I think I speak for a lot of Irish people when I quietly mutter "Uh-oh..."
It's official: EU chiefs WILL probe Apple's Irish tax deal
The European Commission officially announced today that it is looking into the possibility that Apple received illegal state aid from Ireland in 1991 and 2007. The Commish is examining whether deals done with the Irish tax authorities constitute state aid. Apple’s European arm is incorporated in Ireland and, like most …
COMMENTS
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Tuesday 30th September 2014 12:15 GMT Berny Stapleton
The EC believes that two special agreements were made, one in 1991 and another in 2007 apparently.
http://businessandleadership.com/business/item/47784-apple-given-special-tax/
Let's see what happens, they haven't targeted Google, Microsoft or Oracle yet, so maybe there is something to this....
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Tuesday 30th September 2014 13:07 GMT codejunky
Meh
Politico's vs Politico's. Firmly summed up by the line- "In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes" and being aware that the word 'fair' is subjective and highly fluid. Translated it is 'we are broke, give us all your money, this is a stick up'.
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Tuesday 30th September 2014 16:55 GMT i like crisps
Re: Meh
Dear Lars,
Have you thought of applying for the position of 'Poet Laureate'? I ask because your use of the English language is excruciaingly good!
As far as 'Patting' Taxes is concerned, if they're moving i wouldn't recommend it as you could cause harm to yourself or someone else. Best to 'Pat' them when they are stationary and only after asking the drivers permission.......lets play safe.
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Wednesday 1st October 2014 00:35 GMT Rolf Howarth
Re: Meh
The Apple-Irish deal isn't about avoiding paying UK or other European taxes (which they do pay - ever heard of VAT?) but about avoiding, or rather delaying, US corporate taxes, currently the highest in the developed world and with punitive terms on companies bringing revenue into the US.
Virtually all US multinationals (not just Apple) are doing everything they can to avoid repatriating their non-US revenue until the US sorts out it tax system, which they keep talking about doing but still haven't managed to get round to. Apple just happened to have registered their non-US business in Ireland rather than somewhere like the Bahamas.
The question is whether Ireland offered Apple special terms that weren't available to other multinationals, which would constitute illegal state aid, not whether it's a bad thing that Apple pay taxes in Europe rather than the USA.
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Tuesday 30th September 2014 14:45 GMT Anonymous Coward
"Price Apple would have charged a non-Apple subsidiary"
So if finished phones were being transferred, the wholesale price they charge vendors - which, for Apple, is very high as a percentage of the retail price.
If IP was being transferred, a high price would also be appropriate as recent court cases against Samsung have shown that Apple assigns a very high price to its IP based on the amount per phone they felt was appropriate for just a few design patents.
Because of this, it might be difficult to prove Apple got a special deal even if its transfer pricing is significantly higher than the competition. While many will say that Apple's prices are too high and they have made ridiculous demands for licensing their patents, if the issue isn't whether those prices are impartially (somehow?) judged to be too high, but rather whether the prices are in line with what Apple would charge a non-Apple subsidiary, Apple may be in the clear.
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Tuesday 30th September 2014 15:02 GMT Anonymous Coward
Vodafone
Forgive my ignorance on large companies and tax matters, but how does that alleged Apple/Eire deal differ from, say, Vodafone's bargain tax settlement in the UK?
Plus should the EU find Eire wanting, should the UK* be equally worried?
*By the UK I mean, basically, the UK population as a whole.
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Tuesday 30th September 2014 15:38 GMT Tim Worstal
Re: Vodafone
Well, the difference being that the EU ruled (or the EU court did) that Vodafone didn't owe any UK tax. Therefore it's unlikely that the EU will now say that it did.
Just to clarify: the EU court said that while that money was in Luxembourg then the UK couldn't have any of it. But if it moved to the UK then of course normal tax would be payable. So, Vodafone moved some to the UK in order to pay a dividend and paid tax.
There wasn't even a "deal".
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Tuesday 30th September 2014 15:43 GMT graeme leggett
Re: Vodafone
The difference is between
An agreement at the start that Company A would only pay X% in tax, and Company A paying just that amount while others had to pay Y%.
Finding out that Company B ought probably/would have been nice to have paid Y% but had only paid X% in effect and then accepting that it wasn't worth the effort (definitions of effort may go up as well as down) to get the full amount back and so settling for a potentially embarrassingly small sum.
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Tuesday 30th September 2014 18:04 GMT Anonymous Coward
Not so fast
"like most multinationals, it moves its profits about so as to pay as little tax as possible. This is not illegal in itself"
Actually, moving profits about for no reason other than to pay less tax is illegal. That's why they always pretend that there was a charge from one subsidiary to another and have to maintain an office in Luxembourg or wherever that is supposedly the European headquarters but employs one person part time to check the answerphone and forward the mail to the real headquarters.
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Tuesday 30th September 2014 20:41 GMT Player One
Maybe Apple will have to pay!
From the published decision:
"The Commission wishes to remind Ireland that Article 108 (3) of the Treaty
on the Functioning of the European Union has suspensory effect, and would
draw your attention to Article 14 of Council Regulation (EC) No 659/1999 35,
which provides that all unlawful aid may be recovered from the recipient."
Which I assume makes Apple the recipient and therefore liable to repay all the
missing tax?
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Wednesday 1st October 2014 08:15 GMT All names Taken
I take the alternative approach of stating: if Ireland can do it why can other nations not do it?
Rather than making a race to a highest common tax level why not make a race to a lowest common tax level?
Shame iScotland could not join its celtic neighbours in a race to John Smithian economics for the good of all rather than taxation as a nice little earner for the Treasury and its mandarins?
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Wednesday 1st October 2014 12:54 GMT All names Taken
Common fallacy
See, there appears to be this common fallacy that by placing a tax on something that tax operates totally independently and without consequence.
Stereotypically: wake up n smell the coffee dude!
Money has to come from somewhere and that is usually the end user purchasing stuff or services.
Taxation is merely a demand for money from guvmint to others and in the case of ... I am sure you can figure the rest out no?