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

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Comments

  • Reply 21 of 114
    cnocbuicnocbui Posts: 3,613member
    jungmark said:
    It was legal and allowed. The EU is crying foul because they need money for bailouts. 
    If the EU rule against Ireland then it will be because it wasn't legal and wasn't therefore allowed.  That is the whole point of the investigation.

    This is about some very large companies having been given preferential tax deals that most other companies couldn't avail of.  This conferred a huge competitive advantage on the companies that got the special rates.  It has nothing to do with money needed for bailouts.  The term bailout is misnomer.  They aren't gifts, they are loans at ridiculous usurious interest rates.  The EU is actually profiting hugely from these so-called bailouts.

    Ireland was one of the 'lucky' recipients of one of these 'bailouts'.  The interest rate was a whopping 6% at a time when The ECB official rate was 1%.  Gee, thanks for the huge 'favour'.  The IMF stuck the boot in as well.  The EU reduced the rate to between 3.5 and 4% in mid 2011 but the IMF still were getting 5%.

    edited January 2016 gwydion
  • Reply 22 of 114
    rob53 said:
    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. 
    If Apple owe backtaxes then every other US company with their European HQ in Eire will be on the hook for money as well
    The list includes (and is not limited to)
    Google
    Microsoft
    Adobe

    Other low corporate tax countries include Luxemburg where Starbucks is located. (AFAIK)

    As for US law. This may have relevance.  If Microsoft are found guilty and have to release data held in Europe to the USA then it won't need a gazillion Harvard Law degrees to make the case for every US corporation liable for US Taxes whereever they earn a $$, pound, Euro, Yes, Yuan etc even if the company has paid local taxes. This is even if they don't bring the money back to the USA. According (As I understand it) to Congress US Federal law applies to every square inch of this planet and takes precidence over local laws.

    An awful lot of companies could be on the hook for an awful lot of money. Watch this space.


    justbobf
  • Reply 23 of 114
    Apple: We followed the law for our HQ in Ireland.

    EU: We realize you have followed the law between 2004 and 2012 but we want to retroactively change the law so that you can pay us more taxes. Ireland did not have the authority to give you that tax deal.

    Apple: Then sue Ireland for that amount of money. Not the corporations who follow its laws.

    Imagine the governments of North America doing this to it's citizens and corporations. There would be civil war 2.
    edited January 2016
  • Reply 24 of 114
    dacloodacloo Posts: 890member
    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.  
    Well... Apple did came up with this super complex construction, setup by many very expensive lawyers to do exactly do this: dodge taxes
    "Dodge" is the same as "avoiding". It doesn't refer to the activity being legal or illegal. It refers to their motive of setting up this construction.

    Personally I hope the law will change ASAP so their current setup becomes illegal.
    Apple will have to start paying taxes like anyone else. 
    steviejustbobfdasanman69
  • Reply 25 of 114
    asdasdasdasd Posts: 5,668member
    rob53 said:
    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.
    Apple will be accused of not following the law. 
  • Reply 26 of 114
    gatorguygatorguy Posts: 23,165member
    rob53 said:
    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. 
    Good post. Thanks. 
    latifbp
  • Reply 27 of 114
    croprcropr Posts: 1,050member
    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.
    Don't be so naive claiming that Apple did not do anything wrong.   When Apple made the arrangement with the Irish tax administration,  Apple was very well aware that there was a risk that the European Commission would consider this as state aid from the Irish government to Apple, which is an illegal practice in the EU.  Like any other multinational Apple has a group of highly specialized tax professionals and they decided to take the risk.   It went fine for a very long period until the European Commission started to have a closer look at all special tax arrangements between the tax administration of all its member states. 
    From an ethical point of view and as an owner of a European start up company, it is for me  very frustrating to see that big multinationals can close with "clever" tax rulings deals while I have to pay the taxes at the normal tariffs.

    singularitysteviejustbobf
  • Reply 28 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.
    1) Apple made a deal with Ireland for tax breaks in exchange for investment within that country.  I believe that both sides should fulfill their parts of the deal.  Apple doesn't "pretend to be based overseas."    Apple, like other large companies, has subsidiaries that sell and support their products in various countries.  The profits earned and taxes paid in each place should somehow represent the value added and expenses incurred in those places.  Obviously all the value is not necessarily added to the pile of components in the place that it is ultimately sold.  The iPhone may have been designed in California, assembled in China, supported in the country where it was sold, etc.  A lot of that value is in the software in the US (and presumably elsewhere too), and not in the guy who takes the finished product off the shelf and hands it to the end customer in Ireland.  So why should Apple pay taxes on the full net profit in a high tax country when most of the work was done elsewhere?  I know none of this interests you, Frankie, since governments are right, are just trying to help people, and they get the credit for all good that happens.

    2) Yes Frankie, I am fine with them not paying the same rates as the rest of us.  In the end, the customer pays for everything.  Do you naively believe that corporate taxes are not incorporated in the cost of things you purchase?
    latifbp
  • Reply 29 of 114
    gatorguygatorguy Posts: 23,165member

    rob53 said:
    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. 
    If Apple owe backtaxes then every other US company with their European HQ in Eire will be on the hook for money as well
    The list includes (and is not limited to)
    Google
    Microsoft
    Adobe

    Other low corporate tax countries include Luxemburg where Starbucks is located. (AFAIK)

    As for US law. This may have relevance.  If Microsoft are found guilty and have to release data held in Europe to the USA then it won't need a gazillion Harvard Law degrees to make the case for every US corporation liable for US Taxes whereever they earn a $$, pound, Euro, Yes, Yuan etc even if the company has paid local taxes. This is even if they don't bring the money back to the USA. According (As I understand it) to Congress US Federal law applies to every square inch of this planet and takes precidence over local laws.

    An awful lot of companies could be on the hook for an awful lot of money. Watch this space.


    According to the article you're commenting on 35 other companies have already been dinged recently for back taxes due to "special tax deals" they should never have received. Apple won't be the first nor only one, tho they may well be the biggest beneficiary and thus owe the most in taxes.
    steviejustbobf
  • Reply 30 of 114
    it's not a tax dodge - it's another EU money grab
    SpamSandwichtallest skil
  • Reply 31 of 114
    gatorguygatorguy Posts: 23,165member
    williamh said:
    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.
    2) Yes Frankie, I am fine with them not paying the same rates as the rest of us.  In the end, the customer pays for everything.  Do you naively believe that corporate taxes are not incorporated in the cost of things you purchase?
    Whether consumers end up paying a higher price to cover those corporate taxes on profits depends on buying that company's product(s). Do you think it's particularly fair (note I didn't ask legal) if Joe and Minnie, who may never buy Apple products, pay higher taxes themselves so that Apple doesn't have to? 
    edited January 2016 steviejustbobf
  • Reply 32 of 114
    jungmark said:
    It was legal and allowed. The EU is crying foul because they need money for bailouts. 
    The point is that these deals are (apparently) not in accordance with European rules with which member states have to comply. What is baffling is that it took the EU years to realise that.
    steviejustbobf
  • Reply 33 of 114
    When you take your view over the edge of your plate you might start to question why, from all subsidiaries in Europe, it is just the HQ in Ireland that is making any profit.
    All other subsidiaries are working with very little profit although they sell the product to the consumer.
    So Apple Ireland is collecting imense rates for services, patents and products from all the other subsidiaries that they can hardly stay profitable at all.
    In the US you get sued if you increase the price for - lets say e-books? But in Europe it should be legal that Apple asks for massively inflated (to my mind) rates for basic services from its own subsidiaries. I think all companies that use this procedure are walking a very fine line.

    singularitysteviejustbobf
  • Reply 34 of 114
    gatorguy said:
    williamh said:
    2) Yes Frankie, I am fine with them not paying the same rates as the rest of us.  In the end, the customer pays for everything.  Do you naively believe that corporate taxes are not incorporated in the cost of things you purchase?
    Whether consumers end up paying a higher price to cover those corporate taxes on profits depends on buying that company's product(s). Do you think it's particularly fair (note I didn't ask legal) if Joe and Minnie, who may never buy Apple products, pay higher taxes themselves so that Apple doesn't have to? 
    That's a good question.  My preference would be for everyone to get treated equally.  I don't like localities (or countries) making special deals to attract a business, sports stadium, etc on the premise that it will bring jobs, increase the tax base, etc. If some place wants to attract business, then make the place more attractive to business in general rather than penalize the folks that already happen to be there.  I think we're not too far apart on that.  In short, no, I don't think it is fair.

    My problem with this Apple thing is that the company (presumably) made a deal in good faith and it's unfair to retroactively retract the benefit that was the basis for the company's business decision to locate there.
    tenly
  • Reply 35 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.
    Sure. Apple, like many other companies didn't dodge taxes. EU should instead patch the law in order to make all these companies make up for the loss all these years.
    asdasd
  • Reply 36 of 114
    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.
    Absolutely agree about the improper use of "tax dodges." Unless Ireland audited Apple's tax return and business and found that Apple was attempting to avoid its Irish tax obligations, there's no "dodging" at all.

    There's a notion of "grandfathering" that goes into legal changes in order to either allow some previously legal action to continue after it had otherwise become illegal, or to restrict violations to those occurring after some specified date. In this situation we have the EU changing Irish tax law and retroactively finding Apple in violation. In a setup like this, everyone is at risk. 
  • Reply 37 of 114
    gwydiongwydion Posts: 1,083member
    jungmark said:
    It was legal and allowed. The EU is crying foul because they need money for bailouts. 
    EU has been ruling ilegal aids from states and regions in Europe since long time ago. It has nothing to do with bailouts and if found ilegal, it was not legal and alowed
    singularityjustbobf
  • Reply 38 of 114
    latifbplatifbp Posts: 544member
    frankie said:
    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.
    Government officials don't have to allow themselves to be bought. President Truman always said the buck stops with him. Too bad people in government don't have anywhere near the integrity he did with regard to money and government.
    justbobf
  • Reply 39 of 114
    gatorguygatorguy Posts: 23,165member
    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.
    Absolutely agree about the improper use of "tax dodges." Unless Ireland audited Apple's tax return and business and found that Apple was attempting to avoid its Irish tax obligations, there's no "dodging" at all.

    There's a notion of "grandfathering" that goes into legal changes in order to either allow some previously legal action to continue after it had otherwise become illegal, or to restrict violations to those occurring after some specified date. In this situation we have the EU changing Irish tax law and retroactively finding Apple in violation. In a setup like this, everyone is at risk. 
    It's not "Irish law" to begin with according to everything I've read. This was a side-deal, not something typically available to businesses that follow Irish tax laws. It could well be that EU agencies were not even aware of it (nor anyone else) until it was revealed during Senate testimony a couple of years ago. In fact it would appear that it was the US Senate and documents they got under subpoena that got the whole EU investigation rolling.  
    edited January 2016 cnocbuisteviejustbobfasdasd
  • Reply 40 of 114
    gwydiongwydion Posts: 1,083member
    Apple: We followed the law for our HQ in Ireland.

    EU: We realize you have followed the law between 2004 and 2012 but we want to retroactively change the law so that you can pay us more taxes. Ireland did not have the authority to give you that tax deal.

    Apple: Then sue Ireland for that amount of money. Not the corporations who follow its laws.

    Imagine the governments of North America doing this to it's citizens and corporations. There would be civil war 2.
    No, EU is not changing the law. Another case of not understanding what the case is about
    singularitystevie
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