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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

#101

Post by antr »

eru wrote: post #13
rdslw wrote: post #4

Good. Read how Tim Cook publicly considers Nobel economist Joeseph Stiglitz as a one who do not know what he (Stiglitz) is talking about. Eye opening. Excerpts from: http://www.washingtonpost.com/sf/business/wp/2016/08/13/2016... Q: What do you say in response to Nobel economist Joseph Stiglitz’s comments on Bloomberg [television], where he called Apple’s profit reporting in Ireland a “fraud”? Tim Cooks answer: I did…

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.

Just from reading the article:

"the Commission says both companies should have been taxed by Ireland on the basis of their worldwide income."

"These profits allocated to the 'head offices' were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force."

It seems it is not an Irish problem, but more a European one, and it appears that there are some technicalities that allow the EU to request Apple to pay taxes.

Let's not forget that regardless of Apple complying with local tax authorities, these laws may be against EU treaties... "[the Treaty] generally prohibits State aid unless it is justified by reasons of general economic development"1

Let's see how this pans out.

1: http://ec.europa.eu/competition/state_aid/overview/index_en....

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

#102

Post by verinus »

zigzigzag wrote: post #96
icebraining wrote: post #65

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Unjust_enrichment Having to pay back the taxes that were due is not a punishment, it's simply restitution.

But no taxes were due, according to the tax collectors themselves. Meanwhile the EU is not a tax collection body, it does not set tax policy and it does not issue tax rulings. It has no power to do this and I'm unaware of any countries that want it to have this power.

oh they were. it's actually quite clear: if you exempt some corp from taxes you are paying them the exempted sum compared to another business not receiving the exemption.

In my opinion it is highly unethical to construct such financial mechanisms with the only aim to reduce tax payments.

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

#103

Post by felipeerias »

onion2k wrote: post #38
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.

Is it Apple's problem that Irish law disagrees with EC agreements? Yes. To the tune of €13bn. At the scale Apple operates their legal team should be considering whether the deals they negotiate are legal in all the applicable jurisdictions, not just the local one. The Irish government should also have done a better job, so part of the blame lies with them, but that doesn't free Apple of all responsibility. In any cas…

The Irish government were doing their job very well.

It just so happens that their job, as they understand it, is attracting multinational corporations by having much lower taxes than their neighbours.

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

#104

Post by flexie »

eru wrote: post #13
rdslw wrote: post #4

Good. Read how Tim Cook publicly considers Nobel economist Joeseph Stiglitz as a one who do not know what he (Stiglitz) is talking about. Eye opening. Excerpts from: http://www.washingtonpost.com/sf/business/wp/2016/08/13/2016... Q: What do you say in response to Nobel economist Joseph Stiglitz’s comments on Bloomberg [television], where he called Apple’s profit reporting in Ireland a “fraud”? Tim Cooks answer: I did…

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.

Yes, it is Apple's problem and no, Apple is not a victim in this thing.

The EU treaty is Irish law as well and lawyers from all over the union (myself included) have been looking on at this blatant violation of EU rules for years wondering how long multinational companies would be able to keep the schemes alive.

The Irish people have voted for politicians who adopted the EU treaty which bans subsidies to large corporations. The Irish people benefits when subsidies to French, British or German corporations are curbed. Under EU law, Apple has been obliged to pay ordinary Irish taxes all along. The whole arrangement has clearly been illegal and it is hardly a surprise to Apple and its army of lawyers and accountants that sooner or later justice would catch up.

Competitors that cannot secure such individual tax agreements are hurt by this. I sincerely hope that other multinationals with similar schemes will be next.

Apple will likely bring this ruling before the European Court of Justice but it is very unlikely that they will succeed in changing the outcome. From a legal point of view this is a very simple matter and it is an embarrassment to the whole EU system that it took so long to do something about it and that other multinationals still enjoy tax subsidies in Ireland (and likely elsewhere in the union).

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

#105

Post by pulse7 »

Companies try to pay the taxes by the "legal minimum" principle: pay what is required, but not more. If you have 2 parking slots in the downtown next to each other and one of them is cheaper, you will park where is cheaper... Why pay more if not required?

Question is: Did politicians, who created such laws, received bribes?

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

#106

Post by [deleted] »

rjtavares wrote: post #84
calg wrote: post #67

Earlier quoted context omitted.

Companies make deals with governments __all the time__ for tax breaks and government subsidies. Governments want jobs and investment, companies want the best deals they can get. This is NOT extortion or bribery, just everyday business. It happens every single day even between US states, not to mention nation-states. Business is competitive and that's a good thing. AAPL in this case has deferred taxes on profits with…

> Companies make deals with governments __all the time__ for tax breaks and government subsidies. Governments want jobs and investment, companies want the best deals they can get. And it's honestly one of the bigger problems of the world today. There was a Planet Money episode where they presented the data from jobs "created" in Kansas and Missouri through tax breaks. It was something like: Kansas stole 5000 jobs fro…

[deleted]

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

#107

Post by verinus »

calg wrote: post #67
rdslw wrote: post #37

Earlier quoted context omitted.

What actually happened between IE and AAPL is on the verge of extortion and bribery - the only difference is not on personal level but on Gov vs Bus. We should heavily penalise this, as AAPL literally stole money from both US and EU people. Because of this arrangement: Apple paid less taxes in US, hence US people have worse roads, healthcare etc. To the same in EU (but here by bad IE decision). Money taken is on AAPL…

Companies make deals with governments __all the time__ for tax breaks and government subsidies. Governments want jobs and investment, companies want the best deals they can get. This is NOT extortion or bribery, just everyday business. It happens every single day even between US states, not to mention nation-states. Business is competitive and that's a good thing. AAPL in this case has deferred taxes on profits with…

one could argue, that corps that get that bug must be cut down to a manageable level to not endanger states and thus the democratic order.

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

#108

Post by rjtavares »

threeseed wrote: post #99
rjtavares wrote: post #84

Earlier quoted context omitted.

> Companies make deals with governments __all the time__ for tax breaks and government subsidies. Governments want jobs and investment, companies want the best deals they can get. And it's honestly one of the bigger problems of the world today. There was a Planet Money episode where they presented the data from jobs "created" in Kansas and Missouri through tax breaks. It was something like: Kansas stole 5000 jobs fro…

It is a problem but unfortunately not a solvable one. It's the equivalent of paying everyone the same wage. Countries are going to aggressively compete for talent just like companies do. And whether it's offering them different tax rates, amending employment laws, building infrastructure for them etc countries are going to bend over backwards.

> It is a problem but unfortunately not a solvable one.

It is solvable through international agreements between countries. Unfortunately those tend to defend companies more than individuals.

But hey, maybe the recent TTIP backlash and apparent failure is part of a positive trend.

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

#109

Post by friendzis »

zigzigzag wrote: post #96
icebraining wrote: post #65

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Unjust_enrichment Having to pay back the taxes that were due is not a punishment, it's simply restitution.

But no taxes were due, according to the tax collectors themselves. Meanwhile the EU is not a tax collection body, it does not set tax policy and it does not issue tax rulings. It has no power to do this and I'm unaware of any countries that want it to have this power.

There are two things to keep in mind: * Tax laws are (not theoretically) changed retroactively, i.e. even if no taxes were due at the time of filling, that may change. * Law interpretation and/or leading acts may change (again retroactively), i.e. taxable amount, various exemptions, etc..

Some countries may pat you on the back for finding loopholes in the law while other may simply order one to pay hopefully without calling that criminal offence. We have no idea how this will turn out

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

#110

Post by 7952 »

eru wrote: post #33
Scirra_Tom wrote: post #22

Earlier quoted context omitted.

And how is 0% tax on profits fair and reasonable exactly?

If you tax something, you get less of it. Either because you actually really get less of it, or because you encourage clever accounting. (Just look up Hollywood accounting..) People making profit isn't something we need to discourage. How about taxing CO2 emissions and eg alcohol consumption instead? (Something we can live with less off.) And the old classic: put most of the tax burden on unimproved land value. Land'…

Or just tax the product through VAT for consumer facing companies.
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