Ireland could face fine for dragging heels on back taxes from Apple

Posted:
in General Discussion
The European Commission is set to penalize Ireland with a "non-compliance action" for failing to collect up to $17.6 billion in back taxes from Apple, owed after the Commission found the Irish government brokered unfair deals that constituted illegal state aid.




The action could be issued as soon as this week, according to a Bloomberg source. A non-compliance penalty should take the form a lawsuit, which if won by regulators would result in a fine on top of the original money due.

Ireland was initially ordered to collect back taxes by Jan. 3, but has resisted both publicly and legally.

Apple and the Irish government have been working on an appeal, the latter insisting that terms extended to Apple were available to other companies as well. Under European Union rules, governments can't offer breaks to one company without making them open to all.

Apple has maintained that it follows the law in every country it operates in, but part of the concern is that Ireland crafted rules allowing the company to pay as little as 0.005 percent in taxes by 2014. The company has been funneling billions in international revenue through Irish operations rather than paying normal taxes in markets the money was generated from.

An appeal could take up to five years. In the meantime Apple and the Irish government have in fact been arranging a collection scheme, in which the latter will hold the money in escrow with the hope of returning it after a successful ruling.
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Comments

  • Reply 1 of 23
     It’s really sad to think that because of tax loopholes in the law the US didn’t get those billions in taxes. Shame on you Apple! 
  • Reply 2 of 23
    chasmchasm Posts: 2,496member
    larrystar said:
     It’s really sad to think that because of tax loopholes in the law the US didn’t get those billions in taxes. Shame on you Apple! 
    I think you grossly misunderstand the situation. The taxes collected on sales in Europe would only ever go to Europe. The US has absolutely zero claim on sales of Apple products outside the US. Perhaps you are referring to the poorly-named "repatriation" of *profits* Apple makes from overseas sales? That's nothing to do with "tax loopholes" either.
    StrangeDaysEdmontonGuyjbdragonRayz2016[Deleted User]ksecsphericanton zuykovlongpath
  • Reply 3 of 23
    yoyo2222yoyo2222 Posts: 144member
    larrystar said:
     It’s really sad to think that because of tax loopholes in the law the US didn’t get those billions in taxes. Shame on you Apple! 
    Apple didn't write the loopholes into law. Apple's board (like all publicly traded companies) is required by law to work for the benefit of it's owners, the stockholders. They would be breaking their fiscal responsibility to give money to a government (in taxes) that isn't required by the laws of that government. Shame on you for not working harder to have the tax laws changed.
    EdmontonGuyjbdragonksecbeowulfschmidt
  • Reply 4 of 23
    The EU is a bully who wants nice people like Ireland to be as cruel and tyrannical as themselves.  Ireland is shining example to be imitated for fostering legitimate business growth; they shouldn't be dragged through the mud because they don't employ the same sadist communism that the rest of Europe suffers enjoys.

    It wasn't long ago that Ireland was in dire straights.  To jump out of that pithole economy (as much of the EU currently faces), they drastically cut taxes, reduced regulations, and implemented supply-side tax reforms that brought corporate taxes from 50% to a mere 12.5%.  The "poor man of Europe" is now hailed as the "Celtic Tiger", and is ranked as one of the wealthiest countries in the world (GPD per capita) .  Rapid growth has been driven by their adoption of pro-market, pro-growth policies, and will continue so long as they pursue their free enterprise model.

    Nobody wants to be Greece.

    https://en.wikipedia.org/wiki/Economy_of_the_Republic_of_Ireland
    edited October 2017 jbdragonsphericcurtis hannahwozwozanton zuykovlongpath
  • Reply 5 of 23
    lkrupplkrupp Posts: 9,991member
    larrystar said:
     It’s really sad to think that because of tax loopholes in the law the US didn’t get those billions in taxes. Shame on you Apple! 
    Shame on you for having no clue what you are talking about.
    StrangeDaysLordeHawkEdmontonGuyjbdragonsphericwozwozlongpath
  • Reply 6 of 23
    analogjackanalogjack Posts: 1,073member
    Tim is simply waiting for the tax rate in the US to be lowered otherwise there would be no problem. Is this cynical and perhaps immoral? I'll leave that for the reader to decide.
  • Reply 7 of 23
    charlitunacharlituna Posts: 7,217member
    Tim is simply waiting for the tax rate in the US to be lowered otherwise there would be no problem. Is this cynical and perhaps immoral? I'll leave that for the reader to decide.

    The money in question is on profits made in Europe so even if the rate goes down in the US, the money would still stay in Europe.
    longpath
  • Reply 8 of 23
    kaipher said:
    The EU is a bully who wants nice people like Ireland to be as cruel and tyrannical as themselves.  Ireland is shining example to be imitated for fostering legitimate business growth; they shouldn't be dragged through the mud because they don't employ the same sadist communism that the rest of Europe suffers enjoys.

    It wasn't long ago that Ireland was in dire straights.  To jump out of that pithole economy (as much of the EU currently faces), they drastically cut taxes, reduced regulations, and implemented supply-side tax reforms that brought corporate taxes from 50% to a mere 12.5%.  The "poor man of Europe" is now hailed as the "Celtic Tiger", and is ranked as one of the wealthiest countries in the world (GPD per capita) .  Rapid growth has been driven by their adoption of pro-market, pro-growth policies, and will continue so long as they pursue their free enterprise model.

    Nobody wants to be Greece.

    https://en.wikipedia.org/wiki/Economy_of_the_Republic_of_Ireland
    Trouble IS, they willingly joined the EU and the Euro and as such have to play by the same rules that everyone else in the EU has to play by. If the grass really IS better then they should do a UK and trigger Act 50 to leave.

    They would then be free to attract big business with whatever tax rates they like but they would crucially lose the free access to the Euro market. We've already seen many UK companies look at shifting operations to France/Germany etc. because we won't have the free market access to trade and skilled labour.
  • Reply 9 of 23
    kaipher said:
    It wasn't long ago that Ireland was in dire straights.  To jump out of that pithole economy (as much of the EU currently faces), they drastically cut taxes, reduced regulations, and implemented supply-side tax reforms that brought corporate taxes from 50% to a mere 12.5%.  The "poor man of Europe" is now hailed as the "Celtic Tiger", and is ranked as one of the wealthiest countries in the world (GPD per capita) .  Rapid growth has been driven by their adoption of pro-market, pro-growth policies, and will continue so long as they pursue their free enterprise model.

    Nobody wants to be Greece.

    https://en.wikipedia.org/wiki/Economy_of_the_Republic_of_Ireland
    Ironically enough, Ireland's "growth" is largely the result of large multinationals that were interested in the tax avoidance. Paper Tiger is probably a better description than Celtic Tiger. 

    https://www.washingtonpost.com/news/monkey-cage/wp/2016/07/15/did-irelands-economy-really-grow-by-26-3-percent-only-on-paper-heres-the-real-story/?utm_term=.6b5983f8bb6b
    sphericpropod
  • Reply 10 of 23
    sphericspheric Posts: 2,223member
    lkrupp said:
    larrystar said:
     It’s really sad to think that because of tax loopholes in the law the US didn’t get those billions in taxes. Shame on you Apple! 
    Shame on you for having no clue what you are talking about.
    One of those cases where the phrase is even more accurate, since not only does he know nothing about the topic he thinks he’s talking about, he also has no clue what the topic actually is. 
    longpath
  • Reply 11 of 23
    avon b7avon b7 Posts: 6,296member
    adm1 said:
    kaipher said:
    The EU is a bully who wants nice people like Ireland to be as cruel and tyrannical as themselves.  Ireland is shining example to be imitated for fostering legitimate business growth; they shouldn't be dragged through the mud because they don't employ the same sadist communism that the rest of Europe suffers enjoys.

    It wasn't long ago that Ireland was in dire straights.  To jump out of that pithole economy (as much of the EU currently faces), they drastically cut taxes, reduced regulations, and implemented supply-side tax reforms that brought corporate taxes from 50% to a mere 12.5%.  The "poor man of Europe" is now hailed as the "Celtic Tiger", and is ranked as one of the wealthiest countries in the world (GPD per capita) .  Rapid growth has been driven by their adoption of pro-market, pro-growth policies, and will continue so long as they pursue their free enterprise model.

    Nobody wants to be Greece.

    https://en.wikipedia.org/wiki/Economy_of_the_Republic_of_Ireland
    Trouble IS, they willingly joined the EU and the Euro and as such have to play by the same rules that everyone else in the EU has to play by. If the grass really IS better then they should do a UK and trigger Act 50 to leave.

    They would then be free to attract big business with whatever tax rates they like but they would crucially lose the free access to the Euro market. We've already seen many UK companies look at shifting operations to France/Germany etc. because we won't have the free market access to trade and skilled labour.
    Yes. Outside the EU, Ireland would lose most, if not all, its high tech companies currently taking advantage of low tax advantages. Brexit hasn't really bitten yet but many companies have begun shifting employees to mainland Europe.

    Even the big companies that have 'comitted' to remaining in the UK have get out clauses in agreements if government doesn't follow through with its promises. This is in fact standard practice but when Nissan says it will remain in the UK, what it really means is that they will remain in the UK if there is no change to I business status there. That has to be thrashed out in the Brexit talks which are not going well for the UK. Ireland would see major readjustment to life outside the EU. Any fine by the EU for dragging it's heels on the Apple issue would be entirely justified. They already got an extension to the deadline.
    spheric
  • Reply 12 of 23
    tshapitshapi Posts: 353member
    In an earlier article didn’t it say Microsoft and other companies also moved there cash through Ireland?  If so why is it Apple that is single handledly put in the spot light? 

    Would Apple even repatriate overseas cash if the tax rate was lowered?  They would need some serious incentives.  

    I think it’s important to note if this witch hunt started before the Brexit vote or after.  And if that has any bearing on this. 

    It’s not a shame on Apple for seeing a legal opportunity regarding paying less taxes and taking it. Companies get tax rebates all the time. 

    While this has has nothing to do with amerI ca, I do remember reading an article on here about someone wanting the  American government stepping in to quash this so that American can get first. Dibs on apples Money. 
  • Reply 13 of 23
    gatorguygatorguy Posts: 23,394member
    tshapi said:
    In an earlier article didn’t it say Microsoft and other companies also moved there cash through Ireland?  If so why is it Apple that is single handledly put in the spot light?
    Because just like "back in the day" when oil companies were being bludgeoned in the news Exxon as the largest of them got the brunt of it. 
  • Reply 14 of 23
    avon b7avon b7 Posts: 6,296member
    tshapi said:
    In an earlier article didn’t it say Microsoft and other companies also moved there cash through Ireland?  If so why is it Apple that is single handledly put in the spot light? 

    Would Apple even repatriate overseas cash if the tax rate was lowered?  They would need some serious incentives.  

    I think it’s important to note if this witch hunt started before the Brexit vote or after.  And if that has any bearing on this. 

    It’s not a shame on Apple for seeing a legal opportunity regarding paying less taxes and taking it. Companies get tax rebates all the time. 

    While this has has nothing to do with amerI ca, I do remember reading an article on here about someone wanting the  American government stepping in to quash this so that American can get first. Dibs on apples Money. 
    There are approximately 300 companies under investigation by the EU. Most of them are not US companies but some of the biggest potential claims do relate to US companies (the case of Apple for example). Logically, if you have to prioritise your actions you base your prioritisation on things like the amounts involved. It doesn't mean the smaller cases are ignored.
    spheric
  • Reply 15 of 23
    yoyo2222 said:
    larrystar said:
     It’s really sad to think that because of tax loopholes in the law the US didn’t get those billions in taxes. Shame on you Apple! 
    Apple didn't write the loopholes into law. Apple's board (like all publicly traded companies) is required by law to work for the benefit of it's owners, the stockholders. They would be breaking their fiscal responsibility to give money to a government (in taxes) that isn't required by the laws of that government. Shame on you for not working harder to have the tax laws changed.
    This fiscal responsibility line is simply not true. By the same logic, anything that protects the environment but costs Apple is also fiscally irresponsible too. They can abide by the spirit of the tax laws rather than the letter and call it corporate responsibility, the same way they do when they switch to renewable energy. There is nothing in the law that requires them to eek out every tax dollar and risk being sued by governments.
    gatorguy
  • Reply 16 of 23
    wozwozwozwoz Posts: 253member
    First BREXIT ... next:  IREXIT
    longpath
  • Reply 17 of 23
    sphericspheric Posts: 2,223member
    yoyo2222 said:
    larrystar said:
     It’s really sad to think that because of tax loopholes in the law the US didn’t get those billions in taxes. Shame on you Apple! 
    Apple didn't write the loopholes into law. Apple's board (like all publicly traded companies) is required by law to work for the benefit of it's owners, the stockholders. They would be breaking their fiscal responsibility to give money to a government (in taxes) that isn't required by the laws of that government. Shame on you for not working harder to have the tax laws changed.
    This fiscal responsibility line is simply not true. By the same logic, anything that protects the environment but costs Apple is also fiscally irresponsible too. They can abide by the spirit of the tax laws rather than the letter and call it corporate responsibility, the same way they do when they switch to renewable energy. There is nothing in the law that requires them to eek out every tax dollar and risk being sued by governments.
    No, that’s not how it works. You can’t just pay more taxes than you’re due - you can fail to report a bunch of write-offs or something, but that’s legally problematic if you’re a corporation, to be sure (I imagine - I am not a corporate tax lawyer). 

    In contrast, you can spend corporate funds on whatever you deem important to your corporate interests. If that’s accessibility, renewable energy sources, employee fitness, or subsidised bagels in the cafeteria - nobody’s business. 
  • Reply 18 of 23
    mytdavemytdave Posts: 447member
    Here's the thing. Apple has a fiduciary responsibility to pay as little tax as possible. It sounds like Apple cut a sweet deal with Ireland for an insanely low rate, but apparently "open" to any corporation (if true), so therefore legal. What you have now is a bunch of socialist whiners on a hissy fit because they're not getting a cut of dough they think they're entitled to. Nothing like a liberal socialist to get all bent when it comes to "evil" cash, when they want to appropriate it.

    On the other hand, what you have with Apple/Ireland is crony capitalism, not true capitalism. Legal? Yes. Moral? Not really - and it's not about "fairness" either. What this is, is a large multi-national getting in bed with government. One of the many problems with that, is it's not a true open market since the little fish can't afford to play in the big pond. All they did was find a legal way to skirt around the exorbitant taxes.

    A more honorable, and still economically beneficial, approach would have been for Ireland to announce to the world, "hey, we're going to lower our corporate tax rate to 5% for all corporations of any size, open to everyone, no requirement to "wine and dine" the elite and cut backroom deals. Corporations would still flock to Ireland, and they could legitimately thumb their nose at the EU and say "suck it" because everything is above board, not only legally, but ethically as well.

    What they did do might have all been legal, but it's still sleazy. Don't get me wrong, the EU taxation scheme is sleazy too. But using sleazy to combat sleazy just creates more sleaze.
  • Reply 19 of 23
    gatorguygatorguy Posts: 23,394member
    mytdave said:
    Here's the thing. Apple has a fiduciary responsibility to pay as little tax as possible. It sounds like Apple cut a sweet deal with Ireland for an insanely low rate, but apparently "open" to any corporation (if true), so therefore legal. What you have now is a bunch of socialist whiners on a hissy fit because they're not getting a cut of dough they think they're entitled to. Nothing like a liberal socialist to get all bent when it comes to "evil" cash, when they want to appropriate it.

    On the other hand, what you have with Apple/Ireland is crony capitalism, not true capitalism. Legal? Yes. Moral? Not really - and it's not about "fairness" either. What this is, is a large multi-national getting in bed with government. One of the many problems with that, is it's not a true open market since the little fish can't afford to play in the big pond. All they did was find a legal way to skirt around the exorbitant taxes.

    A more honorable, and still economically beneficial, approach would have been for Ireland to announce to the world, "hey, we're going to lower our corporate tax rate to 5% for all corporations of any size, open to everyone, no requirement to "wine and dine" the elite and cut backroom deals. Corporations would still flock to Ireland, and they could legitimately thumb their nose at the EU and say "suck it" because everything is above board, not only legally, but ethically as well.

    What they did do might have all been legal, but it's still sleazy. Don't get me wrong, the EU taxation scheme is sleazy too. But using sleazy to combat sleazy just creates more sleaze.
    Have you ever read up on "fiduciary responsibility" and taxes? Apple is under no obligation to search out aggressive tax avoidance structures. That's simply a talking point that somehow gained traction as factual and got a life of it's own. The claim that Apple is legally bound by fiduciary responsibility to avoid taxation where possible is absolute bunk. 
    edited October 2017
  • Reply 20 of 23
    sphericspheric Posts: 2,223member
    mytdave said:
    Here's the thing. Apple has a fiduciary responsibility to pay as little tax as possible. It sounds like Apple cut a sweet deal with Ireland for an insanely low rate, but apparently "open" to any corporation (if true), so therefore legal. What you have now is a bunch of socialist whiners on a hissy fit because they're not getting a cut of dough they think they're entitled to. Nothing like a liberal socialist to get all bent when it comes to "evil" cash, when they want to appropriate it.
    How typical to ruin a decent point with idiotic rhetoric. 

    What’s happening here is that the EU Commission is requiring somebody who is refusing to collect those taxes to do so, because if they don’t, it puts everybody else at a financial and business disadvantage. 

    Getting mad at somebody for ruining your business by violating laws you all contractually agreed upon isn’t “socialist whiners on a hissy fit”; it’s more like capitalist whiners missing out on business because a partner backed up on an agreement. 
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