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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

#361

Post by noirbot »

alibarber wrote: post #352
dotancohen wrote: post #336

Earlier quoted context omitted.

In the case of conflicting laws, who prevails? If the Irish pass a law that Apple can not pay certain taxes, does that not override EU law? Usually in cascading situations, the more local entity wins, n

Ireland cannot do that. That’s literally the whole point of the EU (or specifically a single market) Effectively - your hypothetical proposed ‘apple law’ would, at some point in the Irish law passing process, be found to be incompatible with their commitments to being in the EU, and I assume it would be then an unconstitutional law. The price of admittance to the EU is basically having this process and constitution.…

I mean, isn't that exactly the case here though? Ireland's law said they could do this. The EU says that's wrong, and Ireland is seemingly getting a reward for doing something illegal that the EU didn't decide was illegal for almost 30 years?

Again, not disputing that this is legally accurate to how things work, but that definitely strikes me as an environment that a lot of businesses would find hard to work with. Other smaller startups I've worked with had Irish branches because it was a good way to hire devs and governments gave us some incentives. Finding out, potentially decades later, that the Irish government had screwed us over would be a lot more catastrophic than this fine will be to Apple.

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

#362

Post by hinkley »

vasco wrote: post #357
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…

I think you make it seem like EU doesn't care at all about what member states do in regards to taxation but there's many limitations to what can be done by any member state in order to harmonize and prevent corruption etc. This in practice makes the EU have a lot of say in regards to taxation. Moreover the EU has special rules to limit moving funds to jurisdictions that have taxes that are deemed too low (read tax ha…

Maybe they should do it like Roth IRAs. You can move the money to a tax haven only after you’ve paid taxes on it.

So if you’re building hotels or factories in the haven that’s fine. If you’re hiding money we demand our pound of flesh.

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

#363

Post by bluecalm »

jokethrowaway wrote: post #185
ko27 wrote: post #46

Earlier quoted context omitted.

> You can just ignore deals because you (EU) said so? Of course you can, because EU law has precedence over Ireland's deal in this situation.

I guess what comes as a shock is how much control the EU has. At the same time, if bureaucrauts in Ireland were a bit smarter they could have just written in a special exemption for companies with certain specific requirements - which end up being Apple and a few big ones. Apple was also pretty dumb to go to Ireland while Malta, Cyprus and Bulgaria offer pretty low taxes out of the box. I guess they did that to acces…

Or Ireland could just lower the tax for every company making it a level playing field. I am not a fan of EU economic ideas at all but I am happy they are starting to enforce this one. My country (Poland) has done such deals as well. Wanna start a small business? 19% corporate tax, 23% VAT, 19% cap gain tax. Some German car company thinking about opening a factory here? Let's offer 0 tax rate for many years + additional incentives!

This really is demoralizing how they set rules for small guys but then give big incumbent companies everything they want.

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

#364

Post by EduardoBautista »

itake wrote: post #337
ghusto wrote: post #321

Earlier quoted context omitted.

> Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation Glad to hear it, because what Americans told me (that they get taxed for the same money they paid tax on in their host country) is bonkers. EDIT: Seems there's some disagreement ;) The other commentor echoes what I've heard from Americans living in Eu…

its complex.. The USA has FEIE, (no federal taxes the first $120k/yr), but not all states (like Cali) honor that and may still charge you state income tax. and FEIE doesn't exempt you from self-employment taxes. and doesn't exempt non-earned income (dividends, etc.). Americans can come out ahead (if they earn less than $120k/yr and live in a 0% tax country). But a non-American (like Canadian) doing the samething, wou…

> but not all states (like Cali) honor that and may still charge you state income tax

Whoa, so before moving to a low tax country you should move to a state that is not insane for a while and then move abroad? Crazy.

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

#365

Post by marcosdumay »

noirbot wrote: post #311
jemmyw wrote: post #268

Earlier quoted context omitted.

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.

It does feel a little weird then that Apple is being fined here then? It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Obviously they worked on it together, but it feels odd that Ireland has now essentially gotten all the benefits of offering this illegal deal by having Apple do business there and now also gets all the back taxes that Apple probably wouldn't have paid to I…

If the government "offers" you a deal that you don't deserve, and you take it, that's a crime.

It's pretty much everywhere. The government isn't a person that can make decisions autonomously.

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

#366

Post by jandrewrogers »

hayd wrote: post #296
ghusto wrote: post #287

> Apple, however, said in a statement: "The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US." My understanding is that the U.S.A. double-taxes both corporations operating abroad, as well as it's own expats. If this is true, then it's quite the remark to say _the country you're actually in_ is the o…

Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation but it’s unclear/unlikely the IRS are just going to hand back money Apple already paid (it likely falls outside of what’s required in those international agreements). Companies, and people, make decisions based on the tax laws of the day eg deciding to…

> Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed.

This is not correct, it is only practically true in trivial cases. Excess taxation is a very real pain point for Americans living overseas, never mind the other indefensible things the US government does to its expats like FATCA.

Many types of income cannot be offset nor or they covered by tax treaties. Every time there is an impedance mismatch between US tax code and foreign tax code, including basic things like classification of income, deductions, and exemptions, you can end up with liabilities in both countries. It is not uncommon to pay more taxes in aggregate as an expat than you would pay in either country separately.

The way the US government, and some State governments, treat American expats is quite fucked.

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

#367

Post by pyrale »

noirbot wrote: post #311
jemmyw wrote: post #268

Earlier quoted context omitted.

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.

It does feel a little weird then that Apple is being fined here then? It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Obviously they worked on it together, but it feels odd that Ireland has now essentially gotten all the benefits of offering this illegal deal by having Apple do business there and now also gets all the back taxes that Apple probably wouldn't have paid to I…

> It seems like Ireland did the thing that's against the rules by offering the deal, not Apple?

Well, Apple accepted the illegal deal, didn't they?

> That seems like a bit of a perverse incentive for countries to offer deals they may know will get overturned later because they'll get the money eventually.

There's also a perverse incentive for companies to defer paying taxes for 20 years. Apple isn't getting fined, they're just paying what they owe 20 years late.

edit: apparently the years were 1991 to 1997, so that's about 30 years actually.

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

#368

Post by jandrewrogers »

EduardoBautista wrote: post #364
itake wrote: post #337

Earlier quoted context omitted.

its complex.. The USA has FEIE, (no federal taxes the first $120k/yr), but not all states (like Cali) honor that and may still charge you state income tax. and FEIE doesn't exempt you from self-employment taxes. and doesn't exempt non-earned income (dividends, etc.). Americans can come out ahead (if they earn less than $120k/yr and live in a 0% tax country). But a non-American (like Canadian) doing the samething, wou…

> but not all states (like Cali) honor that and may still charge you state income tax Whoa, so before moving to a low tax country you should move to a state that is not insane for a while and then move abroad? Crazy.

Yes, this is a real thing. There are a few States like South Dakota that have kind of made a business of helping expats launder their State citizenship.

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

#369

Post by returningfory2 »

itake wrote: post #337
ghusto wrote: post #321

Earlier quoted context omitted.

> Expats aren’t double taxed but you need to file tax returns to offset taxable income that’s already been taxed. There are specific agreements to avoid double taxation Glad to hear it, because what Americans told me (that they get taxed for the same money they paid tax on in their host country) is bonkers. EDIT: Seems there's some disagreement ;) The other commentor echoes what I've heard from Americans living in Eu…

its complex.. The USA has FEIE, (no federal taxes the first $120k/yr), but not all states (like Cali) honor that and may still charge you state income tax. and FEIE doesn't exempt you from self-employment taxes. and doesn't exempt non-earned income (dividends, etc.). Americans can come out ahead (if they earn less than $120k/yr and live in a 0% tax country). But a non-American (like Canadian) doing the samething, wou…

This isn’t the full story though, because there is also the foreign tax credit. If your US taxes are lower than your foreign taxes (which they will be if eg you live in Europe) you won’t pay US tax: https://www.irs.gov/individuals/international-taxpayers/fore...

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

#370

Post by ensignavenger »

noirbot wrote: post #311
jemmyw wrote: post #268

Earlier quoted context omitted.

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.

It does feel a little weird then that Apple is being fined here then? It seems like Ireland did the thing that's against the rules by offering the deal, not Apple? Obviously they worked on it together, but it feels odd that Ireland has now essentially gotten all the benefits of offering this illegal deal by having Apple do business there and now also gets all the back taxes that Apple probably wouldn't have paid to I…

I read through the first part of the ruling to get a better idea of what happened. Apparently, Apple wrote to the Irish tax authorities, and said "this is how we plan to calculate our taxes" and the Irish tax authority said "okay, no problem, that works for us" and the EU commission investigated some years later, and said "wait, was that method of calculating taxes available to all Irish companies? We don't think so, so now Ireland has to collect taxes from all the way back many years." Ireland said "no bro, we're all good, they don't owe us anything", and Apple said "wait, we just did what we were told to do, and we already paid taxes on that income in the US instead of the EU, you can't retroactively change the rules" and the EU top court just said "Sorry, those tax rules go against EU law, and yes we can"
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