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Apple Appeals EU Tax Ruling, Says It Was a 'Convenient Target' (reuters.com)
Apple has launched a legal challenge to a record $14 billion EU tax demand, arguing that EU regulators ignored tax experts and corporate law and deliberately picked a method to maximize the penalty, senior executives said. From a report on Reuters: Apple's combative stand underlines its anger with the European Commission, which said on Aug. 30 the company's Irish tax deal was illegal state aid and ordered it to repay up to 13 billion euros ($13.8 billion) to Ireland, where Apple has its European headquarters. European Competition Commissioner Margrethe Vestager, a former Danish economy minister, said Apple's Irish tax bill implied a tax rate of 0.005 percent in 2014. General Counsel Bruce Sewell and Chief Financial Officer Luca Maestri outlined in an interview with Reuters at Apple's global headquarters in Cupertino the company's plans for its appeal against the Commission's ruling at Europe's second highest court. The iPhone and iPad maker was singled out because of its success, Sewell said. "Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines. It allows the commissioner to become Dane of the year for 2016," he said, referring to the title accorded to Vestager by Danish newspaper Berlingske last month.
They had to start somewhere, right Luca?
It might as well be one of the worst offenders, ie. You.
No sig today...
The issue is not that they're successful, but that they were breaking the law. Sure, the amount due may have been less had they been less successful, but it would not have changed anything about the legality of their construct.
Maybe at the end of this the lesson here for Apple, Google, ... et al is that you should not piss off large blocks of nation states because they are bigger than you and not only do they have more lawyers than you, they make the laws. It must be surreal for a soulless megacorp to finally find out what it is like for a regular citizen when he/she gets bullied in court by somebody way bigger than them.
No rules where changed retroactively - they were in place when Apple and the Irish government decided the rules did not apply to them and those rules continued to apply ever since. Irish tax law does not trump EU directives agreed to by the government of Ireland and US tax law is utterly irrelevant to the tax obligations of an Irish company.
Every dollar or euro Apple doesn't pay has to be paid by somebody else.
Time is what keeps everything from happening all at once.
While it might be unwanted on the moral/ethical compass, tax evasion is not illegal.
It is illegal. That is what defines tax evasion. When legal means are used to avoid paying tax, it is called tax avoidance.
Apple played by the rules, and the Irish government agreed on it
That does not make it legal. By making this arrangement with Apple, the Irish government violated EU directives it had previously agreed upon.
The EU desperately needs more cash, so they try all sorts of things, including these tricks
Enforcing the law in this case will not result in a single cent going to the EU. They are forcing the government of Ireland to collect the taxes Ireland is owed. Moreover, I don't think the EU is desperately in need of cash. I don't know where you get that idea from. The EU budget has been more or less stable for a long time.
This is a sign that the EU is cracking up.
This is a sign that you don't know what you are talking about.
"because it disregarded tax experts brought in by Irish authorities."
Because your experts aren't biased *eye roll*
"The low rate is achieved by Apple telling U.S. tax authorities that the profits are earned by Irish units. Meanwhile it tells Ireland the profits are not earned in Ireland. "
"Sewell said the fact that an entity was a holding company with no employees on its books did not mean it was inactive and it could be actively managed by employees of its parent company." http://www.reuters.com/article...
Wow just wow. I guess Apple learned at the knees of Goldman Sachs. Pay your fucking taxes hippie!
Irish and US tax law are in this case both superseded by EU tax law in this case. So that argument is completely irrelevant in this case.
Remember by becoming a member of the EU the Irish agreed that their tax laws would be compliant with EU law. The commission found that Irish tax law was not compliant with EU law and as EU law is supreme Apple and Ireland are in trouble.
Sorry Apple cry me a river that you can't afford decent tax lawyers.
They will because once all this is settled and the Irish government has actually collected the back taxes, the EU will promptly fine the Irish government for breaking EU state aid rules, aka special tax breaks are state aid and that is not allowed under the EU rules (this is ruling Apple and Ireland have lost on) and fine them somewhere near the amount of illegal state aid that Ireland gave to Apple in the way of a special tax deal.
Well duh, of course you're an easy target
Apple is one of the most profitable companies on the planet (if not THE most profitable)
They earn millions or even billions of Euro revenue each year and pay less tax than a jar of Marmite. So yeah, it was pretty obvious Apple was doing a massive (moral, if not also legal) tax dodge.
Ireland's arrangement with Apple violates European directives, hence it is illegal and the taxes should be re-assessed without the illegal arrangement. It's that simple.
WRONG, WRONG, and WRONG again.
I will point you to the following article on the supremacy of EU law over national law.
https://en.wikipedia.org/wiki/...
I will then point you to the third amendment of the Irish constitution, which enshrined this primacy of EU law into the Irish constitution.
https://en.wikipedia.org/wiki/...
The EU has *VERY* strong rules on state aid. The Irish government gave Apple a special tax deal, that was not available to everyone. This has been found to break those state aid rules and is therefore illegal under EU law and as EU law has primacy over Irish law as confirmed by the third amendment to the Irish constitution then it is illegal.
It is amazing the crap people spout about this sort of stuff without the first clue as to what they are talking about.
Arguing that one should not be singled out for misconduct on the premise that everyone else is doing it is ultimately still an admission of guilt.
File under 'M' for 'Manic ranting'
...apples have alway been a convenient target.
you might try something like PAYING YOUR TAXES!
I forgot to mention the third amendment to the Irish constitution was approved 83.1% for to 16.9% against in a referendum on the 10th May 1972 on a turnout of 70.9%. So the Irish people voted heavily for it with a absolute majority of 58.9% of registered voters in favour.
the EU will promptly fine the Irish government for breaking EU state aid rules
Under what mandate, exactly?
I don't think you understand how the EU works. It works on a budget and is a political union that comprises 28 countries. The countries can use EU to pass laws that apply to all countries, but EU itself holds no power - the power comes from the member nations.
It's primarily a legislative body, not an executive one.
Ireland is a net recipient of funds channeled through EU, so it's possible (although not plausible) that a country could sue to get a larger piece of the cake based on Ireland not needing it with the extra tax money. But I find that highly unlikely. Apple would be long gone by the time allocation changes could be passed.
https://europa.eu/european-union/topics/taxation_en
"The EU does not have a direct role in raising taxes or setting tax rates. The amount of tax you pay is decided by your government, not the EU."
They even admit it themselves.
Their remit is: Cross border value added tax (introduced under the remit of 'free trade') and European Union withholding tax (introduced under anti-money laundering). Any claim to legislate on tax is done by leveraging another directive.
What they're doing here is trying to pretend that can legislate tax laws based on the free trade and competiton directives. But if tax is decided individually by Nation States, then its decided by Nation States.
And as to "Ireland must demand that in tax from Apple", no. Any tax decision by Ireland is Irelands remit, and it would be for Ireland to decide if Apple would be required to repay the taxes if it broke Irish tax laws... which they didn't because Ireland makes no such claim.
When you are one of the world leaders in hoarding cash, it tends to make you stand out a bit when the Tax Man comes looking.
It becomes especially obvious when more than 90% of your entire cash reserves are overseas.
I would expect all of the players that use offshore tax havens will eventually be in the spotlight.
Apple just happens to be one of the first because their arrogance against paying taxes via tax havens will be used as an example for the rest.
A win against Apple would significantly decrease the amount of work that will be necessary to go after the others.
Eh... Are you seriously equivocating Apple, a multibillion dollar global megacorp with 'liberal do gooders'? Really? Yeah I get it, plenty of liberals use Apple products, but I've never seen people - on the right or on the left - claim that Apple as a company is in any sense liberal. Their tax-evasion as well as lack of any charity work whatsoever are quite well known, so I don't know where this notion of Apple as a 'liberal' company is coming from.
If anything, stories like this further go on to prove that Apple is just as unethical and uncaring as most other companies of their size.
"It is the business of the future to be dangerous" -Alfred North Whitehead
I will then point you to the third amendment of the Irish constitution, which enshrined this primacy of EU law into the Irish constitution.
Thing is that doesn't even matter. I mean the EU doesn't care if you pass a law which says that you can break the EU's rules: if you keep breaking the rules then you'll be kicked out no matter what your local laws say.
And of course there's no legal, moral or sovereign right to be a member of someone else's club if you refuse to abide by the rules.
SJW n. One who posts facts.
That's simply false, taxation across the EU is not set by the EU and corporate tax rates are not level across the EU or even within each nation state.
Corporate tax rate:
Austria 25%
Belgium 34%
Czech 19%
France 33% (36.6% above 3.5 million euros)
Germany 30.175% to 33.325%
etc. etc.
The rates are not required to be level across the EU, and they are not level even within each nation state. Taxation simply isn't within the EU remit, and your broad "no financial advantage" has no legal basis.
Apple does not receive state aid from Ireland and taxation is not within EU remit. The nations have not agreed to harmonize it, and so EU Commission has no such power.
Apple still needs to pay what they have always been owing, plus applicable interest in the intervening time, plus applicable legal penalties. They are only applying it retroactively to previous taxes not paid as far back as 2003 because that's the relevant statute of limitations here. The arrangement between Apple and the Irish government actually started in 1991.
File under 'M' for 'Manic ranting'
Remember Lawyers win even when they lose
Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
Hum, I know I have a much much better idea of how the EU works than the vast majority of people......
I think you will find the EU "fines" member states for failing to comply with directives all the time. Well perhaps not all the time, but it would certainly not be something new.
But specifically this year a fine for illegal state aid
http://www.shippingherald.com/...
No mandate my ass.
Let's put it another way, what would be the point of banning state aid if the country giving illegal state aid could keep the gains of giving such aid?
Really the lack of clear thinking and common sense let alone actual knowledge when it comes to the EU is staggering at times.
Heck the UK can't even start negotiating trade deals on it's own before it has left the EU without facing large fines from the EU.
To point 1: Have you even read a single history book on Europe? The current post-war period is probably the longest stretch of general peace Western and Central Europe has ever had.
To point 2: How is a common market and currency contributing to cultural homogeneity? Is the US homogeneous? Is China? Is Canada?
To point 3: The population of the EU is over 500 million people. Why does 200,000 employees seem so outrageous?
To point 4: There are a common set of rules governing the Common Market.This adds a layer, but the benefits of companies being able to trade on that open market largely unimpeded by tariffs and other trade restrictions more than make up for extra regulation.
To point 5: The European Union is a creature of treaty, a multilateral treaty between all its member states. It isn't a national government, so trying to compare it to one is absurd.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Yes, the outcome was pre-determined, because Ireland was violating the terms of its membership in the Common Market. This is like a thief caught red handed bemoaning the fact that the "fix was in".
The world's burning. Moped Jesus spotted on I50. Details at 11.
Strictly speaking, it was Ireland that broke the rules. The effect is that Apple's tax deal violated EU rules, and therefore Ireland must collect the taxes from Apple.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Can't Ireland AND those corrupt assholes both be breaking the rules? How does misconduct by the President of the European Commission make Ireland's illegal tax deal with Apple alright?
The world's burning. Moped Jesus spotted on I50. Details at 11.
Except that's not really what happened. Both Ireland and Apple knew this tax deal would almost certainly eventually end up in the courts, seeing as the deal violated EU rules that Ireland had agreed to as part of its membership in the Common Market. This is more like you and your accountant cooking up a tax avoidance scheme, knowing that the IRS might eventually catch up with you, but you taking the gamble on the possibility that they won't (and tax authorities often take years to finally take down shady tax avoidance schemes).
Ireland has been colluding with a number of non-EU companies to offer cheap tax rates. To my mind, what Apple, Microsoft and the rest have been doing is the taxation equivalent of money laundering.
The world's burning. Moped Jesus spotted on I50. Details at 11.
By trying to circumvent the law. You could not have become a convenient target by playing by the rules.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Guys, a lot of you are talking about tax evasion, which is not the point here. No one is accusing Apple of not paying the tax that they should to Ireland.
This is a case of illegal government subsidizing. Ireland has illegally (at least according to EU) given Apple an unfair tax and by doing so have illegally given state funding to Apple. This is not allowed in EU. The ruling is that Apple must have the standard Irish company tax, which leads to the enormous sum.
Whether this is right or not is a legal battle. But it's pitifully bad form by Apple to start throwing personal mud. "It allows the commissioner to become Dane of the year". That's far more than crossing the line.
The EU has just recently decided to reinterpret their laws to ban the rules Ireland has had in place for 25 years, and then do so retroactively to arrive at $14B.
I'm fully in favor of the EU shutting down this obvious tax shelter scheme, but: (a) society can't function if laws are reinterpreted retroactively, and (b) it's fundamentally uncompetitive to apply this revised reinterpretation to Apple alone.
Apple cannot even afford to put audio jacks in their phones anymore and these now these eurotrash bullies expect them to pay their taxes too!
cooking up a tax avoidance scheme, knowing that the IRS might eventually catch up with you
This doesn't make sense. Tax avoidance is perfectly legal. It's tax evasion that isn't And if you are complying with the law, the worst the IRS can do is to change the law (at the direction of Congress) and plug your loophole going forward.
Have gnu, will travel.
They weren't complying with the law.
The world's burning. Moped Jesus spotted on I50. Details at 11.
I would say yes, that within economic integration, there would have inevitably been a slow march towards renewed conflict. The Germans and French, through the various iterations from the collapse of the Carolingian Empire as a unified political entity, have spent centuries at each others' throats. Economic integration between Germany, France and the Low Countries has been absolutely critical to this extended period of peace.
NATO's role has been unifying as well, but by and large its purpose has always been to prevent Russian invasion of Western (and now large portions of Central and Eastern Europe).
Economic integration was seen as critical by both the pre-eminent European powers and by the US as a means of making another general conflict impossible. Even Winston Churchill fully believed that economic and partial political integration were necessary to prevent another general European war:
Churchill - 1947
The world's burning. Moped Jesus spotted on I50. Details at 11.
tax evasion is not illegal
<pedantic mode=on>Actually, it's tax avoidance that is legal. Not evasion.</pedantic>
The EU desperately needs more cash
Which is funny because they claim that Ireland should be collecting this tax. None will be going to the EU. If the Irish want, they could take it and grant a one time payout to every Irish citizen. And then they'd be right back where they are today.
Have gnu, will travel.
It doesn't matter whether the people running it claim to be conservative or liberal, if they're running the company against liberal positions (tax-evasion and shitty treatment of employees for example) then they - and hence the company itself - are not liberal.
"It is the business of the future to be dangerous" -Alfred North Whitehead
For 25 years there wasn't a peep from the EU that Ireland's tax laws constituted illegal state aid. Then they change their interpretation--towards a single US company--and now they want that company to pay years of back-taxes.
There wasn't a peep because the tax rates were applied fairly to all companies. Apple then negotiated a special "Apple only" deal which applied only to them which the Irish were happy to do to have Apple's EU HQ in the country. That deal constituted being state aid of the type which is illegal in the EU for all member states.
I only please one person per day. Today is not your day. Tomorrow isn't looking good either. - Scott Adams
...because you didn't want to pay your fair share. Sorry, Apple, it's time to pay the piper. You've benefitted off the backs of Euro taxpayers as you utilized their infrastructure. If the US was smart, we'd get our dues as well. We, THE PEOPLE, don't owe any corporation a penny. They exist solely because we allow them to and in exchange WE get income taxes. It's time to pay up. Your trademarks and assets are protected because of my country's military. That has a price, boys.
I wonder how far $14 billion would go to pay for Ireland to break away from the EU....
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Why would the US get involved in a local European dispute? Europe doesn't have as much oil as the Arabian Gulf and now the US is getting more self sufficient. MightyMartian answered your points well and perhaps you might need to take time to digest and understand the responses.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Why does EU restrict itself to competing companies in Ireland?
They EU hasn't just gone after Ireland or Apple. They've gone after many governments and companies. You just haven't been paying attention. You REALLY mustn't have been or else the irony of going after Ireland while The Netherlands has the EU presidency would not have gone unnoticed.
It is hard to say and your points are justified.
But remember, after the first world war, another war of such a scale seemed unthinkable to many.
Thus one of the quotes at the foundation of the pre-predecessor of the EU was "to make war not just unthinkable, but impossible".
What you consider "constant turmoil" is just discussion, negotiation (sometimes a bit heavy-handed), conflict of interest etc.
Do you hear (except maybe at football/soccer games) of people from one EU country being beaten up by members of another? As long as that stays an absolute rarity, I don't think there is any real conflict.
I think a lot of people simply lack understanding of conflict resolution. It often is tedious, and may involve some strong words, but that just means it is working, and people are talking to each other still.
And do any of the conflicts you see in the EU reach the level of pro- and anti-Trump in the US?
I can't believe the number of Apple supporters here. Come on! Apple is like every large scoundrel with lawyers, not only do they make billions, they like to fake victim status. Frankly they are a disgrace and they need to be told off. Have you seen how they tread employees?
I get that some people here don't like governments to have money, but govs are pretty much free to raise any tax they want anyway. Like death, taxes are a fact of life. Either you and I pay it with our hard-earned cash or some enormous, selfish company selling unnecessary, luxury, first world items pay it. Which do you prefer ?
Disclaimer: I'm a happy Apple customer. I don't care if Apple raise their price by 5% to pay for this tax. They already do it anyway (see last touchy-feely MBP with same specs as a year earlier).
They're a US company? Funny, I don't recall them paying the US any realistic taxes on all the money they make.
They weren't complying with the law.
Yes, they were. Irish law. The issue of Irish law not complying with EU treaty is a matter between Ireland and Brussels.
Have gnu, will travel.
In my experience, within Europe it is a relatively widely held opinion that the EU (and its precursors) did indeed play a big role in supporting peace and prosperity on the continent. (Which does not at all negate the support of the US.)
But perhaps a clearer example than western European peace might be the Balkans. I believe that the prospect of entering the EU has played a non-trivial role in helping convince the Balkan states to finally bury the hatchet for real. (Similarly the prospect of entering the EU has been used to motivate modernizing the post-soviet European states to great effect.)
> The EU by contrast seems to be a source of constant turmoil.
I think the turmoil you speak of is generally on a completely different order of magnitude than violent conflict. (Of course one would be easily forgiven for miss-interpreting the severity of this turmoil given how Europeans do seem to so enjoy moaning and griping about their lots in life -- justified or not. In fact sometimes I feel like it is actually one of the more unifying traits in Europe cultures. Then again, maybe that's just humanity in general.)
It seems Apple is willing to demonstrate that EU courts are not really independent. EU justice court's judges are appointed by common accord of the governments of the member states and hold office for a renewable term of six years (quoted from Wikipedia).