Irish minister says EU probe into Apple tax dodges should reach finding by end of 2015

Posted:
in General Discussion edited October 2015
The Irish government has an "indication" the European Commission will decide whether its tax arrangements with Apple violated state aid rules by the end of the year, it was revealed on Monday.




Regardless of which way they go, the findings won't hurt Ireland, Finance Minister Michael Noonan told news agencies such as Bloomberg. The minister claimed that any findings against the country would be "based on very thin legal grounds" and challenged in the European Court of Justice.

Last year, however, the Commission issued a preliminary finding that Apple was receiving unfair tax breaks in exchange for putting jobs in the country. In 2013 Apple admitted that it had been paying an effective tax rate of less than 2 percent for the previous decade -- European Union regulations don't allow governments to favor individual corporations with special subsidies.

A number of businesses, including Apple, have exploited loopholes in Irish tax law to pay minimal taxes on billions in revenue funneled there from much larger markets around the world. Apple has consistently maintained that it's simply following the law, but that legality is currently in a shakier position, and the Irish government is working to close at least some of those loopholes.

In terms of jobs, Apple runs a variety of operations out of the Irish city of Cork, including administration, distribution, and manufacturing. In May, news emerged that Apple is considering a major expansion of local manufacturing.

If Apple is required to pay a standard tax rate of 12.5 percent, it could potentially reduce Apple's annual earnings by just under 10 percent unless the company finds another tax haven to funnel revenue through.
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Comments

  • Reply 1 of 39
    The Moon is a tax-free zone. As is the underwater city of Atlantis.
  • Reply 2 of 39
    solipsismysolipsismy Posts: 5,099member
    Why is the investigation into Apple, not the tax loopholes themselves? Since when are loopholes placed by the policy writers the fault of the companies that use them? Sure, many of them were put in place from lobbying by corporations, but considering how Apple has only recently started increasing their lobbying in recent years and how long these tax laws have been in place in Ireland, I don't see how Apple could be responsible for its existence.
  • Reply 3 of 39

    and the likes of Microsoft, Google, Adobe etc will be looking with a great deal of interest.

    Then the Atlantic version of the TTIP will make it all nice and cozy when the US decides to tax all companies that do any sort of business with the USA even if they have paid all their tax due in their country of domicile just to get even. (my impression of it anyway)

  • Reply 4 of 39
    MacProMacPro Posts: 19,778member
    solipsismy wrote: »
    Why is the investigation into Apple, not the tax loopholes themselves? Since when are loopholes placed by the policy writers the fault of the companies that use them? Sure, many of them were put in place from lobbying by corporations, but considering how Apple has only recently started increasing their lobbying in recent years and how long these tax laws have been in place in Ireland, I don't see how Apple could be responsible for its existence.

    Excellent point.
  • Reply 5 of 39
    MacProMacPro Posts: 19,778member
    The Moon is a tax-free zone. As is the underwater city of Atlantis.

    Mars is more in vogue.
  • Reply 6 of 39
    boltsfan17boltsfan17 Posts: 2,294member
    Quote:

    Originally Posted by sog35 View Post

     

     

    total and utter bullshit.

     

    Apple will make $50 billion in profits for FY2015.

     

    Are telling me they will charge Apple $5 billion in taxes?


    Actually, worst case scenario for Apple is they would have to pay a $19 billion if the EU probe found Ireland broke EU rules. Ireland is going to fight the EU if this happens, so this will end up being drawn out in the European Court of Justice for years. 

  • Reply 7 of 39
    boltsfan17 wrote: »
    Actually, worst case scenario for Apple is they would have to pay a $19 billion if the EU probe found Ireland broke EU rules. Ireland is going to fight the EU if this happens, so this will end up being drawn out in the European Court of Justice for years. 

    And if it no longer benefits Ireland they should abandon the Euro and the EU at the end of whatever legal wrangling occurs.
  • Reply 8 of 39
    frankiefrankie Posts: 381member
    These loopholes need to be closed for EVERYONE, not just Apple.

    And if they or anyone else owe taxes, as Im sure they do, than they should pay it just like the rest of us.
  • Reply 9 of 39
    dachardachar Posts: 330member
    Anything that distorts tax that should be due by such methods as licensing from one high tax country to a low tax country and thereby transferring profit made in one country to another needs addressing. This is why today the OECD / G20 countries made proposals to address tax avoidance by multinational companies. Governments across the world are finally waking up to the fact that they are being short changed. For example, it was reported by the BBC that in the UK Over 14 years Starbucks had 3 billion poounds of sales but paid less than 9 million pounds in corporation tax. As well as not paying the tax that should reasonably be due in the UK they also have an unfair advantage over local businesses who are unable to transfer profit abroad.
  • Reply 10 of 39
    boltsfan17boltsfan17 Posts: 2,294member
    Quote:

    Originally Posted by sog35 View Post

     

     

    Thats just a random bullshit number EU is spewing out.  No way on earth will they get even $1 billion from Apple.

     

    Worse case scenerio is a moon sized astroid hitting earth.


    I believe the $19 billion number is based on back taxes Apple would owe from the previous 10 years. That's of course if Ireland were to lose and they would have to recoup the taxes from Apple. Regardless, this will take years to be decided if Ireland loses and they fight it in court. 

  • Reply 11 of 39
    lol @ Ireland.
    And I'm part Irish.

    Apple abode by your laws, however poorly written.

    In other words, Apple has done nothing wrong.

    You may not like that you're not making as much off them as you'd want, but that's not Apples fault.

    You can either rewrite your laws to avoid confusion in the future or shut up.

    And no, rewriting your laws don't give you the right to charge backtracked that "would have been owed" if this law was in place then. You can only start fresh and move forward.

    Why? Because Apple abode by your laws and did everything they were supposed to do. Legally.

    The stupidity astounds.
  • Reply 12 of 39
    Quote:

    Originally Posted by digitalclips View Post





    Mars is more in vogue.

    Has Elon Musk mentioned what his tax policy will be if he does indeed become Supreme Martian Emperor?

  • Reply 13 of 39
    chadbagchadbag Posts: 2,008member
    Quote:

    Originally Posted by frankie View Post



    These loopholes need to be closed for EVERYONE, not just Apple.



    And if they or anyone else owe taxes, as Im sure they do, than they should pay it just like the rest of us.



    You do understand that the taxes that were owed under the law were paid. The question is if the law that set the taxes was "allowable" under EU rules.

     

    It is not a question of owing taxes at the moment, but the legality of the law that set the tax rates.

  • Reply 14 of 39
    aaarrrggghaaarrrgggh Posts: 1,609member
    [QUOTE]If Apple is required to pay a standard tax rate of 12.5 percent, it could potentially reduce Apple's annual earnings by just under 10 percent unless the company finds another tax haven to funnel revenue through.[/QUOTE]
    No, Apple's earnings assume paying US taxes on international profits (less international taxes).

    The only impact is that cash allocated for paying taxes when profits are repatriated partially goes to paying Irish taxes.
  • Reply 15 of 39
    jessijessi Posts: 302member

    Putting the word "Dodges" in the headline is dishonest, and tells us the writer is a leftist idiot who can't keep his ignorant assed socialist politics from bleeding over.

     

    The editor should have caught this.

     

    Shame on AI.

     

    This is why I take anything you write with a grain of salt.  Still not as bad as mac rumors tho.

  • Reply 16 of 39
    gatorguygatorguy Posts: 24,361member
    9secondko wrote: »
    lol @ Ireland.
    And I'm part Irish.

    Apple abode by your laws, however poorly written.

    In other words, Apple has done nothing wrong.

    You may not like that you're not making as much off them as you'd want, but that's not Apples fault.

    You can either rewrite your laws to avoid confusion in the future or shut up.

    And no, rewriting your laws don't give you the right to charge backtracked that "would have been owed" if this law was in place then. You can only start fresh and move forward.

    Why? Because Apple abode by your laws and did everything they were supposed to do. Legally.

    The stupidity astounds.
    Several posters are misunderstanding what this is all about. It's not a "loophole", tho there are plenty of them that need closing. The reason Apple is in the crosshairs in this instance is that someone in the Irish government made an unusual deal with them, not available to any other company, that had nothing to do with the tax laws themselves. Apple was offered a deal that reduced their tax-rate and no one else's. The end result was an effective rate of 2%. The EU says Ireland had no right to offer them such a special low rate in return for basing their EU operations there. Apple isn't the only company who worked out these side deals either. The EU is also after Starbucks and Fiat (I think) for similar private tax deals made with certain European governments.

    Those tax loopholes that several posters mention are something else entirely and actively exploited by not only Apple (over and above the private Irish deal) but also by Google, Microsoft, GE, and hundreds of other multinationals. IMHO those do need to be deal with too in fairness to the millions of individual taxpayers who pay significantly more percentage-wise.
  • Reply 17 of 39
    jfc1138jfc1138 Posts: 3,090member
    When you comply with a nation's implementation of it's tax regulations and the EU goes after that nation for their tax policy it's not really accurate to term Apples compliance with Irish regulations a "tax dodge". Heck even the EU looks at it as an Irish ,prohibited by EU rules, subsidy.
  • Reply 18 of 39
    latifbplatifbp Posts: 544member
    jessi wrote: »
    Putting the word "Dodges" in the headline is dishonest, and tells us the writer is a leftist idiot who can't keep his ignorant assed socialist politics from bleeding over.

    The editor should have caught this.

    Shame on AI.

    This is why I take anything you write with a grain of salt.  Still not as bad as mac rumors tho.
    And the AI editor is pissed people like you won't pay a subscription fee... pf! I keep trying to decide which Apple blog is the best, but you make a good point about journalistic integrity.
  • Reply 19 of 39
    softekysofteky Posts: 137member
    Perhaps Apple can buy its own sovereign island, move its headquarters there, and pay itself taxes every year. I'm sure that creates enough tax exceptions, import/export deal opportunities, currency hedges etc. to keep the rest of the world tied up and stumbling for the rest of the century.
  • Reply 20 of 39
    MacProMacPro Posts: 19,778member
    9secondko wrote: »
    lol @ Ireland.
    And I'm part Irish.

    Apple abode by your laws, however poorly written.

    In other words, Apple has done nothing wrong.

    You may not like that you're not making as much off them as you'd want, but that's not Apples fault.

    You can either rewrite your laws to avoid confusion in the future or shut up.

    And no, rewriting your laws don't give you the right to charge backtracked that "would have been owed" if this law was in place then. You can only start fresh and move forward.

    Why? Because Apple abode by your laws and did everything they were supposed to do. Legally.

    The stupidity astounds.

    Yep, Apple abided by the laws in that abode.
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