EU delays judgement on Apple's Irish tax deal as discovery proves 'time consuming'

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  • Reply 21 of 117
    melgrossmelgross Posts: 33,663member
    gatorguy wrote: »
    Apparently it was not public record per-se according to discovery documents. In public statements the corporate tax rate was quoted as 12.5%. In more recent articles it was thought Apple was actually paying closer to 2% due to "special arrangements". In actuality it was even less than that, and with a very significant percentage of Apple revenue completely shielded from any tax being collected since the Apple subsidiary involved answered to no taxing authority.

    As far as I'm concerned, that's perfectly fine. They weren't concealing anything though. They were doing what the authorities allowed them to do. Even now, each country in the EU can have its own tax law. This EU investigation itself is somewhat against the EU rules. They are just miffed. Perhaps they should be investigating their own big corporations that are doing this, as well as putting funds in third world countries that refuse to acknowledge tax laws anywhere.

    And perhaps the EU should finally become something other than a totally useless organization, with a central tax authority, which it doesn't have. It should also treat every country equally, which it doesn't do. Both France and Germany treat the EU as their playground, skirting laws and rules as it suits them. This needs to stop, even though It likely won't, because these two control the EU.
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  • Reply 22 of 117
    Quote:

    Originally Posted by singularity View Post





    Ireland joined the EEC in 1973. The EEC became the EU when the treaty of Mastricht came into affect in 1993. Thus the time period the alleged illegal state aid 1991-2007 is covered.



    Thank you for the info. More reading for those interested:  http://en.wikipedia.org/wiki/European_Economic_Community

     

    So are they only investigating now because, it seems, these arrangements with Ireland were not known/public and have only recently been discovered? If so, then I can't say I really object to the investigation (they don't care about my opinion anyway :P ).

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  • Reply 23 of 117
    gatorguygatorguy Posts: 24,686member
    melgross wrote: »

    But I have always believed that a business must do what is legal to reduce costs. When it comes to taxes, if it's legal, then there is a reason to do it. It seems as though the EU has "suddenly" found this arrangement, even though it's been in place for decades. As EU companies take these advantages when they can as well, I would like to seem them investigated too. Will that happen? Well, going by history, it's not likely.
    Fiat is being investigated. I think they were an EU company at the time of the alleged tax offenses.

    In any event the EU is looking closely at all the member countries tax policies looking for evidence of illegal state aid. Luxembourg and Belgium in particular are being scrutinized. From an EU Commission statement:

    "On 11 June 2014, the Commission opened under state aid rules formal investigations in three cases, respectively: Apple in Ireland, Starbucks in the Netherlands and Fiat Finance& Trade in Luxembourg. On 7 October 2014, the Commission opened another investigation regarding Amazon in Luxembourg. The probes examine whether Member States provide certain companies a selective advantage in the context of issuing a tax ruling."
    http://europa.eu/rapid/press-release_IP-15-4080_en.htm

    There's also an open case involving Hungary
    http://europa.eu/rapid/press-release_IP-15-4598_en.htm
    and another where Great Britain and an EU power provider's tax favors is the focus
    http://europa.eu/rapid/press-release_IP-15-4456_en.htm
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  • Reply 24 of 117
    melgrossmelgross Posts: 33,663member
    chelin wrote: »
    I think what is forgotten is that before Irlend JOINED the EU they were free to do whatever they wanted with their tax code. However upon joining they gained access to the entire EU market of half a billion people. What happened was that Apple and others consolidated their EMEA HQs on Ireland because they were and are being supported by the richer economies of Europe. Because Ireland decided to lower their corporate taxes and lure companies there whilst receiving funding for their infrastructure and other projects from EU.

    Now this in term means that Apple, Google, Microsoft etc. got subsidized by EU tax monies, I see nothing wrong with EU trying to regain these and give them to other places where they would be needed more.

    In case you haven't noticed, Ireland needs these funds more than most other EU countries, other than perhaps Greece, which is being bled dry by that very same EU.
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  • Reply 25 of 117
    melgrossmelgross Posts: 33,663member
    Marvin wrote: »
    I don't think they purposely added having no tax jurisdiction as an incentive. An incentive is offering a low tax rate and one that would be available to multiple companies (including Irish companies). Apple employs a lot of people in Ireland theses days:

    http://www.independent.ie/business/irish/25pc-of-apples-european-workforce-based-in-cork-30487720.html

    but this wouldn't have been the case when the business was setup.

    Just because something is legal at one point in time, if it is found to have been wrong in future then it can be backdated. If you commit murder, are acquitted and double jeopardy laws prevent you being convicted even when new evidence surfaces then removing double jeopardy laws would allow a court to try you again. If a tax avoidance scheme is removed and Apple is found to not have paid what other companies were expected to pay then they'd be perfectly right in asking for what was due. Apple knew the tax rates the whole time.

    When Apple setup in the US, they similarly agreed to a tax rate (which is nearly 3x Ireland's rate). Even if Apple pays Ireland the full rate, it's still one of the cheapest tax rates around. To get it lower, they'd have to go to a smaller population country but then they might not be able to hire the staff to work there.

    Whatever amount is due, it's a tiny fraction of what they have sitting in a bank account somewhere and it won't need to affect their Irish staff count.

    No tax authority is in agreement with tax avoidance:

    http://www.irs.gov/uac/Offshore-Tax-Avoidance-and-IRS-Compliance-Efforts

    This is using the law against its intent.

    I can't quite agree with the historical information you're giving. You need to remember that Apple had a manufacturing plant there at one time, long ago, that was a large one, and administrative, and distribution personnel for the entirety of Europe. They still have everything there except for the manufacturing.

    Bah, tax avoidance is an interpretive thing in many ways. As long as the law is followed, then it's fine. What we're seeing here is the EU looking for more funds, suddenly, and deciding that Ireland is going further than their other states in granting business tax accommodations. You can't treat a State the way you treat a corporation. If the state decides to do something, then it's legal. The problem with the EU is that it enforces what it wants to, and doesn't if it doesn't want to. And this is all controlled from France and Germany.

    Ireland has a population of around 5 million. It's pretty small.
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  • Reply 26 of 117
    chelinchelin Posts: 115member
    Quote:

    Originally Posted by melgross View Post





    In case you haven't noticed, Ireland needs these funds more than most other EU countries, other than perhaps Greece, which is being bled dry by that very same EU.

    If you are receiving money from someone is that person bleeding you dry? 

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  • Reply 27 of 117
    melgrossmelgross Posts: 33,663member
    gatorguy wrote: »
    Fiat is being investigated. I think they were an EU company at the time of the alleged tax offenses.

    In any event the EU is looking closely at all the member countries tax policies looking for evidence of illegal state aid. Luxembourg and Belgium in particular are being scrutinized. From an EU Commission statement:

    "On 11 June 2014, the Commission opened under state aid rules formal investigations in three cases, respectively: Apple in Ireland, Starbucks in the Netherlands and Fiat Finance& Trade in Luxembourg. On 7 October 2014, the Commission opened another investigation regarding Amazon in Luxembourg. The probes examine whether Member States provide certain companies a selective advantage in the context of issuing a tax ruling."
    http://europa.eu/rapid/press-release_IP-15-4080_en.htm

    There's also an open case involving Hungary
    http://europa.eu/rapid/press-release_IP-15-4598_en.htm
    and another where Great Britain and an EU power provider's tax favors is the focus
    http://europa.eu/rapid/press-release_IP-15-4456_en.htm

    Sure, an Italian company. I doubt much will happen. We can look at these investigations, which are very rate. Hungry as well. Same thing for Luxembougy and the Netherlands. It's all nonsense. France and Germany are secure from any major investigations. And when some occur there, they are quashed.

    Several years ago, when both France and Germany exceeded the rules for a -3% budget shortfall, and we're supposed to pay large fines to the EU as a result, what happened? Nothing. No fines were ever issued. But when smaller countries there have these problems, the heavy hand of the EU comes down on them.

    The EU is a scam. The entire purpose of it was to bring Germany into close relationship with France so that these two traditional enemies, which had numerous wars going back to the 1800's, would become too close to ever war again. It's worked too well. And then they bring countries into the EU which should never have been brought into it, just so they could expand their influence.

    The UK was smart to not buy into the banking union, tax union and the currency union.
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  • Reply 28 of 117
    asdasdasdasd Posts: 5,686member

    Then please explain to us how it does work because JBDragon sounds right on. Apple made a deal with Ireland, If Ireland did some funny stuff to land that deal, then this is Ireland's problem.

    Ireland will be fined. However if the "state aid" is considered illegal under EU law it would need to be repaid by the company that benefited. That's Apple.

    I don't agree with this but that's the explanation. Hence the 10-Q
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  • Reply 29 of 117
    asdasdasdasd Posts: 5,686member
    melgross wrote: »
    Sure, an Italian company. I doubt much will happen. We can look at these investigations, which are very rare. Hungry as well. Same thing for Luxembourg and the Netherlands. It's all nonsense. France and Germany are secure from any major investigations. And when some occur there, they are quashed.

    Several years ago, when both France and Germany exceeded the rules for a -3% budget shortfall, and we're supposed to pay large fines to the EU as a result, what happened? Nothing. No fines were ever issued. But when smaller countries there have these problems, the heavy hand of the EU comes down on them.

    The EU is a scam. The entire purpose of it was to bring Germany into close relationship with France so that these two traditional enemies, which had numerous wars going back to the 1800's, would become too close to ever war again. It's worked too well. And then they bring countries into the EU which should never have been brought into it, just so they could expand their influence.

    The UK was smart to not buy into the banking union, tax union and the currency union.

    What you say about the paucity of fines imposed on the French and Germans is very very true.
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  • Reply 30 of 117
    ericthehalfbeeericthehalfbee Posts: 4,489member
    Quote:

    Originally Posted by lkrupp View Post

     



    Well that’s not how it works.


     

    No, I think that's EXACTLY how it works. Tax laws change all the time and all that matters is if you are obeying the laws in the year to which they applied.

     

    Have you never filed income tax before? Tax breaks come and go and something I was able to write off this year may not be available next year. I was able to write off almost $30K in tools/equipment back in 2008 and if resulted in me getting a $3K refund (as opposed to paying $2K). The tax break I used no longer exists, but it hasn't affected me because it existed in the year I filed.

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  • Reply 31 of 117

    Ireland/EU's problem. Not Apple's problem, because this is ex post facto. Nothing to see here. If Apple gets screwed for making a deal with Ireland, then all that does is poison the attractiveness of Ireland as a place to do business. EU & Ireland can make new rules going forward, which is just and transparent.

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  • Reply 32 of 117
    Quote:

    Originally Posted by lkrupp View Post

     



    Well that’s not how it works.


     

    Actually, it is.

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  • Reply 33 of 117
    asdasdasdasd Posts: 5,686member
    melgross wrote: »
    As far as I'm concerned, that's perfectly fine. They weren't concealing anything though. They were doing what the authorities allowed them to do. Even now, each country in the EU can have its own tax law. This EU investigation itself is somewhat against the EU rules. They are just miffed. Perhaps they should be investigating their own big corporations that are doing this, as well as putting funds in third world countries that refuse to acknowledge tax laws anywhere.

    And perhaps the EU should finally become something other than a totally useless organization, with a central tax authority, which it doesn't have. It should also treat every country equally, which it doesn't do. Both France and Germany treat the EU as their playground, skirting laws and rules as it suits them. This needs to stop, even though It likely won't, because these two control the EU.

    The 12.5% is legal. Less than that is state aid because other companies in Ireland don't benefit. Or so the argument goes.
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  • Reply 34 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    You're right. How can you enter into contracts or agreements if another body can come along at any time in the future and declare it invalid? Worse, I don't think anyone knows or can say whether something is valid until it's tested in court or whatever this process is and you can't do that until you've made the prospective transgression?

    I think the clue is in the article, where they refer to rule of law. It seems that the quest for justice has been completely lost and replaced with law. Law was originally intended as a tool for justice. It has become an end in itself. Law, a tool for justice, has therefore killed any real possibility of justice.

    As for taking longer than they originally planned, I doubt a member of the EU can work out what chair to sit in at a restaurant before everyone else has finished their desserts.

    That's politics! ????
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  • Reply 35 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    Ireland/EU's problem. Not Apple's problem, because this is ex post facto. Nothing to see here. If Apple gets screwed for making a deal with Ireland, then all that does is poison the attractiveness of Ireland as a place to do business. EU & Ireland can make new rules going forward, which is just and transparent.

    Might be worth Ireland's time to exit the EU and continue to receive the benefit of billions of dollars held in their country by more companies than just Apple. To hell with them if they agree with this EU attempt to extort Apple.
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  • Reply 36 of 117
    gatorguygatorguy Posts: 24,686member
    Might be worth Ireland's time to exit the EU and continue to receive the benefit of billions of dollars held in their country by more companies than just Apple. To hell with them if they agree with this EU attempt to extort Apple.
    I don't think Ireland is receiving much benefit from it are they? A few million at best? Even the money itself is reportedly deposited in US banks for the most part instead of benefiting Irish financial institutions.
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  • Reply 37 of 117
    SpamSandwichspamsandwich Posts: 33,407member
    gatorguy wrote: »
    I don't think Ireland is receiving much benefit from it are they? A few million at best? Even the money itself is reportedly deposited in US banks for the most part instead of benefiting Irish financial institutions.

    According to this, Ireland benefitted to the tune of $11.5 billion in 2009-10: http://www.thepositiveeconomist.com/foreign-direct-investment-and-multinationals-–-irish-exporters-or-ireland-based-exporters/

    You're hugely underestimating the value of all this foreign investment.

    Ireland's Industrial Development Agency: http://www.idaireland.com
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  • Reply 38 of 117
    MacPromacpro Posts: 19,865member
    melgross wrote: »


    The UK was smart to not buy into the banking union, tax union and the currency union.

    Amen to that!
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  • Reply 39 of 117
    asdasdasdasd Posts: 5,686member
    According to this, Ireland benefitted to the tune of $11.5 billion in 2009-10: http://www.thepositiveeconomist.com/foreign-direct-investment-and-multinationals-–-irish-exporters-or-ireland-based-exporters/

    You're hugely underestimating the value of all this foreign investment.

    That's from the guys paying the 12.5%
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  • Reply 40 of 117
    asdasdasdasd Posts: 5,686member
    Ireland/EU's problem. Not Apple's problem, because this is ex post facto. Nothing to see here. If Apple gets screwed for making a deal with Ireland, then all that does is poison the attractiveness of Ireland as a place to do business. EU & Ireland can make new rules going forward, which is just and transparent.
    Apples 10-Q form begs to differ.
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