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Commission says Ireland granted undue tax benefits of up to €13B to Apple

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Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#261

Post by noir-york »

khuey wrote: post #234
noir-york wrote: post #166

People here are commenting on Ireland (and other jurisdictions) engaging in tax arbitrage to attract companies and jobs. Competing on tax rates and negotiating tax deals were a huge MNC like Apple pays a ridiculous 0.005% is bad: morally wrong, cuts to public services, increases unjustifiable economic inequality and is just not fair on other much smaller firms who have to pay full whack on the tax. Apple, FBK, etc do…

Companies are already taxed on their profits. The hard question is determining what is a profit and where it is located. And share buybacks are returning capital to the owners of the business, which is why they invested in it in the first place. The owners can then make their own choices about how to allocate capital productively.

> Companies are already taxed on their profits

In theory.

We are having this debate because in practice some are taxed at 20% and others practically nil.

I'm arguing for no negotiated tax arrangements, indeed I have been giving thought to a progressive tax regime for companies. That would be interesting to evaluate.

> And share buybacks are returning capital to the owners of the business

Which is why I am not sure buy backs should be taxed. Either a company invests its earnings, or else it returns them to shareholders who can decide to identify growth opportunities, as you suggest.

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#262

Post by Oletros »

chronid wrote: post #144
Oletros wrote: post #39

Earlier quoted context omitted.

Why they won't collect all the due taxes?

Heavy discounts are usually given for this kind of issues by fiscal authorities, unless there is proof (beyond doubt) there was unlawful intent to not pay those taxes.

But this is not a case of a Tax authority asking a company taxes, it is the EC saying what it is the amount owed.

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#263

Post by masklinn »

pwinnski wrote: post #259
chupy wrote: post #241

Earlier quoted context omitted.

Sure, there was some news that EC has dealt with Amazon, Starbucks, InBev but did they actually pay anything back? Did they appeal? Last I heard for InBev the Belgian Finance minister said: "the consequences for the companies concerned would be considerable and the reimbursement itself would be particularly complex" aka will take forever and we will probably not really do it.

It has taken a number of years for the investigation of Apple to reach this point, and the investigations of Starbucks, Amazon, and InBev are ongoing. I don't believe your "aka" summary is accurate.

I believe the Starbucks case is "over" and they're to pay 30m in owed taxes.

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#264

Post by refurb »

legulere wrote: post #250
refurb wrote: post #227

Earlier quoted context omitted.

by taking part in a race to the bottom You mean countries competing for business? Why is that bad? It would sound ridiculous if you applied it to companies "Car companies offering lower and lower prices is just a race to the bottom! If this keeps up we'll have no car companies as they'll all be bankrupt!".

Countries are not companies. Also your comparison is pretty bad. The direct cost per unit is pretty high for a car in a car company, the one for a company in a country is negligible. So it's more like a publisher selling digital goods, except that there's no copyright, preventing the others from selling exactly the same for a lower price.

Countries provide a service (infrastructure, social programs, court system) based on a price (taxes). There is a floor for those costs. There is a minimal amount of tax required to provide those services.

I think it's a bad idea to tell a country that they can't charge a lower price (taxes) in order to sell more business (have companies move there).

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#265

Post by shaqbert »

anonymousDan wrote: post #174
shaqbert wrote: post #118

What Apple, Amazon, Google, Microsoft, and most other big US company do is the so called "double Irish"[1]. Essentially is a clever way of using two quirks of some EU countries loopholes in tax laws, from treating IP licensing fees (of course the brand and intellectual IP is owned by a British virgin island tax haven, where else could this stuff be created/invented), and the net result is that Apple et al end up payi…

You need to get your facts straight - the 'Double Irish' loophole was remove by the Irish government several years ago.

"those already engaging in the scheme have a five year window to wind down."

The correct way of saying this is by 2020 the loophole will be gone for real. Happy tax saving in the interim...

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#266

Post by CJefferson »

tinkerrr wrote: post #132
andmarios wrote: post #42

In 2014 Apple's effective tax rate was 0.005%. That is 5 cents for every $1000 in profits. Even a patent troll could do better than Ireland...

Why this blatant falsification of facts? In 2014, Apple's earnings before interest and taxes was $53,483,000 and the income tax expense was $13,973,000. That's 26.12% effective tax rate. All data from Yahoo! Finance: https://finance.yahoo.com/quote/AAPL/financials?p=AAPL . It's a similar tax rate in other years too.

Apple made $53 million in a year?

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#267

Post by quantgenius »

germanier wrote: post #239
zigzigzag wrote: post #177

Earlier quoted context omitted.

I disagree that any such distinction exists though. Governments routinely set taxes and tariffs such that they apply to one industry and not another, or put another way, one set of companies pays lower taxes than others do. The oil industry is famously heavily taxed, that does not imply that hydropower companies are receiving illegal state aid. If a country can't charge different tax rates to different companies base…

EU governments, including the Irish one, are free to set different tax rates for different industries. (They are not free to set tariffs but that is because tariffs are a core EU competency as defined in the treaties.) Member states are not free to set different tax rates for different companies . This is part of the deal of joining the EU and has been part of the treaties since the beginning. The only surprising thi…

Ireland did NOT set a different tax rate for Apple or for a specific industry that was basically just Apple. Apple simply structured itself to minimize taxes taking into account the laws at the time. Any company was free to do the same and many did. The structure is so common that there are even two terms that are in standard use to describe this structure, the Double Irish and the Double Dutch.

The EU did not suddenly discover what Irish tax laws were. They were legislated in an open process and were public records and were trumpeted loudly by the Irish government to attract investment. This state of affairs existed for decades. The EU simply wants to get its grubby little hands on Apple's money so they can use it for more dole-outs to friends of the bureaucrats and also use this as a precedent so they can expand their powers into areas where their power has been explicitly curtailed by treaty.

Apple made a business decision to invest in the EU based in part on the tax rates at the time which went into it's calculations of expected rate of return. Of course they probably did much better than what they expected, but many who made similar decisions lost money too. If tax laws are subject to change retroactively, investors have to start taking uncertainty about the tax rate and the expected rate of return into account and will demand a (potentially much) higher rate of return to invest. This is why it's so hard to attract investment in countries without stable governments and a strong rule of law even though the purported rate of return is much higher. If this continues it will lead to further slowdown in the EU economy. The current slowdown is not apparent to EU citizens only because the market is not charging the EU a credit risk premium on EU bonds and so EU governments are still able to fund public benefits by borrowing. This is something that will change quickly and lead to a Greece like situation if the EU starts acting in this manner.

As an outside observer, I did not think Brexit was a great idea but this event frankly is a very good argument for why more countries should consider EUExit and/or the national governments need to figure out how to defang the EU. The EU was supposed to be about free movement, no "TARIFFS" as in impediments to TRADE within the block and a single currency. What it seems to have turned into is unelected bureaucrats in Europe dictating to elected national governments what their tax policy must be.

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#268

Post by DashRattlesnake »

wodencafe wrote: post #181
collyw wrote: post #48

Earlier quoted context omitted.

If the owners aren't paying for it, then it should go to the public domain. The idea of someone "owning" land seems pretty stupid to me.

Technically the gov't own the land (or so they say), they just let you use it. Like money.

I believe that's actually true in China, but what about elsewhere?

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#269

Post by fnord123 »

criddell wrote: post #153
eru wrote: post #13

Earlier quoted context omitted.

Apple paid taxes according to Irish laws. Is it Apple's problem that Irish law disagrees with EC agreements? (Seems to be Ireland's problem.) If people want companies to pay certain taxes, they should vote for politicians that pass laws that require companies to pay those taxes.. In any case, we should be taxing land value. That's harder to avoid: you can't hide land.

> In any case, we should be taxing land value. That's harder to avoid: you can't hide land. Would you also tax virtual property? I guess that would be things like domain names.

Tax intellectual property. If copyright and patent infringement is such a big deal and tie up the courts then they can be taxed too, surely.

Re: Commission says Ireland granted undue tax benefits of up to €13B to Apple

#270

Post by wsc981 »

cel1ne wrote: post #69
Luc wrote: post #26

Every country in Europe has some sort of wacky tax exception for multinationals. Every state is locked in this race to the bottom with its neighbouring countries. It's great that there is a supra-national authority forcing the states to cooperate on getting multinationals to pay reasonable taxes, because it wouldn't happen otherwise.

I'm not sure about that. I think most multinationals follow the same double-irish structure [0] which is based on laws in Ireland, the Netherland and the Bermudas. According to Wikipedia (just listing the IT-companies): * Adobe Systems * Apple Inc. * Facebook * Google * IBM * Microsoft * Oracle Corp. * Yahoo! [0] https://en.wikipedia.org/wiki/Double_Irish_arrangement

Also bands like U2 make use of such structures to avoid taxes: http://www.economist.com/news/business-and-finance/21625444-...
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