This is the equivalent to throwing a flag for a penalty that never happened 25 years after a game has been played. The EU is looking for companies to bail them out. It ain't gonna happen.
Cook: "Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company's profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle."
Well, not exactly. The US wants to tax Apple as well if they bring their profit to the U.S. That's why Apple and other U.S. companies store cash outside the United States and do not invest in the U.S. Trump actually offers a tax holiday or low taxation for companies to bring their cash to the United States.
I'm French and I'm getting pissed off by all the EU bureaucrats. This decision is just stupid. I suspect something else at stake here. Perhaps a "vengeance" for the Volkswagen scandal and heavy punishment by US ? Except that in Dieselgate, there was a fraud. But there is no fraud here.
Calling the move "unprecedented," Cook portrayed the Commission's decision as potentially dangerous, with "serious, wide-reaching implications."
EC previously ruled against Starbucks's tax deal in Holland and Fiat's tax deal in Luxembourg. Not unprecedented.
"In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States," he wrote. "European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules."
There is no law that states you should only be taxed where your R&D offices are located. There ARE laws however that say you pay tax where you operate and sell products. On top of that, funnelling profits from those sales to other countries while not technically illegal, is morally questionable. Similar to those with offshore accounts (cayman islands, panama etc.) albeit nowhere near as shady.
It does not matter if the law is morally questionable in your opinion. It was the Irish tax law at that time. Apple did nothing wrong. They followed Irish tax law, and any other company operating in Ireland could have done the same.
You like to keep saying that but if ANY company could do the same why wouldn't they? There's smart accountants all over the world and what Apple was doing was probably known to many of them.
So no sir they could not. It requires a perfect storm of US corporate tax laws, a pre-existing special tax arrangement with the Irish and a creative use of corporate structure to pull it all off. Only the larger companies with US bases and worldwide operations could have taken advantage of this particular avoidance structure and even then only with special cooperation from friendly Irish tax folks. Your local Irish restaurant or retailer? Nope. The French bakery owner? Nope. The German car dealer (with three locations, whoo hoo). Sorry, no again. The computer retailer in Sweden? Sorry, no deal for you. Well then how about a big ol well-to-do grocery chain like Publix. Surely they can. They're kinda rich. Sorry. They all have to pay taxes if they have profits. No "stateless for tax purposes" is available to them, nor for any other regional company. Only the richest and biggest get this one.
"In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States"
how does research and development relate to taxes besides taxing salaries? Doesn't Apple have transactions that get taxed in Europe? Not sure how Europe could look past this... seems odd
It does not matter if the law is morally questionable in your opinion. It was the Irish tax law at that time. Apple did nothing wrong. They followed Irish tax law, and any other company operating in Ireland could have done the same.
You like to keep saying that but if ANY company could do the same why wouldn't they? There's smart accountants all over the world and what Apple was doing was probably known to many of them.
What a crock. Why do you think all those other tech companies are ALSO in Ireland? Because they like the weather? I guarantee you that Google and the rest have the exact same tax arrangement as Apple. The only reason the EU hasn't gone after them is because it's using Apple as its test case. If the EU wins on final appeal then you can bet they'll head down to Google (and everyone else's) office the next morning notifying them that they also owe taxes, and they should pay up because of the decision in the case against Apple.
If Apple wins (likely) then the EU won't pursue anything against other companies in Ireland.
Calling the move "unprecedented," Cook portrayed the Commission's decision as potentially dangerous, with "serious, wide-reaching implications."
EC previously ruled against Starbucks's tax deal in Holland and Fiat's tax deal in Luxembourg. Not unprecedented.
"In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States," he wrote. "European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules."
There is no law that states you should only be taxed where your R&D offices are located. There ARE laws however that say you pay tax where you operate and sell products. On top of that, funnelling profits from those sales to other countries while not technically illegal, is morally questionable. Similar to those with offshore accounts (cayman islands, panama etc.) albeit nowhere near as shady.
$14.5 billion is unprecedented as well as is the recent attempts to gouge U.S. companies for extra. In the U.S. European companies do not face a corporation tax, but simple sales and VAT. Maybe we'll retroactively apply a new law and start vouching your companies. BMW... want to keep selling your cars here now you gotta pay an extra 12.5% on your profits here even though you're based in Europe. Too bad, so sad. Same tax deal since 1980. Apple never asked for anything different.
Forget it's Apple for a second or even that it's retroactive. Do you agree in principle that corporations should pay fair tax on their profits? Apple is using Ireland as a tax haven to avoid paying tax in Europe and the US. If these corporations would pay tax in the US then these tax haven shell companies wouldn't exist but they aren't. If BMW/VW wasn't paying tax in Europe, I don't think anyone would object to the US collecting it so your example doesn't work
If Apple repatriated the profit held in Ireland and paid US taxes on it then maybe there'd be some sympathy. As it is, this reeks of hypocrisy and entitlement.
Calling the move "unprecedented," Cook portrayed the Commission's decision as potentially dangerous, with "serious, wide-reaching implications."
EC previously ruled against Starbucks's tax deal in Holland and Fiat's tax deal in Luxembourg. Not unprecedented.
"In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States," he wrote. "European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules."
There is no law that states you should only be taxed where your R&D offices are located. There ARE laws however that say you pay tax where you operate and sell products. On top of that, funnelling profits from those sales to other countries while not technically illegal, is morally questionable. Similar to those with offshore accounts (cayman islands, panama etc.) albeit nowhere near as shady.
Are you joking? Starbucks/Fiat got slapped on the wrist. They were ordered to pay $20 million each. The $14 billion for Apple is the definition of unprecedented.
It does not matter if the law is morally questionable in your opinion. It was the Irish tax law at that time. Apple did nothing wrong. They followed Irish tax law, and any other company operating in Ireland could have done the same.
Again the dispute isn't if Apple broke Irish tax law. They have not. The dispute is if Apple was given a DIFFERENT tax law they anyone else in Ireland. And as far as I can tell they didn't. They were just better at tax planning than anyone else.
It's all relative. $20 million to Starbucks was for how many years retroactively? And in comparison to the sheer size of Apple compared to Starbucks obviously the fee will be much less.
Prove that Apple wasn't given a different tax law, because from what I can tell paying 0.005% tax is well below what anyone else pays.
The diagram shown in this tweet is pretty accurate at describing what happened:
Calling the move "unprecedented," Cook portrayed the Commission's decision as potentially dangerous, with "serious, wide-reaching implications."
EC previously ruled against Starbucks's tax deal in Holland and Fiat's tax deal in Luxembourg. Not unprecedented.
"In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States," he wrote. "European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules."
There is no law that states you should only be taxed where your R&D offices are located. There ARE laws however that say you pay tax where you operate and sell products. On top of that, funnelling profits from those sales to other countries while not technically illegal, is morally questionable. Similar to those with offshore accounts (cayman islands, panama etc.) albeit nowhere near as shady.
Are you joking? Starbucks/Fiat got slapped on the wrist. They were ordered to pay $20 million each. The $14 billion for Apple is the definition of unprecedented.
It does not matter if the law is morally questionable in your opinion. It was the Irish tax law at that time. Apple did nothing wrong. They followed Irish tax law, and any other company operating in Ireland could have done the same.
Again the dispute isn't if Apple broke Irish tax law. They have not. The dispute is if Apple was given a DIFFERENT tax law they anyone else in Ireland. And as far as I can tell they didn't. They were just better at tax planning than anyone else.
It's all relative. $20 million to Starbucks was for how many years retroactively? And in comparison to the sheer size of Apple compared to Starbucks obviously the fee will be much less.
Prove that Apple wasn't given a different tax law, because from what I can tell paying 0.005% tax is well below what anyone else pays.
The diagram shown in this tweet is pretty accurate at describing what happened:
No it's not It's on the EU Commission, who obviously believes they have. If/when it goes to court on appeal those arguments will be put to the test and perhaps they'll lose. Or perhaps it will be completely upheld. Maybe something in the middle. I can nearly guarantee none of us have a better grasp of the facts than the Commission, Ireland, and Apple, or the courts that will hear the arguments. Some of the commenters just presume they know better than actual experts with all the available facts do.
Love how all the fanboys and multinational corporation supporters show up to defend tax cheating. Apple uses "the commons" to conduct their trade, and to draw billions in profits. They have the obligation to help fund the infrastructure and tax base that they use. If you still say no, then let's force Apple to build their own electrical grids, water supplies, shipping defense military, etc. Let Apple become their own legal world entity, a nation unto their own, and we'll see how successful they can be. Dimwits, freeloaders, tax cheats.
Love how all the fanboys and multinational corporation supporters show up to defend tax cheating. Apple uses "the commons" to conduct their trade, and to draw billions in profits. They have the obligation to help fund the infrastructure and tax base that they use. If you still say no, then let's force Apple to build their own electrical grids, water supplies, shipping defense military, etc. Let Apple become their own legal world entity, a nation unto their own, and we'll see how successful they can be. Dimwits, freeloaders, tax cheats.
The problem is that it's not cheating. It's exactly the same thing that Apple does in the US. As Uncle Tim said in his testimony before Congress, Apple pays all of the taxes it's required to pay based on US tax laws. In the case of Ireland, the government set things up for just this reason: give people a place to set up their businesses with very low taxes and they'll move their operations here and hire locals, even if a lot of this is on paper only. If the eurocrats were doing what they should, they be after Ireland for having tax rates like this and not go after the companies that have followed the letter of the law and benefitted from it. The point isn't whether what Ireland and Apple do is right or wrong, it's whether it's legal. Is it legal for a country to set its corporate tax rate so low. Of course it is! Is it legal for a company to take advantage of this and save billions on taxes? Of course it is. It's like the US government going after the state of New Hampshire for not charging a sales tax or the state of Washington for not having a state income tax.
And all of this is absurd because the EU didn't lose one penny over this, Ireland did! Ireland pays its money into the EU kitty whether or not its tax rate is 2% or 15% or 30%. Just as the US government doesn't lose money because Oregon has no sales tax. Who knows how soon it'll be before there's an EU income tax and not just one for each country.
Calling the move "unprecedented," Cook portrayed the Commission's decision as potentially dangerous, with "serious, wide-reaching implications."
EC previously ruled against Starbucks's tax deal in Holland and Fiat's tax deal in Luxembourg. Not unprecedented.
"In Apple's case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States," he wrote. "European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules."
There is no law that states you should only be taxed where your R&D offices are located. There ARE laws however that say you pay tax where you operate and sell products. On top of that, funnelling profits from those sales to other countries while not technically illegal, is morally questionable. Similar to those with offshore accounts (cayman islands, panama etc.) albeit nowhere near as shady.
$14.5 billion is unprecedented as well as is the recent attempts to gouge U.S. companies for extra. In the U.S. European companies do not face a corporation tax, but simple sales and VAT. Maybe we'll retroactively apply a new law and start vouching your companies. BMW... want to keep selling your cars here now you gotta pay an extra 12.5% on your profits here even though you're based in Europe. Too bad, so sad. Same tax deal since 1980. Apple never asked for anything different.
Forget it's Apple for a second or even that it's retroactive. Do you agree in principle that corporations should pay fair tax on their profits? Apple is using Ireland as a tax haven to avoid paying tax in Europe and the US. If these corporations would pay tax in the US then these tax haven shell companies wouldn't exist but they aren't. If BMW/VW wasn't paying tax in Europe, I don't think anyone would object to the US collecting it so your example doesn't work
What is "fair share"? Apple's effective tax rate in the US is 25%.
Yeah right Tim. Nice letter but you forgot to mention the corporate greed that is the real issue you should be addressing. Surely you don't believe that if Apple did not create the 1.5 million jobs you spoke of, those jobs would never have been created by other companies such as the ones that never introduced the orange-phone by orange computer. Like any other large corporate entity you have actively fought to take as big a piece of the consumer market pie as you could thereby limiting the potential growth of other companies you have seen as competitors you needed to restrain or eliminate. So before you boast about all you have done for society you should ask yourself how things might be different if all the money you have tied up Apple were more broadly dispersed throughout a more diverse corporate community that surely would have brought a broader mix of more innovative products to consumers. Paying your share of taxes is the least Apple should do in return for all it has gotten from the community you wrongly claim owes you a debt of gratitude. It's the other way around Tim and you should try not to forget that.
Love how all the fanboys and multinational corporation supporters show up to defend tax cheating. Apple uses "the commons" to conduct their trade, and to draw billions in profits. They have the obligation to help fund the infrastructure and tax base that they use. If you still say no, then let's force Apple to build their own electrical grids, water supplies, shipping defense military, etc. Let Apple become their own legal world entity, a nation unto their own, and we'll see how successful they can be. Dimwits, freeloaders, tax cheats.
And how do we know that you are not a shill for the EC as part of a much larger campaign to change the public's perception of Apple and shame them into a settlement where they have done no wrong? Everyone bitches about "fair share" but taxes are not paid based on what's fair. They are paid according to law. While the EC alleges that Ireland broke EU law, Ireland insists that Apple has complied with its tax laws as they have for more than three decades.
Some of the commenters just presume they know better than actual experts with all the available facts do.
Which is the norm for ALL discussions here on AI, MacRumors, 9TO5Mac, and the like. Constant babbling from anonymous wannabes. Perfect recent example? TouchID Disease. Faux experts and trolls crawling out of the woodwork to explain what they know nothing about.
Comments
How pathetic your happiness revolves around something unjust happening to Apple. Seek help.
how does research and development relate to taxes besides taxing salaries? Doesn't Apple have transactions that get taxed in Europe? Not sure how Europe could look past this... seems odd
What a crock. Why do you think all those other tech companies are ALSO in Ireland? Because they like the weather? I guarantee you that Google and the rest have the exact same tax arrangement as Apple. The only reason the EU hasn't gone after them is because it's using Apple as its test case. If the EU wins on final appeal then you can bet they'll head down to Google (and everyone else's) office the next morning notifying them that they also owe taxes, and they should pay up because of the decision in the case against Apple.
If Apple wins (likely) then the EU won't pursue anything against other companies in Ireland.
It's on you to prove they were given a deal
It's on the EU Commission, who obviously believes they have. If/when it goes to court on appeal those arguments will be put to the test and perhaps they'll lose. Or perhaps it will be completely upheld. Maybe something in the middle. I can nearly guarantee none of us have a better grasp of the facts than the Commission, Ireland, and Apple, or the courts that will hear the arguments. Some of the commenters just presume they know better than actual experts with all the available facts do.
If the eurocrats were doing what they should, they be after Ireland for having tax rates like this and not go after the companies that have followed the letter of the law and benefitted from it. The point isn't whether what Ireland and Apple do is right or wrong, it's whether it's legal. Is it legal for a country to set its corporate tax rate so low. Of course it is! Is it legal for a company to take advantage of this and save billions on taxes? Of course it is.
It's like the US government going after the state of New Hampshire for not charging a sales tax or the state of Washington for not having a state income tax.
And all of this is absurd because the EU didn't lose one penny over this, Ireland did! Ireland pays its money into the EU kitty whether or not its tax rate is 2% or 15% or 30%. Just as the US government doesn't lose money because Oregon has no sales tax. Who knows how soon it'll be before there's an EU income tax and not just one for each country.