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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

#451

Post by chrisdhoover »

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?

Ireland was a poor country. They recognized low taxes would attract business. It worked. They then became a “tiger”

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

#452

Post by timomaxgalvin »

bjornsing wrote: post #342
gzer0 wrote: post #50

I found some rather troubling aspects within the ruling itself: 1. Retroactive application of arm's length principle The Court's reliance on the arm's length principle, despite acknowledging it's not required by EU law, is problematic. As stated in paragraph 124: > "Article 107(1) TFEU gives the Commission the right to check whether the level of profit allocated to such branches... corresponds to the level of profit…

Unfair and uncertain taxation is a European specialty.

Taxation in Europe is much simpler and more certain than the US.

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

#453

Post by mcny »

jay_kyburz wrote: post #449
epolanski wrote: post #424

Earlier quoted context omitted.

That's not what really Apple did in Europe to pay little taxes. The scheme was essentially like this: - Apple Ireland bought iphones for 200$ or so (talking about pre X numbers, now they're likely slightly higher) - Apple Ireland sold iPhones to Apple Italy for 599€s - Apple Italy sold iPhones for 599€s + vat (thus avoiding to pay any corporate taxes in Italy while making billions) - Apple Ireland had a special agree…

A good argument for GST. With a 10% GST the Italians would have at least seen 10% of the 599.

I apologize if this is a stupid question but aren't GST and VAT (basically) the same thing? It is just an "advanced" sales tax, no? It still does not fix the problem of income tax...

The big problem from what I remember from earlier is some companies like grocery stores operate on razor thin margins -- like they buy tomatoes for USD 0.90 per kilogram and sell for USD 1.00 or whatever so if we charge income tax on the whole USD 1.00, the rate would have to be RIDICULOUSLY low or the grocery store simply won't survive.

Problem I want to see fixed with some kind of sales tax upgrade (VAT/GST/whatever) is if a company / conglomerate "sells" goods and services to itself, it should have to pay this tax on the pre-discount rate. For example, if Google web search has an advertisement for Google Chrome, Google should have to pay this tax on the market value of the ad placed, not on the actual money amount that changed hands (which is likely zero dollars). Same thing with Apple Music on iPhone. There are MAJOR ads placed when you first set up an iPhone and later continuing ads that show up saying "hey, how about now? do you want to pay for Apple Music EXTREME THUNDER edition now?" These are ads that have a lot of value and Apple should have to pay (upgraded) sales tax for displaying these ads.

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

#454

Post by timomaxgalvin »

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.

It's not a fine is it? They are just paying what they should have.

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

#455

Post by Epa095 »

the_optimist wrote: post #418
tivert wrote: post #293

Earlier quoted context omitted.

>> there is a rich person on the end of it with the loan as an asset earning interest. > About half of treasuries are held by the Fed or foreign investors which largely means other governments and foreign companies. Most of the rest are owned by pension funds, banks, local government, insurance companies, etc. So what? That doesn't mean you shouldn't think about it in terms of a rich person, like the GP suggests. The…

There is no such slippery-ness or slippage. The system is fundamentally assessable with basic accounting and Econ 101. No, the 401k is not a coup. No, class-warfare advocates cannot fundamentally create value, improve the economy, or the better state of individual well-being—-either temporarily or permanently—-by wealth transfer, and their efforts typically result in gross infringement of human rights. Typically in h…

Economy is a prime example of a field where a bit of knowledge is worse than no knowledge, and nothing is more deranged than someone who has completed Econ 101, and thinking they now understand the world:-P

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

#456

Post by codethief »

okwhateverdude wrote: post #430
TillE wrote: post #398

Earlier quoted context omitted.

You're free to renounce American citizenship to escape future tax obligations. Anyway it's not an issue for non-rich expats, you just have to file a tax return which shows you owe $0.

> You're free to renounce American citizenship to escape future tax obligations. The hilarious thing about this statement is that it costs a few thousand dollars to renounce (as in a fee, paid to the embassy) and they reserve the right to come get you up to ten years later in tax cases.

And IIRC there is some law saying that if you renounce citizenship to avoid taxation, you might never be able to enter the US again.

EDIT: https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration) (Thanks, ChatGPT!)

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

#457

Post by rowanG077 »

noitpmeder wrote: post #343
dmitrygr wrote: post #332

Earlier quoted context omitted.

> Apple's ignorance of EU law is not an excuse > Ireland doesn't have the power alone to overturn these kinds of laws How was apple to know what ireland could and could not do? Why should they have to? Irish government said to apple that the rules are as such. The precedent this sets is that companies should not trust governments' words, instead each company should somehow interpret the laws themselves, each (surely)…

Presumably these laws are published publicly, and apple has more an enough resources to hire enough lawyers to ensure they are in compliance. Ignorance of the law is not an excuse.

Laws are also often intentionally written in such a way to be both hard to understand and ambiguous. Such rarely exercised laws are really only made manifest once tested by a court of law.

It's basically impossible to protect yourself via the word of law. Because when the rubber hits the road the judge can interpret whatever they want. Unless there is precedent even the best lawyers are just guessing.

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

#458

Post by andy_ppp »

dgrin91 wrote: post #99
andy_ppp wrote: post #51

It would just be really good if companies stopped avoiding tax. Most countries are already pretty much bankrupt - it's worth thinking about for every debt (US National Debt is $35.35 trillion!!) there is a rich person on the end of it with the loan as an asset earning interest. If companies avoid tax and rich people avoid tax it means more tax for normal people who work for a living.

This is a very naive way of thinking about debt. Cash has a time value. Cash now is worth more than cash later. I have a mortgage. This mortgage is worth more than the cash I own. That doesn't mean I'm bankrupt. The mortgage is paid on a fixed schedule over 30 years, and during those 30 years I'll have a home and be able to accrue other assets. If I didn't get a mortgage then I would still be saving for my home. The…

> This is a very naive way of thinking about debt.

Well it’s how this economist and Citibank’s former number 1 trader describes our debt based money system. So maybe you’re the naive one here. Please watch this video and enlighten yourself: What is Money? https://youtu.be/_gcNMu40jqs

> As long as the US has enough to pay it's obligations over the next few decades there are no issues

This is rather my point, as more wealth is transferred from individuals and governments to the rich (who the tax system is largely optional for) there simply won’t be that tax take to support the debt.

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

#459

Post by samatman »

Supernaut wrote: post #277
afiori wrote: post #270

Earlier quoted context omitted.

> 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.

VAT is a tax paid by the consumer, not the manufacturer. If you buy an iPhone, it's you that pays the VAT on it, not Apple.

Yes, this is correct, although it may be more obvious to visitors than to residents.

The evidence that this is correct follows: visitors, tourists if you prefer, can collect reimbursement for VAT payments, the first link I hit was Norway but this is very common if not universal: https://www.toll.no/en/tourist-in-norway/reimbursement-of-va...

If VAT were a tax on the corporation, it would make no sense at all to reimburse it to specific consumers who are not obliged to pay it. That only makes sense when the tax is on the consumer, and merely collected by the corporation. Which is how VAT works.

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

#460

Post by HWR_14 »

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…

Brilliant of Ireland. They get the Apple (and Google and Microsoft, etc.) business with low tax rates, thus bringing a lot of money into Ireland. Worst case scenario, a decade later some 3rd party they cannot be blamed for gets them billions more.

I agree with your recollection. AFAIK the rules were changed years ago.

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