Apple could owe over $8 billion in European taxes, new estimate indicates

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Apple could owe in excess of $8 billion in back taxes after the conclusion of a European Commission investigation into its Irish tax dodges, a new estimate suggests.




Apple pays about 1.8 percent in taxes on the revenue it generates outside the U.S., not even the 2.5 percent figure normally cited, according to Bloomberg Intelligence. If the Commission finds against Apple, the company could end up paying 12.5 percent on the $64.1 billion in profits it took in between 2004 and 2012.

The Commission has been investigating a collection of multinational corporations and European governments, accusing the latter of breaking rules against state aid by offering special tax incentives to the multinationals. A recent ruling against Belgium will see a group of 35 companies pay back $765 million.

Until recently Ireland was infamous for tax loopholes allowing companies like Apple to funnel billions in revenue from other countries yet avoid paying normal local or foreign taxes. The Irish government is working to close some of those loopholes, but could still face reprimands from the Commission, which has been investigating the country since 2014.

A ruling was recently delayed and now isn't expected to be issued until at least March.

Apple CEO Tim Cook has repeatedly insisted that his company follows the law and pays everything it owes. In a 60 Minutes interview the executive complained about U.S. politicians scrutinizing Apple's tax dodges, calling the allegations "total political crap."
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Comments

  • Reply 1 of 114
    I recommend Apple sue both the EU and the Irish government for damages, plus file a formal complaint seeking sanctions against the EU by the WTO.
    latifbptallest skil
  • Reply 2 of 114
    ...this was news 2 years ago. Nothing new has happened, aside from EU deciding to postpone the case against Apple (probably because they figured they didn't have one...). They are picking on "easier" targets first like Amazon and Google.
    "according to an analysis by Bloomberg Intelligence"

    Yeah right... planted by someone with an agenda like all the other trash.

    ...and by the way, Apple has been setting more than plenty aside for potential tax claims for years. So even if they were to pay, that would come from prior years income statements.

    edited January 2016 latifbp
  • Reply 3 of 114
    rob53rob53 Posts: 2,647member
    I recommend Apple sue both the EU and the Irish government for damages, plus file a formal complaint seeking sanctions against the EU by the WTO.
    Sounds good to me. Apple followed EU and Irish law at the time so all the damages should be paid for by Ireland and the EU for writing stupid laws and not changing them years ago. At the same time, it might be a good time for the US government to look into "illegal" tax shelters being used by European companies as well as Asian companies--oh wait! they own the majority or the US anyway.
    tallest skil
  • Reply 4 of 114
    Ah another story followed by comments not understanding EU law about illegal state aid and who has to pay if found to be infringing.

    If and it still is a big if Apple is found to have benefited from state aid not allowed under EU law.  Apple has to pay back what is owed.. it is essentially a back dated demand on the taxes it should have paid (if it is found to be in the wrong).
    cnocbuijustbobf
  • Reply 5 of 114
    I don't appreciate how the author refers to Apple's "tax dodges."  The clearly has a negative connotation when Apple did NOTHING WRONG.  Apple received tax incentives from the Irish government.  If any party did something wrong, it was the Irish government and, if wrong, they should be sanctioned for it.  

    Apple can't undo having set up operations in Ireland premised on those incentives.  Apple kept their end of the bargain. The problem is these overspending governments looking for any possible source of funding to put off the inevitable reckoning that will come.
    Rayz2016JamesBBredraider11SpamSandwichfotoformatanantksundaramjbdragontallest skil
  • Reply 6 of 114
    rob53rob53 Posts: 2,647member
    Ah another story followed by comments not understanding EU law about illegal state aid and who has to pay if found to be infringing.

    If and it still is a big if Apple is found to have benefited from state aid not allowed under EU law.  Apple has to pay back what is owed.. it is essentially a back dated demand on the taxes it should have paid (if it is found to be in the wrong).
    No I don't understand EU law and for that matter US law doesn't make much sense either. On the flip side, it sounds like the corporation (Apple and others) is the only one that's at fault while Ireland gets off scot free. Why isn't Ireland punished as well? They're the ones who allowed it and approved the entire process used by Apple. 
    jbdragon
  • Reply 7 of 114
    TRUE

    If you take the child tax exemption, or the mortgage interest exemption on your annual taxes,
    you are NOT "dodging taxes".

    You are actually adhering to the current tax rules.

    If the author feels otherwise, then "Roger Fingas dodges taxes", every time he 
    uses the tax rules, to lower his tax liability.
    supadav03latifbp
  • Reply 8 of 114
    lukeilukei Posts: 358member
    The Irish government like others fought for these companies to do what they do. They did this by creating local tax deals. Dell is another company that took full advantage


  • Reply 9 of 114
    Oh government, they can't produce anything of their own so they use threat of force to steal money from people and corporations. 
    buzdotstallest skil
  • Reply 10 of 114
    I'd think the EU has bigger problems to worry about, but I suppose this Potemkin investigation distracts from their demographic and immigration issues. 
    tallest skil
  • Reply 11 of 114
    cnocbuicnocbui Posts: 3,613member
    I recommend Apple sue both the EU and the Irish government for damages, plus file a formal complaint seeking sanctions against the EU by the WTO.
    What damages?
    stevierevenantjustbobf
  • Reply 12 of 114
    boltsfan17boltsfan17 Posts: 2,274member
    Even if the EU rules against Ireland/Apple, this will be drawn out in court for a long time. Ireland will appeal the ruling if it goes against them. 
    anantksundaram
  • Reply 13 of 114
    frankiefrankie Posts: 378member
    Oh government, they can't produce anything of their own so they use threat of force to steal money from people and corporations. 
    Apple among hundreds of other businesses pretending to be based overseas, along with most billionaires, should never have be able to do the accounting tricks they do anyway. 

    But then I would guess you're fine with them not paying the same rates as the rest of us.
    edited January 2016 cnocbuisteviejustbobf
  • Reply 14 of 114
    frankiefrankie Posts: 378member
    williamh said:
    I don't appreciate how the author refers to Apple's "tax dodges."  The clearly has a negative connotation when Apple did NOTHING WRONG.  Apple received tax incentives from the Irish government.  If any party did something wrong, it was the Irish government and, if wrong, they should be sanctioned for it.  

    Apple can't undo having set up operations in Ireland premised on those incentives.  Apple kept their end of the bargain. The problem is these overspending governments looking for any possible source of funding to put off the inevitable reckoning that will come.
    Depending on the tax laws you might be right, but then again corporations should be allowed to BUY our government and write laws that benefit them in the first place.

    Government in and of itself isn't the problem, multi-billions $ corps and billionaires BUYING the government is.
    drunkzombiesteviejustbobf
  • Reply 15 of 114
    cnocbuicnocbui Posts: 3,613member
    Even if the EU rules against Ireland/Apple, this will be drawn out in court for a long time. Ireland will appeal the ruling if it goes against them. 
    If they appeal, I as a put-upon tax payer will ask them loudly why they are doing so as it isn't in my interests nor those of other Irish tax payers that the large US multinationals continue to get away with this unbelievable rort.

    This shouldn't just be about Apple, but all the companies that have had their snouts in the trough.
    justbobf
  • Reply 16 of 114
    gatorguygatorguy Posts: 23,171member
    TRUE

    If you take the child tax exemption, or the mortgage interest exemption on your annual taxes,
    you are NOT "dodging taxes".

    You are actually adhering to the current tax rules.
    What if you take the mortgage interest exemption on a home you don't actually live in? 
    edited January 2016 justbobf
  • Reply 17 of 114
    jungmarkjungmark Posts: 6,869member
    It was legal and allowed. The EU is crying foul because they need money for bailouts. 
    jbdragontallest skil
  • Reply 18 of 114
    Even if the EU rules against Ireland/Apple, this will be drawn out in court for a long time. Ireland will appeal the ruling if it goes against them. 
    On the assumption Apple/Ireland are found guilty then appealing will drag it out but it is unlikely to change the outcome. On a guilty verdict Ireland has 30 days to appeal.
    justbobf
  • Reply 19 of 114
    frankie said:
    Apple among hundreds of other businesses pretending to be based overseas, along with most billionaires, should never have be able to do the accounting tricks they do anyway. 

    But then I would guess you're fine with them not paying the same rates as the rest of us.
    I'm fine with Apple using whatever legal means possible to pay as little in taxes as possible. Apple is just trying to save a buck just like all of us when we do our taxes. That's what their accountants get paid to do. Isn't that why people hire HR Block? Whabever Apple has to pay in taxes just gets passed on to the consumer.
    icoco3jbdragontenly
  • Reply 20 of 114
    rob53rob53 Posts: 2,647member
    gatorguy said:
    TRUE

    If you take the child tax exemption, or the mortgage interest exemption on your annual taxes,
    you are NOT "dodging taxes".

    You are actually adhering to the current tax rules.
    What if you take the mortgage interest exemption on a home you don't actually live in? 
    I have been doing this for years but it's used in the business income section (rental property). Again, it all depends on how honest you are and how much you understand the (insane) US tax code. I try to be as honest as I can, only taking exemptions and deductions I am allowed by law to take. I also keep all my tax information so I should be able to handle an audit. My question about this whole fiasco is whether Apple has been audited and, if so, how the audit came out. If they were audited and were able to justify every single entry, then why is the EU coming back at them? If they failed the audit, then they pay the penalty but I don't remember reading about any failed audit. I've only read about the EU realizing that they've messed up and didn't have their tax act together. Loopholes aren't part of a tax code, they're simply a method someone uses to minimize their tax liability. There are plenty of tax lawyers in the US who's only job is to find creative methods to minimize a person's or company's tax liability. 
    cornchip
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