European Commission takes Ireland to court for failing to collect taxes from Apple

Posted:
in General Discussion
Confirming an earlier report, the European Commission on Wednesday said it will bring Ireland to the European Court of Justice for failing to collect at least $15 billion in back taxes from Apple, which were originally due Jan. 3.




"More than one year after the Commission adopted this decision, Ireland has still not recovered the money," Competition Commissioner Margrethe Vestager said in a statement heard by Reuters. "We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition."

She noted that in similar tax cases such as Fiat in Luxembourg and Starbucks in the Netherlands, money was recovered before appeals were exhausted -- in those circumstances though, far less money was involved.

Vestager refused to comment on potential penalties, but the Irish government will likely face a fine if it loses at court.

Ireland's finance ministry on Wednesday said that it has been contact with Apple and the Commission for over a year, and is close to setting up an escrow account which would hold Apple's money pending the outcome of a government appeal. Apple is also appealing.

"It is extremely regrettable that the Commission has taken this action, especially in relation to a case with such a large scale recovery amount," the finance ministry said in a statement.

In August 2016, the Commission ruled that Ireland had extended illegal state aid to Apple, offering preferential terms that allowed the iPhone maker to pay miniscule amounts -- as little as 0.005 percent in 2014 -- despite funneling billions in international revenue through the country. E.U. law stipulates that benefits available to one company must be offered to all.

Ireland has maintained that it offered the same terms to other businesses, while Apple has repeatedly stated that it follows the law in every country it operates in. The laws themselves are in question, however.
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Comments

  • Reply 1 of 64
    jd_in_sbjd_in_sb Posts: 1,481member
    Time for Irexit.
    SpamSandwichJWSCanton zuykovjbdragonrazorpitgeorgie01watto_cobra
  • Reply 2 of 64
    If the European Commission keeps this up, it’ll generate a mood for Irexit (or whatever corny nickname the media conjures up for an Irsh departure from the EU). There is a subtle but real shift in opinion happening here. With just the right amount of annoyance (or perceived annoyance) coming from central European authorities, it might reach a critical tipping point. I’m just saying....
    JWSCbshankwatto_cobra
  • Reply 3 of 64
    gatorguygatorguy Posts: 19,024member
    This isn't just Ireland in the crosshairs. There's at least three other quite-similar "illegal state-aid" tax cases involving Luxembourg, the latest one being Amazon. They've just been dinged for about $300M.
    SpamSandwichsphericbradipao
  • Reply 4 of 64
    bloggerblogbloggerblog Posts: 1,774member
    And then the western world wonders why is everything made in China.
    edited October 2017 anantksundaramjbdragonrazorpitbshankwatto_cobra
  • Reply 5 of 64
    gatorguy said:
    This isn't just Ireland in the crosshairs. There's at least three other quite-similar "illegal state-aid" tax cases involving Luxembourg, the latest one being Amazon. They've just been dinged for about $300M.
    Holland is in their sights too, I read today that IKEA's back taxes could run into the billions from their dodgy deals over the past decade or so.
  • Reply 6 of 64
    If the European Commission keeps this up, it’ll generate a mood for Irexit (or whatever corny nickname the media conjures up for an Irsh departure from the EU). There is a subtle but real shift in opinion happening here. With just the right amount of annoyance (or perceived annoyance) coming from central European authorities, it might reach a critical tipping point. I’m just saying....
    The trouble IS, if Ireland leaves the EU then companies operating there can no longer use it as a base for European sales and supply - to access the EU market they would have to relocate to one of the other member states or face double import-export tarriffs - USA/China etc. to Ireland, then Ireland to EU. If Ireland were to leave, so would the multinationals based there.
  • Reply 7 of 64
    SpamSandwichSpamSandwich Posts: 29,747member
    adm1 said:
    If the European Commission keeps this up, it’ll generate a mood for Irexit (or whatever corny nickname the media conjures up for an Irsh departure from the EU). There is a subtle but real shift in opinion happening here. With just the right amount of annoyance (or perceived annoyance) coming from central European authorities, it might reach a critical tipping point. I’m just saying....
    The trouble IS, if Ireland leaves the EU then companies operating there can no longer use it as a base for European sales and supply - to access the EU market they would have to relocate to one of the other member states or face double import-export tarriffs - USA/China etc. to Ireland, then Ireland to EU. If Ireland were to leave, so would the multinationals based there.
    On the other hand, the entire EU is on shaky ground anyway. Their union comes down to an unenforceable handshake agreement. In reality, any member country could basically tell the EU to sod off and abandon the sinking ship. Their penalties are unenforceable.
    edited October 2017 jbdragonrazorpit
  • Reply 8 of 64
    HBW1HBW1 Posts: 39member
    What is going on in Europe? 
    edited October 2017
  • Reply 9 of 64
    JWSCJWSC Posts: 137member

    Ireland may well consider an Irexit.  But they will surely want to see how Brexit turns out first.  And they would have to consider what it means to all the companies that set up there for EU access and low taxes.

    If Ireland’s tax laws do not jive with EU law then they should be changed to align with EU law.  Then going forward Apple would pay the higher tax rate.  But attempting to collect taxes retroactively is terrible policy and is legally and ethically dodgy.  Just sends all the wrong signals about the EU being a good place to do business.

    jbdragon
  • Reply 10 of 64
    shrekshrek Posts: 1member
    Every situation has many facets. In EU there are only 5 “sponsoring” members. They provide more funds to EU budget when receive from it. For other 23 members EU is “profitable” business. One of the biggest beneficiars of this system has been Ireland. And second largest sponsor is (soon: was) UK. 

    Regarding taxes and competition: EU has legislation in pipeline which introduces “virtual residency” for tax purposes. This will be quite groundbraking and from EU perspective will level playing field for companies regardless on their country of incorporation.
  • Reply 11 of 64
    adm1 said:
    gatorguy said:
    This isn't just Ireland in the crosshairs. There's at least three other quite-similar "illegal state-aid" tax cases involving Luxembourg, the latest one being Amazon. They've just been dinged for about $300M.
    Holland is in their sights too, I read today that IKEA's back taxes could run into the billions from their dodgy deals over the past decade or so.
    What 'dodgy' deals? How do you know for a fact that's the case?
  • Reply 12 of 64
    croprcropr Posts: 825member
    adm1 said:
    If the European Commission keeps this up, it’ll generate a mood for Irexit (or whatever corny nickname the media conjures up for an Irsh departure from the EU). There is a subtle but real shift in opinion happening here. With just the right amount of annoyance (or perceived annoyance) coming from central European authorities, it might reach a critical tipping point. I’m just saying....
    The trouble IS, if Ireland leaves the EU then companies operating there can no longer use it as a base for European sales and supply - to access the EU market they would have to relocate to one of the other member states or face double import-export tarriffs - USA/China etc. to Ireland, then Ireland to EU. If Ireland were to leave, so would the multinationals based there.
    On the other hand, the entire EU is on shaky ground anyway. Their entire union comes down to an unenforceable handshake agreement. In reality, any member country could basically tell the EU to sod off and abandon the sinking ship. Their penalties are unenforceable.
    Every member state in the EU has agreed in writing to a number of European treaties, so yes European legislation is enforceable.  It is even so that even after the UK will have left, some EU regulations are still applicable to the UK.  

    It is absolutely unthinkable that Ireland will leave the EU.   The European HQ of international companies like Apple, Microsoft, Dell, ... is the chicken with the golden eggs.  Leaving the EU, would make these companies to move to another European member state, which would have a devastating impact on the economy of Ireland.     Currently a lot of international companies have announced to move part of their UK offices to mainland Europe in view of the Brexit becoming a fact in 2019.  The shaky ground is not in Europe, but in the UK
    propodbradipao
  • Reply 13 of 64
    sphericspheric Posts: 1,590member
    adm1 said:
    gatorguy said:
    This isn't just Ireland in the crosshairs. There's at least three other quite-similar "illegal state-aid" tax cases involving Luxembourg, the latest one being Amazon. They've just been dinged for about $300M.
    Holland is in their sights too, I read today that IKEA's back taxes could run into the billions from their dodgy deals over the past decade or so.
    What 'dodgy' deals? How do you know for a fact that's the case?
    Ikea’s tax-evading international construct is the stuff of legends and an oft-used prime example for how to confuse things to the point that nobody is owed anything. 
  • Reply 14 of 64
    rob53rob53 Posts: 1,900member
    The ironic thing is the tax benefits Apple enjoys in Ireland happen all the time in the US. Why else would Apple and others locate in barren Nevada or built huge facilities in the South and Mid West? States are giving away everything to get them to build their including all sorts of deals much worse than what Ireland is accused of giving Apple. Ireland is not complaining because they reap a huge amount of benefits. It's the weird EU government that wants to get the spoils while doing absolutely nothing to justify them. This would be like Maryland demanding that Nevada not give Apple any kickbacks to locate there then demanding a cut in the money Apple would have to pay for past kickbacks. That ain't going to happen in the US.
    GG1
  • Reply 15 of 64
    jd_in_sbjd_in_sb Posts: 1,481member
    cropr said:
    adm1 said:
    If the European Commission keeps this up, it’ll generate a mood for Irexit (or whatever corny nickname the media conjures up for an Irsh departure from the EU). There is a subtle but real shift in opinion happening here. With just the right amount of annoyance (or perceived annoyance) coming from central European authorities, it might reach a critical tipping point. I’m just saying....
    The trouble IS, if Ireland leaves the EU then companies operating there can no longer use it as a base for European sales and supply - to access the EU market they would have to relocate to one of the other member states or face double import-export tarriffs - USA/China etc. to Ireland, then Ireland to EU. If Ireland were to leave, so would the multinationals based there.
    On the other hand, the entire EU is on shaky ground anyway. Their entire union comes down to an unenforceable handshake agreement. In reality, any member country could basically tell the EU to sod off and abandon the sinking ship. Their penalties are unenforceable.
    Every member state in the EU has agreed in writing to a number of European treaties, so yes European legislation is enforceable.  It is even so that even after the UK will have left, some EU regulations are still applicable to the UK.  

    It is absolutely unthinkable that Ireland will leave the EU.   The European HQ of international companies like Apple, Microsoft, Dell, ... is the chicken with the golden eggs.  Leaving the EU, would make these companies to move to another European member state, which would have a devastating impact on the economy of Ireland.     Currently a lot of international companies have announced to move part of their UK offices to mainland Europe in view of the Brexit becoming a fact in 2019.  The shaky ground is not in Europe, but in the UK
    With the tax breaks eliminated, why should the likes of Apple and Microsoft want to remain in Ireland?
    edited October 2017 SpamSandwichJWSC
  • Reply 16 of 64
    sphericspheric Posts: 1,590member

    shrek said:
    Every situation has many facets. In EU there are only 5 “sponsoring” members. They provide more funds to EU budget when receive from it. For other 23 members EU is “profitable” business. One of the biggest beneficiars of this system has been Ireland. And second largest sponsor is (soon: was) UK. 
    Note that that calculation only figures net payments into the EU vs. direct payments from the EU. It does NOT account for the hundreds of billions gained by free trade within the common market, by having common customs control and all the other benefits of living within the EU — all of which Britain is losing, as things are going now. 
  • Reply 17 of 64
    JWSCJWSC Posts: 137member
    shrek said:
    “Regarding taxes and competition: EU has legislation in pipeline which introduces “virtual residency” for tax purposes. This will be quite groundbraking and from EU perspective will level playing field for companies regardless on their country of incorporation.”

    Leveling the playing field on EU wide taxes would be a crushing blow to free market principles and competition among member states in the sense of who’s got the better economic structure and tax policy.  This implementation will mostly benefit the higher tax countries and it will leave countries like Ireland at a disadvantage in attracting investment.

  • Reply 18 of 64
    gatorguygatorguy Posts: 19,024member
    jd_in_sb said:
    cropr said:
    adm1 said:
    If the European Commission keeps this up, it’ll generate a mood for Irexit (or whatever corny nickname the media conjures up for an Irsh departure from the EU). There is a subtle but real shift in opinion happening here. With just the right amount of annoyance (or perceived annoyance) coming from central European authorities, it might reach a critical tipping point. I’m just saying....
    The trouble IS, if Ireland leaves the EU then companies operating there can no longer use it as a base for European sales and supply - to access the EU market they would have to relocate to one of the other member states or face double import-export tarriffs - USA/China etc. to Ireland, then Ireland to EU. If Ireland were to leave, so would the multinationals based there.
    On the other hand, the entire EU is on shaky ground anyway. Their entire union comes down to an unenforceable handshake agreement. In reality, any member country could basically tell the EU to sod off and abandon the sinking ship. Their penalties are unenforceable.
    Every member state in the EU has agreed in writing to a number of European treaties, so yes European legislation is enforceable.  It is even so that even after the UK will have left, some EU regulations are still applicable to the UK.  

    It is absolutely unthinkable that Ireland will leave the EU.   The European HQ of international companies like Apple, Microsoft, Dell, ... is the chicken with the golden eggs.  Leaving the EU, would make these companies to move to another European member state, which would have a devastating impact on the economy of Ireland.     Currently a lot of international companies have announced to move part of their UK offices to mainland Europe in view of the Brexit becoming a fact in 2019.  The shaky ground is not in Europe, but in the UK
    With the tax breaks eliminated, why should the likes of Apple and Microsoft want to remain in Ireland?
    Because Ireland's base corporate tax-rate of 12.5% is still the lowest in the EU.
    bradipaokaipher
  • Reply 19 of 64
    Wow, so much false informations and made up "facts".
  • Reply 20 of 64
    gatorguygatorguy Posts: 19,024member
    Grimzahn said:
    Wow, so much false informations and made up "facts".
    A bit vague. Any specifics?
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