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HeartyMeatballs
30th Aug 2016, 10:35
The latest US multinational found to be paying no meaningful tax in Europe has been ordered to pay €13bn to be recovered by the Irish government after provided what amounted to illegal state aid. In 2003 they paid just 1% on European profits and 0.0005% in 2014.

I never thought I'd agree with the EU. But bravo chaps.

Apple faces record Irish tax bill with EU set to rule on 'sweetheart' deal | Business News | News | The Independent (http://www.independent.co.uk/news/business/news/apple-tax-eu-ireland-europe-biggest-ever-penalty-repayment-sweetheart-deal-a7215941.html)

ExXB
30th Aug 2016, 10:55
This is a judgement against the Irish state, not Apple. It also applies to all other companies granted similar deals in Ireland.

Sallyann1234
30th Aug 2016, 10:59
So instead of being punished for a dodgy tax regime, the Irish will apparently gain a multi-billion windfall.

Is that entirely fair? :ugh:

HeartyMeatballs
30th Aug 2016, 11:04
Well, the multi billion euro windfall will pay for the job losses that Apple are now threatening. Apple are not the victim here. They're the ones who set up the 'headquarters' with no employees and no activity.

VP959
30th Aug 2016, 11:07
So instead of being punished for a dodgy tax regime, the Irish will apparently gain a multi-billion windfall.

Is that entirely fair? :ugh:
It's not in the slightest bit fair, in some respects, but when Ireland set this incentive scheme up those that did so knew full well that it was outwith EU regulations. It was only a matter of time before the slow processes of the EU caught up with them, and I doubt that they will be the only ones. IIRC Dell had a similar deal, as did a few other companies who took advantage of the incentives the Irish government offered.

HeartyMeatballs
30th Aug 2016, 11:13
I wonder if the Luxemburg 'based' businesses are under a similar set up? For example Amazon, eBay and PayPal?

VP959
30th Aug 2016, 11:16
I wonder if the Luxemburg 'based' businesses are under a similar set up? For example Amazon, eBay and PayPal?
From the article linked above:

There are also ongoing investigations into Luxembourg’s tax arrangements with McDonalds and Amazon.com.

ExXB
30th Aug 2016, 11:17
Apple has over 500 employees in Ireland. If Apple can get no better tax deal elsewhere in the EU, they would have no reason to move elsewhere.

Of course the Ex-EU UK could attract them with similar deals.

HeartyMeatballs
30th Aug 2016, 11:23
Good. I'm glad of these investigations. I think there's something very wrong when large companies move in, small local independents shut and all of the would-be taxed profits are syphomed off for another country to benefit from. There's something very wrong when multi billion dollar companies pay so little no matter what the set up. Even if the soon-to-be ex EU UK offered 10% tax rates it would still be extremely attractive to the large companies.

G-CPTN
30th Aug 2016, 14:53
What can be done if Apple refuse to pay?

tdracer
30th Aug 2016, 15:20
Well, the multi billion euro windfall will pay for the job losses that Apple are now threatening. Apple are not the victim here. They're the ones who set up the 'headquarters' with no employees and no activity.
How do you figure? According to the AP article:
Apple has 5,500 workers in Ireland, making it one of the biggest private-sector employers.
It also says Ireland is appealing the decision.

G-CPTN
30th Aug 2016, 15:24
How can a company with 'no employees' create 'job losses'?

racedo
30th Aug 2016, 15:30
This is a judgement against the Irish state, not Apple. It also applies to all other companies granted similar deals in Ireland.


Issue appears was that Apple were solely offered the deal........................ if other companies offered the deal then there would be nothing wrong.


Every govt offers big companies deals be it Boeing / BAE / Airbus / Airlines or other.

HeartyMeatballs
30th Aug 2016, 15:35
No, the proposed job losses will allegedly be in their operations. Apple set up a ghost HQ with nobody in it for the reasons of benefiting from this tax deal. It is this ghost HQ where no jobs will be lost because nobody works there and nothing happens there. I only hope they send someone in to the 'office' to pick up the €13bn euro tax bill.

Closer to home we have IKEA with a vastly complex set up using sweetheart deals and nonprofit status to pay an extremely low tax rate. Shouldn't the EU look closer to home too?

racedo
30th Aug 2016, 15:45
Apple has over 500 employees in Ireland. If Apple can get no better tax deal elsewhere in the EU, they would have no reason to move elsewhere.

Of course the Ex-EU UK could attract them with similar deals.


Irish Government went out and offered Apple a deal originally to move to Ireland in 1980s', Facebook I believe in 2004/5 and lots of other companies well before we had even heard of them.


I looked at this list and whatever about the legalities of the deal you find that many of the companys were enticed to Invest there years before we had even heard of them.................. seems while maybe their Tax strategy is questionable their sourcing for jobs is not.

andytug
30th Aug 2016, 15:51
Apple has over 500 employees in Ireland. If Apple can get no better tax deal elsewhere in the EU, they would have no reason to move elsewhere.

Of course the Ex-EU UK could attract them with similar deals.

But if the Brexited UK has higher trade tarrifs with the EU due to being outside the single market, would they be able to offer such a deal?

ShyTorque
30th Aug 2016, 16:22
Will this prompt an Irexit vote?

Una Due Tfc
30th Aug 2016, 17:11
We don't want the money. The EU has been after Ireland's 12.5% corporate tax rate for years. The loophole allowing Apple to pay those ridiculously low figures 12+ years ago, the "double Irish" rule, is gone. Last year they contributed over €2 billion taxes more than in 2014 as this loophole closes in stages over 4 years.

42% of total US foreign direct investment since 1990 has been in the Republic of Ireland, that's over 300 billion Euros. If the EU gets very combative over Ireland's corporate tax rate it is absolutely in our interest to leave, especially seeing as Britain and the US are our #1 and #2 trading partners respectively (Ireland is Britain's 5th largest trading partner).

Sallyann1234
30th Aug 2016, 17:14
What the published numbers do show is how much profit Apple makes from iFans who pay inflated prices for the latest iUpgrade.

B Fraser
30th Aug 2016, 17:19
Would Ireland have a vote on leaving ?


http://i.dailymail.co.uk/i/pix/2016/02/29/01/31AA33C300000578-3468004-image-a-56_1456708838568.jpg

SARF
30th Aug 2016, 19:27
Irelands tax free back door to the eu single market is being shut. I'm surprised it took so long. I'm guessing the eu where just counting up the cash till it reached ten bill plus..
Apple can piss their pants as much as they like.. As many a u.s firm that fronted up to the federal government found out to their cost. There will be only one winner

Economics101
30th Aug 2016, 20:36
A lot of ill-informed and at times anti-Irish comment. The EU rules give competency over Tax rates exclusively to member states, a situation which is jealously guarded by the member states. Competition policy is however largely an EU competency - in the single market this is obviously necessary. The problem here is that the Competition Directorate of the Commission is now barging into the tax area in which it should have no competency. Hence the likely Irish and Apple appeals.

Most countries offer inducements to attract foreign direct investment. It is highly unlikely that these will be scrapped. What is not allowed are “special deals” i.e. deals specific to a company such as Apple, and not available as part of a generally available package. I know of no evidence of such a “special deal” in the Irish case.

The Irish finance minister has pointed out that Apple will, under U.S. tax law, get tax credits for the €13billion, which will lower its tax liabilities in the US. So a lot of this is an attempted grab from US taxpayers by the EU. Therefore the US Treasury and Apple are on the same side, unlike what SARF seems to think.

Anyhow if Ireland is forced to take the €13 billion, EU budgetary rules more or less compel it to use the money to write down debt, and also other EU states (and the USA!) Are being told by the Commission that they should apply to the Irish authorities for that part of the €13 billion which arises from activity in their countries. So no windfall, despite the delusions of the Irish Left.

Loose rivets
30th Aug 2016, 20:46
That's interesting. Thanks.


But, still don't quite get it. What I do get is the loudness of the scream from the US. But have no fear, the US taxpayer will foot the bill. Ordinary families always do, I'm not sure about the big players.



(From the Republic)

This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation."


Okay, I'll go along with that, but I don't quite see it marrying up to us in the UK begging for just small pockets of individuality and being sent home empty handed.

racedo
30th Aug 2016, 20:52
Anyhow if Ireland is forced to take the €13 billion, EU budgetary rules more or less compel it to use the money to write down debt, and also other EU states (and the USA!) Are being told by the Commission that they should apply to the Irish authorities for that part of the €13 billion which arises from activity in their countries. So no windfall, despite the delusions of the Irish Left.

Countrys will think we will have some of that ...................... until they get reminded that if countrys set a precedent of taking someone elses Tax on profits then it also will apply to them and any company making money in their country.

racedo
30th Aug 2016, 20:53
US going after VW pretty much guaranteed that Apple would get hit hard.

SARF
30th Aug 2016, 21:04
Not much uk sympathy after B.P.

Economics101
30th Aug 2016, 21:29
Racedo: No causation that you suggest: the Apple case has been under way for several years, well before the VW emissions business. Anyhow it's not so much the Feds as the car-chasing lawyers and authorities from many countries (including EU ones) who are going after VW.

cavortingcheetah
30th Aug 2016, 21:37
Here's something from Bloomberg.


How have Apple and Ireland reacted?

Apple and the Irish government have both vowed to appeal the decision.
In a statement, Apple said: "The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe. Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned.”
Apple also published a letter on its European websites, along with a picture of a young Steve Jobs at its first factory in Cork, Ireland.
Irish Finance Minister Michael Noonan said: “I disagree profoundly with the commission’s decision." Ireland’s tax system is founded on the strict application of the law “without exception,” he said.
Apple's Chief Financial Officer Luca Maestri said on a conference call that the payback order is a “completely made up number” and that there was “no special deal” from Ireland.

How did the markets react?

Hardly at all. Apple stock fell about 2 percent on the news in Frankfurt trading. In New York at 11 a.m. it was down less than 1 percent.

What has the U.S Treasury said?

In an e-mailed statement, a U.S. Treasury spokesperson said: "We believe that retroactive tax assessments by the commission are unfair, contrary to well-established legal principles, and call into question the tax rules of individual Member States. The commission’s actions could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and the EU. We will continue to monitor these cases as they progress, and we will continue to work with the commission toward our shared objective of preventing the erosion of our corporate tax bases.‎”
What have legal experts said?
Joylon Maugham QC, a British trial lawyer specializing in tax cases at Devereux Chambers in London, said the decision will make U.S. multinationals think twice about engaging in aggressive tax avoidance strategies in Europe, even if the Apple decision is ultimately overturned by EU courts.
He said that the commissioner was using a creative interpretation of the state aid rules to try to drive greater tax harmonization among EU nations. "This is part of the project of driving forward the single market project," he said. "It is difficult to imagine a single market working effectively if member states are able to eat one another's tax base."
Aisling Donohue, a tax partner at MGPartners in Ireland, said Apple's Irish tax policy is considered the most brazen among multinational U.S. technology companies, said while other companies should be concerned, they aren't likely to face nearly the demands or scrutiny as what the commission imposed on Apple.
"Apple is unique in having this structure and I can't fathom how they didn't fix it. It was always high risk," Donohue said. "I don't understand how Apple's tax advisers didn't tell them to change this ten years ago."

Can Apple afford to pay the bill?

Easily. As of last month, Apple had $232 billion in cash, with about $214 billion of that being held overseas.

Peter-RB
31st Aug 2016, 11:25
Irexit...next.....or Appexit from the Land of the Shamrock, which ever way the EU will not back off, they are an unelected law to there own destiny !

Evanelpus
31st Aug 2016, 13:19
If I owned a company that could use a back door, no tax, get out of jail free card, I blooming well would.

Let's not be too quick to decry Apple, from what I gather, no laws have been broken here.

ORAC
31st Aug 2016, 20:00
Apple travesty is a reminder why Britain must leave the lawless EU (http://www.telegraph.co.uk/business/2016/08/31/apple-travesty-is-a-reminder-why-britain-must-leave-the-lawless/)

Sue Vêtements
31st Aug 2016, 20:41
As has been pointed out several times on the other thread ... NOT unelected. And not able to arbitrarily make Regulations. In fact far from it.


And the Telegraph article which contains more hyperbole than it does persuasive, reasoned prose also contains this bitWe can agree too that Apple's cosy EU arrangements should never have been permitted :confused:

Economics101
31st Aug 2016, 21:33
Peter RB and others: Why do you use this case to argue that Ireland should leave the EU? Why does Apple locate in Ireland? Not just because of tax but also to guarantee access to the EU single market.

I'm no Irish Nationalist, but not for the first time the Brits have f*cked us over with the Brexit referendum result, and saying that we should just follow the UK and leave is calculated to really annoy a lot of otherwise well-disposed Irish people.

The EU is not "lawless": Ireland and Apple can appeal the ruling, and appeal again to a higher court if they lose the first one. The Torygraph piece has a high garbage content.

Ant then of course we have the lunatics of the Irish Left, who don't want an appeal, even though the rules would not allow the Government to to splurge it on various causes beloved of the Left.

The whole thing has smoked out a wide variety of ideologues, who have one thing in common: spouting rubbish.

ORAC
1st Sep 2016, 09:47
The EU?s Attack on Apple (and the US): Rotten to the Core (http://www.nationalreview.com/corner/439584/eus-attack-apple-and-us-rotten-core)

'......In 2008 Irish voters rejected the EU’s notorious Lisbon Treaty in a referendum. They were persuaded to change their mind in a second referendum held the following year. In doing so, they were influenced by the country’s desperate economic condition (the financial and euro zone crises had erupted in the meantime) and by guarantees that the treaty would (to quote the BBC) “not affect key areas of Irish sovereignty, such as taxation….....”

Ireland to hold second referendum on Lisbon Treaty - Telegraph (http://www.telegraph.co.uk/news/worldnews/europe/eu/5579684/Ireland-to-hold-second-referendum-on-Lisbon-Treaty.html)

".....5:58PM BST 19 Jun 2009

The Taoiseach, who held private talks with Gordon Brown yesterday, won guarantees from European Union leaders that Irish policies on tax, abortion and military neutrality would not be affected by Ireland ratifying the treaty. "I feel we will be in a position to hold a second referendum at the start of October," he said at the close of a European Union summit in Brussels. "I am confident that we now have a solid basis to go to the Irish people and ask them to ratify the Treaty so that Europe can move forward."

Mr Cowen needed the guarantees in the form of a "protocol" - the most legally watertight form of EU agreement. He said he could not reverse last year's Irish No to the treaty without the protocol. The deal involves wording in the conclusions stating explicitly that the guarantees given to Ireland will not require any form of re-ratification in any other member state.......

Jose Manuel Barroso, the president of the European Commission who was confirmed in the job for another five years at the summit, said: "I'm especially pleased that we have agreed the Irish guarantees. This gives the Irish people all the guarantees they need.........."

Widger
1st Sep 2016, 11:45
Its not just the Irish. the EC has meddled in our Apples too. They recently infringed the UK for giving a lower rate of excise duty for small cider producers. UK sovereign tax policy and the Commission meddled in it saying it was unlawful and constituted state aid. So we could see a lot of small artisan cider producers going out of business because of the evangelists in Brussels.

HeartyMeatballs
1st Sep 2016, 13:09
An absolute disgrace. Yet CAP happily ploughs tens of billions into keeping some farms going, others will be crucified and left to fail when the EUrocracts come after them. For the sake of cider producers I hope we are well out of the EU before they get a chance.

radeng
1st Sep 2016, 16:48
What are Apple's European sales each year? Could they find it financially better to shut down completely in Europe and keep the 13 billion, thus waving the finger at the Commission? In addition, of course, to having a lot of now unemployed people told that they are unemployed because of the Commission....

Sallyann1234
1st Sep 2016, 17:00
Apple are not known for running away from a fight. Just look at their continuing legal battles with Samsung and others over patent rights.
Their in-house lawyers will be crawling all over the EU ruling and will come out fighting.

cavortingcheetah
1st Sep 2016, 17:22
The EU is beating up Apple in an effort to set a common European tax policy that will eventually embrace every citizen and company within the EU financial union. Countries will be permitted to set their own rates of taxation over and above this level but will not be allowed to set rates of taxation below that level. The rationale for this is so as to have, as EU policy, no one country within the EU as a more advantageous financial destination that any other.
It would be an enormous fillip to the amorphous ambitions of the leaders of the european union if they were able to seriously damage the United States economy in the process. The US, for its own best interests, should pull out of NATO right now thereby permitting the bear in the east to extend its claws into the soft underbelly of Europe, collapsing Italy and France before encircling through France to deal with Germany from the west.
Deranged as many are prone to call Putin, he will be infinitely easier for the US to deal with in the mid to long term future than the multi faceted socialist demagoguery presently suppurating at the heart of socialist Europe.

yellowtriumph
1st Sep 2016, 18:26
The EU is beating up Apple in an effort to set a common European tax policy that will eventually embrace every citizen and company within the EU financial union. Countries will be permitted to set their own rates of taxation over and above this level but will not be allowed to set rates of taxation below that level. The rationale for this is so as to have, as EU policy, no one country within the EU as a more advantageous financial destination that any other.
It would be an enormous fillip to the amorphous ambitions of the leaders of the european union if they were able to seriously damage the United States economy in the process. The US, for its own best interests, should pull out of NATO right now thereby permitting the bear in the east to extend its claws into the soft underbelly of Europe, collapsing Italy and France before encircling through France to deal with Germany from the west.
Deranged as many are prone to call Putin, he will be infinitely easier for the US to deal with in the mid to long term future than the multi faceted socialist demagoguery presently suppurating at the heart of socialist Europe.
The only flaw I can see in your plan is France's independent nuclear weapons. Other than that ... I'd crack on if I were Putin.

mini
1st Sep 2016, 22:34
Does anyone have a link to the actual judgment? we seem to be firing off on press releases at the moment. Experience has taught me that there is often a chasm between the two...

Tom!
1st Sep 2016, 23:48
What are Apple's European sales each year? Could they find it financially better to shut down completely in Europe and keep the 13 billion, thus waving the finger at the Commission? In addition, of course, to having a lot of now unemployed people told that they are unemployed because of the Commission....
9,5 billion in european sales in just the last quarter, they are not going anywhere

Does anyone have a link to the actual judgment?
It is still confidential...
Case search ? Competition - European Commission (http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373)

ORAC
2nd Sep 2016, 06:30
https://www.theguardian.com/technology/2016/sep/01/eu-state-aid-tax-avoidance-apple

ORAC
2nd Sep 2016, 07:20
A good synopsis of the current position.

Why Ireland should appeal EU's Apple tax ruling -CapX (http://capx.co/external/why-ireland-should-appeal-eus-apple-tax-ruling/)

maliyahsdad2
12th Sep 2016, 10:05
This thread needs merging!