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

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

#571

Post by stale2002 » Wed, Sep 11, 2024, 5:07 AM UTC

AnthonyMouse wrote: post #570

martinald wrote: post #502

Earlier quoted context omitted.

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.

The problem with all of this is that it's all sneaky schemes. You probably have something in mind for how a government is supposed to spend tax revenues. Assistance for the poor or something like that. But as a sovereign state they get to decide for themselves. Except that as soon as you admit this there is no point in having any kind of minimum rate etc., because there are a thousand ways for the state to return the…

> But as a sovereign state they get to decide for themselves.

Not really no. The results of the court case prove that.

> There is no real way to prevent this kind of thing

Well. No way, except for through the result of an EU court case that just ruled that the tax scheme wasn't allowed.

> Apple would

Woulda coulda shoulda. The real question is "did they"? And the answer is no.

They didn't do these other schemes, and they lost the court case.

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

#572

Post by stale2002 » Wed, Sep 11, 2024, 5:11 AM UTC

noirbot wrote: post #545

kwhitefoot wrote: post #325

Earlier quoted context omitted.

Apple is a lot worse than merely 'isn't blameless'. They knew perfectly well what they were getting into and I'm confident that the current judgment would have been a scenario that their lawyers would have explored. I'm sure that if Apple thinks that they have been hard done by that they could sue the Irish government for damages in the Irish courts.

I mean, don't you see how that's bad though? Ireland gets to just lie to people, promise them things, profit from their lies and then their courts get to decide if they were wrong? Also, everyone's stating with a lot of confidence that Apple absolutely knew this was illegal under EU law. Is that in evidence in the case? Have there been other prosecutions of other EU states for doing this?

No, its not bad because it means that companies will be hesitant to do stuff like this in the future.

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

#573

Post by musiciangames » Wed, Sep 11, 2024, 5:12 AM UTC

yunohn wrote: post #496

hinkley wrote: post #395

Earlier quoted context omitted.

That is definitely a difficult paper trail. If you make valves in Ireland they at least have to be shipped. Code just moves on the network. As do commands. But wouldn’t Ireland see their taxes as “working” if Irish coders are being hired to do the work?

There’s absolutely no employment requirement outside of any PR deals that IE may impose on Apple to satisfy their citizens. The tax evasion scheme they used does not necessitate any real humans in any jurisdictions - it’s almost literally just documentation.

I’m not sure that’s the case. I worked for Irish subsidiary of a financial software company. Management openly said the main reason we were there was for the tax benefit. We cut standard code for the product, then once a year had to fill out a form describing the ‘R&D’ component of what we had done. As I understood it, that was required for the tax treatment we received.

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

#574

Post by mvonballmo » Wed, Sep 11, 2024, 5:12 AM UTC

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…

Thank you for summarizing this so well.

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

#575

Post by AnthonyMouse » Wed, Sep 11, 2024, 5:14 AM UTC

stale2002 wrote: post #571

AnthonyMouse wrote: post #570

Earlier quoted context omitted.

The problem with all of this is that it's all sneaky schemes. You probably have something in mind for how a government is supposed to spend tax revenues. Assistance for the poor or something like that. But as a sovereign state they get to decide for themselves. Except that as soon as you admit this there is no point in having any kind of minimum rate etc., because there are a thousand ways for the state to return the…

> But as a sovereign state they get to decide for themselves. Not really no. The results of the court case prove that. > There is no real way to prevent this kind of thing Well. No way, except for through the result of an EU court case that just ruled that the tax scheme wasn't allowed. > Apple would Woulda coulda shoulda. The real question is "did they"? And the answer is no. They didn't do these other schemes, and…

You seem to be assuming that this isn't an iterative process. The process continues until the scheme is convoluted enough to satisfy the court while still being effective in attracting companies through de facto lower taxes.

Meanwhile Ireland now has $13B to throw at Apple somehow to convince them to stay.

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

#576

Post by xvector » Wed, Sep 11, 2024, 5:19 AM UTC

oblio wrote: post #407

pembrook wrote: post #257

Earlier quoted context omitted.

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.

It is nothing. Apple's profits over the period mentioned were probably hundreds of billions.

This is 27% of their cash on hand. It simply cannot be spun as "nothing".

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

#577

Post by bryanrasmussen » Wed, Sep 11, 2024, 5:21 AM UTC

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.

So - at this point is Apple and other companies going to move out of Ireland? I mean they have invested a lot and got there, probably they did alright in the situation, Ireland is a relatively nice place to move your company, it just isn't as nice as it was before - that is to say I'm not sure how bad it really is for Ireland.

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

#578

Post by xvector » Wed, Sep 11, 2024, 5:25 AM UTC

Zuiii wrote: post #565

K3V1N_FLYNN wrote: post #486

Eventually Apple will pull out of Europe and I’ll be sitting back laughing my ass off.

I hope so too. Maybe if apple and google finally pull out, the EU will be forced to innovate again. I'm sick of only having two shades of poo to pick from.

EU regulations make it a nightmare to innovate there. While millions of people cheer on "sticking it to big tech," they don't notice how the EU has become a barren wasteland of technological innovation for the past two decades.

The only way to force the EU to innovate is for US tech to pull out entirely, thus disabling vast swaths of technological infrastructure and product the EU relies on and takes for granted. The absence of this technology will force the EU to recognize its importance, and thus the importance of crafting a regulatory environment that enables such benefits to come about.

Without the fundamental recognition of the value of technology - and without this recognition happening at the level of the citizenry - the EU will continue to technologically stagnate while passing more and more regulations designed to rent-seek from the US.

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

#579

Post by throwaway2037 » Wed, Sep 11, 2024, 5:43 AM UTC

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.

The standard VAT rate in Italy in 22%, so Google tells me. The real problem: Apple runs stores in Italy (and hence a business in Italy), but doesn't pay any corporate income tax in Italy. So, Italy is missing out on tax revenues.

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

#580

Post by throwaway2037 » Wed, Sep 11, 2024, 5:46 AM UTC

jay_kyburz wrote: post #541

mcny wrote: post #453

Earlier quoted context omitted.

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…

Sorry, I don't know anything about VAT, but in Australia, consumers pay 10% on all products except food, financial services, and a few other things. When Apple sells an phone to a consumer in Australia, 10% of the sale price is collected by the retailer, and paid directly to the government, rather giving the full sale price to Apple, then allowing Apple to work out later what was profit and what was not. There are mi…

    > If you consume a lot of stuff, you pay a lot of tax. Sounds fair to me.

Most economists view VAT/GST as a regressive tax. I don't know why so many highly advanced, liberal democracies are so dependent upon VAT/GST for tax revenues.