Apple's Tim Cook meets with EU antitrust chief ahead of decision on Irish taxes

AppleInsider · January 21, 2016 8:23PM

Earlier on Thursday Apple CEO Tim Cook attended a private meeting in Brussels with Margrethe Vestager, the head of the European Commission's antitrust efforts, presumably in an attempt to diminish the chances of owing billions in back taxes because of the company's Irish tax deals.

The meeting's existence was confirmed by both Apple and the Commission, Bloomberg reported. Neither party was willing to share the topic of discussion.

The Commission is however in the middle of investigating whether the Irish government extended illegal state aid to Apple in the form of tax deals. Apple is known to have exploited Irish loopholes for years to pay extremely low rates on international revenue, possibly as small as 1.8 percent. Ireland's normal corporate tax rate is 12.5 percent.

A ruling could be issued as soon as March, but the investigation is already on a delayed schedule and information gathering is still said to be ongoing.

The matter also has high stakes, as Apple could theoretically owe over $8 billion, and Irish political parties are split on the matter. While Prime Minister Enda Kenny has vigorously denied that Ireland is a tax haven, and promised to fight any EU ruling against the country, the opposition Sinn Fein party has said it would be willing to pursue money owed by Apple.

EU aid rulings have already been issued against companies like Fiat and Starbucks and countries like Belgium, Luxembourg, and the Netherlands, which may not bode well for Apple and Ireland.

jmgregory1 · January 21, 2016 8:54PM

Just like the BS spouted by US politicians, the European's want to talk about changing the rules of the game after the fact, because they would now like a piece of Apple's pie. If you set up the rules to provide tax benefits to entice businesses to your country, you have no right to come back after the fact with outstretched hand, looking for "your" money. Sure, you can talk about changing the rules going forward, but you can't go back in time.

gwydion · January 21, 2016 8:57PM

jmgregory1 said:

Just like the BS spouted by US politicians, the European's want to talk about changing the rules of the game after the fact,

Then you'll be glad to know that this is not what this case is about

jmgregory1 said:

If you set up the rules to provide tax benefits to entice businesses to your country, you have no right to come back after the fact with outstretched hand, looking for "your" money.

Then you'll be glad to know that this is not what this case is about

This case is about allegedly ilegal state aids to some companies in Ireland, not about taxation in the EU

mr. h · January 21, 2016 9:26PM

jmgregory1 said:

changing the rules of the game after the fact

No, this is not about "changing the rules”. It is about applying the rules as they always have been. Ireland may have reached a deal with Apple that was in actual fact illegal, i.e. against the rules, as the rules always have been. No rules have changed. The EU is just trying to apply the existing rules.

Now, on a separate note - AI, will you please stop using “revenue” when you mean “profit”. These two things are not the same. Companies pay tax on profits, not revenue.

icoco3 · January 21, 2016 9:27PM

Sinn Fein, the political arm of the terrorist group IRA. Glad they are on the job. /s

teejay2012 · January 21, 2016 9:27PM

gwydion said:

This case is about allegedly ilegal state aids to some companies in Ireland, not about taxation in the EU

This does not seem very straightforward. Apple recently settled a tax dispute with Italy which has been interpreted by some that monies owed to Italy for Apple business there, had been paid earlier to Ireland. ie. Apple overpaid in Ireland for the taxes that ended up being paid in Italy. I can understand that the EU would want tax policies to be consistent across its member countries, but I think this has a chance to unravel and become very messy.

MacPro · January 21, 2016 9:40PM

icoco3 said:

Sinn Fein, the political arm of the terrorist group IRA. Glad they are on the job. /s

OT ... Since G.W Bush mangled the English language it's now referred to as a terror group. At least we got nuclear back!

radster360 · January 21, 2016 9:42PM

Why are companies responsible for something that is a mistake on the Government part? For example, What if the local government like Austin, TX thought they were doing the right thing by provide tax incentive for a company to create facilities there that results in generating the jobs. Few years down the line, if the new local government decides that those incentives was partial and illegal, making the company pay for the past taxes. What about the cost of moving/creating the facility in Austin, TX? Who pays for that now?

Isn't this similar situation here?

MacPro · January 21, 2016 9:46PM

gwydion said:

jmgregory1 said:

Just like the BS spouted by US politicians, the European's want to talk about changing the rules of the game after the fact,

Then you'll be glad to know that this is not what this case is about

jmgregory1 said: Then you'll be glad to know that this is not what this case is about

This case is about allegedly ilegal state aids to some companies in Ireland, not about taxation in the EU

I'm genuinely curious, and I ask you as the blog's expert on this topic .... why on earth didn't Ireland's allegedly Illegal tax incentive scheme get immediately investigated and stopped by the EU? Or didn't the EU know? It all seems a complete f***k up and from where I sit, Apple is surely an innocent party here along with the other companies that accepted Ireland's deal.

acgmph · January 21, 2016 9:51PM

mr. h said:

jmgregory1 said:

changing the rules of the game after the fact

No, this is not about "changing the rules”. It is about applying the rules as they always have been. Ireland may have reached a deal with Apple that was in actual fact illegal, i.e. against the rules, as the rules always have been. No rules have changed. The EU is just trying to apply the existing rules.

Now, on a separate note - AI, will you please stop using “revenue” when you mean “profit”. These two things are not the same. Companies pay tax on profits, not revenue.

You're giving this site way too much credit. They're bloggers with journalism dreams ... Econ 101 definitely was not in their syllabuses. I learned that a long time ago.

As for Apple and EU Commission, probably Cooke got a phone call to get his behind to Brussels to beg for mercy and soften the news of the $8B in back taxes they will be slapped with pretty soon. And may I remind those that don't understand what this case is about, the $8B will not go to the EU, they will go to Ireland, as Ireland established an illegal state-aid with Apple and failed to collect the proper amount of taxes.

jmgregory1 · January 21, 2016 9:53PM

mr. h said:

jmgregory1 said:

changing the rules of the game after the fact

No, this is not about "changing the rules”. It is about applying the rules as they always have been. Ireland may have reached a deal with Apple that was in actual fact illegal, i.e. against the rules, as the rules always have been. No rules have changed. The EU is just trying to apply the existing rules.

Now, on a separate note - AI, will you please stop using “revenue” when you mean “profit”. These two things are not the same. Companies pay tax on profits, not revenue.

Ahh, but if Ireland in fact changed the rules to the benefit of Apple, is it Apple who is at fault, or Ireland? We could hope that Apple would have known that Ireland was doing something they shouldn't be (and planned for contingencies), but Ireland was giving the same breaks to other companies, which helped bring several high profile companies, so it was clearly considered the norm at the time. If the EU can enforce tax equality across all member states, it will be a miracle, just like things here in the States are not equal, from state to state.

anantksundaram · January 21, 2016 9:59PM

The fact that a meeting like this took place tells me that things are currently not going Apple's way.

I am not saying that wherever it is currently will stand, but it's not the best news (on top of everything else that is out there now).

gwydion · January 21, 2016 10:02PM

digitalclips said:

gwydion said:

Then you'll be glad to know that this is not what this case is about

jmgregory1 said: Then you'll be glad to know that this is not what this case is about

This case is about allegedly ilegal state aids to some companies in Ireland, not about taxation in the EU

I'm genuinely curious, and I ask you as the blog's expert on this topic .... why on earth didn't Ireland's allegedly Illegal tax incentive scheme get immediately investigated and stopped by the EU? Or didn't the EU know? It all seems a complete f***k up and from where I sit, Apple is surely an innocent party here along with the other companies that accepted Ireland's deal.

Because as have been said a lot of times, they were secret agreements between Irish government and some companies.

suddenly newton · January 21, 2016 10:02PM

"But Lord Sidious, is that... legal?"

"I will make it legal."

quinney · January 21, 2016 10:08PM

digitalclips said:

icoco3 said:

Sinn Fein, the political arm of the terrorist group IRA. Glad they are on the job. /s

OT ... Since G.W Bush mangled the English language it's now referred to as a terror group. At least we got nuclear back!

I bought some nookular joolery from a realator.

boltsfan17 · January 21, 2016 10:11PM

I don't know why people keep reporting this $8 billion figure. If the EU rules against Ireland, Apple will not owe $8 billion. Worse case scenario, Ireland gets around $200 million in taxes over the last decade from Apple.

singularity · January 21, 2016 10:17PM

It's a good job people are reading all the other threads about this topic... Oh they are not or are just wilfully ignoring the facts.

The EU are claiming Apple had a secret sweetheart deal that gave Apple a tax rate not available to other companies.

This rate the EU claims is illegal state aid according to the treaty of Rome and the treaty of Mastricht.

If Apple and Ireland are found guilty and any appeal is lost. Apple will have to pay back taxes they will have deemed to avoided.

At the moment it is not looking good for Apple for the initial ruling but it still has a long way to go before any final ruling is given.

boltsfan17 · January 21, 2016 10:18PM

mr. h said:

jmgregory1 said:

changing the rules of the game after the fact

No, this is not about "changing the rules”. It is about applying the rules as they always have been. Ireland may have reached a deal with Apple that was in actual fact illegal, i.e. against the rules, as the rules always have been. No rules have changed. The EU is just trying to apply the existing rules.

Now, on a separate note - AI, will you please stop using “revenue” when you mean “profit”. These two things are not the same. Companies pay tax on profits, not revenue.

Ireland can legally make a deal with Apple on tax breaks. There is nothing illegal about that.The EU can't enforce or create tax rules for other EU countries. The EU doesn't have that power. The only thing the EU is investigating is if Ireland gave Apple preferential treatment that isn't available to other companies. If Ireland did in fact give preferential treatment to Apple, that would be considered illegal state aid. Now if Ireland is giving the same tax breaks to other corporations, then that isn't considered illegal state aid. Honestly, I don't see how Ireland is doing anything wrong. What Apple is doing is the so called structure called Double Irish. Double Irish can't be considered illegal state aid because it's available to all companies.

boltsfan17 · January 21, 2016 10:23PM

gwydion said:

digitalclips said:

I'm genuinely curious, and I ask you as the blog's expert on this topic .... why on earth didn't Ireland's allegedly Illegal tax incentive scheme get immediately investigated and stopped by the EU? Or didn't the EU know? It all seems a complete f***k up and from where I sit, Apple is surely an innocent party here along with the other companies that accepted Ireland's deal.

Because as have been said a lot of times, they were secret agreements between Irish government and some companies.

Ireland can legally have agreements between companies and offer them tax breaks like it did for Apple.

gwydion · January 21, 2016 10:24PM

boltsfan17 said:

I don't see how Ireland is doing anything wrong. What Apple is doing is the so called structure called Double Irish. Double Irish can't be considered illegal state aid because it's available to all companies.

No, the case is not about Double Irish

jfc1138 · January 21, 2016 10:25PM

anantksundaram said:

The fact that a meeting like this took place tells me that things are currently not going Apple's way.

I am not saying that wherever it is currently will stand, but it's not the best news (on top of everything else that is out there now).

Somewhat depends on who called for the meeting I suppose.

Apple's Tim Cook meets with EU antitrust chief ahead of decision on Irish taxes

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