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Apple Ordered To Pay Up To $14.5 Billion in EU Tax Crackdown, Cook Refutes EU's Conclusion (bloomberg.com)
Apple has been ordered to pay a record sum of 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally slashed the iPhone maker's tax bill, in a crackdown on fiscal loopholes that also risks inflaming tensions with the United States Treasury. According to the European Union regulator, Apple benefited from selective tax treatment that gave it an unfair advantage over other businesses. In the meanwhile, Apple has refuted such accusations, saying that EU's conclusion has "no basis in fact or law." EU Competition Commissioner Margrethe Vestager said, "If my effective tax rate would be 0.05 percent falling to 0.005 percent -- I would have felt that maybe I should have a second look at my tax bill." Apple CEO Tim Cook said, "Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law -- the same kind of guidance available to any company doing business there. In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe."
Apple got a special tax deal from the Irish government in exchange for locating their European headquarters in Ireland. This has been ruled illegal state aid which was illegal at the time.
A number of other companies such as Microsoft, Dell and Google have similar arrangements and they are now all under investigation.
Funnelling the sales through Ireland was not illegal.
What was illegal was Ireland giving Apple a special tax deal where they only needed to pay tax on profits generated in Ireland, so all the profits from sales in the rest of the EU where tax free. EU has now decided that this is against the state aid rules. Had every firm in Ireland had the same tax deal it would not have been illegal.
So while Mr. Cook is claiming that they complied with Irish law and may well be right, this is utterly irrelevant to whether they broke EU laws.
Whether or not the tax breaks were illegal, Apple simply paid what the Irish government told them to pay, so as far I am concerned the EU can pound sand.
Apple didn't simply "pay what the Irish government told them to pay", there was a huge amount of negotiation between the two parties, leading to an agreement.
That agreement does not transcend EU rules, so it was illegal at the time and I'm sure you will understand that illegal agreements are not worth the paper they are written on.
I believe Apple has replied "You can have your back taxes or you can have our jobs - but not both."
Good for them.
Wow. 6,000 jobs. When Apple already employ more than that in the UK, where they have no tax deal. What a wonderful deal the Irish got...
From what I gather, it is not the EU ordering Apple to do anything, but the EC ordering Ireland to collect the money as outstanding taxes.
If Ireland refuses, the EC could fine them, or better, remove Ireland from the Common Market, incl all effects this would have.
If Ireland does end up having to collect the taxes, and Apple refuses to pay them, then freezing assets would be on the table.
But if Ireland broke its treaty with the EU, why punish Apple for following the law as it stood at the time? Punishing Ireland would seem fairer.
They are not punishing Apple, there is absolutely no punishment levied against Apple. Apple is just asked to pay what they owe Ireland with no damages or punishment added on top.
You are apparently completely ignorant of what Apple's tax arrangement was. Please read the statement of the European Comission.
To spell it out: Ireland was charging Apple the 12.5% tax on sales made in Ireland. The sales made in the rest of Europe were not taxed. At all. So Ireland was simply robbing the other EU countries of their tax money. Stopping this scam is precisely what we need the EU comission to do.
And you think exiting the EU would be the proper answer to this? Go ahead, please. Let's see how Apple likes to stay in Ireland without access to the European market.
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