EU presses Apple for details on latest tax arrangements in wake of Paradise Papers

Posted:
in General Discussion edited November 2017
The European Union's competition commissioner has asked Apple to update details on its tax situation, following allegations that the company relocated some operations from Ireland to Jersey to avoid higher rates.




"I have been asking for an update on the arrangement made by Apple, the recent way they have been organized, in order to get the feeling whether or not this is in accordance with our European rules but that remains to be seen," the Washington Post quoted Margrethe Vestager as saying at a technology summit in Lisbon, Portugal.

The official said that her requests for information actually predate the Jersey claims, but noted that it "remains to be seen if we will open more cases after the Paradise Papers."

The Paradise Papers have exposed a myriad of offshore financial arrangements for individuals and businesses. To escape a crackdown on Irish tax loopholes, Apple reportedly turned to a Bermuda-based law firm, Appleby, to search for a place it could continue avoiding normal taxes on billions in international revenue. The company is said to have settled on Jersey, a U.K. crown depndency off the coast of France.

Apple subsequently posted a vehement denial online, saying that it didn't move any operations or investments out of Ireland, or reduce its tax payments in any country.

Late last year the European Commission ordered Ireland to collect $14.5 billion in back taxes from Apple, arguing that it had extended preferential -- and therefore illegal -- state aid to the company. Both Apple and Ireland are pursuing appeals, though the Commission is bringing Ireland to court for missing a collection deadline.

Apple has some $252 billion in overseas cash reserves, but has refused to bring anything back to the U.S. unless it can avoid a standard 35 percent tax rate. The Republican party is seeking a plan that could drop taxes on repatriated cash to 12 percent -- Apple CEO Tim Cook has voiced his support for lower corporate taxes, despite his opposition to Republicans on many other platforms like LGBT rights and immigration.
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Comments

  • Reply 1 of 82
    I wouldn’t worry about it if I was them. By the time this gets through any sort of proceedings, the EU won’t exist anymore.
    bshankJWSCmacseekerd_2gregg thurmanentropysrandominternetpersonmike1SpamSandwichjbdragon
  • Reply 2 of 82
    Apple should just cut and run from the EU as a market
  • Reply 3 of 82
    JWSCJWSC Posts: 78member
    Oh, so now it’s a ‘he said, she said’ thing.  Ladies and gentlemen, get your popcorn and drinks at the ready and settle in.  This will be long and entertaining.

    But really, the EU can just toss off.  They clearly do not have their house in order.
    bshankSpamSandwichjbdragon
  • Reply 4 of 82
    Wait a minute! If Apple won’t pay 12% through Ireland why would they pay 12% through the United States?

    or any other company for that matter....
    gatorguy
  • Reply 5 of 82
    Why should they send money from sales abroad anyway? They also have expenses abroad, stores, offices, research centers, staff. Governments are just greedy to fill their coffers.
    tallest skilbshankjbdragon
  • Reply 6 of 82

    Why should they send money from sales abroad anyway? They also have expenses abroad, stores, offices, research centers, staff. Governments are just greedy to fill their coffers.

    Politicians never accuse you of ‘greed’ for wanting other people’s money–only for wanting to keep your own money. The difference between a politician and a pickpocket is that the pickpocket doesn’t get indignant when you tell him to keep his hands to himself.
    – Joseph Sobran

    American voters should understand that Congress will always find a way to spend every last dollar sent to Washington. Remember, politicians get votes by promising everything to everyone, always at the expense of some other invisible taxpayers. The federal government cannot maintain a budget surplus any more than an alcoholic can leave a fresh bottle of whiskey untouched in the cupboard.
    – Ron Paul

    You can, of course, edit the latter to say “European” (though they don’t vote), “Parliament” and “Brussels”, respectively.
    edited November 2017 macseekergregg thurmanSpamSandwichjbdragonJWSC
  • Reply 7 of 82
    Uh-oh. Called to the principal's office. /s
  • Reply 8 of 82
    foggyhillfoggyhill Posts: 4,356member
    Even if it were true, which Apple is disputing, It's legal, so WTF is it to them.
    Close up your fracked up laws and live with the consequences of that, or shut the hell up about your mock consternation. I'm not fooled by this though this grandstanding my impress the peanut gallery.
    This kind of double talk were those guys (in the EU and abroad) are all amazed that tax paradise exist when most of them have all their money there is sounds pretty hollow.
    This is akin to the Claude Rains character being disturbed gambling is going on in that place while collecting his winnings in the film Casablanca.

    edited November 2017 mike1bshank
  • Reply 9 of 82
    JanNLJanNL Posts: 211member
    bshank said:
    Apple should just cut and run from the EU as a market
    Better: The EU should just cut and run!
    jbdragon
  • Reply 10 of 82
    tshapitshapi Posts: 269member
    foggyhill said:
    Even if it were true, which Apple is disputing, It's legal, so WTF is it to them.
    Close up your fracked up laws and live with the consequences of that, or shut the hell up about your mock consternation. I'm not fooled by this though this grandstanding my impress the peanut gallery.
    This kind of double talk were those guys (in the EU and abroad) are all amazed that tax paradise exist when most of them have all their money there is sounds pretty hollow.
    This is akin to the Claude Rains character being disturbed gambling is going on in that place while collecting his winnings in the film Casablanca.

    It’s not “legal” it’s a back door deal. Why would anyone want to build there company in any other country If Ireland is providing a tax shelter? So the eu get compelled to kill it. 
    muthuk_vanalingam
  • Reply 11 of 82
    radarthekatradarthekat Posts: 2,123moderator
    cbolger said:
    Wait a minute! If Apple won’t pay 12% through Ireland why would they pay 12% through the United States?

    or any other company for that matter....
    Because Apple argues that the value upon which it ultimately would owe that tax was created in the US, in the form of the design and engineering of its hardware products and in the software.  And this is proper according to tax law.  And so Apple is okay paying tax to the United States.  But if it paid 12% to another country - a country Apple chose merely as an offshore locale to consolidate its foreign revenues - then the US, by virtue of the fact it gives a dollar-for-dollar break in foreign-paid taxes, would therefore get no tax income from Apple.  And, knowing this, it’s therefore unlikely the US would lower its repatriation tax rate from 35% to 12%.  Maybe to 24%...so that Ireland could have their 12% and the US could have the 12% they’ve been talking about.  In that scenario, US multinationals would end up paying 24%.  But what’s most likely is that the US will assist companies like Apple in making a case for where taxes should be paid while Apple goes and finds a friendlier place to consolidate their foreign-earned profits.  A place that agrees with Apple with respect to where the value is added and won’t seek to tax Apple’s foreign-earned profits.  A place like Ireland used to be before the EU stepped in.  A place like...  Jersey.
    edited November 2017 equality72521hubbaxSpamSandwichbb-15
  • Reply 12 of 82
    Did Margrethe Vestager not get Apple’s memo?
  • Reply 13 of 82
    Amazing, not a single comment that actually condemns Apple for its morally reprehensible approach to taxation. The legalities may be contentious, but damn it, the ethics that Apple and other global companies, super-rich individuals and organised crime (what great bedfellows) use are beneath contempt.

    Bshank ...suggesting that Apple should cut and run is missing the point. Firstly, Apple are not paying enough tax so they do not have the moral high-ground here, even over the rightly despised EU; Secondly, you clearly have no idea of what the EU market is worth to Apple. 

    For those who defend the likes of Apple, think how many more teachers, hospital beds, police and firemen, carers, etc your country could afford if these organisations paid their way properly and honestly.
    frankiecropr
  • Reply 14 of 82
    gatorguygatorguy Posts: 17,848member
    cbolger said:
    Wait a minute! If Apple won’t pay 12% through Ireland why would they pay 12% through the United States?

    or any other company for that matter....
    Because Apple argues that the value upon which it ultimately would owe that tax was created in the US, in the form of the design and engineering of its hardware products and in the software.  And this is proper according to tax law.  And so Apple is okay paying tax to the United States.  But if it paid 12% to another country - a country Apple chose merely as an offshore locale to consolidate its foreign revenues - then the US, by virtue of the fact it gives a dollar-for-dollar break in foreign-paid taxes, would therefore get no tax income from Apple.  
    It's not nearly that simple Radar. Apple can rightfully claim of course that the value of the Apple products was created in the US in the form of design and engineering of the software just as you mentioned, but it's a misdirection play. Apple has muddied those waters by transferring the valuable licensing of that design and software created in the US to their Irish subsidiary who had no hand in it, who then uses the fees charged for using it move the majority of profits from the sale of an Apple product in dozens of foreign countries to an entity shielded from tax obligations. That's been found true over and over in countries ranging from Japan to Italy, Australia to Spain, where Apple sells billions in products but claims the value of them and thus the source of the profits came from Irish property. Essentially non-taxable Irish and/or Jersey IP holding companies.

    So Apple really has no valid argument about the value being created in the US and therefor that's where the taxes should be paid when they transfer that value to a foreign country and use creative accounting and obscure law to avoid those taxes there and worldwide. Right?
    edited November 2017 muthuk_vanalingamavon b7bshanksingularity
  • Reply 15 of 82
    fred1fred1 Posts: 219member
    So much EU bashing, and why?  Do you live in the EU? (Have you ever even been to an EU country?). Did you say that the US shouldn’t exist when Congress was supposedly investigating where Aplle stashes its profits?

    These EU officials are doing their job: enforcing the tax laws. Why does this seem so strange to you?
    nubusmuthuk_vanalingamfrankiesingularitycropr
  • Reply 16 of 82
    abriden said:
    Amazing, not a single comment that actually condemns Apple for its morally reprehensible approach to taxation. The legalities may be contentious, but damn it, the ethics that Apple and other global companies, super-rich individuals and organised crime (what great bedfellows) use are beneath contempt.

    Bshank ...suggesting that Apple should cut and run is missing the point. Firstly, Apple are not paying enough tax so they do not have the moral high-ground here, even over the rightly despised EU; Secondly, you clearly have no idea of what the EU market is worth to Apple. 

    For those who defend the likes of Apple, think how many more teachers, hospital beds, police and firemen, carers, etc your country could afford if these organisations paid their way properly and honestly.
    Amazing. Someone who registered and made their first post just to assert that Apple is “morally reprehensible” because they are organizing their finances to reduce the taxes they are obliged to pay.  If you’re in the US, I hope you are morally consistent and don’t put any money in tax-favored investments or take advantage of tax deductions. 
    mike1macseekerbshankbb-15JWSCanantksundaram
  • Reply 17 of 82

    Dear European Union,

    The details are: We have complied with all applicable laws.

    Now sod off.


    macseekerbshankJWSCanantksundaram
  • Reply 18 of 82
    abriden said:
    Amazing, not a single comment that actually condemns Apple for its morally reprehensible approach to taxation. The legalities may be contentious, but damn it, the ethics that Apple and other global companies, super-rich individuals and organised crime (what great bedfellows) use are beneath contempt.


    That's because they have a moral and legal obligation to their shareholders which supersedes any imaginary obligation to pay taxes that they aren't required to pay.

    If you want to blame someone, blame your lawmakers.  They're the ones who created the loopholes, mostly for the benefit of their friends and cronies.  Now, when someone they don't like takes advantage of those same loopholes, they get all high horsed.

    macseekerstompybb-15JWSCanantksundaram
  • Reply 19 of 82
    xbitxbit Posts: 172member

    You can, of course, edit the latter to say “European” (though they don’t vote)
    Yes, we do. The last European elections were held in 2014.
    nubustallest skilsingularity
  • Reply 20 of 82
    mike1mike1 Posts: 1,528member
    abriden said:
    Amazing, not a single comment that actually condemns Apple for its morally reprehensible approach to taxation. The legalities may be contentious, but damn it, the ethics that Apple and other global companies, super-rich individuals and organised crime (what great bedfellows) use are beneath contempt.

    Bshank ...suggesting that Apple should cut and run is missing the point. Firstly, Apple are not paying enough tax so they do not have the moral high-ground here, even over the rightly despised EU; Secondly, you clearly have no idea of what the EU market is worth to Apple. 

    For those who defend the likes of Apple, think how many more teachers, hospital beds, police and firemen, carers, etc your country could afford if these organisations paid their way properly and honestly.
    So, you're a socialist arguing for yet more government employees paid for by taxpayers.
    macseekertallest skilJWSCanantksundaram
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