I say make Apple Pay. They want heavy government spending, they should pay for it; their effective tax rate is too low for the biggest public company in the world.
It was Ireland who broke the law, not Apple. Apple reaped the benefits of the scheme (as did Ireland). But it was Ireland who committed the crime -- Apple basically simply received the stolen goods.
Isn’t knowingly taking stolen goods a crime?
Can you prove that Apple knew that they were receiving stolen goods? Think carefully now, because so far, Ireland doesn't believe the goods were stolen and neither does the court of appeal
Good news, it was obvious that the EU were on a money grab and trying to retroactively change the law to do so imho. I’m not saying Apple and Ireland will ultimately win even though I do not believe for a minute Apple broke the law. I do believe the EU will more than ever given recent economic events do anything they can get to as much as they can from anywhere they can.
This has been gone over many times, there is no retroactive changing of the law, the law came into force in 1992 (I believe it was Maastricht) and Ireland should have adjusted its tax relationship with Apple at the time. Just because it has taken a number of years for the case to be brought doesn't mean the law has been changed in any way. It is Ireland that is accused of breaking EU law, not Apple; Apple was merely the beneficiary. Also, the EU will not "get" anything much from this - if Apple and Ireland loses the case then the money held in escrow is payable to the tax authorities in Ireland, not the EU.
Again, this has been covered many times. Please stop spreading misinformation.
You're the one spreading misinformation, I am afraid. If the money gets credited to Ireland, that is money in the bank for the EU since they will have to send a smaller annual check to the country (Ireland is a net recipient of EU largesse).
Moreover, if Apple had lost, the long run consequences for Ireland, by making is less competitive as a destination for US tech investment, might have been for more onerous. You're ignoring some basic facts here.
Ireland is a net contributor to the EU, and has been for a while.
As for the comment you were replying to, the law used against Ireland was state aid, not that they had too low a taxation level. Which isn't something that is a competency of the EU.
Ireland didn't turn positive in its net contributions to the EU until recently (2018, I think). During the period 2014-2016 (when the case was being brought), Ireland was a net recipient (see below for actual EU -- not Irish Times -- data). Ireland was even more of a net recipient during the period of the supposed "preferential tax treatment", i.e., the period that is actually being litigated (which I believe was the 2000s through the early 2010s).
I recall discussion in the media then about how, if the EU won the case, Ireland might have had to fork over the money to the EU because of its cumulative net recipient status.
I say make Apple Pay. They want heavy government spending, they should pay for it; their effective tax rate is too low for the biggest public company in the world.
Even if this case ultimately goes the other way - i.e., Apple and Ireland lose - that won't mean Apple pays more taxes. Rather, it will mean that Apple pays taxes to a different jurisdiction. The supposed taxes that would be paid to Ireland would represent a credit against U.S. taxes owed (pursuant to the deemed repatriation of the Tax Cuts and Jobs Act).
That's likely part of why it took a while for Ireland to get Apple to escrow the funds. Apple had leverage. Ireland needed Apple to agree on how the escrow funds would be invested and that Ireland wouldn't be responsible for losses that might occur.
It is all so stupid. Corporations do not pay taxes- they pass them on to the customers.
Sure, that's largely true, but if some corporations are allowed to evade or avoid paying some or all tax then they have an unfair competitive advantage over those that cannot. The whole point of this is the claim that Apple was afforded special treatment that wasn't available to their competitors.
The Commission's problem is it can't demonstrate that the profit allocation method which Apple was allowed to use wasn't available to other similarly situated parties. (That's not necessarily the problem it had in the General Court. But that's its big picture problem.)
This was an interpretation, by Ireland, of its own tax laws and policies. It told Apple that a certain method (what I'll call cost plus) for determining the profits of the Irish branches of its Irish corporations was okay. Did Ireland tell similarly situated parties that it wasn't okay for them to use such method? The Commission couldn't identify any such parties. That's what it really needs to make its case. It needs to demonstrate that Ireland told others that they couldn't use the same method which Apple used.
The Commission's decision essentially said... We don't like what your interpretation of your tax policies allowed to happen. We don't think it made for good policy. And we wouldn't have chosen such tax policies, so you must not have chosen such tax policies and what you allowed Apple to do thus wasn't consistent with your tax policies and was thus state aid.
The Commission would deny that reading of its decision, I'm sure. But that's what it boiled down to. It couldn't, and didn't, demonstrate what it claimed.
Good news, it was obvious that the EU were on a money grab and trying to retroactively change the law to do so imho. I’m not saying Apple and Ireland will ultimately win even though I do not believe for a minute Apple broke the law. I do believe the EU will more than ever given recent economic events do anything they can get to as much as they can from anywhere they can.
This has been gone over many times, there is no retroactive changing of the law, the law came into force in 1992 (I believe it was Maastricht) and Ireland should have adjusted its tax relationship with Apple at the time. Just because it has taken a number of years for the case to be brought doesn't mean the law has been changed in any way. It is Ireland that is accused of breaking EU law, not Apple; Apple was merely the beneficiary. Also, the EU will not "get" anything much from this - if Apple and Ireland loses the case then the money held in escrow is payable to the tax authorities in Ireland, not the EU.
Again, this has been covered many times. Please stop spreading misinformation.
No. Ireland should NOT have adjusted their tax rate in 1992. That is a fundamental misreading of the law. Margrethe Vestager misread it and the court agreed. The Maastricht Treaty never mandated tax harmonization between the nations of the EU.
Excerpt from The Spectator: “The EU has been using tech regulation, and competition policy, as a cover for a naked, federalising power grab. Let’s take the Apple case as an example. The company is perfectly entitled to base a lot of its operations in Ireland, which happens to have a very low corporate tax rate (just 12.5 per cent). Low taxes are one of the ways that what used to be a slightly damp island on the far west of Europe has made itself one of the richer countries in the world.”
Ireland was always perfectly happy with Apple’s taxes. It paid what it owed in full. And Apple was quite happy to base itself there, and employ lots of people. And then the EU came along, and tried to redefine that as 'state aid' and slapped it with a huge bill. It is hardly the first time that has happened. The Commission has already lost a similar case against Starbucks, and Google is quite rightly appealing against the billions in fines that have been imposed upon it (its lawyers must be smiling this morning).”
Whether you happen to approve of big American companies or not isn’t really the point, whatever the EU’s defenders try to maintain. In reality, under the existing treaties, aside from VAT, Ireland is allowed to charge any taxes it wants. If the Commission wants an EU-wide corporate tax it should argue for it, and change the treaties openly. Instead, it has been trying to do it in secret, and with lots of spin, but, as it has just discovered, without any legal basis.”
The EU often tries to portray itself as a 'rules-based' organisation. But it is increasingly acting outside the law. It has now lost a whole series of key cases, and in its own courts as well.”
Good news, it was obvious that the EU were on a money grab and trying to retroactively change the law to do so imho. I’m not saying Apple and Ireland will ultimately win even though I do not believe for a minute Apple broke the law. I do believe the EU will more than ever given recent economic events do anything they can get to as much as they can from anywhere they can.
This has been gone over many times, there is no retroactive changing of the law, the law came into force in 1992 (I believe it was Maastricht) and Ireland should have adjusted its tax relationship with Apple at the time. Just because it has taken a number of years for the case to be brought doesn't mean the law has been changed in any way. It is Ireland that is accused of breaking EU law, not Apple; Apple was merely the beneficiary. Also, the EU will not "get" anything much from this - if Apple and Ireland loses the case then the money held in escrow is payable to the tax authorities in Ireland, not the EU.
Again, this has been covered many times. Please stop spreading misinformation.
You're the one spreading misinformation, I am afraid. If the money gets credited to Ireland, that is money in the bank for the EU since they will have to send a smaller annual check to the country (Ireland is a net recipient of EU largesse).
Moreover, if Apple had lost, the long run consequences for Ireland, by making is less competitive as a destination for US tech investment, might have been for more onerous. You're ignoring some basic facts here.
Ireland is a net contributor to the EU, and has been for a while.
As for the comment you were replying to, the law used against Ireland was state aid, not that they had too low a taxation level. Which isn't something that is a competency of the EU.
Ireland didn't turn positive in its net contributions to the EU until recently (2018, I think). During the period 2014-2016 (when the case was being brought), Ireland was a net recipient (see below for actual EU -- not Irish Times -- data). Ireland was even more of a net recipient during the period of the supposed "preferential tax treatment", i.e., the period that is actually being litigated (which I believe was the 2000s through the early 2010s).
I recall discussion in the media then about how, if the EU won the case, Ireland might have had to fork over the money to the EU because of its cumulative net recipient status.
+
Dont know where that map came from, do you have a source? In any case its from 2014-2016. Here is another source for Ireland being a net contributor.
As to whether the EU would spend more money in Ireland or garner more money from it if the case had gone the other way I doubt it. EU spending into a country is largely fixed on certain industries.
Good news, it was obvious that the EU were on a money grab and trying to retroactively change the law to do so imho. I’m not saying Apple and Ireland will ultimately win even though I do not believe for a minute Apple broke the law. I do believe the EU will more than ever given recent economic events do anything they can get to as much as they can from anywhere they can.
This has been gone over many times, there is no retroactive changing of the law, the law came into force in 1992 (I believe it was Maastricht) and Ireland should have adjusted its tax relationship with Apple at the time. Just because it has taken a number of years for the case to be brought doesn't mean the law has been changed in any way. It is Ireland that is accused of breaking EU law, not Apple; Apple was merely the beneficiary. Also, the EU will not "get" anything much from this - if Apple and Ireland loses the case then the money held in escrow is payable to the tax authorities in Ireland, not the EU.
Again, this has been covered many times. Please stop spreading misinformation.
No. Ireland should NOT have adjusted their tax rate in 1992. That is a fundamental misreading of the law. Margrethe Vestager misread it and the court agreed. The Maastricht Treaty never mandated tax harmonization between the nations of the EU.
Excerpt from The Spectator: “The EU has been using tech regulation, and competition policy, as a cover for a naked, federalising power grab. Let’s take the Apple case as an example. The company is perfectly entitled to base a lot of its operations in Ireland, which happens to have a very low corporate tax rate (just 12.5 per cent). Low taxes are one of the ways that what used to be a slightly damp island on the far west of Europe has made itself one of the richer countries in the world.”
Ireland was always perfectly happy with Apple’s taxes. It paid what it owed in full. And Apple was quite happy to base itself there, and employ lots of people. And then the EU came along, and tried to redefine that as 'state aid' and slapped it with a huge bill. It is hardly the first time that has happened. The Commission has already lost a similar case against Starbucks, and Google is quite rightly appealing against the billions in fines that have been imposed upon it (its lawyers must be smiling this morning).”
Whether you happen to approve of big American companies or not isn’t really the point, whatever the EU’s defenders try to maintain. In reality, under the existing treaties, aside from VAT, Ireland is allowed to charge any taxes it wants. If the Commission wants an EU-wide corporate tax it should argue for it, and change the treaties openly. Instead, it has been trying to do it in secret, and with lots of spin, but, as it has just discovered, without any legal basis.”
The EU often tries to portray itself as a 'rules-based' organisation. But it is increasingly acting outside the law. It has now lost a whole series of key cases, and in its own courts as well.”
Right the real problem here isnt that Apple should or should not be paying more taxes. It probably should be paying more in fact, in Europe. And maybe taxes should be equalised across the EU. Maybe there is a need for a digital tax.
But this is underhand nonsense, a redefinition of State Aid, all the more appalling as State Aid goes on all the time in the EU. I mean banks were bailed out in 2008. Covid payments are a form of state aid.
I say make Apple Pay. They want heavy government spending, they should pay for it; their effective tax rate is too low for the biggest public company in the world.
Even if this case ultimately goes the other way - i.e., Apple and Ireland lose - that won't mean Apple pays more taxes. Rather, it will mean that Apple pays taxes to a different jurisdiction. The supposed taxes that would be paid to Ireland would represent a credit against U.S. taxes owed (pursuant to the deemed repatriation of the Tax Cuts and Jobs Act).
How so? That's the part that's always confused me.
Where in Apple's financial statements is that Irish held (or Jersey held) "cash" accounted for and where is the tax obligation stated? It should be way in excess of $200 billion cash, maybe just this side of $300B by now with some of it (maybe a lot of it) offset by loan obligations, Apple borrowing against it rather than repatriating and paying the taxes. At one point those Irish held funds were treated as undeclared which I thought meant no accompanying tax obligation established.
And no I'm not trying to distract from the topic so if you'd rather not get into it we can start a different thread. I am neither a tax accountant nor a lawyer so I can absolutely defer to those members that factually are. Won't hurt my feelings to learn something I did not know.
I say make Apple Pay. They want heavy government spending, they should pay for it; their effective tax rate is too low for the biggest public company in the world.
This isn’t about making Apple pay. Ireland can change their corporate tax rate at will with passage of new Irish tax regulations. It’s about the European Commission’s attempt to strengthen its centralized authority over individual nations by stealth.
I say make Apple Pay. They want heavy government spending, they should pay for it; their effective tax rate is too low for the biggest public company in the world.
This isn’t about making Apple pay. Ireland can change their corporate tax rate at will with passage of new Irish tax regulations.
The rate charged Apple was not a standard Irish corporate tax rate. It was a special and unique negotiated one. New tax regulations would not necessarily prevent the same result.
Good news, it was obvious that the EU were on a money grab and trying to retroactively change the law to do so imho. I’m not saying Apple and Ireland will ultimately win even though I do not believe for a minute Apple broke the law. I do believe the EU will more than ever given recent economic events do anything they can get to as much as they can from anywhere they can.
This has been gone over many times, there is no retroactive changing of the law, the law came into force in 1992 (I believe it was Maastricht) and Ireland should have adjusted its tax relationship with Apple at the time. Just because it has taken a number of years for the case to be brought doesn't mean the law has been changed in any way. It is Ireland that is accused of breaking EU law, not Apple; Apple was merely the beneficiary. Also, the EU will not "get" anything much from this - if Apple and Ireland loses the case then the money held in escrow is payable to the tax authorities in Ireland, not the EU.
Again, this has been covered many times. Please stop spreading misinformation.
No. Ireland should NOT have adjusted their tax rate in 1992. That is a fundamental misreading of the law. Margrethe Vestager misread it and the court agreed. The Maastricht Treaty never mandated tax harmonization between the nations of the EU.
Excerpt from The Spectator: “The EU has been using tech regulation, and competition policy, as a cover for a naked, federalising power grab. Let’s take the Apple case as an example. The company is perfectly entitled to base a lot of its operations in Ireland, which happens to have a very low corporate tax rate (just 12.5 per cent). Low taxes are one of the ways that what used to be a slightly damp island on the far west of Europe has made itself one of the richer countries in the world.”
Ireland was always perfectly happy with Apple’s taxes. It paid what it owed in full. And Apple was quite happy to base itself there, and employ lots of people. And then the EU came along, and tried to redefine that as 'state aid' and slapped it with a huge bill. It is hardly the first time that has happened. The Commission has already lost a similar case against Starbucks, and Google is quite rightly appealing against the billions in fines that have been imposed upon it (its lawyers must be smiling this morning).”
Whether you happen to approve of big American companies or not isn’t really the point, whatever the EU’s defenders try to maintain. In reality, under the existing treaties, aside from VAT, Ireland is allowed to charge any taxes it wants. If the Commission wants an EU-wide corporate tax it should argue for it, and change the treaties openly. Instead, it has been trying to do it in secret, and with lots of spin, but, as it has just discovered, without any legal basis.”
The EU often tries to portray itself as a 'rules-based' organisation. But it is increasingly acting outside the law. It has now lost a whole series of key cases, and in its own courts as well.”
I didn’t say Ireland needed to adjust their tax rate. You’re quite right that they didn’t. What they needed to adjust was the arrangement they had with Apple that meant Apple were paying less than the 12.5% rate.
This has nothing to do with Ireland’s general tax rate, it has to do with special arrangements, where the accusation is that Apple were afforded circumstances that weren’t available to other companies.
I say make Apple Pay. They want heavy government spending, they should pay for it; their effective tax rate is too low for the biggest public company in the world.
Even if this case ultimately goes the other way - i.e., Apple and Ireland lose - that won't mean Apple pays more taxes. Rather, it will mean that Apple pays taxes to a different jurisdiction. The supposed taxes that would be paid to Ireland would represent a credit against U.S. taxes owed (pursuant to the deemed repatriation of the Tax Cuts and Jobs Act).
How so? That's the part that's always confused me.
Where in Apple's financial statements is that Irish held (or Jersey held) "cash" accounted for and where is the tax obligation stated? It should be well in excess of $200 billion cash with some of it (maybe a lot of it) offset by loan obligations, Apple borrowing against it rather than repatriating and paying the taxes. At one point those Irish held funds were treated as undeclared which I thought meant no accompanying tax obligation.
And no I'm not trying to distract from the topic so if you'd rather not get into it we can start a different thread. I am neither a tax accountant nor a lawyer so I can absolutely defer to those members that factually are. Won't hurt my feelings to learn something I did not know.
So a few things about how this work, some of this you may already understand, but I'm gonna hit aspects of it anyway...
Apple has long had foreign earnings which weren't repatriated. That just means the the foreign subsidiaries which made those earnings didn't technically pay them to the parent corporation as dividends. It's similar to how I might own stock in a company. It might have earnings which it pays taxes on, but then it may keep those earnings for some period of time - i.e., it may have retained earnings. If it pays them to me as a dividend, then I (typically) incur tax liability for those earnings. In Apple's case it owns foreign corporations in their entireties, not just shares in them, so the parent company effectively decides whether the foreign subsidiaries will retain the earnings themselves or hand them over to the parent company. If it hands them over, then the parent corporation - a U.S. corporation - may have tax liability for those earnings which the parent company now has.
As for where the cash is accounted for, it's accounted for in a number of ways. The cash (or equivalents) held by subsidiaries is, generally, all lumped together when it comes to reporting Apple's assets. Apple reports that it has X in cash and cash equivalents. It reports this much in certain kinds of instruments and that much in other kinds of instruments. That doesn't mean that Apple, the parent corporation, owns those assets. It means that Apple, the parent corporation, or one of its subsidiaries owns those assets. Some of those assets represent earnings which have been retained by foreign subsidiaries. Apple also reports (or did report) deferred income tax liability and a number of other metrics relating to earnings of foreign subsidiaries. The earnings of foreign subsidiaries aren't undeclared, they just aren't paid to the parent corporation. In some cases Apple intends to eventually have them paid to the parent corporation and so Apple records deferred tax liability for them. In other cases Apple has no plans to ever repatriate the earnings so it doesn't record deferred tax liability for them.
The TCJA deems past foreign earnings (so-called post-1986 earnings) as repatriated. In other words, it doesn't matter whether U.S. parent corporations actually have those foreign earnings paid to them by their foreign subsidiaries. They now owe income taxes on those earnings regardless. The rate is lower, but taxes are now due on them which weren't due on them before. But when it comes to paying U.S. income taxes on foreign earnings, Apple and others generally get credits for the foreign taxes which have been paid on those earnings. So, speaking simplistically, if Apple would owe the U.S. government $10 billion on $100 billion in earnings that its foreign subsidiaries made, but those foreign subsidiaries already paid $5 billion in taxes on those earnings, then Apple would only owe the U.S. government $5 billion in taxes on them.
Returning to the Apple-Irish tax situation, if Apple is ultimately determined to owe Ireland more taxes for years passed, then those taxes paid will generally become credits against the U.S. income taxes that Apple will have to pay pursuant to the TCJA. The money will be paid to Ireland instead of to the U.S., not paid to Ireland in addition to what is paid to the U.S. Apple's TCJA tax bill will be reduced.
Apple's only crime was essentially receiving stolen goods -- where Ireland undercut EU taxation rules.
But, if nothing else, this points out the absurdity of international taxation rules -- where a company can fabricate a "headquarters" in some low taxation environment and then operate in other, better established countries and take advantage of the societal advantages there -- societal advantages reaped from infrastructure and stability from a strong central government supported by an adequate revenue stream.
This is not new: companies have been locating fake headquarters in Caribbean tax havens for decades. In fact, that area featured prominently in the causes of the 2008 Great Recession where bad loans were packaged into highly rated CDO's in these Caribbean shelters and sold to unsuspecting buyers. Essentially, it is one country bypassing international rules to benefit itself -- much like any organized crime family does the same.
It is past time that international taxation conventions be modernized to insure that companies (not just Apple) pay for the benefits they receive in the countries they operate in.
I’m confused about what “international taxation rules” you are referring to. I believe each independent nation is entitled to establish their own tax laws and regulations - or did I miss something.
I must point out that Delaware has no corporate taxes and many US companies choose to place their headquarters in that state for that reason. I don’t see anyone screaming about how unfair that is.
It is all so stupid. Corporations do not pay taxes- they pass them on to the customers.
And it is absolutely stunning how so many are seemingly incapable of understanding that simple concept. If the fervor to “stick it to the corporation” too many lack the fundamental awareness of where the money comes from.
Apple's only crime was essentially receiving stolen goods -- where Ireland undercut EU taxation rules.
But, if nothing else, this points out the absurdity of international taxation rules -- where a company can fabricate a "headquarters" in some low taxation environment and then operate in other, better established countries and take advantage of the societal advantages there -- societal advantages reaped from infrastructure and stability from a strong central government supported by an adequate revenue stream.
This is not new: companies have been locating fake headquarters in Caribbean tax havens for decades. In fact, that area featured prominently in the causes of the 2008 Great Recession where bad loans were packaged into highly rated CDO's in these Caribbean shelters and sold to unsuspecting buyers. Essentially, it is one country bypassing international rules to benefit itself -- much like any organized crime family does the same.
It is past time that international taxation conventions be modernized to insure that companies (not just Apple) pay for the benefits they receive in the countries they operate in.
I’m confused about what “international taxation rules” you are referring to. I believe each independent nation is entitled to establish their own tax laws and regulations - or did I miss something.
I must point out that Delaware has no corporate taxes and many US companies choose to place their headquarters in that state for that reason. I don’t see anyone screaming about how unfair that is.
Delaware is widely considered to be a tax haven, and there are plenty of people who are opposed to such practises.
I say make Apple Pay. They want heavy government spending, they should pay for it; their effective tax rate is too low for the biggest public company in the world.
This isn’t about making Apple pay. Ireland can change their corporate tax rate at will with passage of new Irish tax regulations.
The rate charged Apple was not a standard Irish corporate tax rate. It was a special and unique negotiated one. New tax regulations would not necessarily prevent the same result.
Ireland didn't negotiate a special rate with Apple. The Commission didn't even accuse Ireland of doing that.
The issue was how two aspects of Irish tax law and policy interacted. One was the quirky rule by which the earnings of non-Irish branches of Irish corporations weren't taxed by Ireland. That rule was a bit of an outlier when it comes to international tax policies. But it was a rule that Ireland had every right, based on EU agreements, to have. That rule has since been changed.
The other aspect of the situation was Ireland's interpretation of what methods are allowable when it comes to determining how much of an Irish corporation's profits are allocated to the respective branches of that corporation. Ireland allowed Apple to use a cost plus method to determine the profits of the Irish branches of its Irish subsidiaries. That method left the rest of those corporations' profits to the non-Irish branches, thus they weren't - under Irish law - taxed by Ireland.
The only real question is whether that method, which Ireland allowed, was contrary to generally-applicable Irish tax policies. But, at any rate, Apple paid the standard rate on its taxable income in Ireland. As is always the case when it comes to taxes, the question is what is and what isn't taxable in a given scenario.
Comments
Can you prove that Apple knew that they were receiving stolen goods? Think carefully now, because so far, Ireland doesn't believe the goods were stolen and neither does the court of appeal
Ireland didn't turn positive in its net contributions to the EU until recently (2018, I think). During the period 2014-2016 (when the case was being brought), Ireland was a net recipient (see below for actual EU -- not Irish Times -- data). Ireland was even more of a net recipient during the period of the supposed "preferential tax treatment", i.e., the period that is actually being litigated (which I believe was the 2000s through the early 2010s).
I recall discussion in the media then about how, if the EU won the case, Ireland might have had to fork over the money to the EU because of its cumulative net recipient status.
Even if this case ultimately goes the other way - i.e., Apple and Ireland lose - that won't mean Apple pays more taxes. Rather, it will mean that Apple pays taxes to a different jurisdiction. The supposed taxes that would be paid to Ireland would represent a credit against U.S. taxes owed (pursuant to the deemed repatriation of the Tax Cuts and Jobs Act).
That's likely part of why it took a while for Ireland to get Apple to escrow the funds. Apple had leverage. Ireland needed Apple to agree on how the escrow funds would be invested and that Ireland wouldn't be responsible for losses that might occur.
This was an interpretation, by Ireland, of its own tax laws and policies. It told Apple that a certain method (what I'll call cost plus) for determining the profits of the Irish branches of its Irish corporations was okay. Did Ireland tell similarly situated parties that it wasn't okay for them to use such method? The Commission couldn't identify any such parties. That's what it really needs to make its case. It needs to demonstrate that Ireland told others that they couldn't use the same method which Apple used.
The Commission's decision essentially said... We don't like what your interpretation of your tax policies allowed to happen. We don't think it made for good policy. And we wouldn't have chosen such tax policies, so you must not have chosen such tax policies and what you allowed Apple to do thus wasn't consistent with your tax policies and was thus state aid.
The Commission would deny that reading of its decision, I'm sure. But that's what it boiled down to. It couldn't, and didn't, demonstrate what it claimed.
https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-07/cp200090en.pdf
Excerpt from The Spectator:
“The EU has been using tech regulation, and competition policy, as a cover for a naked, federalising power grab. Let’s take the Apple case as an example. The company is perfectly entitled to base a lot of its operations in Ireland, which happens to have a very low corporate tax rate (just 12.5 per cent). Low taxes are one of the ways that what used to be a slightly damp island on the far west of Europe has made itself one of the richer countries in the world.”
https://www.statista.com/chart/18794/net-contributors-to-eu-budget/
As to whether the EU would spend more money in Ireland or garner more money from it if the case had gone the other way I doubt it. EU spending into a country is largely fixed on certain industries.
But this is underhand nonsense, a redefinition of State Aid, all the more appalling as State Aid goes on all the time in the EU. I mean banks were bailed out in 2008. Covid payments are a form of state aid.
Where in Apple's financial statements is that Irish held (or Jersey held) "cash" accounted for and where is the tax obligation stated? It should be way in excess of $200 billion cash, maybe just this side of $300B by now with some of it (maybe a lot of it) offset by loan obligations, Apple borrowing against it rather than repatriating and paying the taxes. At one point those Irish held funds were treated as undeclared which I thought meant no accompanying tax obligation established.
And no I'm not trying to distract from the topic so if you'd rather not get into it we can start a different thread. I am neither a tax accountant nor a lawyer so I can absolutely defer to those members that factually are. Won't hurt my feelings to learn something I did not know.
This has nothing to do with Ireland’s general tax rate, it has to do with special arrangements, where the accusation is that Apple were afforded circumstances that weren’t available to other companies.
Apple has long had foreign earnings which weren't repatriated. That just means the the foreign subsidiaries which made those earnings didn't technically pay them to the parent corporation as dividends. It's similar to how I might own stock in a company. It might have earnings which it pays taxes on, but then it may keep those earnings for some period of time - i.e., it may have retained earnings. If it pays them to me as a dividend, then I (typically) incur tax liability for those earnings. In Apple's case it owns foreign corporations in their entireties, not just shares in them, so the parent company effectively decides whether the foreign subsidiaries will retain the earnings themselves or hand them over to the parent company. If it hands them over, then the parent corporation - a U.S. corporation - may have tax liability for those earnings which the parent company now has.
As for where the cash is accounted for, it's accounted for in a number of ways. The cash (or equivalents) held by subsidiaries is, generally, all lumped together when it comes to reporting Apple's assets. Apple reports that it has X in cash and cash equivalents. It reports this much in certain kinds of instruments and that much in other kinds of instruments. That doesn't mean that Apple, the parent corporation, owns those assets. It means that Apple, the parent corporation, or one of its subsidiaries owns those assets. Some of those assets represent earnings which have been retained by foreign subsidiaries. Apple also reports (or did report) deferred income tax liability and a number of other metrics relating to earnings of foreign subsidiaries. The earnings of foreign subsidiaries aren't undeclared, they just aren't paid to the parent corporation. In some cases Apple intends to eventually have them paid to the parent corporation and so Apple records deferred tax liability for them. In other cases Apple has no plans to ever repatriate the earnings so it doesn't record deferred tax liability for them.
The TCJA deems past foreign earnings (so-called post-1986 earnings) as repatriated. In other words, it doesn't matter whether U.S. parent corporations actually have those foreign earnings paid to them by their foreign subsidiaries. They now owe income taxes on those earnings regardless. The rate is lower, but taxes are now due on them which weren't due on them before. But when it comes to paying U.S. income taxes on foreign earnings, Apple and others generally get credits for the foreign taxes which have been paid on those earnings. So, speaking simplistically, if Apple would owe the U.S. government $10 billion on $100 billion in earnings that its foreign subsidiaries made, but those foreign subsidiaries already paid $5 billion in taxes on those earnings, then Apple would only owe the U.S. government $5 billion in taxes on them.
Returning to the Apple-Irish tax situation, if Apple is ultimately determined to owe Ireland more taxes for years passed, then those taxes paid will generally become credits against the U.S. income taxes that Apple will have to pay pursuant to the TCJA. The money will be paid to Ireland instead of to the U.S., not paid to Ireland in addition to what is paid to the U.S. Apple's TCJA tax bill will be reduced.
I must point out that Delaware has no corporate taxes and many US companies choose to place their headquarters in that state for that reason. I don’t see anyone screaming about how unfair that is.
The issue was how two aspects of Irish tax law and policy interacted. One was the quirky rule by which the earnings of non-Irish branches of Irish corporations weren't taxed by Ireland. That rule was a bit of an outlier when it comes to international tax policies. But it was a rule that Ireland had every right, based on EU agreements, to have. That rule has since been changed.
The other aspect of the situation was Ireland's interpretation of what methods are allowable when it comes to determining how much of an Irish corporation's profits are allocated to the respective branches of that corporation. Ireland allowed Apple to use a cost plus method to determine the profits of the Irish branches of its Irish subsidiaries. That method left the rest of those corporations' profits to the non-Irish branches, thus they weren't - under Irish law - taxed by Ireland.
The only real question is whether that method, which Ireland allowed, was contrary to generally-applicable Irish tax policies. But, at any rate, Apple paid the standard rate on its taxable income in Ireland. As is always the case when it comes to taxes, the question is what is and what isn't taxable in a given scenario.
How does any of this play into your generalized scenario regarding taxable income?
https://www.irishtimes.com/business/apple-s-cash-mountain-how-it-avoids-tax-and-the-irish-link-1.3281734