I don't see how Ireland is doing anything wrong. What Apple is doing is the so called structure called Double Irish. Double Irish can't be considered illegal state aid because it's available to all companies.
No, the case is not about Double Irish
I know. It's about if Ireland gave Apple a special deal. I should have been more specific in my other post but what I was going to say is the Double Irish will come into play if the EU rules against Ireland.
I don't see how Ireland is doing anything wrong. What Apple is doing is the so called structure called Double Irish. Double Irish can't be considered illegal state aid because it's available to all companies.
No, the case is not about Double Irish
Are you getting the feeling that your head is hurting from hitting the brick wall when trying to explain something that is so basic in its concept as this issue?
Just like the BS spouted by US politicians, the European's want to talk about changing the rules of the game after the fact,
Then you'll be glad to know that this is not what this case is about
jmgregory1 said:
Then you'll be glad to know that this is not what this case is about
This case is about allegedly ilegal state aids to some companies in Ireland, not about taxation in the EU
This perspective doesn't appreciate the complexities of this issue and has become such a Liberal pitchfork pounding cliche that it is moving me away from being a Liberal. Apple by all means doesn't have to stay in Ireland and help aid the Irish economy by providing Irish citizens jobs or allowing Ireland to be the de facto country that collects taxes from Apples extensive European profits. Apple does more social good than any other large company and is a great example of what responsible corporate citizenship can bring to the table. Yet everybody wants all that for free. Sorry that does not equate with reality buddy. On top of it I'm sure Apple could hunker down somewhere else like Samsung and reduce their tax liabilities even more, but they don't... yet, until they get run out, and we'll be clamor for them to return. If you're an Apple fan or want AAPL then you don't get the mutually beneficial relationship that exists between citizen and corporation- mutual good. Get on board or go hang with MoveOn.org.
No, this is not about "changing the rules”. It is about applying the rules as they always have been. Ireland may have reached a deal with Apple that was in actual fact illegal, i.e. against the rules, as the rules always have been. No rules have changed. The EU is just trying to apply the existing rules.
Now, on a separate note - AI, will you please stop using “revenue” when you mean “profit”. These two things are not the same. Companies pay tax on profits, not revenue.
This article does not address the violation of preferential treatment to Apple vs the much blogged "taxes to the EU". It is linked to show that what is taxed (revenue or profit) is not as clear cut w/i the EU vis a vis American tax practices.
Are you getting the feeling that your head is hurting from hitting the brick wall when trying to explain something that is so basic in its concept as this issue?
You obviously don't see the big picture. What the EU is investigating is simple. Did Apple receive a special deal that others didn't? Now what isn't so simple is if the EU rules against Ireland and what Ireland can collect. That's why I brought up Double Irish in my other post. That will play a factor in what Ireland can actually collect from Apple.
No, this is not about "changing the rules”. It is about applying the rules as they always have been. Ireland may have reached a deal with Apple that was in actual fact illegal, i.e. against the rules, as the rules always have been. No rules have changed. The EU is just trying to apply the existing rules.
Now, on a separate note - AI, will you please stop using “revenue” when you mean “profit”. These two things are not the same. Companies pay tax on profits, not revenue.
Because as have been said a lot of times, they were secret agreements between Irish government and some companies.
Ireland can legally have agreements between companies and offer them tax breaks like it did for Apple.
No they can't, because that would be in breach of EU rules against state subsidies. While member states mostly have autonomy concerning taxation matters, they still must comply with other non-taxation related EU rules.
The Irish government could have agreed with Apple and other companies that they would set the corporate tax rate at 2%, but only if they made that the official corporate tax rate applicable to all companies. That would have been their legitimate prerogative and the EU wouldn't have blinked. The minute they started setting different tax rates for different companies, Ireland stepped over a line because the effect of that move was de facto state subsidisation of the companies getting the favourable rate and it became a matter the EU could have a say about because it was no longer just a taxation matter.
A tad confusing for me. The article comments on moving products through the distribution chain and taxing on the "value added" at each step. Not being up on EU corporate tax practices it sounded like it was applicable to corporations as well.
Then you'll be glad to know that this is not what this case is about
jmgregory1 said:
Then you'll be glad to know that this is not what this case is about
This case is about allegedly ilegal state aids to some companies in Ireland, not about taxation in the EU
This perspective doesn't appreciate the complexities of this issue and has become such a Liberal pitchfork pounding cliche that it is moving me away from being a Liberal. Apple by all means doesn't have to stay in Ireland and help aid the Irish economy by providing Irish citizens jobs or allowing Ireland to be the de facto country that collects taxes from Apples extensive European profits. Apple does more social good than any other large company and is a great example of what responsible corporate citizenship can bring to the table. Yet everybody wants all that for free. Sorry that does not equate with reality buddy. On top of it I'm sure Apple could hunker down somewhere else like Samsung and reduce their tax liabilities even more, but they don't... yet, until they get run out, and we'll be clamor for them to return. If you're an Apple fan or want AAPL then you don't get the mutually beneficial relationship that exists between citizen and corporation- mutual good. Get on board or go hang with MoveOn.org.
Ireland can legally have agreements between companies and offer them tax breaks like it did for Apple.
No they can't, because that would be in breach of EU rules against state subsidies. While member states mostly have autonomy concerning taxation matters, they still must comply with other non-taxation related EU rules.
The Irish government could have agreed with Apple and other companies that they would set the corporate tax rate at 2%, but only if they made that the official corporate tax rate applicable to all companies. That would have been their legitimate prerogative and the EU wouldn't have blinked. The minute they started setting different tax rates for different companies, Ireland stepped over a line because the effect of that move was de facto state subsidisation of the companies getting the favourable rate and it became a matter the EU could have a say about because it was no longer just a taxation matter.
Yes they can. What you said is what I'm referring too. I didn't mean making agreements with different rates for different companies. As an example, Ireland can make an agreement with Apple and offer them tax breaks. The way you do that is creating a new tax category and having a lower tax rate than the current 12.5% corporate rate. You can have a category that covers something such as intellectual property. Even though Ireland made an agreement with Apple, the new tax category would apply to all companies that fall under the same category. There is nothing illegal about that at all. Now that I'm thinking about that, I actually believe Ireland did something similar recently, although I don't know the details.
A tad confusing for me. The article comments on moving products through the distribution chain and taxing on the "value added" at each step. Not being up on EU corporate tax practices it sounded like it was applicable to corporations as well.
I need to do some more reading on this for sure.
The easy part is what the EU is investigating. The part that will get complicated is what exactly Ireland can collect if the EU gives an unfavorable ruling.
No, this is not about "changing the rules”. It is about applying the rules as they always have been. Ireland may have reached a deal with Apple that was in actual fact illegal, i.e. against the rules, as the rules always have been. No rules have changed. The EU is just trying to apply the existing rules.
Now, on a separate note - AI, will you please stop using “revenue” when you mean “profit”. These two things are not the same. Companies pay tax on profits, not revenue.
This article does not address the violation of preferential treatment to Apple vs the much blogged "taxes to the EU". It is linked to show that what is taxed (revenue or profit) is not as clear cut w/i the EU vis a vis American tax practices.
VAT is not a tax on companies. It is a tax on consumers which companies collect on behalf of the government.
I'm genuinely curious, and I ask you as the blog's expert on this topic .... why on earth didn't Ireland's allegedly Illegal tax incentive scheme get immediately investigated and stopped by the EU? Or didn't the EU know? It all seems a complete f***k up and from where I sit, Apple is surely an innocent party here along with the other companies that accepted Ireland's deal.
Because as have been said a lot of times, they were secret agreements between Irish government and some companies.
I've heard people claim in the comments that there were "secret meetings" between Apple and Ireland - but I don't see it in the articles. Even this article simply states "Apple is known to have exploited Irish loopholes" without any mention of a "secret deal".
Loopholes are defined as "inadequacies in the law" and much of the time they are subjective. Something that some people claim is a loophole may actually be an intentional part of the rules. Exploit means "make full use of and derive benefit from". Both "loophole" and "exploit" carry negative connotations and I wonder why AI chose to use them. Their statement could have just as easily be written as "Apple is known to have taken full, legal advantage of all tax reduction mechanisms available in the Irish tax code" instead of "Apple is known to have exploited Irish loopholes". Both statements mean the exact same thing, but the second phrase uses words that make it sound like Apple did something illegal or nefarious. They didn't.
Also - this article starts with the words "Earlier Thursday". I'm curious....earlier than what???
This perspective doesn't appreciate the complexities of this issue and has become such a Liberal pitchfork pounding cliche that it is moving me away from being a Liberal. Apple by all means doesn't have to stay in Ireland and help aid the Irish economy by providing Irish citizens jobs or allowing Ireland to be the de facto country that collects taxes from Apples extensive European profits. Apple does more social good than any other large company and is a great example of what responsible corporate citizenship can bring to the table. Yet everybody wants all that for free. Sorry that does not equate with reality buddy. On top of it I'm sure Apple could hunker down somewhere else like Samsung and reduce their tax liabilities even more, but they don't... yet, until they get run out, and we'll be clamor for them to return. If you're an Apple fan or want AAPL then you don't get the mutually beneficial relationship that exists between citizen and corporation- mutual good. Get on board or go hang with MoveOn.org.
WTF?
Exactly what I've thought about your comments on the different threads on taxes
What I would like to know is if other companies, like Google, Microsoft, SalesForce etc...... or other companies outside of Tech industry actually employ and have a working force inside Ireland?
Because Apple do, and it is not a small working force either.
What I would like to know is if other companies, like Google, Microsoft, SalesForce etc...... or other companies outside of Tech industry actually employ and have a working force inside Ireland?
Because Apple do, and it is not a small working force either.
Exactly! It's a huge boon to the Irish economy. It's not state aid but more aid Apple is providing Ireland.
What I would like to know is if other companies, like Google, Microsoft, SalesForce etc...... or other companies outside of Tech industry actually employ and have a working force inside Ireland?
Because Apple do, and it is not a small working force either.
Yes they do. A lot of companies run support operations from Ireland because the workforce is very intelligent and relatively cheap.
State aid would be like a gift of some sort. A unilateral handout either in cash or perhaps as a discount in taxes owed - however the key word is unilateral. If the agreement - secret or not - contains obligations from Apple in order to qualify for the discount in taxes, it becomes a contract. So, in essence, Ireland has contracted with Apple to bring jobs and offices to the country...and Apple has done so. There were obligations and deliverables on both sides, so it's clearly not "state aid". It's a business agreement which Ireland decided to fund out of future tax revenue.
It doesn't matter if the value of Apples presence exactly equals the discount in tax that Apple received. Somebody in the Irish government clearly thought that it was a good agreement to enter into. There may be an EU law that makes it illegal for Ireland to provide state aid to companies - but I seriously doubt there is a law that prohibits them from entering into mutually beneficial contracts with companies. If it is determined that Apple received more benefit from the contract than Ireland did, that just means Ireland miscalculated. It may have been a bad contract to enter into - but the EU can't just take every contract that Ireland "lost" on and declare the loss as state aid and then go after the other party to the contract for reimbursement - but that is exactly what's happening! Hell - if that's the way things work - the Ireland government should just buy up all the shares in any stock IPO's - and if the stocks drop in value - declare the loss to be "state aid" and go after the company for reimbursement! That's a ridiculous example - but it's also ridiculous what the EU is doing here. They are the same as the patent trolls and class action lawyers. They see how much money Apple has in the bank and they'll try anything to get a piece of it.
So...like I said above. Ireland and Apple entered into a mutually beneficial contract. Ireland asked Apple to set up shop in Ireland and create x number of jobs, lease x thousand square feet of office/factory space, etc, etc. Apple - knowing that doing so has value, demanded compensation. Ireland decided the best way to fund it was out of future tax revenue. Maybe that's a legal funding move and maybe it's not - but it's clearly an issue between the EU and Ireland. The only thing Apple is guilty of is negotiating a good contract!
What I would like to know is if other companies, like Google, Microsoft, SalesForce etc...... or other companies outside of Tech industry actually employ and have a working force inside Ireland?
Because Apple do, and it is not a small working force either.
Yes, lots of American companies have operations here. I think one in five jobs, or thereabouts, are with multinationals. Not all of them are because of the tax lurks. Ireland has a young and well educated english speaking workforce, with many having a second language.
Comments
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm
This article does not address the violation of preferential treatment to Apple vs the much blogged "taxes to the EU". It is linked to show that what is taxed (revenue or profit) is not as clear cut w/i the EU vis a vis American tax practices.
The Irish government could have agreed with Apple and other companies that they would set the corporate tax rate at 2%, but only if they made that the official corporate tax rate applicable to all companies. That would have been their legitimate prerogative and the EU wouldn't have blinked. The minute they started setting different tax rates for different companies, Ireland stepped over a line because the effect of that move was de facto state subsidisation of the companies getting the favourable rate and it became a matter the EU could have a say about because it was no longer just a taxation matter.
I need to do some more reading on this for sure.
Loopholes are defined as "inadequacies in the law" and much of the time they are subjective. Something that some people claim is a loophole may actually be an intentional part of the rules. Exploit means "make full use of and derive benefit from". Both "loophole" and "exploit" carry negative connotations and I wonder why AI chose to use them. Their statement could have just as easily be written as "Apple is known to have taken full, legal advantage of all tax reduction mechanisms available in the Irish tax code" instead of "Apple is known to have exploited Irish loopholes". Both statements mean the exact same thing, but the second phrase uses words that make it sound like Apple did something illegal or nefarious. They didn't.
Also - this article starts with the words "Earlier Thursday". I'm curious....earlier than what???
Because Apple do, and it is not a small working force either.
It doesn't matter if the value of Apples presence exactly equals the discount in tax that Apple received. Somebody in the Irish government clearly thought that it was a good agreement to enter into. There may be an EU law that makes it illegal for Ireland to provide state aid to companies - but I seriously doubt there is a law that prohibits them from entering into mutually beneficial contracts with companies. If it is determined that Apple received more benefit from the contract than Ireland did, that just means Ireland miscalculated. It may have been a bad contract to enter into - but the EU can't just take every contract that Ireland "lost" on and declare the loss as state aid and then go after the other party to the contract for reimbursement - but that is exactly what's happening! Hell - if that's the way things work - the Ireland government should just buy up all the shares in any stock IPO's - and if the stocks drop in value - declare the loss to be "state aid" and go after the company for reimbursement! That's a ridiculous example - but it's also ridiculous what the EU is doing here. They are the same as the patent trolls and class action lawyers. They see how much money Apple has in the bank and they'll try anything to get a piece of it.
So...like I said above. Ireland and Apple entered into a mutually beneficial contract. Ireland asked Apple to set up shop in Ireland and create x number of jobs, lease x thousand square feet of office/factory space, etc, etc. Apple - knowing that doing so has value, demanded compensation. Ireland decided the best way to fund it was out of future tax revenue. Maybe that's a legal funding move and maybe it's not - but it's clearly an issue between the EU and Ireland. The only thing Apple is guilty of is negotiating a good contract!