Court rejects US bid to intervene in Apple's appeal of EU tax ruling
The European Union's General Court has refused a U.S. government request to intervene in Apple's appeal of a 2016 European Commission ruling, which ordered Ireland to collect approximately $15.3 billion in back taxes from the company.
The U.S. moved to intervene in April, arguing that the E.U.'s actions would impact its own tax revenues, tax deals with other European countries, and attempts to forge rules on transfer pricing in keeping with the Organization for Economic Co-operation and Development, Reuters said. On Friday, though, the General Court ruled that the U.S. had "failed to establish the existence of a direct interest in the result of the case."
For similar reasons the General Court also refused an intervention attempt by IBEC Company Limited by Guarantee, a group which represents firms operating in Ireland.
For years, loopholes in Irish tax law allowed Apple to pay minimal taxes on billions in international revenue, reportedly as low as 0.005 percent in 2014. The Commission accused Ireland of offering preferential treatment, including modifying tax rules with Apple in mind -- something illegal under E.U. law, which says that state aid must be offered to all companies equally.
Both Apple and the Irish government have filed appeals. The latter missed a January deadline to collect the money, which has prompted the Commission to take it to court. Funds should finally enter an escrow account in the first quarter of 2018.
The U.S. could conceivably have claimed some of that money if Apple had decided to repatriate it, but the iPhone maker has so far avoided bringing cash back without a promise of lower taxes. Changes advocated by Republicans and the Trump administration could prompt Apple to take action.
The U.S. moved to intervene in April, arguing that the E.U.'s actions would impact its own tax revenues, tax deals with other European countries, and attempts to forge rules on transfer pricing in keeping with the Organization for Economic Co-operation and Development, Reuters said. On Friday, though, the General Court ruled that the U.S. had "failed to establish the existence of a direct interest in the result of the case."
For similar reasons the General Court also refused an intervention attempt by IBEC Company Limited by Guarantee, a group which represents firms operating in Ireland.
For years, loopholes in Irish tax law allowed Apple to pay minimal taxes on billions in international revenue, reportedly as low as 0.005 percent in 2014. The Commission accused Ireland of offering preferential treatment, including modifying tax rules with Apple in mind -- something illegal under E.U. law, which says that state aid must be offered to all companies equally.
Both Apple and the Irish government have filed appeals. The latter missed a January deadline to collect the money, which has prompted the Commission to take it to court. Funds should finally enter an escrow account in the first quarter of 2018.
The U.S. could conceivably have claimed some of that money if Apple had decided to repatriate it, but the iPhone maker has so far avoided bringing cash back without a promise of lower taxes. Changes advocated by Republicans and the Trump administration could prompt Apple to take action.
Comments
I think Vestager is honestly convinced she right in trying what she sees as leveling the playing field, attempting to rectify what she perceives as unfair advantages some big multinationals are claiming for themselves to the detriment of smaller companies and individual consumers. She's done so with Google, and she'll do so with Apple. Personally I believe she goes too far, seeing things that just don't exist on the level she thinks they do and applying corrective fixes with too heavy a hand, but I don't think it's just about the tax money from Apple which the EU doesn't get for themselves anyway. Any recovered taxes go to the the individual countries where the tax obligation originates.
At the risk of repeating myself, the EU should sort out the mess that allows local taxation to be avoided via Double Dutch off shoring to one - in this case ‘lucky’ country...Eire. If taxes are due they rightly should be returned to the treasury where they were created.
That aside, the EU is definitely making an example of Apple to hammer the point home...it’s just too big a hammer which is probably all Apple can appeal.
Apple should move out of there.
There is a project to have an EU designed processor for 2020. In the first phase it will be oriented to supercomputing.
After that they will move into other areas of computing.
The underlying reason is to have technological control of critical infrastructure.
You will see the EU 'hardening' its stance in many other areas considered to be critical for control of its future.
Would I be justified in opining that the USA is finished because I don’t like some judicial declaration by your government?
...and
Yes...Apple should totally leave $10B per qtr on the table, you’ll be able to celebrate when they immediately hike prices by 50%.
"Whenever the President finds that, under the laws of any foreign country, citizens or corporations of the United States are being subjected to discriminatory or extraterritorial taxes, the President shall so proclaim and the rates of tax imposed by sections 1, 3, 11, 801, 831, 852, 871, and 881 shall, for the taxable year during which such proclamation is made and for each taxable year thereafter, be doubled in the case of each citizen and corporation of such foreign country; but the tax at such doubled rate shall be considered as imposed by such sections as the case may be. In no case shall this section operate to increase the taxes imposed by such sections (computed without regard to this section) to an amount in excess of 80 percent of the taxable income of the taxpayer (computed without regard to the deductions allowable under section 151 and under part VIII of subchapter
https://www.law.cornell.edu/uscode/text/26/891
That legal basis. If we ever had a President that would use the nuclear tax option on the EU, Trump is the one.
The point is that the EU is making an example of US companies.
It would sure as hell help the brits out. Suddenly routing things though UK entities halves the tax burden and gives the UK a significant advantage in Brexit talks.
The fact that the EU is non-competitive isn't the fault of US based multi-nationals having an uneven playing field but because the US culturally is more receptive to disruptive changes whether via technology, politics or culture...its still New World vs Old World mentality.
The disruption of Microsoft could have just as easily been from a European startup rather than Google. Tim Berners Lee is a brit that invented the WWW at CERN. But it was kids at US universities that created Google, Facebook, etc as small companies that disrupted giants.
The EU can go pound sand. If Trump hammers them with double taxation in response to this BS then he will have done something useful.
Apple couldn’t care one way or the other, since any extra taxes they pay in the EU will simply show up as tax credit when their cash is repatriated back to the US and things will be awash (as it will likely soon be, with the new tax law in the offing).
As for “making an example of US companies”...such a parochial view. If the cap fits, it’s not by coincidence. Apple, Amazon, Google, McDonald’s, Starbucks er al all using the same (legal) shenanigans is not an example of targeting US companies, but rather that multinational corporations that happen to be US based, are deliberately targetting morally debatable tax evasion procedures that are not available to other companies competing in the same arena. Neither Eire nor Apple were able to point to any other company that was offered the same sweet deal arrangement. Quite how that equates to the EU being non-competitive is a bizarre reversal of the evidence. It’s the multinationals that are creating the uneven playing field.
How any of this helps us “brits post Brexit is beyond meaningless.
“...the US culturally is more receptive to disruptive changes whether via technology, politics or culture...its still New World vs Old World mentality.” and “The EU can go pound sand. If Trump hammers them with double taxation in response to this BS then he will have done something useful.” is just the sort of juvenile irony_desert xenophobic exceptionalism we have come to expect from a certain entitlement corner.
US is failing....?
Any company that wants to do business in the EU should complot with our law and rules. Like any company must do in the US.
is fair isn’t it?
More companies will follow, since they all try to use loopholes.
Of course it doesn't exist yet. That's what I said. I even said the initial version is not aiming to be a groundbreaker but simply a necessary first step. Since the original announcement, more countries have come onboard. Things will be coordinated from the Barcelona Super Computing Centre.
You can yawn as much as you want but the US stopped the Chinese from using Xeons in their supercomputers so they went ahead and designed their own processors (TaihuLight), jumping to first place in world rankings in the process. Could that have backfired harder for US business? Now the EU is going the same route but for different reasons.
Yawn away!
Nope, no backfire. The Sunway is essentially a shitload of SMIDs and narrowly focused for highly parallel tasks. It’s nothing like a Xeon and doesn’t translate into anything but...well making a shitload of SMIDs for some HPC domains. Impressive for what it is but we’re far better off with them on this rather than a Xeon+Phi platform that may benchmark in at less petaflops but can be applied to a wider range of problems.
The Chinese were already number one because they like to add a cabinet and claim the top spot. The prior Top was the tianhe2 which is a Xeon+Phi box.
The US is behind is due to budgeting so the Chinese and Swiss have the top 3 slots.
The ExaNoDe that you are crowing about is ARM v8 based. Which may be of interest to HPC folks if it works but pretty much a yawn for everyone else.
Its not going to challenge Intel, AMD or Apple.
And given the only advanced fab in the EU is owned by Intel those arm processors will be fabbed in Asia unless they are going with the 32nm process node (yawn) owned by STM.
“It’s not based on an existing architecture. They built it themselves" ... "This is a system that has Chinese processors.” ... "This is the first time that the Chinese have more systems than the US, so that, I think, is a striking accomplishment,”.
Jack Dongarra, professor at the University of Tennessee (creator of the measurement method used by TOP500)
Being a shitload of [your technology of choice] is besides the point.
You missed the point again. The point is that they ever had to go to these lengths in the first place, not that they trounced the US in 2016 and 2017 (and look to continue their lead in 2018), which you try to justify because of a lack of funds - no one cares!
The EU will go the same route but basically for security reasons. Those reasons didn't exist (or didn't have as much importance) just ten years ago. Although the EU project will start out at the supercomputing level, it is planned to scale down to other applications. Some of the people involved speak of an 'Airbus' of supercomputing. Big yawn, right?. Who knows! I know the project will require billions in investment so it can only be pan European. No single member state has the finances to carry such a big project.
As for fabrication:
There is nothing to build yet!
do you really think no European company would be up to the task? And no, there would be no need to produce in Asia (in the near term).
Siemens, Infineon and Bull will probably be very interested in taking part.
You do realize that the US builds supercomputers not to be number one on a chart somewhere but to do stuff. Titan is 5 years old build using Opterons and K20s.
No, probably not.
The Chinese spent money and Oak Ridge and LLNL didn’t.
The bottom line is that Intel and IBM have a significant technical advantage over the Sunway. You can brute force your way forward and add enough cores to grab the top spot but it doesn’t mean anything in terms of applicable technology to mainstream computing.
You can hand wave the lack of EU fabs if you like but if you don’t build fabs overnight and it isn’t economically viable to do so just to make ARM chips for supercomputers.
And yes it’s a hugh Yawn. By the time the EU gets its shit together the Australians will have built a 10000 core Rasberry Pi cluster for LANL.
Dream on about billions of euros. The total budget allocated by the EU so far for exanode/mont blanc/whatever is 10.1 million euros.
Meanwhile Intel, Samsung, TSMC, etc spends $10-15 billion on fabs every major node and IBM invested $3B into quantum computing by itself.
Yeah, the EU is going to be a freaking supercomputing powerhouse because they have a massively underfunded R&D project.