European Commission to investigate Apple's Ireland tax haven - report

Posted:
in General Discussion edited June 2014
The competition authority of the European Union is reportedly set to launch a formal investigation on Wednesday into Apple's corporate presence in Ireland, a strategy that it and other companies use to avoid paying taxes.

Cork
Apple's headquarters in Cork, Ireland, via Flickr user Sigalakos.


Additional details on the allegedly impending investigation from the European Commission were not shared by the initial source, Ireland's RTE, according to Reuters. A formal announcement of the investigation is expected to follow.

It's already been established through other investigations that Apple has not broken any laws in utilizing Ireland as a tax haven, so it's unclear exactly what the commission may be seeking in targeting Apple. A U.S. Senate investigation found that Apple paid just 2 percent tax on $74 billion in income made outside America, by moving billions of dollars in profits to affiliate corporations such as Apple Operations International in Ireland, where the effective tax rate is less than 2 percent.

Apple, for its part, has contended that it pays all of the taxes it owes and has broken no laws. Tax laws also force Apple to hold the vast majority of its cash overseas, otherwise it would pay high repatriation rates on bringing that money back to the U.S.

And Apple is not the only company that has set up operations in Ireland for its favorable tax laws. Other major U.S. corporations with a presence there include Google, Microsoft, Facebook, and Amazon.

Facing scrutiny from other countries around the world, legislators in Ireland have expressed interest in closing loopholes that companies use to avoid high taxes. Many companies utilize a strategy famously dubbed the "Double Irish with a Dutch Sandwich," in which funds are routed through the Netherlands to further avoid international taxes.
«134

Comments

  • Reply 1 of 78
    rob53rob53 Posts: 2,073member
    I understand Apple is obeying the local laws but I know the real reason the EU is going after Apple and others is because they don't have any money and haven't figured out a legal and fair way of taxing their people to finance their countries.
  • Reply 2 of 78

    Interesting. Perhaps an august body should be implemented to find out what these "fact-finders" have been up to since this has been going on for years. Where have these "geniuses" been hiding out, at a local pub?

     

    There must come a point where every organization has to justify its existence. Hasn't Apple and all the rest been investigated on this before? The tax officials have been very lax in letting stuff like this happen.

     

    Look at the dimwits in the US (congress) who were recently looking into this and when they asked, "What are you doing?" Apple's execs said, in effect, "You tell us. You wrote and passed the laws that allowed us to do this and now you act like we are not patriots."

     

    The real problem is, $$$. Somehow, at one time, all this favored senators and congressmen's buddies and so it was OK. Heck, they would get trips to Europe, meals, 5 star hotels etc. Now that the US need money, and lots of it, they are trying to change the direction of the "blame" game. It is "The international corporation's fault, not ours." Send these bastards to jail.

  • Reply 3 of 78
    herbapouherbapou Posts: 2,221member
    For hardware, the way I understand it Apple pays its tax in every EU countries then send the money into Ireland. So its a cash placeholder and it affects US Tax not EU tax. Ireland is a good place to hold cash because Apple can invest its cash and only pay 2% in tax to Ireland on the interest it makes.

    For software and services, its another story, it looks like Apple is dodging EU taxes for everything itunes related.

    The EU may have a case on itunes sales, but on hardware sales I dont see anything wrong with this.
  • Reply 4 of 78
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by rob53 View Post



    I understand Apple is obeying the local laws but I know the real reason the EU is going after Apple and others is because they don't have any money and haven't figured out a legal and fair way of taxing their people to finance their countries.



    So just like the US then ;-)

  • Reply 5 of 78
    MacProMacPro Posts: 18,347member
    Apple should just buy the EU. ;)
  • Reply 6 of 78
    bugsnwbugsnw Posts: 717member

    I'd offer a special discount on taxes to get this money back to our shores. Maybe it's time to look at lowering marginal rates and broadening the tax base. Simplify the code and regulations. Make it fair and easy. Make it business friendly. Then watch companies disengage from avoidance activities and worry about creating better goods and services.

     

    Even liberal Steve Jobs decried the unfriendly business climate. Businesses respond to incentives. If we want things done here...........

  • Reply 7 of 78
    rob53rob53 Posts: 2,073member
    Quote:

    Quote:

    Originally Posted by rob53 View Post



    I understand Apple is obeying the local laws but I know the real reason the EU is going after Apple and others is because they don't have any money and haven't figured out a legal and fair way of taxing their people to finance their countries.

     

    Originally Posted by cnocbui View Post

     

    So just like the US then ;-)


    Yes in some ways. I should include equitable way of taxing but at least in the US too many people could care less about supporting the country, other than to pay for guns and bombs, and simply insist they should get all kinds of support without contributing. I'm not talking about the disadvantaged people, I'm talking about corporations, investors, people who have more money than they need (made on the backs of others), farmers, grossly high paid athletes and crazy owners, and everyone who gets a benefit from our insane tax code geared to make the honest people (without lawyers) pay more taxes than they should. Other than these I'd just say--yep

  • Reply 8 of 78
    SpamSandwichSpamSandwich Posts: 31,300member

    It's not at all "unclear"... The goal is to extort the rich companies. As simple as that.

  • Reply 9 of 78
    SpamSandwichSpamSandwich Posts: 31,300member
    Quote:

    Originally Posted by digitalclips View Post



    Apple should just buy the EU. image

     

    Yes. Buy it, sell off the assets and shut it down.

  • Reply 10 of 78
    tallest skiltallest skil Posts: 43,399member
    Originally Posted by digitalclips View Post

    Apple should just buy the EU. image

     

    What, uh… what happens if Italy collapses?

     

    Because I’ve heard things. Not about Italy–well, yes, about Italy, but that’s not what I mean–but about the EU in this regard.

     

    What happens to the Eurozone if one, two, three of its members collapse?

  • Reply 11 of 78
    mastericmasteric Posts: 86member
    With companies leaving California left and right for more tax friendly states like Texas, it surprises me that Apple choose to build their flagship corporate office in un-business-friendly California.

    Just ask Toyota about leaving California for Texas. Don't believe the spin that it had nothing to do with California business costs.
  • Reply 12 of 78
    plovellplovell Posts: 801member
    Same kind of foolery happens within the U.S. as well. That's why all of Microsoft's software sales are "recognized" in Nevada -- no tax. Apple might do the same - I don't know.
  • Reply 13 of 78
    SpamSandwichSpamSandwich Posts: 31,300member
    Quote:

    Originally Posted by Tallest Skil View Post

     

     

    What, uh… what happens if Italy collapses?

     

    Because I’ve heard things. Not about Italy–well, yes, about Italy, but that’s not what I mean–but about the EU in this regard.

     

    What happens to the Eurozone if one, two, three of its members collapse?


     

    Obviously the EU should never have allowed mismanaged and economically damaged countries to join.

  • Reply 14 of 78
    SpamSandwichSpamSandwich Posts: 31,300member
    Quote:
    Originally Posted by Masteric View Post



    With companies leaving California left and right for more tax friendly states like Texas, it surprises me that Apple choose to build their flagship corporate office in un-business-friendly California.



    Just ask Toyota about leaving California for Texas. Don't believe the spin that it had nothing to do with California business costs.

     

    Apple has a stake in Texas already and they could certainly add more people there if it becomes necessary. I also don't believe the "torus" is a sound business decision. Some may consider it a monument to Steve Jobs, but I think the best tribute to Jobs would be a fiscally responsible company that continues to grow and innovate and pinch pennies (it really doesn't matter how much money they have in the bank). I have a theory about businesses that when they've grown to the point where people are more concerned about the size of their offices, the quality of their furnishings and the appearance of their buildings, they are too "comfortable" and need a shakeup.

  • Reply 15 of 78
    greatrixgreatrix Posts: 95member
    Apple, Google, Microsoft, Facebook, and Amazon are all using this Irish Republic loophole and thereby depriving, mainly the US treasurer, of tax income of some considerable order, that could otherwise be used for social services etc. However this can be justified according to Irish law, it is immoral and should be condemned. It could become a reason for us to cease buying Apple products, which would be a great shame.
  • Reply 16 of 78
    tallest skiltallest skil Posts: 43,399member
    Originally Posted by greatrix View Post

    …that could otherwise be used for social services etc.

     

     

    However this can be justified according to Irish law, it is immoral and should be condemned.


     

    Paying taxes is immoral?

     

      It could become a reason for us to cease buying Apple products, which would be a great shame.




    Thanks for the FUD.

  • Reply 17 of 78
    SpamSandwichSpamSandwich Posts: 31,300member
    Quote:
    Originally Posted by greatrix View Post



    Apple, Google, Microsoft, Facebook, and Amazon are all using this Irish Republic loophole and thereby depriving, mainly the US treasurer, of tax income of some considerable order, that could otherwise be used for social services etc. However this can be justified according to Irish law, it is immoral and should be condemned. It could become a reason for us to cease buying Apple products, which would be a great shame.

     

    Who cares? Government is a living, growing entity since it is made of self-interested people. Unchecked, government will tax and spend without regard to the harm caused to the taxpaying citizenry.

  • Reply 18 of 78
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by greatrix View Post



    Apple, Google, Microsoft, Facebook, and Amazon are all using this Irish Republic loophole and thereby depriving, mainly the US treasurer, of tax income of some considerable order, that could otherwise be used for social services etc. However this can be justified according to Irish law, it is immoral and should be condemned. It could become a reason for us to cease buying Apple products, which would be a great shame.



    They are using US tax loopholes more than Irish ones.

  • Reply 19 of 78
    croprcropr Posts: 953member
    The main issue is that the US and Irish tax laws are not aligned. Apple (and other American companies) can avoid paying taxes on profits made on software and service sales in Europe, by a simple accounting trick.
    In a nutshell, according to the US tax laws the tax should be paid in Ireleand and according to Irish tax laws the tax should be paid in the US. Or the perfect definition of a loophole.
    Because all European App Store and iTunes Store sales is handled via Ireland, the amount of avoided taxes is considerable.
    So the fact that the EU wants to eliminate such a loophole is quite logical. Apple just happens to be the example wth the biggest impact
  • Reply 20 of 78
    r00fusr00fus Posts: 245member
    So I assume they're going to inspect Google, Microsoft and Amazon (and 100 other huge multinational corporations) as well? I'm absolutely certain they all use the double-dutch irish coffee sandwich, or whatever it's called these days, to avoid taxes.
Sign In or Register to comment.