So am I; I'll take all companies in Ireland paying an appropriate and equal rate of tax so the government can lessen it's shafting of me on my tax. Ireland will get all of what Apple pays up, there is no mechanism for them to claim a share. That would be game-over for the EU.
I would appreciate your help, as an Irish Citizen, cnocbui.
If the EU is analogous to the Fed's in the US with the Supremecy Clause in force. Then the EU is ordering the back taxes owed (at least partially) to them (EU). Otherwise, Ireland is arguing against itself regarding the back taxes. If so, I'd suggest the Irish Tax Authority, say "We are forced to collect these back taxes (celebrate very, very quietly) and Apple, while appreciate your investment in Ireland -- please stay; please expand, etc. -- you've got to pay up."
Isn't there some mechanism for the EU to get a piece of this judgement? They are doing the ordering? Perhaps there are penalties due to the EU Commission?
This judgement is against Ireland. Ireland is being ordered to collect taxes the EU Commission believes it should have been collecting all along. If the money is collected, the only beneficiary will be Ireland. None will be sent to the EU. Apple will only owe tax to Ireland.
There are some amazing facts being ignored in all the indignant outrage this has generated. There are no fines or penalties involved - none. The worst case scenario is that Apple will be no worse off financially than if they had simply been paying Ireland's 12.5% corporate tax rate all along, like most other companies in Ireland. So even after paying €13 B, Apple will still have gotten a very good tax deal as Ireland has one of the lowest corporate tax rates in the EU.
Apple says: "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. 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.". That, I don't understand. I think profit comes from sales, not from R&D. And wasn't Apple not bringing back profits to the US to prevent them form being taxed 'twice' (which is quite a count if one of those is 0.0015% or so)?
Being pedantic, 0.005 isn't an actual tax rate, the EU judgement says it was the effective tax rate.
So it seems that Apple have a mind numbingly complex set of corporate entities and the Irish tax authorities made a ruling that Apple could allocate the vast majority of their profits to a corporate entity that didn't pay tax while a much smaller amount of profits were allocated to another entity that paid tax at the Irish corporate rate which is 12.5%.
The EU are basically saying that everything should have been taxed at 12.5%.
Expect this to go to appeal with an argument if the ruling about allocation of profits was correct or not. The Irish government will back their own tax department.
Yep, it is illegal because the deals made it so that Apple hardly paid any taxes at all (0.0015% at one year) and it is fraudulent because those 'head offices' that were supposed to make the profits did not really exist.
Whatever the outcome, Apple is not different from any other large corporation. They're just as morally bankrupt, because that is what their shareholders demand from them. I'm a fan of Apple's products and product philosophy, believe it or not. But this tax evasion I find disgusting.
@gatorguy, just say no benefit for the citizen's. country/states of the eu need their money due to financial aid to Greece, Italy, Spain, Portugal, France.... one big mismanagement.....
Being pedantic, 0.005 isn't an actual tax rate, the EU judgement says it was the effective tax rate.
So it seems that Apple have a mind numbingly complex set of corporate entities and the Irish tax authorities made a ruling that Apple could allocate the vast majority of their profits to a corporate entity that didn't pay tax while a much smaller amount of profits were allocated to another entity that paid tax at the Irish corporate rate which is 12.5%.
The EU are basically saying that everything should have been taxed at 12.5%.
Expect this to go to appeal with an argument if the ruling about allocation of profits was correct or not. The Irish government will back their own tax department.
Do you think their citizen's will too? There's certainly little to no benefit for them when a wealthy corporation is permitted to completely avoid taxation while they themselves are not. The Irish politicians that choose to get involved will be walking a fine line.
I am an Irish citizen... I'll take the jobs provided by foreign investment over a possible one-off windfall. Even if Apple end up paying, it is hardly the case that the Irish government will get EUR 13 B. All the other EU countries and the US government will be saying - feck off - we want our share.
So am I; I'll take all companies in Ireland paying an appropriate and equal rate of tax so the government can lessen it's shafting of me on my tax. Ireland will get all of what Apple pays up, there is no mechanism for them to claim a share. That would be game-over for the EU.
That's probably what Ireland should preferably do, provided it doesn't scare away investment. The question is whether the EU commission has proven state aid or not. I don't see it.
My that's not the only bias. Eu government's support local companies all the time, particularly in the defence sector.
You're arguing with the wrong entity. Message your outrage over this to the EU Commission.
The allegation is that Apple was acting anti-competitively. There'd have to be competition that got stifled in order for that to be true. Not one person can identify any corporation that was stifled in their competition against Apple. We now know that Apple had this tax rate since 1980 and that there was no request by Apple and no 'deal' brokered.
No sir, the current tax avoidance structure was put in place much more recently wasn't it? Apple has been able to pay relatively few taxes on their Irish manufacturing activities since early in the '80's, that is true. The two new Irish corporations (one of which exists in name and bank accounts only, no employees) used for mitigating taxes from other countries and regions began around the time of the iPhone release. They pay taxes to no one, claiming no country or region has the authority to tax them. The EU Commission has a difference of opinion with them.
That's not a competancy of the EU. They are claiming state aid or preferential treatment. Where do they prove that?
In court when it's appealed.
They are going to "prove it" in court based on what evidence given their ruling?
Theres clearly a loophole in Irish law. They've proven that. What they haven't even bothered to prove is that loophole is exclusive to Apple. Where in the report is that stated?
Being pedantic, 0.005 isn't an actual tax rate, the EU judgement says it was the effective tax rate.
So it seems that Apple have a mind numbingly complex set of corporate entities and the Irish tax authorities made a ruling that Apple could allocate the vast majority of their profits to a corporate entity that didn't pay tax while a much smaller amount of profits were allocated to another entity that paid tax at the Irish corporate rate which is 12.5%.
The EU are basically saying that everything should have been taxed at 12.5%.
Expect this to go to appeal with an argument if the ruling about allocation of profits was correct or not. The Irish government will back their own tax department.
Do you think their citizen's will too? There's certainly little to no benefit for them when a wealthy corporation is permitted to completely avoid taxation while they themselves are not. The Irish politicians that choose to get involved will be walking a fine line.
I am an Irish citizen... I'll take the jobs provided by foreign investment over a possible one-off windfall. Even if Apple end up paying, it is hardly the case that the Irish government will get EUR 13 B. All the other EU countries and the US government will be saying - feck off - we want our share.
So am I; I'll take all companies in Ireland paying an appropriate and equal rate of tax so the government can lessen it's shafting of me on my tax. Ireland will get all of what Apple pays up, there is no mechanism for them to claim a share. That would be game-over for the EU.
what effective tax rate do you pay?
It's 52% marginal in Ireland. He's right about that being a gouging.
You're arguing with the wrong entity. Message your outrage over this to the EU Commission.
The allegation is that Apple was acting anti-competitively. There'd have to be competition that got stifled in order for that to be true. Not one person can identify any corporation that was stifled in their competition against Apple. We now know that Apple had this tax rate since 1980 and that there was no request by Apple and no 'deal' brokered.
No sir, the current tax avoidance structure was put in place much more recently wasn't it? Apple has been able to pay relatively few taxes on their Irish manufacturing activities since early in the '80's, that is true. The two new Irish corporations (one of which exists in name and bank accounts only, no employees) used for mitigating taxes from other countries and regions began around the time of the iPhone release. They pay taxes to no one, claiming no country or region has the authority to tax them. The EU Commission has a difference of opinion with them.
That's not a competancy of the EU. They are claiming state aid or preferential treatment. Where do they prove that?
In court when it's appealed.
Where on the document do they prove this deal is exclusive?
FACT: Any other company headquartered in Ireland could have used the same tax strategy as Apple.
If someone can dispute this then the EU has a case and Apple should pay the $14 billion.
But Tim Cook was 100% clear that Apple was not given a special deal: "The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals." Tim Cook
Yup any company headquartered in Ireland could have got the same deal if they had the same agreement with the Irish tax authority. Which were secret and other companies were not privy to.
You are wrong. There was no secret deal with Apple. Tim Cook said it himself.
"The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals." Tim Cook
Apple was following WELL ESTABLISH IRISH TAX RULES that does not levy taxes on income booked in subsidiaries of Irish companies that are outside the state. Those are LAWS that are clear and were available to any corp.
As it stands pending all the appeals those tax rules aren't allowed. The agreements were invalid and are null and void. Thus the ruling.
No, the Irish ruling still stands unless the appeal is rejected. It is business as usual for Apple and they have already announced that they aren't changing tax information in their corporate guidance and it will be several years before they expect the issue to be resolved.
They are setting aside the amount in an escrow account and will have to ensure going forward they have two sets of figures to ensure that if the appeals fail they can pay all the amount that is eventually set from the past and upto the final ruling.
That is just being prudent. They may be confident the EU judgement will be overturned but confidence is not the same as 100% certainty. The money isn't going anywhere for the time being anyway... If the tax ruling actually had been overturned, then they would be paying 12.5% on all future profits so would need to update their financial guidance to say that.
Well I said it would be billions rather than SOG's ludicrous millions.
I hope the final outcome is that Apple eventually have to cough up. They have over $200 Billion in the bank because they are worlds biggest and most effective tax avoider. I hope this is just the start of all the other multinational tax dodgers finally getting what's coming to them.
Of course the situation Apple finds itself in is all the fault of the US government, not Ireland or the EU as it is US tax legislation that allows US companies to indefinitely defer tax repatriation while pretending to their host countries their tax is payable in the US.
You do know Apple is the largest corporate taxpayer in the United States and has been in the top three for the last few years.
All this arguing about who knows more about Irish and EU rights.
Did everyone just glaze over the part that this taxable income was generated by businesses in EU countries that are not Ireland? The profits were then funneled to Ireland.
Ireland can set whatever tax rate they want for business conducted in Ireland. What this ruling says is that they cannot set the tax rate for business transactions that happened in other EU member countries.
I remember when the EU went after Microsoft o so long ago, many people in the Mac community were very glib about it, but I recognized it for what it was: economic warfare waged by Europe, which is incapable of innovating and competing, versus the U.S., where we lead in cutting edge technology, software, content, ideas.... This is simply the other shoe dropping. This isn't the end of something, it's the beginning... The only consolation is that Brexit means our best ally all these generations will be at our side.
In other words the opinion of a few beaucrates in the EU is worth more than the entire citizenship of Ireland. Crazy.
As much as I think this seems like a poor choice of action from a well meaning(I listened to a 30 minute interview which was very sensible) commissioner, they are not bureaucrats, they are politicians appointed by the government(Danish government in this case). She is effectively a minister.
Not one person can identify any corporation that was stifled in their competition against Apple.
It isn't U.S. territory, so it's not U.S. sensibilities applying. European criteria for monopoly and anti competition are somewhat different.
There are no European rules on corporate tax, that's up to the national sovereign. The EU is using a law designed to stop illegal state aid (which means state aid which prefers certain companies rather than others within the same jurisdiction*) but has failed to prove any deal. In other words other companies can use this same mechanism. And some do. The EU is investigating them. This is a clearly an infringement on Irelands sovereignty and and exercise in big country bullying.
* except for big countries where you can in fact aid fiat, aerospace or the euro fighter etc.
Unfortunately the zero-sum mindset is widespread in Europe. EU politicians are behaving as if Europe is a victim on the global stage. Instead we should shape up and grow some balls. We are so afraid of loosing our share of the cake that we miss all the opportunities of our time. I'm sure that in 10 years I will be able to name several big opportunities that we missed as a continent. Lack of inspired leadership
Well I said it would be billions rather than SOG's ludicrous millions.
I hope the final outcome is that Apple eventually have to cough up. They have over $200 Billion in the bank because they are worlds biggest and most effective tax avoider. I hope this is just the start of all the other multinational tax dodgers finally getting what's coming to them.
Of course the situation Apple finds itself in is all the fault of the US government, not Ireland or the EU as it is US tax legislation that allows US companies to indefinitely defer tax repatriation while pretending to their host countries their tax is payable in the US.
What are you cnocbui? a burrowing troll insect? you do know Apple is the largest corporate taxpayer in the United States and has been in the top three for the last few years.
I am an Irish taxpayer who is slightly annoyed at paying tax to my government that I calculated is at an effective rate 2,226% higher than Apple does. However, it would seem that I was being overly generous in calculating that rate as I had assumed Cook's 2% was the rate. In 2014 Apple's tax rate was calculated by the Competition Commission at 0.005%, so that means my tax rate was actually 891,200% times higher than Apple's (why don't they just make it a million times higher just to rub it in?). I would be happy if Apple was paying tax at the rate it should - 12.5% - even though that would still mean my effective tax rate was nearly 4 times higher than Apple's.
I don't really care what tax Apple pays in the US. If I was a US taxpayer, I would be more concerned about the rate at which Apple was paying tax, not the dollar amount.
Bloomberg published an article today discussing multinational's tax structures in general (Netflix, Amazon, etc) but did include some pertinent comments on Apple:
"While $14.5 billion represents the EU’s estimate of how much Ireland should claw back from Apple, the final amount, which also will include interest, is still not set in stone.
“Who knows what the final figure will be,” Eamonn O’Dea, a senior Irish tax official, told RTE radio. The EU’s comments are “very, very confusing.” He said the amount would “at max” be in line with an earlier $19 billion estimate by a JPMorgan Chase & Co. analyst.
Ireland’s cabinet meets on Wednesday to decide on appealing the EU’s decision, amid media reports that some government members are hesitant about endorsing a challenge."
Well I said it would be billions rather than SOG's ludicrous millions.
I hope the final outcome is that Apple eventually have to cough up. They have over $200 Billion in the bank because they are worlds biggest and most effective tax avoider. I hope this is just the start of all the other multinational tax dodgers finally getting what's coming to them.
Of course the situation Apple finds itself in is all the fault of the US government, not Ireland or the EU as it is US tax legislation that allows US companies to indefinitely defer tax repatriation while pretending to their host countries their tax is payable in the US.
What are you cnocbui? a burrowing troll insect? you do know Apple is the largest corporate taxpayer in the United States and has been in the top three for the last few years.
I am an Irish taxpayer who is slightly annoyed at paying tax to my government that I calculated is at an effective rate 2,226% higher than Apple does. However, it would seem that I was being overly generous in calculating that rate as I had assumed Cook's 2% was the rate. In 2014 Apple's tax rate was calculated by the Competition Commission at 0.005%, so that means my tax rate was actually 891,200% times higher than Apple's (why don't they just make it a million times higher just to rub it in?). I would be happy if Apple was paying tax at the rate it should - 12.5% - even though that would still mean my effective tax rate was nearly 4 times higher than Apple's.
I don't really care what tax Apple pays in the US. If I was a US taxpayer, I would be more concerned about the rate at which Apple was paying tax, not the dollar amount.
While slightly annoyed that you bear an admittedly onerous individual tax burden, placed on you by your sovereign, are you also somewhat appreciative that the largest hi-tech company in the world decided to repeatedly invest in your country, providing jobs, stimulating economic growth and lending Brand prestige, through a lengthy period of crisis when economy and financial future were in tatters? Have you always resented the tax environment that attracted Apple's enormous investment there -- or do you only feel that way now? Please understand that I don't intend for the question to sound hostile. Really just taking the temperature of a concerned party, when asked to consider the long view on this relationship between sovereign and International Corporation. If you think I have the narrative wrong, please tell. There is much to consider and I honestly haven't yet come to my own conclusions about this ruling.
I wouldn't yet laugh all the way to the bank unless it's to get $14.5 billion out to pay this tax bill. Large corporations (such as Apple) have been playing this game since "trickle down" Regan era began. The idea is to stash it away tax free and use it as a carrot to get a nation like the USA to lower the corporate tax rate on profits earned overseas. If governments cave in and say lower that tax rate from 35% (my small company pays 47%) down to 10% or lower then the cycle begins again with future profits held up in tax haven countries until the next deal is made. We are all expected to pay taxes and companies are no different. People that defend Apple no matter what need to do some research into corporate tax laws to see how and why companies like Apple play this game. If these tax shelters were eliminated this tax money would go to the home nations and be used for what is intended not to buy back stock and fatten executive bonuses.
Comments
There are some amazing facts being ignored in all the indignant outrage this has generated. There are no fines or penalties involved - none. The worst case scenario is that Apple will be no worse off financially than if they had simply been paying Ireland's 12.5% corporate tax rate all along, like most other companies in Ireland. So even after paying €13 B, Apple will still have gotten a very good tax deal as Ireland has one of the lowest corporate tax rates in the EU.
"We had a secret tax deal Ireland and you caught us"
I don't see it.
My that's not the only bias. Eu government's support local companies all the time, particularly in the defence sector.
Theres clearly a loophole in Irish law. They've proven that. What they haven't even bothered to prove is that loophole is exclusive to Apple. Where in the report is that stated?
Where on the document do they prove this deal is exclusive?
Did everyone just glaze over the part that this taxable income was generated by businesses in EU countries that are not Ireland? The profits were then funneled to Ireland.
Ireland can set whatever tax rate they want for business conducted in Ireland. What this ruling says is that they cannot set the tax rate for business transactions that happened in other EU member countries.
It isn't U.S. territory, so it's not U.S. sensibilities applying. European criteria for monopoly and anti competition are somewhat different.
I don't really care what tax Apple pays in the US. If I was a US taxpayer, I would be more concerned about the rate at which Apple was paying tax, not the dollar amount.
Bloomberg published an article today discussing multinational's tax structures in general (Netflix, Amazon, etc) but did include some pertinent comments on Apple:
"While $14.5 billion represents the EU’s estimate of how much Ireland should claw back from Apple, the final amount, which also will include interest, is still not set in stone.
“Who knows what the final figure will be,” Eamonn O’Dea, a senior Irish tax official, told RTE radio. The EU’s comments are “very, very confusing.” He said the amount would “at max” be in line with an earlier $19 billion estimate by a JPMorgan Chase & Co. analyst.
Ireland’s cabinet meets on Wednesday to decide on appealing the EU’s decision, amid media reports that some government members are hesitant about endorsing a challenge."
http://www.bloomberg.com/news/articles/2016-08-30/apple-ireland-ruling-heralds-twilight-of-easy-european-tax-dealsPlease understand that I don't intend for the question to sound hostile. Really just taking the temperature of a concerned party, when asked to consider the long view on this relationship between sovereign and International Corporation. If you think I have the narrative wrong, please tell. There is much to consider and I honestly haven't yet come to my own conclusions about this ruling.