[News] EC puts Apple on the hook for 13 billion tax bill [Update: Ireland to appeal]

[StyM]

http://www.bit-tech.net/news/hardwar...ple-tax-bill/1

Apple has been found to have illegally benefited from ?13 billion (around ?11.1 billion) in tax benefits from the Irish government, with the European Commission demanding that Ireland recovers the cash back from the company.

Like most multinationals, Apple's corporate structure is deliberately opaque. Part of this involves setting up national subsidiaries in countries where corporate and income tax rates are lower, then funnelling profits through these subsidiaries in order to reduce the amount of tax owed. Apple's Dublin-based Irish subsidiary exists for exactly this reason, but the European Commission has found that Apple Sales International and Apple Operations Europe have benefited from hefty tax breaks that the Irish government had no legal right to offer.

In the conclusion to an investigation begun in June 2014, the European Commission has found that two tax rulings made in Ireland - one in 1991 and one in 2007 - existed purely to offer the company a selective tax treatment which runs counter to European Union state aid rules. According to the Commission's findings, the tax rulings gave Apple tax breaks equivalent to paying just 1 per cent corporation tax in 2003 dropping to 0.005 per cent in 2014. That gaffe is on the Irish government, but Apple is hardly innocent: the Commission has also found that its practice of attributing profit to its Irish head offices is misleading in the extreme: 'the Commission's assessment showed that these "head offices" existed only on paper and could not have generated such profits,' the EC statement explained.

The result: Apple managed to dodge taxation on what the Commission claims was 'almost all profits generated by sales of Apple products in the EU Single Market.' Admitting that 'this structure is however outside the remit of EU state aid control,' the Commission is nevertheless to order recovery of illegal state aid for the ten-year period preceding its first request for information filed in 2013. The result: Ireland is being made to recover the unpaid taxes for Apple's business through 2003 to 2014 inclusive, a sum of ?13 billion plus interest.

that's a lot of cash...

Ireland decides to appeal Apple ruling

The Irish cabinet decided earlier today that it would, after all, appeal the ruling of the European Commission that wants to make Apple pay €13 billion in missing corporation tax.

Apple has already said that it will appeal the ruling, with its CEO Tim Cook describing the decision yesterday as “political crap”.

But before it can appeal against the ruling there will have to be a vote taken in the Irish parliament to back the move.

Ireland currently has a minority government.

It’s believed the cabinet’s decision to challenge the ruling will be because the government wants a full investigation into the matter to avoid any suspicion that it had colluded with Apple in helping it to avoid tax.

In other words, this case is going to rumble on and it may be quite some time, if ever, before Cook has to put his hands into the company’s coffers and stump up a large sum of money.

[drmrlordx]

Ouch. Looks like the EU/EC is trying to put away the Double Irish once and for all.

[Sparky]

What burns me about this more is how some commission has power (or thinks it has power) over sovereign nations. If the Irish wanted to give them a tax break, that's up to them is it not? It is their nation, isn't it?

[StAndrew]

What burns me about this more is how some commission has power (or thinks it has power) over sovereign nations. If the Irish wanted to give them a tax break, that's up to them is it not? It is their nation, isn't it?

No, unfortunately countries that are part of the EU are no longer completely sovereign; hence the Brexit. Welcome to Globalism.

[AliG]

I also don't understand why the US lets these companies get away with sheltering all of their taxes in overseas headquarters. It's one thing to lower corporate taxes in America to support business; it's another to let them get away with paying nothing.

[Sparky]

What do you suggest we do, march over to Europe?

I see why Britain said "screw you" to the EU.

[zanzabar]

What do you suggest we do, march over to Europe?

I see why Britain said "screw you" to the EU.

we could have seized their assets since they are illegally dodging taxes in the US, or we could have stopped this early when it was shown they were bribing foreign government officials so they would not have dodged US taxes so this would have been a non issue. apple was found to have been using ireland as a tax shelter since they were doing most of their EU biz in other countries with just a home base to dodge taxes.

the EU is basically like the US and each country (state) has exchanged some sovereignty for a single market, unified trade regulations, and a court to settle disputes. it seems fine from the outside but they might have thought more about letting countries in that were not equal before joining.

[crash5s]

I also don't understand why the US lets these companies get away with sheltering all of their taxes in overseas headquarters. It's one thing to lower corporate taxes in America to support business; it's another to let them get away with paying nothing.

Conservative/libertarian economics. The goal is to have low taxes on the rich and corporations period. Corporations pay not tax is a goal all of it's own. If we require taxation it should be on sales and income taxes that hit the working class and middle class. This will let the winners of the market keep their riches and use them to guide the nation as they see fit.

You may not like it, but that is the economic ideology of conservatism and it has been in power since Reagan. The corporations are more important than the nation, end of story if you are to the right of the political isle.

[HTC]

http://www.bit-tech.net/news/hardwar...ple-tax-bill/1



that's a lot of cash...

Apple can afford it ...

[Sparky]

we could have seized their assets since they are illegally dodging taxes in the US, or we could have stopped this early when it was shown they were bribing foreign government officials so they would not have dodged US taxes so this would have been a non issue. apple was found to have been using ireland as a tax shelter since they were doing most of their EU biz in other countries with just a home base to dodge taxes.

the EU is basically like the US and each country (state) has exchanged some sovereignty for a single market, unified trade regulations, and a court to settle disputes. it seems fine from the outside but they might have thought more about letting countries in that were not equal before joining.

Well, not quite. The states have all been part of the USA since they were ratified, and they aren't "exchanging" sovereignty in that sense. USA and EU are quite different in that regard.

Conservative/libertarian economics. The goal is to have low taxes on the rich and corporations period. Corporations pay not tax is a goal all of it's own. If we require taxation it should be on sales and income taxes that hit the working class and middle class. This will let the winners of the market keep their riches and use them to guide the nation as they see fit.

You may not like it, but that is the economic ideology of conservatism and it has been in power since Reagan. The corporations are more important than the nation, end of story if you are to the right of the political isle.

Please, take your political nonsense elsewhere. (And you're either purposely being dishonest about the "goals" or you don't understand or want to understand, or probably a combination.) Not going to argue any of this with you first and foremost because this is not the place for it.

[StAndrew]

we could have seized their assets since they are illegally dodging taxes in the US, or we could have stopped this early when it was shown they were bribing foreign government officials so they would not have dodged US taxes so this would have been a non issue. apple was found to have been using ireland as a tax shelter since they were doing most of their EU biz in other countries with just a home base to dodge taxes.

the EU is basically like the US and each country (state) has exchanged some sovereignty for a single market, unified trade regulations, and a court to settle disputes. it seems fine from the outside but they might have thought more about letting countries in that were not equal before joining.

Not illegal. Capitalism; if the US wants to double tax overseas revenue on top of the 2nd (IIRC) highest cooperate tax, increase employee overhead costs, carbon tax, energy tax, and about 10 million pages of regulation, don't be upset when companies find an alternative place to setup shop. Ireland offered a better alternative

[vario]

Hope it goes through, with all the e going on, it would be a breath of fresh air if SOME corporate entitities would pay a tax.
The whole problem is of course hugely massively complicated, but it boils down to BIG (because small businesses cant afrord lawyers and the whole system) corporate firms dodging taxes using small poorer countries (because they get at least SOME money+corruption) to not pay their share where they REALLY do business, it has a lot to do with semi-monopolies and patent law as well, and also with international trade agreements and international pro corporate courts (whole countries can be fined by an arbitrary group of pro corporate lawyers/banks).Anyone who thinks its about pure capitalism, lives in a bubble.
Lets also remember where and how apple gets the money, they arent builders, they arent innovators, they are designers using someone elses technology, they hold a ton of patents, and are one of popular digital content distributors.No more.

[madmaxx]

They rightfully should be on the hook. I'm sick and tired of my taxes constantly increasing, and my services constantly decreasing. These large corporations need to pay their fair share.

[StAndrew]

Hope it goes through, with all the e going on, it would be a breath of fresh air if SOME corporate entitities would pay a tax.
The whole problem is of course hugely massively complicated, but it boils down to BIG (because small businesses cant afrord lawyers and the whole system) corporate firms dodging taxes using small poorer countries (because they get at least SOME money+corruption) to not pay their share where they REALLY do business, it has a lot to do with semi-monopolies and patent law as well, and also with international trade agreements and international pro corporate courts (whole countries can be fined by an arbitrary group of pro corporate lawyers/banks).Anyone who thinks its about pure capitalism, lives in a bubble.
Lets also remember where and how apple gets the money, they arent builders, they arent innovators, they are designers using someone elses technology, they hold a ton of patents, and are one of popular digital content distributors.No more.

So either the company pays the tax, distributes the cost to the people by driving up costs of their products or takes the cost out of hide and is unable to re-invest into growth, ultimately becoming less competitive in a highly competitive market. Ultimately, Apple will downsize or go under, and now the governments are getting less or no tax revenue. What's worse is the work force is displaced due to layoffs which puts additional burdens on the governments. The EU and US are being shortsighted here and should rather be considering why Apple is forced to relocate. Maybe we should be more conscious of being a competitive country for corporations rather than chasing them away with tax grabs.

Apple is not the only company that is threading tax loop holes, with the current corporate tax rate and regulations, any company that tries to play by the rules will struggle to compete in the open market because ultimately it IS all about capitalism.

The solutions are as follows: Either make the US/EU a competitive country to do business with, reduce regulations, reduce cost either of labor, energy, or both, reduce corporate taxes, etc...
OR
Establish a socialistic world order (globalism) that regulates companies globally into submission. Don't for one second believe that socialism redistributes money from the rich to the poor; it redistributes from the rich to the government.

They rightfully should be on the hook. I'm sick and tired of my taxes constantly increasing, and my services constantly decreasing. These large corporations need to pay their fair share.

Why not drive down taxes and re-distribute wealth from the Governments back to the people. Take all the billion dollar companies out there, wring them dry, and you still won't have the kind of capital that is tossed around by multi trillion dollar governments like the US and EU. Redistribute THAT wealth back to the people; trickle down economics do work if you remove the crippling regulations and taxes the US imposes and allow true competition to reign free again. Don't believe me? Look how the "1%" is getting richer, the middle class is diminishing, the poor are getting poorer, and how it all correlates to increase regulation and taxes.

[vario]

You understand that everyone can live without an iphone and itunes, but living without bridges roads schools trains healthcare military and all other services every governmant provides (mostly inefficiently but still), is kinda hard ?
We could argue hours about trickle down economics, and how it isnt really different from feudal system.but One thing is certain. Apple is just a cash hoarder, hoarding cash isnt good for the economy, they pay little to none taxes, they employ miniscule amount of people, and they have so much money that even if they would pay this fine, it would not really hurt them.
Thing is, bailouts, tax injustice . This happens when something gets too big , because they have the resources to fight with the whole world and even blackmail it (eg. banking system) .If there is no consequences NEVER for the big ones, they will just do more and more to grab as much as they can.So Apple paying this mediocre fine, is maybe , just maybe something that would make some lawyer/accountant at a big corp to think twice about doing something.

[Sparky]

It is just simply stupid that the same people who typically rail against "evil corporations" are the same ones who flock to go buy the latest iThing which is exactly how the company makes any money in the first place.

Like, whatever

[StAndrew]

You understand that everyone can live without an iphone and itunes, but living without bridges roads schools trains healthcare military and all other services every governmant provides (mostly inefficiently but still), is kinda hard ?
We could argue hours about trickle down economics, and how it isnt really different from feudal system.but One thing is certain. Apple is just a cash hoarder, hoarding cash isnt good for the economy, they pay little to none taxes, they employ miniscule amount of people, and they have so much money that even if they would pay this fine, it would not really hurt them.
Thing is, bailouts, tax injustice . This happens when something gets too big , because they have the resources to fight with the whole world and even blackmail it (eg. banking system) .If there is no consequences NEVER for the big ones, they will just do more and more to grab as much as they can.So Apple paying this mediocre fine, is maybe , just maybe something that would make some lawyer/accountant at a big corp to think twice about doing something.

The EU doesn't need Apple's taxes to pave roads. The US doesn't either making almost $6.5 Trillion this year alone. Additionally, making the US or EU more competitive through lower corporate taxes and eased regulations will increase corporate investments and actually increase income over the long term. If the EU want's to continue to hound Apple, Apple will eventually be forced to leave Ireland and find another country outside of the EU to host its headquarters. If the EU and US continue to chase away jobs, they won't get any revenue.

Lastly, I don't think Ireland is happy about the EU reaching over its once sovereign boarders and administering this fine. I wouldn't be surprised if more countries such as France and Ireland exit the EU in the coming years.

[vario]

The EU doesn't need Apple's taxes to pave roads. The US doesn't either making almost $6.5 Trillion this year alone. Additionally, making the US or EU more competitive through lower corporate taxes and eased regulations will increase corporate investments and actually increase income over the long term. If the EU want's to continue to hound Apple, Apple will eventually be forced to leave Ireland and find another country outside of the EU to host its headquarters. If the EU and US continue to chase away jobs, they won't get any revenue.

Lastly, I don't think Ireland is happy about the EU reaching over its once sovereign boarders and administering this fine. I wouldn't be surprised if more countries such as France and Ireland exit the EU in the coming years.

Guy, i know you have a religion to preach i get it.But cmon, you do know that apple gets most of their money from EU/US and CANT leave those markets, and at the same time, their job creation in EU is almost NIL ,and in US is at most laughable in comparison to the whole markets ?
And yes EU and US and any government needs tax money to pave the roads, of course they (apple) pay almost nothing, but thats the system, every busines pays somewhat , and then after government waste you get a road .
EU/US/UK are the bulk of worlds economy, these firms arent going anywhere, they just dont want to pay taxes there .OF course apple can establish its HQ at the cayman islands, and thats why the system is broken, but the solution is paying the taxes in the country/region you do your business in and not just saying that they dont have to pay any taxes.
You cant have a world without any regulations, ,because what you get is 1% elite living like gods in their secluded clean ultra enviroments, and the rest of us will get all the bad things you can get, be it pollution, lack of water, poor quality food and etc.Thats because people are greedy and lazy, thats why any pure capitalistic or purely communist/socialist system will never work.
There is a river where i live, 20 years ago it was a chemical sewer, with mutated fish and general lack of life.After enforcing the old and introducing the new regulations, you can even swim in this and not die instantly.There is no simple solution, no one idealogy that will make everything nice.No ,its a constant struggle between different forces.And when in those forces the upper hand goes to the ones that enforce realistic and future proof ideas ,then you can get some progress in the right direction.If you would just leave everything to a darwinian model of pure selection without any far reaching thought, you will get efficient, but not good results.People will get rich, people will die, enviroments are gonna be devastated, wars will come and you will end up with either elysium or mad max .People tend to be very short sighted, egoistic in nature.
As for ireland, look it up.Look it up how it was there 20-30 years ago, and how the country looked before this EU "nonsense".BTW, texas or california in theory would be also better off, without the rest of the US, you think thats how it should be ? Yea, lets divide the world in smaller and smaller parts that will fight each other through different means, and waste much more energy/resources on that instead of "unity" waste.

Btw, i just wanted to make sure you guys knew, that i am not a vegan iphone ponytail WWF LGBTQ+ communist :P .I just find any radical views uninformed

[drmrlordx]

They rightfully should be on the hook. I'm sick and tired of my taxes constantly increasing, and my services constantly decreasing. These large corporations need to pay their fair share.

Do you think corporations like Apple are responsible for your taxes constantly increasing while your services are constantly decreasing?

If you look at the actions of the corporation alone, the answer would certainly be "no". If you look at the actions of the individuals running such corporations on their own . . . maybe the answer would be "yes".

And yes EU and US and any government needs tax money to pave the roads, of course they (apple) pay almost nothing, but thats the system, every busines pays somewhat , and then after government waste you get a road .

Actually corporations pay twice, if they pay at all. Go out and form a business (sole proprietorship) in the U.S., earn enough money to have a tax bill, and then distribute profits to yourself. Guess what? You pay as business owner AND employee. Twice. All assets distributed to employees as pay or a bonus (or other forms of compensation) are subject to taxation, ON TOP of the corporate rate that is paid just for the privs of earning the money in the first place.

[vario]

...
Actually corporations pay twice, if they pay at all. Go out and form a business (sole proprietorship) in the U.S., earn enough money to have a tax bill, and then distribute profits to yourself. Guess what? You pay as business owner AND employee. Twice. All assets distributed to employees as pay or a bonus (or other forms of compensation) are subject to taxation, ON TOP of the corporate rate that is paid just for the privs of earning the money in the first place.

Well thats certainly bad, small bussiness owner in my country pays the tax once and he can use the earnings for himself, there are many many bad laws and taxes , but i think the way they are now is becasue of the big corporations, they like it that way, it also makes it harder for the small people to compete, and THEY have the resources to pay small or next to nothing.The laws we have now, have been written with a big "help" of lobbying groups, which include mostly intrests of lawyers/accountants/big corporations. There are many ways in different countries to not pay taxes, to get refunds, to hide earnings, to bloat costs etc.However ,these ways are too complicated and costly for smaller firms (also sometimes illegal and to do them, corporation has to be big enough to have money and lawyers to defend itself in an event of uncovering it) .Its a very complicated topic, moreover because of the global nature of the economy.

[drmrlordx]

Tax dodges mostly exist as the logical conclusion of the requirement that American corporations exert fiduciary responsibility, e.g. they do whatever they can to deliver the most profit to their public shareholders (if any). All board rooms and CEOs are trained to dodge taxes as a matter of instinct. There are also ways for executives to dodge personal taxes, such as by taking compensation in the form of stock options rather than cash payments. Exercising stock options allows them to pay the lower capital gain rate instead of paying personal income tax (it's actually more complex than that but whatever).

So yes, larger firms with accounting departments can do some slick tax-dodging, and having enough cash to pay off politicians can also have benefits (such as using regulatory powers to eliminate competition, but that's another issue).

[AbortRetryFail?]

... Actually corporations pay twice, if they pay at all. Go out and form a business (sole proprietorship) in the U.S., earn enough money to have a tax bill, and then distribute profits to yourself. Guess what? You pay as business owner AND employee. Twice.

That's incredibly disingenuous and/or untrue. An LLC, S-Corp or sole proprietor will never be taxed twice, unless the owner is a moron.

In fact, the IRS considers a sole proprietor, or an LLC operating with a single individual, a "disregarded entity" who is entitled to report profit/losses on their individual/personal tax return.

[AliG]

I vote Trump seizes all their cash reserves and donates it towards the American Beer Fund.

Free beer for everybody!!!!!

#MakeAmericaDrunkAgain

[StAndrew]

Do you think corporations like Apple are responsible for your taxes constantly increasing while your services are constantly decreasing?

If you look at the actions of the corporation alone, the answer would certainly be "no". If you look at the actions of the individuals running such corporations on their own . . . maybe the answer would be "yes".



Actually corporations pay twice, if they pay at all. Go out and form a business (sole proprietorship) in the U.S., earn enough money to have a tax bill, and then distribute profits to yourself. Guess what? You pay as business owner AND employee. Twice. All assets distributed to employees as pay or a bonus (or other forms of compensation) are subject to taxation, ON TOP of the corporate rate that is paid just for the privs of earning the money in the first place.

You also pay taxes twice in that if when you sell your products in another country and pay their tax, you have to pay an additional tax to bring your earnings back into the US. I think we are one of three Countries that do this.

@vario,

Maybe you don't understand what I'm trying to say. If Apple played by the rules and paid the taxes as you think they should, they would be noncompetitive and at best, shrink in size (a lot) and at worst, go out of business. The successful companies are the ones that are able to thread and dodge the tax loop holes.

[AliG]

If Apple played by the rules and paid the taxes as you think they should, they would be noncompetitive and at best, shrink in size (a lot) and at worst, go out of business. The successful companies are the ones that are able to thread and dodge the tax loop holes.

I whole heartedly disagree with that statement. Apple has 250 Billion in cash reserves - paying more taxes would not make them non-competitive, nor would playing by the rules inhibit innovation. It would certainly reduce CEO bonuses, but I frankly am ok with that. Taxes come off profits. Our structure literally makes it as beneficial as possible to declare a financial loss.