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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

#501

Post by sparrc »

jandrewrogers wrote: post #366
hayd wrote: post #296

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 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. E…

On the other hand, I know someone from the UK who moved away and lived in places like Qatar and Oman for 20-30 years, keeping their UK citizenship and paying zero taxes to the UK (and extremely low taxes in the gulf countries).

Then they retired, returned to the UK, sent their kids to subsidized state universities (in the UK), receive free healthcare on the NHS, and receive state benefits for retirees.

They receive all of these state benefits and they paid almost no taxes to the UK government for most of their adult life. Is that fair?

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

#502

Post by martinald »

nine_k wrote: post #385
vasco wrote: post #357

Earlier quoted context omitted.

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…

Specifically in Ireland, corporate taxes were being lowered from late 1980s until 2003, in a series of agreements with the EU regulators. It's not like Ireland lowered the taxes in a sneaky scheme, or grandfathered-in an abnormally low rate.

Just to be clear - I don't think many people have (much) of a problem with ireland's "headline" 12.5% CT rate.

The problem is the selective tax rates that Ireland gave to many multinationals, often as low as 0.005% (effectively in return for ensuring x amount of jobs were created in Ireland). I think these are really very much sneaky schemes.

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

#503

Post by martinald »

pmontra wrote: post #493
ribosometronome wrote: post #485

Earlier quoted context omitted.

Punishing Ireland for gaming the system by paying Ireland 13 billion hardly makes it seem like the EU is super concerned about Ireland's transgressions.

Apple having to pay those 13 B means that companies won't be as eager to have a headquarter in Ireland as they have been in the past. They could move somewhere else in the EU. That's a damage for Ireland and that's why Ireland sided with Apple for all this litigation.

Correct, Ireland fought very hard against getting that 13B.

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

#504

Post by aguaviva »

nodamage wrote: post #491

An important point that seems to have been missed by most of the comments: the reason Apple lost this case is not because of the profit shifting scheme itself, but rather than they did not set up the scheme correctly: > ASI's 2014 structure was an adaptation of a Double Irish scheme, an Irish IP–based BEPS tool used by many US multinationals. Apple did not follow the traditional Double Irish structure of using two se…

So if such an easily obtainable, and comparatively lucrative (but fully legal) option were available -- and if it's so obvious, one has to presume Apple's people would have been perfectly aware of it -- why didn't they just take that route from the beginning (or if not, at least much earlier in this saga)?

Something tells me there's more to the story here.

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

#505

Post by benoau »

martinald wrote: post #502
nine_k wrote: post #385

Earlier quoted context omitted.

Specifically in Ireland, corporate taxes were being lowered from late 1980s until 2003, in a series of agreements with the EU regulators. It's not like Ireland lowered the taxes in a sneaky scheme, or grandfathered-in an abnormally low rate.

Just to be clear - I don't think many people have (much) of a problem with ireland's "headline" 12.5% CT rate. The problem is the selective tax rates that Ireland gave to many multinationals, often as low as 0.005% (effectively in return for ensuring x amount of jobs were created in Ireland). I think these are really very much sneaky schemes.

Corruption with a twist: the government is the one who got the kickback.

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

#506

Post by imchillyb »

croes wrote: post #166
yieldcrv wrote: post #117

Earlier quoted context omitted.

That doesnt mean regimes we respect should retroactively apply new rules in unpredictable ways

It's not a new rule. They just found that Ireland's tax rules from 1991 and 2007 are illegal tax benefits according to the preexisting rule. Just because they took so long apply existing law doesn't make it retroactive.

While that sounds true, the EU approved Ireland's 1% tax rate.

This is a retroactive ruling. This is playing favorites, the opposite game.

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

#507

Post by anonymousDan »

jwildeboer wrote: post #468
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…

It’s a final ruling. Not a current (over-)ruling as you paint it. This is a decision from the European Court of Justice. No appeal possible. The 13B€ are already in an escrow account and will now be released.

What? It overruled a previous ruling from a lower court (which I believe in turn overruled an initial rulin in the other direction!)

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

#508

Post by ajross »

ribosometronome wrote: post #485
ajross wrote: post #461

Earlier quoted context omitted.

At the same time it's clear that Ireland has been "gaming the system" here, and the proof is the huge delta between the effective tax rates between member nations we're seeing in the judgement. I don't know that there's much of a moral or principled argument to be made here, every system gets gamed, and the European Commission is another such system. And Ireland absolutely agreed to be bound in that game as a price o…

Punishing Ireland for gaming the system by paying Ireland 13 billion hardly makes it seem like the EU is super concerned about Ireland's transgressions.

As others are pointing out, Ireland was offering that discount to great impact, essentially taking over the UK's traditional spot as the core exchange for US companies in the EU. They absolutely would prefer not to be charging that tax.

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

#509

Post by margana »

pyrale wrote: post #360
tiffanyh wrote: post #255

Earlier quoted context omitted.

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?

> Eg Ireland might give a tax incentive if a large Fortune 500 company hires X people in Ireland. If Ireland is willing to give the same tax incentive to any company hiring X people in Ireland, it's fine. If Ireland only grants the rebate to Fortune 500 companies in a bid to lure specific US investment, it's the state creating a competitive distortion i.e. state aid.

Unless the threshold is set high enough that only a few corporations could even possibly do it. Especially if they limited it further per industry.

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

#510

Post by GeekyBear »

jrnx wrote: post #498
GeekyBear wrote: post #440

Earlier quoted context omitted.

> avoiding to pay any corporate taxes in Italy This us a fairly common strategy not limited to tech. For instance, Starbucks in the UK: > Starbucks Coffee Company (UK) made a £149m “gross profit” in the year to October 2023, up from £129m the year before. But after “administrative expenses” of £127m, its pre-tax profits were reduced to £16.9m, on which it paid £7.2m tax... In 2012, it was revealed that Starbucks had…

you're ignoring the 20% VAT on those 3bn sales, which provided 600m tax revenue. Why is it so important that they paid 7m in corporate tax instead of any other amount? Their business apparently has high cost of sales (like stores, personnel etc.), where by the way also taxes occur, e.g. for wages... So I suggest to think twice if you want to paint the picture that Starbucks does not contribute it's fair share to taxe…

My understanding is that the VAT exists independently of Starbucks paying UK income tax or using various strategies to avoid doing so.

The object here is to avoid recognizing income in nations with a higher tax rate as much as possible.

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