutory corporate tax rate is 33.3% while the actual effective tax rate is lower than Ireland’s 12.5% at 8.2%.
Luxembourg has a statutory rate of 22.5% but an effective rate of just 4.1%. Ireland has a famously low statutory corporate tax rate of 12.5% but its effective rate according to the study is 11.9%.
Ok, its an Irish newspaper but the report is not from Ireland but from PWC and the World bank. Since Ireland's effective rate is about the same as it's declared rate, it means that - Apple aside - Ireland has no significant insider deals but France has pretty much deals with all companies, and I guess there are plenty of companies paying 0%. Typical Big country bullying, and an example of how the EU is a bit of a joke.
Ireland has a very high tax income take, as it happens. So you don't get Third World services.
As it happens if Ireland is in the wrong here, it is either Ireland, or the US, which is owed the tax back. Not the EU - an entity which doesn't collect tax at all. ( It does get some remittances from countries after they apply tax but it doesn't directly get tax from any sovereign nation. There is no EU wide federal or income tax).
Indeed, the EU claims that Ireland did not tax Apple (and other companies) in the correct way and as such Ireland got a anti-competitive advantage wrt the other EU member states in attracting companies. Many international companies have put their European HQ in Ireland because of the tax reasons. If things proceed as planned, Ireland might be forced to collect additional taxes and the advantage of putting the HQ in Ireland will get smaller.
The fact that Apple is mentioned, is circumstantial. Apple happens to be one of the biggest companies that make use of the Irish construction. As such the comparison in the article with Google and Microsoft is just irrelevant and a case of bad journalism.
For instance only one area on the world which produces fizzy wine can call it champagne.
It's worth noting that the one area in the world is called Champagne, France. In order for something to be named Champagne it should have been made in Champagne, France. That's a pretty important fact that you left out there in your attempt to make France look bad.
It's worth noting that the one area in the world is called Champagne, France. In order for something to be named Champagne it should have been made in Champagne, France. That's a pretty important fact that you left out there in your attempt to make France look bad.
Why? Names often become generic. Champagne isn't a brand name owned by a Company. It's a region. And a name for fizzy wine. It would be like Ireland ( or Scotland) claiming whiskey or whiskey as being only generated in either country as the name comes from Gaelic. Cheddar isn't restricted even though it originated in Cheddar Gorge in the UK. Feta is restricted although that cheese could be made anywhere.
Why? Names often become generic. Champagne isn't a brand name owned by a Company. It's a region. And a name for fizzy wine. It would be like Ireland ( or Scotland) claiming whiskey or whiskey as being only generated in either country as the name comes from Gaelic. Cheddar isn't restricted even though it originated in Cheddar Gorge in the UK. Feta is restricted although that cheese could be made anywhere.
With the EU the bias tends to be continental.
Let me try to follow your logic here.
- Champagne is a protected name.
- Countries like the US ignore that protection and use the name anyways.
- This becomes so common that the name becomes generic to future generations who are too ignorant to realize the origin of the name.
- The name becomes generic in the minds of Americans (not in France, mind you) and it's now unreasonable for France to continue to try to protect the name.
Great post, although I doubt anybody will read it. Tl;dr Apple can't be accused of illegal transfer pricing unless the price that Apple Ireland charges to Apple UK (etc.) retail is higher than the prices it charges to external resellers and it doesn't look like that is the case.
Great post, although I doubt anybody will read it. Tl;dr Apple can't be accused of illegal transfer pricing unless the price that Apple Ireland charges to Apple UK (etc.) retail is higher than the prices it charges to external resellers and it doesn't look like that is the case.
For more on the subject of transfer pricing. The royalties charged for licensing of intellectual property between divisions of the same company is ripe for abuse IMO, in large part because it's extremely difficult to prove/disprove the company's valuation of that IP. http://www.taxjustice.net/topics/corporate-tax/transfer-pricing/
- Countries like the US ignore that protection and use the name anyways.
- This becomes so common that the name becomes generic to future generations who are too ignorant to realize the origin of the name.
- The name becomes generic in the minds of Americans (not in France, mind you) and it's now unreasonable for France to continue to try to protect the name.
Did I get that right?
No you got nothing right. I didn't even mention America in my post. The EU restricts fizzy wine made outside that region of France being called Champagne, and that includes imports. It doesn't do so with Cheddar cheese, and Whisk(e)y. In general the bias is towards France in these things.
The US has also agreed to stop fizzy wine producers naming their produce Champagne, however thats only since 2006. However I googled that.
I suppose this restriction of trade is ok, for some reason.
The EU restricts fizzy wine made outside that region of France being called Champagne, and that includes imports. It doesn't do so with Cheddar cheese, and Whisk(e)y.
I believe 'sparkling wine' is the name you're looking for, but I digress.
Just because a region chooses not to protect a name doesn't invalidate those that do. If I invent something and choose not to patent it, that doesn't make Apple unreasonable for wanting to patent things to protect their inventions.
??
If the explanation of EU law is correct the Irish government can be held accountable (fined) for illegal state aid in promoting anti-competitive practices, and going back up to 10 years.
Comments
It's as well a question on proportions. Is it really worthwhile to relinquish a potentially earned tax of ca. $15 billion (or $30 if moved back to the U.S.) so that a few hundred jobs can get created in Irland. What would have been a fair tax rate considering the circumstances now? How good the deal really was for Irland vs. Apple. I guess the race to the bottom of the tax rate is real and this can't be the goal if you believe that taxes are a "necessary evil".
Apple is actually a bad example, but consider how a Starbucks imperium in Europe is basically not paying any taxes in Europe, while every little coffee shop is hit by relatively high taxes. Same is true for Amazon and bookstores. This is the anti-competitive element which has to be considered.
The FT article is incredibely shoddy, written with a very slanted point of view.
First the OECD has no power at all over the EC commission.
Second, the commission has been fighting so called state aids for at least 25 years, so it is not a new theory, it is one of the most important missions of the commission, free fut fair competition both between states and companies.
Third, the most fined countries over this have been France (often when trying to save near bankrupt companies to save employement) and Germany so they are hardly pushing for more.
Strangely, contrary to what the article state, Airbus was never fined, it is Boeing who alleged such misconducts over reimbursable research grants. Interestingly, WTO has found that Boeing was receiving illegal aids from US, especially over the military KC-767.
The truth is that Ireland (and Netherland for some extent) has been in hot waters for over 15 years for his tax policies, and the focus has been for the last 3 years on the internet giants. Apple had very very favorable agreements with Ireland in the past. Those were changed a bit when laws were changed around 2007, and the question is about if the new agreement is in fact legal. Apple risks to owe some backtaxes to Ireland, but the Irish governement would be fined at least twice the amount they will receive.
A point is clear about Apple though, they never redirected profits to a tax haven like Bermudas, unlike Google, Starbuck and al. The real fight is there, and EU has made some steps in that direction, even if it is still timid.
http://www.forbes.com/sites/timworstall/2014/09/29/the-european-commission-is-not-about-to-fine-apple-nor-even-to-accuse-the-company-of-anything/?partner=yahootix
I wonder who that could have been?
Since the EU hasn't yet released it's findings, including documents and details outlining Apple's tax negotiations in Ireland, it's a bit early to say no one did anything they perhaps should not have. Give it another couple of days for the details to be published.
No it isn't. Since no findings have been released, what it's actually too early for is to say that anyone did anything they should not have. That whole innocent until proven guilty thing.
Also note that the accusations aren't directed at Apple directly. The Irish government is in the crosshairs, altho they may then have a talk with Apple if things don't go their way. But as far as Apple and the EU this isn't about them specifically.
'Apple rode to riches totaling $137.7bn in offshore cash with the help of the Irish taxpayer'.
You do get the feel that the lucky Apple Irish deal shat on the whole economy of Europe.
When you get 3rd world tax incomes you become third world, which is maybe the way Europe will now head.
There is a call for lower corporate tax rates but when companies lie Apple pay something like 0.2%, that topic is smokescreen for the reality of this economic disaster.
Interestingly Obama's call for taxes would likely usefully repatriate EU earned money into US coffers.
Ireland has a very high tax income take, as it happens. So you don't get Third World services.
As it happens if Ireland is in the wrong here, it is either Ireland, or the US, which is owed the tax back. Not the EU - an entity which doesn't collect tax at all. ( It does get some remittances from countries after they apply tax but it doesn't directly get tax from any sovereign nation. There is no EU wide federal or income tax).
The FT article is incredibely shoddy, written with a very slanted point of view.
First the OECD has no power at all over the EC commission.
Second, the commission has been fighting so called state aids for at least 25 years, so it is not a new theory, it is one of the most important missions of the commission, free fut fair competition both between states and companies.
Third, the most fined countries over this have been France (often when trying to save near bankrupt companies to save employement) and Germany so they are hardly pushing for more.
Strangely, contrary to what the article state, Airbus was never fined, it is Boeing who alleged such misconducts over reimbursable research grants. Interestingly, WTO has found that Boeing was receiving illegal aids from US, especially over the military KC-767.
The truth is that Ireland (and Netherland for some extent) has been in hot waters for over 15 years for his tax policies, and the focus has been for the last 3 years on the internet giants. Apple had very very favorable agreements with Ireland in the past. Those were changed a bit when laws were changed around 2007, and the question is about if the new agreement is in fact legal. Apple risks to owe some backtaxes to Ireland, but the Irish governement would be fined at least twice the amount they will receive.
A point is clear about Apple though, they never redirected profits to a tax haven like Bermudas, unlike Google, Starbuck and al. The real fight is there, and EU has made some steps in that direction, even if it is still timid.
Yes, this is to investigate secret Government agreements between Ireland and Apple to avoid the tax rate of 12.5%. However as you said the same commission has investigated the larger countries of Europe and found that they have subsidised and allowed tax breaks for all their indigenous companies, without any fines.
Take for instance this report from PWC about France having an "effective tax rate" of 8.5% compared to it's headline tax rate of 33%.
http://www.irishexaminer.com/business/france-has-lower-effective-tax-rate-than-ireland-study-227320.html
In France the statutory corporate tax rate is 33.3% while the actual effective tax rate is lower than Ireland’s 12.5% at 8.2%.
Luxembourg has a statutory rate of 22.5% but an effective rate of just 4.1%. Ireland has a famously low statutory corporate tax rate of 12.5% but its effective rate according to the study is 11.9%.
Ok, its an Irish newspaper but the report is not from Ireland but from PWC and the World bank. Since Ireland's effective rate is about the same as it's declared rate, it means that - Apple aside - Ireland has no significant insider deals but France has pretty much deals with all companies, and I guess there are plenty of companies paying 0%. Typical Big country bullying, and an example of how the EU is a bit of a joke.
Ireland has a very high tax income take, as it happens. So you don't get Third World services.
As it happens if Ireland is in the wrong here, it is either Ireland, or the US, which is owed the tax back. Not the EU - an entity which doesn't collect tax at all. ( It does get some remittances from countries after they apply tax but it doesn't directly get tax from any sovereign nation. There is no EU wide federal or income tax).
Indeed, the EU claims that Ireland did not tax Apple (and other companies) in the correct way and as such Ireland got a anti-competitive advantage wrt the other EU member states in attracting companies. Many international companies have put their European HQ in Ireland because of the tax reasons. If things proceed as planned, Ireland might be forced to collect additional taxes and the advantage of putting the HQ in Ireland will get smaller.
The fact that Apple is mentioned, is circumstantial. Apple happens to be one of the biggest companies that make use of the Irish construction. As such the comparison in the article with Google and Microsoft is just irrelevant and a case of bad journalism.
The European Commission Is Not About To Fine Apple; Nor Even To Accuse The Company Of Anything
http://www.forbes.com/sites/timworstall/2014/09/29/the-european-commission-is-not-about-to-fine-apple-nor-even-to-accuse-the-company-of-anything/
For instance only one area on the world which produces fizzy wine can call it champagne.
It's worth noting that the one area in the world is called Champagne, France. In order for something to be named Champagne it should have been made in Champagne, France. That's a pretty important fact that you left out there in your attempt to make France look bad.
It's worth noting that the one area in the world is called Champagne, France. In order for something to be named Champagne it should have been made in Champagne, France. That's a pretty important fact that you left out there in your attempt to make France look bad.
Why? Names often become generic. Champagne isn't a brand name owned by a Company. It's a region. And a name for fizzy wine. It would be like Ireland ( or Scotland) claiming whiskey or whiskey as being only generated in either country as the name comes from Gaelic. Cheddar isn't restricted even though it originated in Cheddar Gorge in the UK. Feta is restricted although that cheese could be made anywhere.
With the EU the bias tends to be continental.
Short story: the EU is broke; Apple isn't.
They want Apple's money by fair means or foul
If the EU is broke, what is the US?
Don't use facts it will only confuse people when try want to rant. ????
We could start with the fact that Mr. Frost was comparing Europe to Apple, not to "the US".
But if you want to compare national debts, try also comparing GNP, to round things out a bit.
Why? Names often become generic. Champagne isn't a brand name owned by a Company. It's a region. And a name for fizzy wine. It would be like Ireland ( or Scotland) claiming whiskey or whiskey as being only generated in either country as the name comes from Gaelic. Cheddar isn't restricted even though it originated in Cheddar Gorge in the UK. Feta is restricted although that cheese could be made anywhere.
With the EU the bias tends to be continental.
Let me try to follow your logic here.
- Champagne is a protected name.
- Countries like the US ignore that protection and use the name anyways.
- This becomes so common that the name becomes generic to future generations who are too ignorant to realize the origin of the name.
- The name becomes generic in the minds of Americans (not in France, mind you) and it's now unreasonable for France to continue to try to protect the name.
Did I get that right?
Umm No: Forbes:
The European Commission Is Not About To Fine Apple; Nor Even To Accuse The Company Of Anything
http://www.forbes.com/sites/timworstall/2014/09/29/the-european-commission-is-not-about-to-fine-apple-nor-even-to-accuse-the-company-of-anything/
Great post, although I doubt anybody will read it. Tl;dr Apple can't be accused of illegal transfer pricing unless the price that Apple Ireland charges to Apple UK (etc.) retail is higher than the prices it charges to external resellers and it doesn't look like that is the case.
For more on the subject of transfer pricing. The royalties charged for licensing of intellectual property between divisions of the same company is ripe for abuse IMO, in large part because it's extremely difficult to prove/disprove the company's valuation of that IP.
http://www.taxjustice.net/topics/corporate-tax/transfer-pricing/
Quote:
Let me try to follow your logic here.
- Champagne is a protected name.
- Countries like the US ignore that protection and use the name anyways.
- This becomes so common that the name becomes generic to future generations who are too ignorant to realize the origin of the name.
- The name becomes generic in the minds of Americans (not in France, mind you) and it's now unreasonable for France to continue to try to protect the name.
Did I get that right?
No you got nothing right. I didn't even mention America in my post. The EU restricts fizzy wine made outside that region of France being called Champagne, and that includes imports. It doesn't do so with Cheddar cheese, and Whisk(e)y. In general the bias is towards France in these things.
The US has also agreed to stop fizzy wine producers naming their produce Champagne, however thats only since 2006. However I googled that.
I suppose this restriction of trade is ok, for some reason.
Ireland is part of the EU and has to comply to EU laws
The EU restricts fizzy wine made outside that region of France being called Champagne, and that includes imports. It doesn't do so with Cheddar cheese, and Whisk(e)y.
I believe 'sparkling wine' is the name you're looking for, but I digress.
Just because a region chooses not to protect a name doesn't invalidate those that do. If I invent something and choose not to patent it, that doesn't make Apple unreasonable for wanting to patent things to protect their inventions.
??
If the explanation of EU law is correct the Irish government can be held accountable (fined) for illegal state aid in promoting anti-competitive practices, and going back up to 10 years.
A plain English explanation can be read here:
http://euobserver.com/news/123083