Apple says EU exaggerates the importance of Ireland to its business

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Apple continues to argue its appeal against the European Commission's $14.4 billion tax ruling, saying that the order was based on the erroneous idea that Ireland is key to Apple's strategic planning.

Apple's Irish headquarters
Apple's Irish headquarters


In a second day at the European Union General Court, Apple is continuing its appeal against a prior tax order, and concentrates on what it says is the erroneous basis for that judgement. The order required Apple to pay $14.4 billion in back taxes to Ireland, even though that country negotiated its tax rate with the company and is in court supporting Apple.

According to Reuters, Apple lawyer Daniel Beard continues to argue that Apple's business in Ireland is not significant.

Referring to Tim Cook's 2013 testimony on the matter in the US Senate, Beard acknowledged that Ireland was important, but said the EU was overestimating its significance.

"Yes, Apple CEO Tim Cook said there were decisions taken in Ireland," he said, "but not strategic decisions."

Beard and the legal team from Apple also criticized the European Commission for having refused Apple's offer to visit the company's operations in Ireland.

However, Paul-John Lowenthal, lawyer for the Commission rejected the claim. "What would a site visit accomplish?" he asked.

The European Union General Court is the second-highest authority in Europe, which means that whichever side loses this current appeal, the other is likely to take on to the EU Court of Justice.

Consequently, no final judgement is expected for some years, but it's also not the only similar case under review. European Competition Commissioner Margrethe Vestager has also targeted other multinational corporations such as Starbucks and Amazon.

Comments

  • Reply 1 of 14
    I wonder what apple means that Ireland is not important in strategic planning? Financially the location, location over all or in corporate operations?

    There must’ve been a huge incentive over usual hubs in Europe that Google too decided to locate their HQs in Europe to Ireland, Ireland isn’t really in the middle of action. But I hope that if this all along has been a tax haven loophole it gets closed, all profit in unpaid taxes get repaid.

    As the article said, we’ll see in a couple of years what is the verdict, but currently doesn’t look like good practice has been followed. 
    kestralmuthuk_vanalingam
  • Reply 2 of 14
    I would have thought Apple lawyers to be more astute than this .....
    muthuk_vanalingam
  • Reply 3 of 14
    gatorguygatorguy Posts: 21,253member
    IMO this is a ridiculous argument.  Arguing that Ireland isn't important at the same time they move revenue's from across the EU and Asia into accounts controlled by their Irish subsidiaries seems $200B+ disingenuous. It could well come back to bite them as individual countries investigate big tech tax avoidance issues, something France is currently doing. 
    edited September 18 Abalos65kestralmuthuk_vanalingam
  • Reply 4 of 14
    gatorguy said:
    IMO this is a ridiculous argument.  Arguing that Ireland isn't important at the same time they move revenue's from across the EU and Asia into accounts controlled by their Irish subsidiaries seems $200B+ disingenuous. It could well come back to bite them as individual countries investigate big tech tax avoidance issues, something France is currently doing. 
    Here's the following 2 paragraphs from the Reuters' article (which explains why Apple was making this point):

    Apple did not do a special Irish tax deal in return for creating jobs, Beard added.

    “The Commission went out of its way to tell a fairy story about supposed benefits to employment. It has no evidence, it is wrong. There was no sense of any special deal. Ireland properly and correctly taxed the Irish branches. There was no derogation from the normal rules,” he said in his closing argument.


    steven n.cat52chasm
  • Reply 5 of 14
    gatorguygatorguy Posts: 21,253member
    gatorguy said:
    IMO this is a ridiculous argument.  Arguing that Ireland isn't important at the same time they move revenue's from across the EU and Asia into accounts controlled by their Irish subsidiaries seems $200B+ disingenuous. It could well come back to bite them as individual countries investigate big tech tax avoidance issues, something France is currently doing. 
    Here's the following 2 paragraphs from the Reuters' article (which explains why Apple was making this point):

    Apple did not do a special Irish tax deal in return for creating jobs, Beard added.

    “The Commission went out of its way to tell a fairy story about supposed benefits to employment. It has no evidence, it is wrong. There was no sense of any special deal. Ireland properly and correctly taxed the Irish branches. There was no derogation from the normal rules,” he said in his closing argument.


    Ah, thanks for that.

    So more a sideshow argument while avoiding reference to Apple's lightly-to-not-at-all-taxed subsidiaries who had nothing directly to do with minimal manufacturing of some Macs.

    IMO the reason Apple has their only Apple-owned manufacturing plant in the world located in Cork is to use it as Irish tax shelter support for their worldwide profits. Without the tax avoidance made possible by the cost+ tax bill Apple arranged for manufacturing the 2 Irish financial subsidiaries would not have had cover. 
    edited September 18 muthuk_vanalingam
  • Reply 6 of 14
    Apple could literally buy Ireland for a few hundred billion.
  • Reply 7 of 14
    I can't understand how any government can change tax laws, or any law for that matter, and make those laws retroactive.
    cat52
  • Reply 8 of 14
    I think a site visit might have been quite enlightening.


    gatorguyFileMakerFellercincytee
  • Reply 9 of 14
    crowleycrowley Posts: 6,056member
    realistic said:
    I can't understand how any government can change tax laws, or any law for that matter, and make those laws retroactive.
    Not that this is what's happening here anyway, but why not?  It's pretty simple.
  • Reply 10 of 14
    gatorguygatorguy Posts: 21,253member
    hentaiboy said:
    I think a site visit might have been quite enlightening.


    LOL!
  • Reply 11 of 14
    crowley said:
    realistic said:
    I can't understand how any government can change tax laws, or any law for that matter, and make those laws retroactive.
    Not that this is what's happening here anyway, but why not?  It's pretty simple.
    It’s exactly what’s happening. The EU has loosely goosey tax laws allowing the EC to interpret them any way they want and not even present any real evidence.
    cat52
  • Reply 12 of 14
    Why do some people call it 'tax avoidance'? Apple is not avoiding the taxes. As a rational economic entity they optimise their financial burden within the legal framework. Apple is optimising its finances. If you personally not doing any optimisation for your own finances, you are (at least) not rational.
    cat52
  • Reply 13 of 14
    chasmchasm Posts: 1,698member
    gatorguy said:
    Ah, thanks for that.

    So more a sideshow argument while avoiding reference to Apple's lightly-to-not-at-all-taxed subsidiaries who had nothing directly to do with minimal manufacturing of some Macs.

    IMO the reason Apple has their only Apple-owned manufacturing plant in the world located in Cork is to use it as Irish tax shelter support for their worldwide profits. Without the tax avoidance made possible by the cost+ tax bill Apple arranged for manufacturing the 2 Irish financial subsidiaries would not have had cover. 
    1. I was under the impression that the last actual "manufacturing" that was done in Cork anymore was the "built to order" assembly of custom Macs. Back two decades or so ago, IIRC, some Mac Pro models and Airport units were made there. Of the 6K people employed there, a tiny percentage are involved in this "manufacturing," which is mostly automated nowadays. According to the article The Irish Times wrote about it, most of the rest are involved in "customer care, finance, localisation, logistics ... finance, sales support and transport management. In more recent times, it has also taken responsibility for iTunes after the business relocated from Luxembourg."

    2. Amazingly canny of Steve to predict, more than 30 years ahead of time, that Apple would need to "use" the manufacturing plant (which, as I say, was the major function of the Cork facility originally) as a "tax shelter" when he opened it in 1980. Of course, he always was ahead of his time ...LOL

    My main problem with this whole sham trial is that a) there's no evidence that Apple knowingly entered into an illegal arrangement, conspiring with Ireland against the EU, that was not offered to other companies -- and b) that if there is fault here for an illegal tax-avoidance scheme, that blame would seem to fall 100 percent on the Irish government of 1980. So ... why is Apple on trial here?

    Apple, like most companies, take advantage of loopholes in various countries' tax laws to lower their tax bill, entirely in line with their fiduciary responsibilities to do so. But neither Apple nor the other companies that have taken advantage of this wrote the loopholes, nor did they actually break any laws. So again ... how is Ireland not 100 percent to blame if the deal was retroactively ruled (10 years later) a "special deal," and why is Apple on trial?
    edited September 20 cat52
  • Reply 14 of 14
    sphericspheric Posts: 1,798member
    realistic said:
    I can't understand how any government can change tax laws, or any law for that matter, and make those laws retroactive.
    Put it differently:

    Suppose you drew up a contract with a customer, but forgot to include service tax, even though you should have been required to.

    Years later, somebody checks your books and discovers that legally, the contract should have included service tax. Does the law require the customer to pay that tax to you, retroactively, because it was actually a required part of the contract, or can you just forfeit it? 
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