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.
hmm so you're saying that you, a random guy on a rumor site named "gatorguy", know for a fact that Ireland made a special deal with Apple, despite the fact that the CEO of Apple, a public guy named Tim Cook, who is barred from lying about his company's financials, says they did not?
just how is it you know what Cook denies? would you be willing to drop your handle and testify to this fact?
You're sometimes very strange acting. Do some independent reading, it will do you good. The basics are available to you if you're willing to look for them. Remember to read between the lines too when you see public statements. What you think you read and what was actually said aren't always the same thing.
Actually, he's spot on, on this issue. I recommend that you also try some independent reading. And independent thinking can a good thing too. And the advice that we should "Remember to read between the lines too when you see public statements. What you think you read and what was actually said aren't always the same thing" should apply to you too.
With exactly what in Tim Cook's statements do you disagree?
I don't disagree with anything as I'm fairly confident I understand what he said and what he didn't. I didn't object when he said "We don't just comply with the law, we comply with the spirit of the law." in Senate testimony, and certainly not objecting now. Where did I say I was? It's all in the the way you read it (or perhaps which side you fall on), one of the reasons we have courts as an arbitrator.
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.
What the what are you talking about? The "Eurocrats" are going after Ireland for having sweetheart back room deals which are not legal. Ireland's 12.5% corporation tax is legal, but the effective rate that Apple paid, being far below that for recently exposed reasons, is not. youre criticising the EU for not doing doing something that is exactly what they are doing, and is the very basis for this story.
Btw. Ireland has a substantial debt to the EU, so the EU does have an interest in Ireland's long term prospects and ability to generate a surplus.
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%.
Which is not in question. Or did you miss the repeated references to Ireland that are everywhere right now?
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.
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.
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.
Exactly! Ireland would rather ensure its citizens have jobs and investment by companies, foreign or domestic, in the local economy and local Irish businesses.
hmm so you're saying that you, a random guy on a rumor site named "gatorguy", know for a fact that Ireland made a special deal with Apple, despite the fact that the CEO of Apple, a public guy named Tim Cook, who is barred from lying about his company's financials, says they did not?
just how is it you know what Cook denies? would you be willing to drop your handle and testify to this fact?
You're sometimes very strange acting. Do some independent reading, it will do you good. The basics are available to you if you're willing to look for them. Remember to read between the lines too when you see public statements. What you think you read and what was actually said aren't always the same thing.
strange acting? in your post which I quoted, you said Apple had a special deal with Ireland. Cook says they do not. so again I ask -- how is it that you, a random guy with a pseudonym on a rumors site, knows more and is to believed more than the public officer of the company involved who is barred from lying?
my point is plain -- you haven't the faintest idea. your stated facts are not, and you're no more credible than sog or my mom, all of which is less than Tim Cook. thus I'll take Cook's opinion as far more valuable than yours, no matter how many links you toss up. FUD is FUD.
Yup a special deal, tho perhaps not entirely unique. Ms. Vestager uses the phrase "selective treatment" so use that if you don't like "special". In any event it was a tax avoidance strategy that was not available to all other companies. What's the source? The EU report itself, penned by folks much more aware of the intricate details than anyone here as far as I know.
Perhaps Apple should sue the Irish Finance Minister or some other tax official for bad advice? Dunno if they can. Dunno if it would matter anyway. Besides that Apple changed it all now since it came to light, deciding to restructure the Irish units and no longer using the "stateless for tax purposes" setup.
Simply amazed by the general support in these comments for a vast corporation that pays virtually no tax - 0.005% seriously ? Are you guys asleep ? It isn't either capitalism or an evil takeover by dark communist forces you know, things are more nuanced that. I for one am proud that the EU is making a start on addressing vast tax avoidance...no other entity could.
Gatorguy said: Doesn't that include deferred taxes, which in actuality may never be physically paid?
Deferred taxes "may never be paid" only in a world with lots of permanent (and opposed to temporary) differences. They are rarely very large in a typical company. Most differences are 'temporary.'
How long has it taken for Apple to accrue the $200B in "overseas" cash for which US taxes have never paid, yet identified deferred taxes on at least a portion of it? Yeah I realize never paying may be overstating it, but "a long long time before they pay it" seems to fit OK.
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.
Yes. Charging corporation tax where sales occur is beyond absurd as a principle.
Yes it is. Like Cook said it finds its basis in Common Law that has served as precedent for all tax law.
Just look who is using common law...
Look in the mirror and honestly tell me that Capri pants look good on you
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%.
Which is not in question. Or did you miss the repeated references to Ireland that are everywhere right now?
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%.
Which is not in question. Or did you miss the repeated references to Ireland that are everywhere right now?
Euros want to get their cut for 'just existing'
No they want EU countries to conform to their treaty obligations and apply the rules.
EU: changing the rules retroactively when we don't like the results.
False. The state aid articles have been EU legislation for decades.
The EU has not been an entity for 'decades'. They were barely starting to roll out the Euro in 1999
The EU did not start with the Euro. It was created in 1993, which is more than one decade ago. The articles in question predate the EU as part of the formative documents of the European Community.
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%.
Which is not in question. Or did you miss the repeated references to Ireland that are everywhere right now?
Euros want to get their cut for 'just existing'
No, they want fair rules and fair enforcement of those rules. Apples tax rate in Ireland and general arrogance in their financial exploitations have been a scandal.
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.
All great points, but unfortunately Timmy will be tone-deaf to any such discussion, as he laughs all the way to the bank with his hundreds of millions in stock benefits and salary. At those pay levels, there is no way that he could ever understand or appreciate how disconnected he is from reality. This kind of greed is all-consuming, never-ending, knows no bounds or limits, is blinding, is the ultimate temptation. Look to the Mylan CEO for similar acts of greed. Just keep taking and taking, enrich the few at the top at the expense of anyone else you can step on. Disgusting.
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.
Taxes have exactly two things to do with morality: "Jack" and "squat."
Taxation levels are completely arbitrary and subject to the whim of politicians. They're not created on stone tablets by deities.
This is one of the reasons the Brexit vote was correct. Can you imagine some world order where unelected officials were deciding your taxes and laws. Sovereignty matters
So many ignorant comments down there: the European Commission president is democratically elected by the democratically elected European parliament and the European commission commissioners chosen between the EC president and the democratically elected EU nations heads of State before being approved by a democratic vote of the same EP (as you are mentioning the Brexit: compare that to the undemocratic and actually unelected members of the UK upper parliament, those "Lords" for life...), then the laws of the European Union and its single market -there ensuing that there is no unfair competition among companies with e.g. unfair State aids or tax advantages- are those agreed upon by the democratically elected head of states/parliaments of the European Union members States who agreed to the single market rules. Do you need more information to correct your ignorant drivel?
Comments
The "Eurocrats" are going after Ireland for having sweetheart back room deals which are not legal. Ireland's 12.5% corporation tax is legal, but the effective rate that Apple paid, being far below that for recently exposed reasons, is not.
youre criticising the EU for not doing doing something that is exactly what they are doing, and is the very basis for this story.
Btw. Ireland has a substantial debt to the EU, so the EU does have an interest in Ireland's long term prospects and ability to generate a surplus.
In any event it was a tax avoidance strategy that was not available to all other companies. What's the source? The EU report itself, penned by folks much more aware of the intricate details than anyone here as far as I know.
Perhaps Apple should sue the Irish Finance Minister or some other tax official for bad advice? Dunno if they can. Dunno if it would matter anyway. Besides that Apple changed it all now since it came to light, deciding to restructure the Irish units and no longer using the "stateless for tax purposes" setup.
The EU has not been an entity for 'decades'. They were barely starting to roll out the Euro in 1999
Quit pretending like you know anything please.
No, they want fair rules and fair enforcement of those rules. Apples tax rate in Ireland and general arrogance in their financial exploitations have been a scandal.
http://europa.eu/rapid/press-release_IP-16-2923_en.htm
All great points, but unfortunately Timmy will be tone-deaf to any such discussion, as he laughs all the way to the bank with his hundreds of millions in stock benefits and salary. At those pay levels, there is no way that he could ever understand or appreciate how disconnected he is from reality. This kind of greed is all-consuming, never-ending, knows no bounds or limits, is blinding, is the ultimate temptation. Look to the Mylan CEO for similar acts of greed. Just keep taking and taking, enrich the few at the top at the expense of anyone else you can step on. Disgusting.
Taxation levels are completely arbitrary and subject to the whim of politicians. They're not created on stone tablets by deities.