Proposed reforms could force Apple to pay taxes all over EU, instead of just in headquarte...

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This upcoming Wednesday, the European Commission is expected to reveal a tax proposal would require digital media companies -- including Apple -- to pay based on where they generate revenue, rather than where they choose to locate their European headquarters.




The change would combat the tendency of multinational tech firms to funnel income through countries that contribute relatively few sales, but nevertheless offer loopholes and generally low tax rates, the New York Times said on Monday. It would most likely target companies with annual global revenues over $925 million, and sales within the E.U. that exceed about $61 million. Taxation could shift to the countries where firms generate the most sales.

The exact terms haven't been set, the Times cautioned. Any proposal must still be approved by the European Parliament and its member states -- which is likely to mean resistance by countries like Ireland and Luxembourg, which have benefitted from multinational financial traffic. Others might dislike the idea of taxes flowing to bigger neighbors, though many are already missing out on those payments.

For years Apple has funneled billions of dollars through Irish subsidiaries, taking advantage of local rules to minimize its international tax bills. In 2016 the European Commission ordered Ireland to collect billions in back taxes, charging that it gave Apple preferential tax treatment, even going so far as to reverse-engineer rules to accommodate the iPhone maker. By E.U. law, governments must offer benefits to all companies equally.

Apple and Ireland have denied any wrongdoing and are working on appeals. The Commission has threatened to take Ireland to court over the slowness of its collection, though that could be dropped now that the country is finalizing an escrow account.
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Comments

  • Reply 1 of 27
    Possibly very reasonable.  A much better use of everyone's energy than trying to retroactively change the tax laws in member countries.
    larryjw
  • Reply 2 of 27
    monstrositymonstrosity Posts: 2,180member
    Who cares. The EU won't exist within 5 years.
    SpamSandwichjbdragonanton zuykov
  • Reply 3 of 27
    Will this apply to every corporation doing business in Europe or just Apple? I thought the EU was built on the idea of free flow of people and money, now this is building walls instead.
  • Reply 4 of 27
    coolfactorcoolfactor Posts: 1,324member
    Will this apply to every corporation doing business in Europe or just Apple? I thought the EU was built on the idea of free flow of people and money, now this is building walls instead.

    Your question is answered in the very first sentence of the article...
    This upcoming Wednesday, the European Commission is expected to reveal a tax proposal would require digital media companies -- including Apple -- to pay based on where they generate revenue, rather than where they choose to locate their European headquarters.


    [Deleted User]gatorguy
  • Reply 5 of 27
    steven n.steven n. Posts: 1,075member
    This is the forget way to do things and not the kangaroo court the EU used with the Irish/Apple ruling.

    codify it in laws going forward instead of retroactive enforcement of nebulous concepts. 
  • Reply 6 of 27
    rob53rob53 Posts: 1,937member
    I have an issue with the annual global sales over $925M and sales within the EU of $61M. They have no right to define anything about a company other than what's happening within the EU. I thought the idea of taxation within each EU country goes against the charter of the EU where sharing taxes was why they even were formed. I wonder whether each country will be able to assign their own level of taxes or if big brother EU will force them to charge what the EU wants. I also wonder whether this is only applies to non-EU-based companies.
    jbdragonbshank
  • Reply 7 of 27
    Will this apply to every corporation doing business in Europe or just Apple? I thought the EU was built on the idea of free flow of people and money, now this is building walls instead.

    Your question is answered in the very first sentence of the article...
    I missed the first sentence because I thought the article began under the photograph. The sentence above the photo is in a different font size (on the original page, not here on the forum page) so I thought the text above the photo was a photo caption and not part of the article. 
  • Reply 8 of 27
    SpamSandwichSpamSandwich Posts: 30,230member
    Will this apply to every corporation doing business in Europe or just Apple? I thought the EU was built on the idea of free flow of people and money, now this is building walls instead.
    Other than by employing blackmail and doling out financial penalties against foreign companies, the EU has virtually no competitive advantages.
    jbdragonbshank
  • Reply 9 of 27
    jvmbjvmb Posts: 53member
    rob53 said:
    I have an issue with the annual global sales over $925M and sales within the EU of $61M. They have no right to define anything about a company other than what's happening within the EU. I thought the idea of taxation within each EU country goes against the charter of the EU where sharing taxes was why they even were formed. I wonder whether each country will be able to assign their own level of taxes or if big brother EU will force them to charge what the EU wants. I also wonder whether this is only applies to non-EU-based companies.
    I don’t think the EU charter was ever to share taxes. The original charter was to avoid another war by collaborating on trade in coal. That was later expanded to the four freedoms (people, goods, services, and capital. 

    The current EU charter is that the EU and its member states must act and legislate consistently. As long as the same rules apply in any member state, then it aligns with the charter. 

    I agree on the global sales requirement. Sales outside the EU should not impact legislation inside the EU. It is not against the charter though. 
  • Reply 10 of 27
    the 'merica! first sentiment is strong in this thread :lol: 

    99% of companies will pay no additional taxes here, just instead of it all going to 1 member state, the taxes are spread between the countries relative to the sales in each country - seems the fairest way to do things. It's more about putting a stop to the "tax haven" status Ireland and Luxembourg have been known for, for years now.
  • Reply 11 of 27
    maestro64maestro64 Posts: 4,335member
    Will this apply to every corporation doing business in Europe or just Apple? I thought the EU was built on the idea of free flow of people and money, now this is building walls instead.

    Actually if you read between the line it is specifically targeting non EU companies since EU companies are not funneling content across borders. Like in the US we have Comcast, AT&T and Verizon who provide content in the US, but they do not provide content in the EU. The EU has local providers of content so they would never be subject to this. There are no large content provided in the EU which stream all over the place.

    Just read a little closer, it looks like the taxation rules will shift to the country in the EU where a company generations most of its revenues. Simple example if Apple sells more  in Germany, then Apple would be taxed on all EU revenue based on Germany's tax rates not Ireland where Apple is incorporated, this could screw with Ireland's deal with Apple. Apple could decide since they have to pay the higher Germany tax why not just set up shop there and get other added benefits. 

    I suspect we will see more laws like this in the EU. It sound like the EU is looking to impose a sales tax kind of activity which companies will pay. The taxes are no on the profits but revenue, so it comes off the top not the bottom which most taxes are paid on profits after all deductions.

    This is what happen when you promise to provide for everyone on, you let more people into your country then your economy can support, and you only require people to work 35 hours, and everyone get 6 weeks of holiday.
    edited March 19 jbdragon
  • Reply 12 of 27
    fallenjtfallenjt Posts: 3,930member
    Does it matter? The cost will pass down to consumers. Apple will get the same profit margins anyway.
    jbdragonbshank
  • Reply 13 of 27
    Actually, when you get the chance to read more than a snippet, this isn’t bad at all. The tax rate proposed is 3% of gross revenue generated within the EU. 

    That compares Apple’s current tax (expressed as a percent of revenue) which about 6%. With tax reform that rate drops to about 5%. 

    The lower EU rate is made possible because the member countries tax consumption.  It’s called VAT (Value Added Tax) which is a kind of national sales tax. 
    tzm41
  • Reply 14 of 27
    MacProMacPro Posts: 17,776member
    I have no idea if this is good or bad for Apple.  However, I have to think if Apple wasn't making so much money all this fuss would never have started.  I don't recall the same fuss over other companies in the past doing the exact same tax structuring Apple has done.  The question is will whatever scheme they come up with be applied to all non European companies or just the ones they feel are too successful?
  • Reply 15 of 27
    So preferential tax treatment for non-digital media companies with annual global revenues under $925 million, and sales within the E.U. that are less than about $61 million.
    Isn't that what the E.U. is attacking Apple on, preferential tax treatment?
    bshank
  • Reply 16 of 27
    jbdragonjbdragon Posts: 1,903member
    Whatever,.. Apple Pays out the Taxes, The people in the EU are the ones paying for the products in higher prices.  Apple is going to get their money.  Really, the people that want this are taxing themselves more.  Corporations don't pay taxes.  They pass those taxes right on down to YOU, the customer.  So YOU the customer are paying for Apple's taxes.  

    I'm fine with it.    If that's what the people want.  Giving more money to the EU, I'm sure they'll love it and have more money to waste on crap.   I think the EU should just throw on another 20% on everything in taxes.  People seem to like them there.

    anton zuykovbshank
  • Reply 17 of 27
    maestro64 said:
    I thought the EU was built on the idea of free flow of people and money, now this is building walls instead.

    EU companies are not funneling content across borders. 
    So are you saying that each company in Europe pays taxes in the country for which its sales occurred? Eg, if an Irish company sells widgets in Germany you are saying they pay taxes for the profit in Germany? That's what "not funnelling content across borders" seems to say to me. I view this new rule as an inconsistent application of tax law to non-EU companies. Am I wrong?
  • Reply 18 of 27
    anton zuykovanton zuykov Posts: 1,016member
    Who cares. The EU won't exist within 5 years.
    Hey, don't get them distracted with your gloomy predictions. EU still have very important laws to pass, such as the ones mandating length of cucumbers, and size of bread loafs.
    bshankSpamSandwich
  • Reply 19 of 27
    anton zuykovanton zuykov Posts: 1,016member
    jbdragon said:
    Whatever,.. Apple Pays out the Taxes, The people in the EU are the ones paying for the products in higher prices.  Apple is going to get their money.  Really, the people that want this are taxing themselves more.  Corporations don't pay taxes.  They pass those taxes right on down to YOU, the customer.  So YOU the customer are paying for Apple's taxes.  

    I'm fine with it.    If that's what the people want.  Giving more money to the EU, I'm sure they'll love it and have more money to waste on crap.   I think the EU should just throw on another 20% on everything in taxes.  People seem to like them there.

    I think, 20% is not enough. 50% would do it! Besides, it is a nice and round number.
    bshankSpamSandwich
  • Reply 20 of 27
    entropysentropys Posts: 1,374member
    Who cares. The EU won't exist within 5 years.
    Hey, don't get them distracted with your gloomy predictions. EU still have very important laws to pass, such as the ones mandating length of cucumbers, and size of bread loafs.
    It would be funny if it wasn’t doing harm.  Mind, up you, don’t forget the benefits: it is easy to buy a nice villa in the French countryside to spend your weekends away from corporate raiding in the City or your few weeks sitting in Westminster every year.
    Worrying about the price of bananas is for little people.
    edited March 19
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