Slashdot Mirror

← Back to Stories (view on slashdot.org)

EU Drops Court Case After Apple Repays More Than $16 Billion In Taxes and Interest To Ireland (theguardian.com)

Posted by BeauHD on from the that's-a-lot-of-zeros dept.

"Ireland's government has fully recovered more than [$16 billion] in disputed taxes and interest from Apple, which it will hold in an escrow fund pending its appeal against a European Union tax ruling," reports The Guardian. From the report: The European commission ruled in August 2016 that Apple had received unfair tax incentives from the Irish government. Both Apple and Dublin are appealing against the original ruling, saying the iPhone maker's tax treatment was in line with Irish and EU law. Ireland's finance ministry, which began collecting the back taxes in a series of payments in May, estimated last year the total amount could have reached -- [$17.5 billion] including EU interest. In the end the amount was [$15.2 billion] in back taxes plus [$1.4 billion] interest.

For its part, the commission said it would scrap its lawsuit against Ireland, which it initiated last year because of delays in recovering the money. "In light of the full payment by Apple of the illegal state aid it had received from Ireland, commissioner (Margrethe) Vestager will be proposing to the college of commissioners the withdrawal of this court action," the commission spokesman Ricardo Cardoso said. Ireland's finance ministry said its appeal had been granted priority status and is progressing through the various stages of private written proceedings before the general court of the European Union (GCEU), Europe's second highest court. The matter will likely take several years to be settled by the European courts, it added.

48 of 118 comments (clear)

  1. Apple has paid nothing. by Anonymous Coward · · Score: 2, Interesting

    Apple has not repaid anything. What they have done is use the tons of money they have doing nothing in Ireland, and put it in a escrow account.

    Now that money is sort of working for Apple. The EU wants a big chunk, and Apple will go to court to prevent that. Meanwhile, Ireland will be beholding
    to Apple for preventing the EU suing Ireland. The EU knew it could not win against Apple, so they went after Ireland. Now we have a proxy court battle.

    1. Re:Apple has paid nothing. by Tough+Love · · Score: 1

      Ireland collects disputed Apple taxes in full ahead of appeal

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    2. Re:Apple has paid nothing. by Tough+Love · · Score: 1

      Ireland's escrow account, not Apple's. I hope you understand the difference.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    3. Re:Apple has paid nothing. by Anonymous Coward · · Score: 1, Insightful

      It makes no difference until the appeal is exhausted, I hope you get that. They can't collect or use that money until they actually win the decision in court, so to say it's really collected is a misnomer. It's in escrow, pending appeal. I don't see why this is hard for you or why you'd need to push back like it were subject to opine.

    4. Re:Apple has paid nothing. by Tough+Love · · Score: 1

      So you admit that Apple no longer has that $16 billion.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    5. Re:Apple has paid nothing. by Tough+Love · · Score: 2

      Apple is a tax evader and got caught. Not like we haven't known this for many years. Apple is far from the only perp, just the worst one.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    6. Re:Apple has paid nothing. by PolygamousRanchKid+ · · Score: 1, Funny

      Ireland tweets:

      "Funding secured! We're buying Tesla and taking it private!"

      --
      Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
    7. Re:Apple has paid nothing. by Tough+Love · · Score: 2

      They can't collect or use that money until they actually win the decision in court

      EU will collect interest on it during the appeal period. The joint appeal by Apple and Ireland (putting its own interests above the rest of the EU) is unlikely to go in Apple's favor. You can always hope, but Apple can basically kiss that money goodbye. From here on out Apple better stop cheating on tax or things will get much worse. As far as I know there were no penalties this time. That could well change if Apple continues to act badly.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    8. Re:Apple has paid nothing. by Tough+Love · · Score: 1

      the governments over there had been accepting Apple as paying it's taxes for over a decade

      Not so, this is about back taxes.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    9. Re:Apple has paid nothing. by rtb61 · · Score: 3, Informative

      Not so, this is about organised and extremely corrupt tax fraud with corporations corrupting governments to cheat on taxes. It is all about income shifting, and cunt countries like Ireland enabling it.

      The Irish government being a raging pack of cunts and scheming with corporations with the idea "Hey lets be a jack pack of greedy fuck head cunts. We provide hugely reduced taxes for licences fees, corporations will shift to Ireland and we will steal other countries social services. Whilst we get great big huge deposit in our tax haven banks accounts for first class luxury holidays for the rest of our lives. Fuck those idiots in the countries we are cheating of taxes upon the revenue generated there, fuck them to death, suckers, morons, let the infrastructure die, let them die for want of health services, we are Irish Cunts and we come first".

      Those countries who the Irish government in a total cunt act, cheated, so sue the fuck out of the Irish government and drive them to bankruptcy, let the fuckers economy burn in poverty. All taxes should be paid at the point of revenue, all profits, every single last fucking cent, should be declared at the point of revenue and all taxes paid there. Cunt countries like Ireland should be driven into poverty and pay with decades of suffering for the suffering they willingly inflicted upon others, in a wanton act of economic piracy and the resulting suffering and death it did cause.

      --
      Chaos - everything, everywhere, everywhen
    10. Re:Apple has paid nothing. by JaredOfEuropa · · Score: 3, Informative

      This is a case about illegal state aid, and was always against Ireland first, ordering them to collected taxes they should have collected in the first place. Apple has very little to do with this as far as the Commission is concerned. And had Apple decided not to pay, Europe would still have had no business suing Apple, they would - again - have to lean on Ireland instead to prosecute Apple for not paying. That is how all these cases work.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    11. Re:Apple has paid nothing. by Megol · · Score: 1

      The correctness of that is in the eye of the beholder.

    12. Re:Apple has paid nothing. by Plumpaquatsch · · Score: 1

      They can't collect or use that money until they actually win the decision in court

      EU will collect interest on it during the appeal period.

      The EU will never own more than 0/10 of that money - how they hell do you think they can collect interest on it? Oh wait, there's your problem: thinking. Stop doing that, you always come up with something stupid. Always.

      --
      Of course news about a fake are Fake News.
    13. Re:Apple has paid nothing. by Plumpaquatsch · · Score: 1

      the governments over there had been accepting Apple as paying it's taxes for over a decade

      Not so, this is about back taxes.

      "Apple Owes $14.5 Billion in Back Taxes to Ireland, E.U. Says" - your source proves his point in the fucking headline.

      --
      Of course news about a fake are Fake News.
  2. Fault? by balsy2001 · · Score: 3, Insightful

    How does making apple pay “back” taxes to Ireland punish Ireland for making an illegal tax agreement with Apple? Not that I agree with the ruling, but shouldn’t the money go to EU coffers or charity? This just sends a message to countries to cut whatever deal you want, if you get caught the worst that happens is you get the money anyway.

    --
    GENERATION 27: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
    1. Re:Fault? by msauve · · Score: 3, Insightful

      Because Ireland currently gets taxes from Apple above the proportion at which Apple does bona-fide business there. Forcing equitable payments removes the tax advantages of Apple having profit making pseudo-businesses there, which should ultimately result in their moving those businesses to other locations which can still offer those tax advantages.

      It's a long term lose-lose situation.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    2. Re:Fault? by ShanghaiBill · · Score: 5, Insightful

      More to the point, why does the EU care if Ireland collects taxes from Apple?

      Because Apple is reporting profits in Ireland that were not actually earned in Ireland. This gives Apple an unfair competitive advantage and compels other companies to seek similar tax shelters, and compels other countries to lower their corporate tax rates in a "race to the bottom".

      There are two solutions:
      1. Harmonize corporate income tax rates, so all countries, or at least all EU countries, tax at the same rate.
      2. Stop taxing profit. Profit is very easy to manipulate and shift around. Instead, tax sales, or payroll, or dividends, or charge resource excise taxes, or infrastructure use fees, or whatever. None of those can be easily shifted between jurisdictions.

      The EU's lawsuit against Ireland is trying to impose #1, but #2 would be better for Europe's economic future.

    3. Re: Fault? by Anonymous Coward · · Score: 1

      Lol no apple is Not reporting profits in the US. At least not any more than they have too. They have various eu and other islands based tax havens to avoid wherever they can

    4. Re:Fault? by balsy2001 · · Score: 2

      I get that, but Ireland was complicit in the deal. Their punishment, get $16 Billion. I just think the money should go somewhere else so both sides in the illegal deal are punished currently, not just by the los of future jobs. For example, make Apple estimate where the sales came from in the EU and give proportional payments to those jurisdictions.

      --
      GENERATION 27: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
    5. Re:Fault? by s4080326 · · Score: 1

      A) Ireland is part of the EU B) The EU wants to prevent a race to the bottom on corporate taxes

    6. Re:Fault? by khchung · · Score: 1

      So how do you define where profit was “actually earned”?

      The product was designed in country X, made in country Y and sold in country Z. Was the profit “actually earned” in X, Y or Z?

      The company C paid $50 to designing company A in country X and $50 to manufacturing company B in country Y and sold the product in country Z for $100. Does that mean it made no profit at all?

      Companies A and B “actually earned” profits in country X and Y, right?

      Both were actually owned by the same company C headquartered in country W. Now, would where the profits were “actually earned” changes?

      It is so funny to see people take an purely imagined concept like “profit” and treat it as if a concrete physical phenomenon that can be well defined.

      --
      Oliver.
    7. Re:Fault? by Solandri · · Score: 1

      2. Stop taxing profit. Profit is very easy to manipulate and shift around. Instead, tax sales, or payroll, or dividends, or charge resource excise taxes, or infrastructure use fees, or whatever. None of those can be easily shifted between jurisdictions.

      I've been advocating this for years. People need to stop thinking of taxes as a way to "stick it to x" (where x = rich person, corporation, someone you don't like). And start recognizing taxes for what they are - diverting a part of the country's productivity to the government coffers to fund government programs. Because the economy is circular (every purchase is a sale, every paycheck is an expense), the point where you do the diverting (the person/company who pays the taxes) is irrelevant. If you tax companies, it just gets passed on to the rest of the economy as lower wages, lower dividends, and higher prices. And on average, everyone pays for the corporate tax. Exactly the same as if you converted all the corporate taxes to a sales tax. Or converted all the corporate taxes to an income tax (profit for a company becomes income for someone else, which can be taxed). Or converted all taxes to a corporate tax.

      Corporations are just trickier to tax than people because they can exist simultaneously in multiple tax jurisdictions, which is what allows them to shift income around from country to country. People by definition can physically exist in only one place at a time, making it a lot easier to tally up their income or sales (purchases) and tax them.

    8. Re:Fault? by hankwang · · Score: 1

      No. The reason the EU cares is that a country must treat all its residents and resident companies on an equal footing. Ireland offered lower tax rates to Apple than it does to other companies, which is illegal in the EU.

      Ireland is allowed to and does undercut other EU countries in corporate tax rates in order to attract businesses. That practice is frowned upon, but allowed, for the time being.

      --
      Avantslash: low-bandwidth mobile slashdot.
    9. Re:Fault? by serviscope_minor · · Score: 2

      I get that, but Ireland was complicit in the deal. Their punishment, get $16 Billion.

      The EU's job is not to punish Ireland, which in practice means punishing its citizens who had little to do with this. The EU's job is to keep the internal market regular and uphold the four freedoms and so on.

      --
      SJW n. One who posts facts.
    10. Re:Fault? by JaredOfEuropa · · Score: 1

      It depends on the circumstances in which the deal was made. If there was clear wrongdoing on Ireland's part, then a fine would be in order. But if Ireland acted in good faith and the Commission merely ruled differently on the interpretation of the rules, then the message to Ireland is: "Sorry, but you can't do that. You'll have to collect those taxes retroactively"

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    11. Re:Fault? by JaredOfEuropa · · Score: 1

      In normal cases about taxes, yes. But it rarely works like this if a tax ruling is deemed to constitute illegal state aid as well. In that case the EC think they have to re-level te playing field as it were, and roll back whatever was given as "state aid".

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    12. Re:Fault? by Tomahawk · · Score: 1

      Profits earned from apple products sold in all EU countries were routed through Ireland, thus a phone sold in France was, according to the books, sold from Ireland.

    13. Re:Fault? by houghi · · Score: 1

      That monmey was Irelands money to begin with. This would be like a joyrider giving the car back and you saying it should be given to the neigbour.

      Now if you are talking to have fines, that is something completely different. Just because they did not get a fine and charges where dropped does not mean they got a blank slate.

      If they try it again, they will be seriously fined, on top of the taxes they need to pay.

      Going after the people who agreed with it in Ireland is not an EU matter, it is a matter for Ireland to see if the person or persons did something illegal and to presecute them.

      --
      Don't fight for your country, if your country does not fight for you.
    14. Re:Fault? by thegarbz · · Score: 1

      but shouldn’t the money go to EU coffers

      The EU is not some overarching federal goverment. It's a join agreement of nations on rules. They don't act indepdently.

    15. Re:Fault? by thegarbz · · Score: 1

      More to the point, why does the EU care if Ireland collects taxes from Apple? If it has to do with EU contributions, it's practically rounding error.

      The whole purpose and point of the EU was to level the European playing field economically and prevent countries from fighting with one another economically (which in the past has not so indirectly lead to them fighting physically too). The EU's only concern here is that Ireland doesn't offer tax breaks to corporations and gain favourable treatment as a result.

      Most EU rules are based around this common economic model.

    16. Re:Fault? by AmiMoJo · · Score: 1

      which should ultimately result in their moving those businesses to other locations which can still offer those tax advantages

      Unlikely, because the EU thought of that. The new rules are making it so that corporations pay tax proportionate to how much business they do in each country, regardless of if they funnel all the profit to some tax haven or not. So there really isn't any point pulling out of Ireland, it won't help them.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    17. Re:Fault? by JBMcB · · Score: 1

      Because Apple is reporting profits in Ireland that were not actually earned in Ireland. This gives Apple an unfair competitive advantage and compels other companies to seek similar tax shelters, and compels other countries to lower their corporate tax rates in a "race to the bottom".

      That very well may be, but seems to be outside the scope of the EU's charter of things to regulate - primarily rules on trade and travel. Taxation is an internal state matter.

      --
      My Other Computer Is A Data General Nova III.
    18. Re:Fault? by JBMcB · · Score: 1

      Ireland offered lower tax rates to Apple than it does to other companies, which is illegal in the EU.

      It most certainly is not. There are hundreds of companies across the EU that get special tax incentives, subsidies, etc... And they are absolutely targeted, in the same way Apple gets breaks in Ireland.

      --
      My Other Computer Is A Data General Nova III.
    19. Re:Fault? by JesseMcDonald · · Score: 1

      This would be like a joyrider giving the car back and you saying it should be given to the neigbour.

      Not even close. Both Ireland and Apple assert that the money belongs to Apple, not Ireland. The EU is stepping in and saying that Ireland must take more of Apple's money in order to comply with EU treaties. In effect the EU is acting as if this money belong to the EU, not Apple or Ireland, to allocate as the EU sees fit.

      The EU's problem is with their treaty partner—which is Ireland, not Apple—but their response to this supposed treaty violation is apparently to hand the offender—Ireland—an extra $16 billion. This makes no sense. From an incentive point of view (and disregarding the moral issues with taxation in general) if the EU wants to set a tax floor then the EU should just claim the difference between what Ireland actually collected in taxes and what the EU treaties say they should have collected for itself so that other member countries won't be tempted to make similar arrangements. The precedent set by this Ireland case is that it can be profitable for member countries to violate the treaties; in the end they get the money and an established corporate headquarters.

      --
      "The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
    20. Re:Fault? by balsy2001 · · Score: 1

      The way to keep markets regular is to have punishments as deterents for unwanted behavior.

      Citizens of various jurisdictions and socio-ecomomic classes will be punished by Apple forfeiting $16B too, you have just made value judgments about who its ok to punish for this and who it isn’t.

      --
      GENERATION 27: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
    21. Re: Fault? by cheesybagel · · Score: 1

      In the US they have an office at Reno, Nevada to avoid paying taxes IIRC.
      They also park (or used to park) the money of their international operations ofshore in the British Virgin Islands IIRC.

      Much of the tax evasion is due to abuse of patents and the like. They have an offshore companies which "own" the patents and license them at a cost which makes the subsidiaries operate at zero profit.

    22. Re:Fault? by cheesybagel · · Score: 1

      The EU is a Confederation basically.

    23. Re:Fault? by cheesybagel · · Score: 1

      1) It does not have an army.
      2) It cannot collect taxes directly.

    24. Re:Fault? by thegarbz · · Score: 1

      1) It does not have an army.

      Maybe not directly, but the CSDP comes pretty damn close to being an army, and it's powers are expanding.

  3. Well you see by rsilvergun · · Score: 1, Interesting

    punishment only deters crime when working class people are involved. When corporations and the extremely rich are involved there's just too much risk to jobs and the economy to significantly punish. Now don't forget to vote for your local pro-corporate political candidate or they'll ship your job overseas and the price of a hamburger will treble.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:Well you see by Tough+Love · · Score: 2

      Microsoft finally learned to respect the law in Europe after getting whacked with multibillion dollar fines. Amazing thing: it took more than one. But they eventually did learn to jump when the EU says jump.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    2. Re:Well you see by AmiMoJo · · Score: 1

      Actually we don't punish people for civil matters like this in Europe.

      There is no concept of punitive damages when suing someone or some entity. There is no restorative justice, which means the amount of money awarded is calculated to restore things to how they would have been if the problematic thing hadn't happened.

      So in this case the back taxes and interest need to be paid to the government that will spend it on the citizens who are entitled to it under EU rules, and also remove the incentive that Ireland has been giving to Apple and others.

      You could argue that Ireland should have to distribute some of that money to other countries that lost out on having businesses set up there because of Ireland's illegal subsidies. But it wouldn't be like in the US where there is a large amount added on top of their losses just as punishment, it would be based purely on losses.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
  4. All this means is... by maroberts · · Score: 2

    ...that because Ireland and not Apple is holding the money in escrow pending the legal decisions on the validity of the Irish tax legislation and incentives in respect of Apple, there is no need for the EU to take Ireland to court for not collecting the money from Apple.

    --

    Donte Alistair Anderson Roberts - hi son!
    Karma: Chameleon

  5. Re:It's not illegal by Tough+Love · · Score: 4, Informative

    The issue is, Apple cooks its books to create the appearance of earning profit in Ireland that was in fact earned in other European states.

    --
    When all you have is a hammer, every problem starts to look like a thumb.
  6. Re:It's not illegal by Solandri · · Score: 1

    So what's the difference between taxing Apple's profit, versus taxing its sales sufficiently to generate the same tax revenue? In both cases the customer will pay $x for an iPhone, and a certain percentage of that will be sent to the government as tax revenue. In the former case, Apple Inc. is the intermediary so gets to play international shell games to try to avoid taxes. In the latter case, the local Apple Store is the intermediary, and hands the tax revenue directly to the government before it can play shell games. Both taxes have the same result (same percentage of what each customer pays is sent to the government as tax revenue), one is just a helluva lot easier to track and collect than the other.

  7. Ireland does not have this money by Tomahawk · · Score: 1

    The title is misleading.

    Ireland have setup an escrow account. (due to legalities around this, this took some time).
    apple have lodged the money plus the interest into this escrow account.

    While Ireland owns the account, it cannot touch the money. However, apple's 'debt' is paid at this point (so no more interest is owning on this).

    What happens next is various court cases and appeals. Funnily, if Ireland _loses_ these court cases, then it gets all that money. If Ireland ultimately win, apple gets all the money back.

    So I'm hoping Ireland lose so that we'll have a few extra billion to do something good with. Too many planned projects have been cancelled here due to lack of funds. We could do a lot with that cash.

  8. Re:APK Hosts File Engine for MacOS!... apk by f3rret · · Score: 1

    ; Protects against Spectre & Meltdown + redirect poisoned or downed DNS/botnets/malware downloads/malcript/email malicious payloads... apk

    Please explain - in-depth please - how adding stuff to the HOSTS file will prevent speculative execution from accessing arbitrary memory under certain conditions.

    --
    Admit nothing. Deny Everything. Make Counter-accusations.
  9. Re:It's not illegal by cheesybagel · · Score: 1

    Sales are already taxed in the EU. It's called VAT. This is about Corporate Tax.