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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

#651

Post by robertlagrant »

nothrabannosir wrote: post #634
nickpp wrote: post #612

Earlier quoted context omitted.

Competition is a good thing. We all lose when powerful players band together and form a cartel. If companies did that - it's illegal. If government politicians do it - their populism brings them votes.

Correct: a market where sellers compete is good for buyers. Unfortunately in this market the buyers are corporations and the sellers are democratic governments (us). That’s why this is not good for people.

We aren't democratic governments. We are subjects to governments, who we must pay taxes to, and customers of corporations, who we pay if they can produce stuff we like for cheap enough.

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

#652

Post by noirbot »

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…

Except this agreement was 30 years old and hasn't been effect for over a decade. Even if you think doing everything else right, how do you know some EU court next year won't find that something you did decades ago where you asked the local regulators for approval and they gave it won't be found to be illegal.

If you think Apple and Google are the only two "shady companies" who work with the governments of the countries they operate in to optimize their taxes, I'm not sure what to tell you.

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

#653

Post by toyg »

Silhouette wrote: post #526
toyg wrote: post #515

Earlier quoted context omitted.

> 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 compan…

> Do you really believe Apple-Ireland is the only cosy tax-based incentive that any EU member state has offered to any international company

Cases are prosecuted if someone (either competitors or the Commission) thinks they're worth the trouble. Apple and Google were clearly worth it, simply because of the massive amounts of money involved - nobody cares if an ice-cream stall is foregone 100 euros. If you know of other worthy cases, feel free to take them up with the courts.

You're mischaracterizing the issue, by the way. The problem is the way one specific company was treated, which was not in line with the practices the Irish had cleared with the EU. Other companies were not treated like that and were just fine.

> 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

That would be an extremely popular measure, politically, but there is currently no indication that the Commission or the ECJ will ever ask for that, and it has nothing to do with this judgement.

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

#654

Post by robertlagrant »

sensanaty wrote: post #622
pmontra wrote: post #493

Earlier quoted context omitted.

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.

If I were an Irish citizen paying taxes I'd be incredibly pissed that my own government is fighting against 13 billion from the richest company on the planet. I'm subsidizing fucking Apple of all things!? Absolute buffoonery, whoever made this deal in the first place should be in prison.

They're not subsidising Apple.

Apple is providing thousands of jobs - they pay taxes on those people, and those people pay income tax / VAT / fuel tax / death tax / etc and they consume from other companies that pay lots of taxes as well, and import tariffs as well. It's taxes and tariffs all the way down.

No one is paying Apple money. It's not a subsidy.

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

#655

Post by robertlagrant »

vasco wrote: post #517
jrnx wrote: post #498

Earlier quoted context omitted.

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…

VAT is paid by the consumer, not the business. The business merely collects it in behalf of the tax office. Starbucks contributes 0 taxes by collecting VAT. Look up the definition of consumption taxes as opposed to corporate income taxes. If you want to give other examples of ways companies contribute you can mention property taxes on owned properties, or jobs created which usually also have some part of pension etc…

> VAT is paid by the consumer, not the business

This doesn't matter.

It's like saying "the employee doesn't pay employee tax; the business does". The cost is still there for the business, who could otherwise be paying you it. Or using it to employ more people. Tax is tax.

In this case, the business could charge the same amount but keep what is currently the VAT portion. It's still tax revenue generated by a business doing work, paid by a consumer who does taxed work elsewhere to get the money, and all the government does is collect the money. Doesn't really matter which tax it is.

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

#656

Post by qwytw »

epolanski wrote: post #523
qwytw wrote: post #482

Earlier quoted context omitted.

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…

Isn't sales tax (and/or GST also a tax) on consumers? GST is just in theory much simpler and cheaper to administer.

> 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.

Sure but how would GST help?

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

#657

Post by robertlagrant »

rolisz wrote: post #615
AnthonyMouse wrote: post #563

Earlier quoted context omitted.

If the tax raises all of their costs and it's a competitive market then they'll all have to raise prices, because competitive market = competitive pricing and it has to come from somewhere. The most common case where it doesn't raise prices is when they don't have any competition and are already charging the monopoly price, so the money has to come from the company because if there was any more to extract from the cu…

There's a third option: they're competitors are small business that don't have the means to do the clever tax optimization/evasions, so they were already paying full tax. So now Starbucks if it were to pay full taxes, would have to either raise their prices (but then competitors could stay at the same price, because they've already been paying those tax rates), or they can lower their margin.

It's true that these taxes make things more expensive for local businesses, but also for all businesses, as they have to employ very expensive tax lawyers to figure out the best places to put their businesses. What a waste of mental effort that could've gone into more productive careers. But that's corporation tax for you.

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

#658

Post by SJC_Hacker »

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…

> sovereign state

Well thats the rub, by being a part of the EU they are effectively semi-sovereign. Not to sound like a Brexiter

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

#659

Post by realusername »

troad wrote: post #551
randunel wrote: post #537

Earlier quoted context omitted.

I'm a non US citizen nor resident, never have been and probably never will be. Because of FATCA, I had to prove to my Eastern European bank (where I actually am a citizen) that I am not a "US person". That designation has no legal meaning, anywhere in my birth country, yet I had to sign a formal written declaration "I, NAME, declare under penalty of penal law, that I am not a US person", to be able to access my funds…

> I'm a non US citizen nor resident, never have been and probably never will be. Because of FATCA, I had to prove to my Eastern European bank (where I actually am a citizen) that I am not a "US person". That designation has no legal meaning, anywhere in my birth country, yet I had to sign a formal written declaration "I, NAME, declare under penalty of penal law, that I am not a US person", to be able to access my fun…

> Your bank was terrified of losing access to US markets, so your bank forced you to prove you're not a US person to be super safe about US tax compliance

It's more that a lot of them got fines a decade ago because of that so now US citizens are just straight up banned from most European banks.

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

#660

Post by pembrook »

gamblor956 wrote: post #473
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…

Many types of income cannot be offset nor or they covered by tax treaties. That's news to me and I've been doing international tax for 15 years. Please, tell me what types of income earned by a U.S. expat isn't covered by a tax treaty? It is not uncommon to pay more taxes in aggregate as an expat than you would pay in either country separately. This is objectively false. For an expat, income taxes paid to a resident…

You clearly haven’t dealt with many of the edge cases then. If you make over $150k as an expat and have a non-American spouse (MFS, as many expats do) you’re looking at roughly $1-$5k in extra taxes that don’t qualify for the Foreign Tax Credit, and since they’re above FEIE, you effectively get double taxed.

You can then take that to the country you reside, IF they have a tax treaty with the US, and apply for a credit which may or may not be accepted.

On top of this, if you’ve worked hard in the US and saved in a Roth IRA (effectively part of the US pension system), any capital gains/dividends accrued are yearly subject to taxation in your country of residence since most tax treaties pre-date the Roth vehicle. Meanwhile, you’re also obligated to pay tax to the national pension system of your country of residence resulting in a double tax, simply because US pensions are mostly private non-governmental savings.

When Europeans move to the US, the IRS doesn’t say “let’s see how much gains you’ve accrued in your national pension fund and tax them yearly.”

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