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Apple must pay 13B euros in back taxes, EU's top court rules

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Re: Apple must pay 13B euros in back taxes, EU's top court rules

#261

Post by darby_nine »

pembrook wrote: post #257
elAhmo wrote: post #251

Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 trillion is around 0.4% of their cap. Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours.

Market cap is the theoretical value of all the company’s future growth/cash flows brought forward to today. It’s speculative, and fluctuates with the stock price. Tax bills have to be paid in cash, not stock. A better analogy is to simply look at Apple’s net profits, since that’s where the money will come from. $13B is not nothing, even for Apple.

Note we also accept stock too if companies want to fork that over instead

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#262

Post by Retric »

ajsnigrutin wrote: post #242
Retric wrote: post #240

Earlier quoted context omitted.

Multinational corporations have subsidiaries not cousins. A great number of tricks go away if you treat subsidiaries as a single company. Countries are reluctant to pierce the corporate veil, but it’s all arbitrary rules.

I was giving an example with 11eur dildos, you have cousins for that. And for every regulatory change will bring changes to tax avoidance... subsidiaries will just get "one more step" removed from the main company...

Ultimately profits flow to a single entity. Taxing 1 levels down and stopping was clearly not the intent of my suggestion. If it’s under the control of Alphabet/ its profits go to Alphabet treat it as a single entity Alphabet.

The idea that subsidiaries, trusts, etc have any meaning whatsoever when collecting taxes is simply a loophole which can be closed at any time.

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#263

Post by igravious »

elAhmo wrote: post #251

Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 trillion is around 0.4% of their cap. Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours.

13bn is not meaningless for Ireland – that'd fund several major infrastructure projects – stuff the Irish people missed out because of these illegal tax shenanigans.

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#264

Post by afiori »

tiffanyh wrote: post #255
anonymousDan wrote: post #233

For non-EU readers, note that taxation is explicitly not a competency of the EU (i.e. Ireland can set its tax levels to whatever it wants). The only thing in question here is whether it was applying the same taxation rules to all companies, as granting special exceptions to certain companies could be viewed as state aid (which is not allowed). Ireland claimed it wasn't, the current (over-)ruling says otherwise. This…

What’s interesting is that it’s common for governments to give tax incentives to companies that will result in driving more economic value for their region. Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. Question: does this ruling prohibit that common practice?

No, it just requires for the rule to exist and be used coherently.

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#265

Post by dtech »

tiffanyh wrote: post #255
anonymousDan wrote: post #233

For non-EU readers, note that taxation is explicitly not a competency of the EU (i.e. Ireland can set its tax levels to whatever it wants). The only thing in question here is whether it was applying the same taxation rules to all companies, as granting special exceptions to certain companies could be viewed as state aid (which is not allowed). Ireland claimed it wasn't, the current (over-)ruling says otherwise. This…

What’s interesting is that it’s common for governments to give tax incentives to companies that will result in driving more economic value for their region. Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. Question: does this ruling prohibit that common practice?

Yes, that is exactly the kind of thing that Ireland did and is not allowed in the EU rules.

You are allowed to make rules, but you can't offer deals.

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#266

Post by igravious »

elAhmo wrote: post #251

Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 trillion is around 0.4% of their cap. Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours.

“The most recent projections for the final cost of Metrolink set a maximum outlay of €12.25billion, excluding VAT, though the rail link is not expected to go live before the middle of the next decade at the earliest.”[1]

13bn would cover the cost of Dublin's first metro system, unlike most European capitals Dublin does not have a metro. This is what this ruling means for the Irish public. shame on the government putting corporate interests ahead of public finances.

[1] https://www.irishexaminer.com/news/arid-41386906.html

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#267

Post by dtech »

igravious wrote: post #260
elAhmo wrote: post #251

Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 trillion is around 0.4% of their cap. Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours.

Apple didn't break the law, Ireland did.

they both did, as they made a deal that was illegal under EU law. I assume it's similar to a US state and corporation therein both falling under federal law.

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#268

Post by jemmyw »

tiffanyh wrote: post #255
anonymousDan wrote: post #233

For non-EU readers, note that taxation is explicitly not a competency of the EU (i.e. Ireland can set its tax levels to whatever it wants). The only thing in question here is whether it was applying the same taxation rules to all companies, as granting special exceptions to certain companies could be viewed as state aid (which is not allowed). Ireland claimed it wasn't, the current (over-)ruling says otherwise. This…

What’s interesting is that it’s common for governments to give tax incentives to companies that will result in driving more economic value for their region. Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. Question: does this ruling prohibit that common practice?

Kind of. It's already prohibited, depending on what you mean. It would be legal to say all companies can have a tax break if they hire X people in Ireland. It's not legal to give the tax break to one company and deny it to another.

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#269

Post by hyperpape »

elAhmo wrote: post #251

Even if this sounds like a huge fine, this is effectively meaningless, even if they end up paying it. 13 billion, for a company with market cap of more than 3 trillion is around 0.4% of their cap. Until these fines become meaningful, companies will just continue breaking the law and asking for forgiveness later, as the changes to their market cap can offset this fine in hours.

Note that in the case of Apple, the fine is proportional to the benefit Apple gained from Ireland. So if the fine is meaningless, then so was the original value of the ill-gotten gains.

(This is in addition to the other commentators, who have correctly pointed out that if you just divide market cap by the fine, you're producing a number that isn't useful for anything but misleading people).

Re: Apple must pay 13B euros in back taxes, EU's top court rules

#270

Post by afiori »

Supernaut wrote: post #239
aswerty wrote: post #225

From discussions in the past, I was under the impression there was general sense that if Ireland should have legitimately taxed them to this degree. That ultimately the taxes owed should probably be paid out to the countries where the sale occurs. As one country reaping the rewards of the tax for the entire European operation would be bizarre, when that country just has a medium sized support/sales operation (which w…

> ultimately the taxes owed should probably be paid out to the countries where the sale occurs. As I wrote in another thread, that's not how business works in the EU. If Volkswagen, incorporated in Germany, sells a car in Poland, they're not required to pay a corresponding sliver of their net profits to the Polish exchequer. It all stays in Germany.

> their net profits to the Polish exchequer

I believe that part of the reason is that they still pay other taxes (eg VAT) in the country of sale.

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