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."

Comments

Good

[MitchDev]

Long overdue

Re:Good

[Anonymous Coward]

ah ah

also US people is already fucked up by Apple, you're paying more taxes since Apple does not pay them, even in US :)

Re:Good

[fluffernutter]

I'm all for giving breaks for inventions that feed people in poverty or cure diseases, but the world would have been just fine without the iPhone. Maybe a few hipsters would have lost track of their Starbucks points, no great loss.

Re:Good

[Anonymous Coward]

And you seem to think invention happens at Apple.

Re:Good

[MitchDev]

BIng bing bing! Yep, corporations buy the congressmen to create the tax loopholes while still demanding corporate welfare and the working people have to pay for it all, it's ridiculous.

Re: Good

[iris-n]

Weird as it may sound, they are punishing Ireland. By giving them 14.5 billion euros. The point is, Ireland was giving illegal state aid to Apple, gaining an unfair competitive advantage over other countries. By making Apple pay back taxes Ireland's advantage is negated, making the playing field level again. This is why Ireland is fighting against this ruling, it wants to preserve its reputation as a tax haven and keep attracting tax-dodging companies.

I hate Apple, but no

[Anonymous Coward]

They can crack the whip now and say that, going forward, the tax laws have changed and Apple should pay more.

However, you can't claim you're owed past money when Apple wasn't hiding anything. They knew what Apple was doing and let it go. This is nothing but theft.

I'm all for fixing the tax laws going forward, but I'm not for killing companies that played by the rules that were in place. Apple can survive this hit, but many companies cannot.

Re:I hate Apple, but no

[fluffernutter]

Actually, if Ireland did indeed step beyond their bounds they can. Apple's bad for not ensuring it was cleared with the EU which has overall governance over Ireland.

Re:I hate Apple, but no

[Nidi62]

I believe Apple has replied "You can have your back taxes or you can have our jobs - but not both."

Good for them.

What jobs? These Irish headquarters barely produce anything or provide services except as a means to funnel corporate profits to a location with an extremely low tax rate. Apple does most of their design work in the US, manufacturing in Asia, and I can bet you most of their marketing is handled from the US as well. At most their Irish division might handle some EU marketing and customer service duties, but most of their employees are probably accountants and lawyers whose sole function is to keep the scam going.

Re:I hate Apple, but no

[jabuzz]

The EU has enough clout that they easily enough force Apple to pay. They can either seize assets to the value of the back taxes and/or prohibit Apple from doing further business in the EU, which would even with a 14billion Euro back tax bill be economic suicide for Apple to pull out of the EU.

Now while Ireland might be upset that the jobs are going, they are not going from the EU because Apple will still need an operation inside the EU to trade there, and the EU Commission does not favour the jobs being in Ireland over anywhere else inside the EU.

So as far as I am concerned both Apple and Ireland can go pound sand.

Re:I hate Apple, but no

[Arroc]

I would agree with you - except that is not a matter of sovereign tax policy. Ireland basically allows Apple tax-free access to the entire EU market. It would have been fine if it was confined to the internal Irish market.

Re:I hate Apple, but no

[MightyMartian]

Forcing companies to pay taxes on earnings they made in a country, rather than allowing them to move that money to a lower-tax jurisdiction is hardly breaking that company's back. It's about time international bodies started going after these race-to-the-bottom tax avoidance schemes.

Re:I hate Apple, but no

[MightyMartian]

Except the EU does have that power. Ireland is a party to the treaties that create these power. If Ireland finds those rules so onerous, it can always join Britain in leaving the EU.

'Refutes' or 'denies'?

[fuzzyfuzzyfungus]

Did Cook actually 'refute' the conclusion, or did he just disagree with it? Those are very, very, different things.

Re:'Refutes' or 'denies'?

[AmiMoJo]

The letter they posted is signed Tim Cook, and does indeed refuse the EU's claims, however it contains obvious lies of omission and seems to demonstrate a complete lack of understanding of how the EU works.

The Commissionâ(TM)s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been.

No Tim, the EU member states have all agreed on some basic ground rules for taxation so that they can have a free market without any of them gaining a competitive advantage. It's hardly a shock to anyone that the extremely advantageous tax arrangements in Ireland were incompatible and the EU has been warning Ireland of this for many years. In fact Ireland changed its laws in 2010 to block companies from doing what Apple did, and as I'm sure you are aware even Apple will have to find a new corporate structure by 2020 or start paying that tax anyway.

The letter is pathetic. It makes out that Apple did Ireland a massive favour by opening a factory and bringing jobs, ignoring that it only did so in order to dodge billions of Euros worth of tax that rightfully belonged to the Irish people.

Money

[Anonymous Coward]

Let's see.. $14.5B in tax savings... 6500 employees in Ireland...
If they'd paid the Irish employees an average of $2.2M each, it would still not be as much as this tax bill.
The point is, $14.5B went into Apple's pocket, and Ireland gets what out of it? 6500 measly jobs?

Re:Money

[AmiMoJo]

They probably threatened to put the factory somewhere else, so Ireland thought it was a choice between getting nothing and getting 6500 jobs and a small amount of tax.

The thing is, the EU doesn't play the "race to the bottom" game. The whole point of having a single market is that rules are harmonized and the playing field is level for everyone. No member state can offer terms like this to get business, which is ultimately bad for everyone except Apple anyway.

Re:SubjectIsSubject

[oh_my_080980980]

Really? Tim Cook undermines his argument by pushing to get a tax holiday to re patriot his Irish earning to America. If he was sincere about Apple' revenues being "earned" in Ireland, then he would keep them there instead if engaging in this ponzi scheme.

EU wins...

[frank_adrian314159]

Apple CEO Tim Cook said, "... Apple follows the law and we pay all the taxes we owe."

Yes, and the EU's law just said you owe 14 billion. Pay and quit whining about it - maybe if Apple had pulled its profits back into the US, they wouldn't be having these issues.

Re:SubjectIsSubject

[MightyMartian]

In other words, the money wasn't earned in Ireland, and Ireland and Apple colluded to create a partial tax shelter, just like the EU is claiming.