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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

#521

Post by vasco »

sparrc wrote: post #501
jandrewrogers wrote: post #366

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. 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 a…

If I don't do any of the dodgy parts of that story but move to another EU country with children they'll also get free school, Healthcare and so on. For this to be "fair" you'd need some global EU contribution scheme OR nobody can move.

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

#522

Post by cokeandpepsi »

epolanski wrote: post #424
The_Colonel wrote: post #388

Earlier quoted context omitted.

It's more difficult to determine where the value in software is being created. Still, big tech has a lot of R&D offices in Ireland.

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…

[dead]

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

#523

Post by epolanski »

qwytw wrote: post #482
jay_kyburz wrote: post #449

Earlier quoted context omitted.

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

Aren't they already getting 22% of it?

No, VAT is a tax on consumers, which is why I left it out of the calculation.

To recap: Apple Ireland made 400€s of profit by getting iPhones at 200€s and selling them at 600€s to Apple Italy.

The 400€s profit went virtually untaxed due to Apple having privileged corporate tax.

Thus, in conclusion, Apple paid little to no taxes on EU sales for ages.

What the EU contested wasn't that the whole thing was illegal, after all it's Irish business how much do they want to tax corporate profits (albeit as you can imagine the whole schema was to push for more trading, not corporate loopholes), but that Apple (and some other companies) got a special treatment compared to other businesses in Ireland.

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

#524

Post by Silhouette »

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.

Ignorance of the law is not an excuse.

That argument is quite a stretch when the EU tends to pass relatively ambiguous legislation and leave interpretation relatively open compared to for example the legal framework in the US, when it was not some random law firm but literally the relevant national government that gave Apple the OK, and when that situation was widely known and apparently accepted for about 30 years before the EU intervened.

I think the EU will pay a high price for actions like this. It is retrospectively moving the goalposts decades after the fact and trying to shift billions in funds when ironically neither the company paying the taxes nor the member state government apparently compelled now to collect them want that situation. You can't play games like that and remain a credible environment for investment and growth.

This particular action is specific to Ireland but by the nature of the EU its willingness and ability to take such an action in one member state taints all other member states as well. And without constitutional change to the EU itself there will never now be anything that any member state can ever do to remove that stain. Businesses now can't trust that any incentives they are offered to invest and grow in any EU member state won't get reversed further down the line no matter what any government of any member state says. It's hard to overstate how devastating that reality could become to member states trying to attract investment and grow their economies.

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

#525

Post by appendix-rock »

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.

If that were the case, they wouldn’t have had such a low tax rate to begin with.

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

#526

Post by Silhouette »

toyg wrote: post #515
dmitrygr wrote: post #356

Earlier quoted context omitted.

five accountants will produce six results from the same input based on the same laws, all of which the IRS will accept. Laws are not code. They are not unambiguous and noncontradictory. And forget apple! This means that any company in existence now needs a lawyer who understands the Treaty of Lisbon! Just in case some EU country tells them to do X, they now need to know if said country can actually say so! I think yo…

> any company in existence now needs a lawyer who understands the Treaty of Lisbon! Hyperbole makes you look hysteric. The reality is that every other company is doing just fine, paying the tax they owe. The only companies who have to worry are shady ones like Apple (abusing tax-havens since the '80s, with Braeburn etc): it's now established that secret agreements with cosy governments will not be tolerated in the EU…

Do you really believe Apple-Ireland is the only cosy tax-based incentive that any EU member state has offered to any international company to invest and operate locally in the past 30 years?

What's next? All the member states that offered attractive VAT rates when the regime was different years ago and doing so was advantageous retrospectively get reset to some baseline rate around the bloc's average and every company that ever paid VAT at lower rates in those member states gets a bill?

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

#527

Post by qaq »

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.

Sure but the taxes are only part of the equation. Native english speakers familiar to US tech giants common law system. Large number of skilled workers. Flexible immigration system.

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

#528

Post by elevatedastalt »

itake wrote: post #387
jandrewrogers wrote: post #366

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. 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…

what is even crazier, is its not just Americans impacted by this. If you have a green card, but not working in the USA, you're impacted by this mess too.

What's funny is America has some of the longest paths to a Green Card (for Indians and Chinese at least), but is very very happy to tax them as a resident the moment they spend a year in the country.

Indians effectively pay taxes as residents without any permanent residency benefits for decades

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

#529

Post by whiterknight »

hyperpape wrote: post #269
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).

> ill-gotten gains

We are assigning moral value to this? You don’t think EU is a self interested party looking to interpret the law as favorably as they can?

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

#530

Post by whiterknight »

dtech wrote: post #267
igravious wrote: post #260

Earlier quoted context omitted.

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.

That’s ascribing a lot of power to the EU which I don’t think is politically cut and dry and certainly not a result of elections.
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