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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

#691

Post by b112 »

pas wrote: post #688
b112 wrote: post #404

Earlier quoted context omitted.

Yes. I could go into a lot of reasons, but I'll keep it simple. It is incredibly rare for governments to break that cycle. This has been demonstrated over and over. Thus, there is no end in 35 years. There is just perpetual 50% taxes to interest on debt. This means that as it is a persistent state, not perpetually losing 50% tax revenue would make an enormous difference. It's just not helpful.

> demonstrated over and over can you elaborate on this please? capital has upkeep costs, yes, but it seems trivial to look up infrastructure spending, debt service costs, GDP, tax burden, for various tax jurisdictions. these things are pretty well studied. taxes do go down.

When I look at my federal and provincial government, I see 50% or more being spent on interest only payments. I've seen that number fluctuate a bit, but it's always been between 30% and 50%, if not higher at times.

When you look at the US fed, you see the same sort of thing.

That's demonstrated, therefore, over and over.

I'll put it another way. If Canadian federal and provincial governments weren't paying 1/2 their yearly tax revenue to interest payments on debt, I'll repeat that.. only interest payments, not principle, all of the funding issues with health care, and the military would be gone.

Put yourself in the same situation. Imagine you decide to spent 1/2 your post-tax income on only interest payments. You never make headway on the principle. So the debt is never going away. Now if times are tight (after all, why did you borrow to start with?!), how much worse are you with half your money gone to do absolutely nothing of value?

That's what many of our governments are doing.

In times of economic boom, some frugal governments pay off debt. They reduce that figure. But here's the kicker...

When times are bad, typically interest rates go up. So not only are you paying more as a government for those interest only payments, you have less tax revenue in a recession.

Frankly, I think it should be illegal for governments to borrow money. It's too tempting to gain votes. Politicians often don't care about 20 years from now, they care about the next election, and will tell themselves wild stories about how it will all be OK.

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

#692

Post by tansan »

timcederman wrote: post #316
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 are absolutely double taxed, just less so (and to be clear - majority cases not at all) when a DTA is in effect.

In what cases are Americans abroad getting double taxed for the majority of the cases? Don't they have foreign income exclusion?

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

#693

Post by tansan »

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.

Market caps aren't cash.

It's an odd comparison and is dishonest to minimize the payment through a speculative value that the market decided on. If Apple owned 50% of the shares and sold all their shares today, they would not be getting 50% of that $3T because of market forces.

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

#694

Post by AnthonyMouse »

trashtester wrote: post #604
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…

> The problem with all of this is that it's all sneaky schemes. The problems start if one member selectively introduces practices that benefit them at a significant cost to the other members. Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs). Target subsidi…

> Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs).

But it doesn't lead to higher taxes, because the whole point is to use the minimum tax rate and then achieve a de facto below-minimum rate by somehow refunding the excess money.

They're not trying to attract only Apple, they're trying to attract businesses in general. Subsidies for things employers would otherwise have to provide apply to all employers and lower the de facto tax rate across the whole country, which is exactly the idea.

> Target subsidies are different. While countries can still get away with it if done on a small scale, large scale cases come with a risk of this kind of response.

"Targeted" is essentially undefinable. All allocation of tax money is targeted at something -- the untargeted thing would be to use the money to uniformly lower the tax rate.

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

#695

Post by AnthonyMouse »

tankenmate wrote: post #685
AnthonyMouse wrote: post #602

Earlier quoted context omitted.

> "because the market price for something already includes a margin."; that's called value add, and all customers pay it, so it doesn't matter whether the government buys it or directs someone else to pay it, the value add becomes the profit. And now the company has profit it wouldn't have had, as a result of the government, which can use control over that profit to attract businesses to the jurisdiction etc. > If th…

> And now the company has profit it wouldn't have had, as a result of the government, which can use control over that profit to attract businesses to the jurisdiction etc. That only works if the government buys something that no one else wants; in which case it is buying at a price, ipso facto, that no one else will pay (at that price which is above the market price). But if the government buys something at the same…

> That only works if the government buys something that no one else wants; in which case it is buying at a price, ipso facto, that no one else will pay (at that price which is above the market price).

Not at all.

Suppose the government funds research. Private entities fund research too. It's clearly worth something. But if the government funds it, the research happens in their jurisdiction. Even if the exact same private company paying the taxes that fund the research might have done the research themselves, they might have done it somewhere else, so the government is now creating a subsidy for doing research in their jurisdiction.

The value of the research could be fully identical regardless of where it happens, but the government subsidizes it because they want it to happen there.

> But if the government buys something at the same price (or lower) that everyone else pays, then it isn't a subsidy.

It could only not be a subsidy if the thing they're buying is identical in all respects to the thing the taxpayer would have bought had they been left to keep the money. Otherwise it's subsidizing the thing the money is being allocated to over the thing it would have been allocated to. That's what subsidies are -- the reallocation of resources through action of law. It's a synonym for spending tax money.

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

#696

Post by robertlagrant »

pmontra wrote: post #682
robertlagrant wrote: post #667

Earlier quoted context omitted.

Is this the case, though? How much profit is generated by Irish Apple customers compared to the giant amount of tax paid in the country due to Apple being there?

Not so giant. You can check https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute which is updated with the latest ruling. The dispute was about taxes from 2004 to 2014. I wonder how much they'll owe to Ireland for the next ten years. > Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014.

Again though, you're only counting corporation tax. Apple has generated far more tax revenue than that.

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

#697

Post by [deleted] »

Supernaut wrote: post #433
lucianbr wrote: post #403

Earlier quoted context omitted.

All the money Apple gets come from customers, no? All of it. Do they print their own dollars or something? Are they subsidized by governments? Do the dollars that make up the profits, and the dollars that make up the taxes on profits, come from somewhere else than the dollars that make up the VAT?

I gather from your disdainful tone that you think you've just schooled me on something really fundamental, but the point you're trying to make is unclear to me. If you're asserting that VAT and the taxes paid on corporate profits are in reality one and the same, then no, that's wholly incorrect.

[deleted]

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

#698

Post by trashtester »

AnthonyMouse wrote: post #694
trashtester wrote: post #604

Earlier quoted context omitted.

> The problem with all of this is that it's all sneaky schemes. The problems start if one member selectively introduces practices that benefit them at a significant cost to the other members. Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs). Target subsidi…

> Universal subsidies of healthcare or electricity come at a net cost for the country, and so doesn't create a competitive advantage. (It will lead to higher taxes that offset the benefit of specific reduced costs). But it doesn't lead to higher taxes, because the whole point is to use the minimum tax rate and then achieve a de facto below-minimum rate by somehow refunding the excess money. They're not trying to attr…

> They're not trying to attract only Apple, they're trying to attract businesses in general.

Ok, so this is about circumventing the 15% minimum corporate tax?

Is this somehow related to the objectives of directive 2022/2523? It seems to me that 2022/2523 is in place mostly to prevent transfer of profits from one jurisdiction to another to minimize the tax on profits generated elsewhere.

Unless, let's say, a Germany corporation registered in Ireland would somehow be affected by electricity costs or healthcare costs covered by the Irish government, I'm not sure if the benefit is large enough to matter.

Obviously, for companies with most operations happening within Ireland, the total tax pressure has a larger effect. But I don't think that was the type of problem this directive was designed to solve.

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

#699

Post by sensanaty »

Silhouette wrote: post #643
kergonath wrote: post #624

Earlier quoted context omitted.

> 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. That is beca…

That is because the EU is not responsible for the member-states’ national laws, so they leave some room for different implementations. It’s on purpose. That's not quite how it works. The EU makes binding legislation in three different forms. Regulations - such as the GDPR - apply directly in all member states. Directives are the indirect ones that establish a principle but require member states to implement their own…

The IRS isn't comparable to this case because there's 2 entities at play, the Irish tax authority and the EU's.

I'm not too familiar with how exactly it works in the US so excuse the probably poor example, but this is more like Texas deciding that they want to attract businesses by saying they'd lower taxes a bunch. They say to the IRS "Hey, we're going to be lowering all corporate taxes to 15% across the board, is this good with you?". The IRS says sure, not knowing that what Texas is actually doing is making sweetheart deals with companies like Apple to have them pay a tax rate that is basically 0 (0.005% as is the case with Apple in Ireland).

This tax-free opportunity is only provided to a single company. The lying here is relevant, because Texas explicitly told the IRS they'd be charging every business at 15%, only to then make a special deal with Apple that's unfair to all other businesses and Apple's competitors.

A decade later (more like 2 in this case), the IRS investigates and sees there's been a discrepancy between what Texas said they'd be doing (taxing them at 15% like they said they'd charge every business) and what they're actually doing. So, the IRS says that's not allowed, and that Apple now owes Texas that unpaid tax income whether Texas wants to take it or not.

Texas doesn't want it because it makes them look like they're double dipping. Apple doesn't want it for obvious reasons.

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

#700

Post by floydnoel »

TillE wrote: post #398
panzagl wrote: post #391

Earlier quoted context omitted.

If you don't like then... uh... come back?

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.

actually you are not free to do that. renouncing citizenship requires a reason other than "to escape tax obligations"

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