back to article 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 …

  1. joeW

    I think I speak for a lot of Irish people when I quietly mutter "Uh-oh..."

    1. Anonymous Coward
      Anonymous Coward

      The money was only resting in our account

      But perhaps we were just holding it wrong.

      1. frank ly
        Thumb Up

        Re: The money was only resting in our account

        Tim Cook: "Feck!"

        1. Carbon life unit 5,232,556

          Re: The money was only resting in our account

          Was that money earmarked to send all the bent iPhones to Lourdes

  2. Brewster's Angle Grinder Silver badge

    "Commish"? "commish"?!

    Welcome, you're gonna fit in just fine here.

  3. 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....

    1. graeme leggett Silver badge

      Good news for the companies if it comes out as illegal state aid, they can claim to be the innocent dupes of cynical and duplicitous politicians, rather than being avaricious and duplicitous businesses.

      1. Trigonoceps occipitalis

        "cynical and duplicitous politicians"

        Can we add something to the comentard style guide, please avoid tautology.

        1. Anonymous Coward
          Anonymous Coward

          Re: Triceratops Octopus,

          Don't forget your 'ICON' next time...... the Headmaster thingy, picture....

  4. i like crisps
    Trollface

    For the sakes of Apple and the Irish Government....

    ...can't we all just blame this on Bono and have done with it?

    1. Matt 21

      Re: For the sakes of Apple and the Irish Government....

      My understanding of the rules is that if this is deemed to be state aid then Apple will have to pay it back.

  5. codejunky Silver badge

    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'.

    1. Lars Silver badge
      Flame

      Re: Meh

      Why, I pay taxes, you pay taxes, we pat taxes. Why should Apple not pay their fair share.

      My solution to this is to never by any Apple gear, never use Starbucks. As far as I am conserned they can just fuck off, or behave.

      1. i like crisps
        Go

        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.

      2. 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.

  6. Anonymous Coward
    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.

  7. Anonymous Coward
    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.

    1. 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".

    2. graeme leggett Silver badge

      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.

  8. chivo243 Silver badge

    Wait!

    You didn't get my forwarding address?? Dude, I sent it weeks ago... you see we bought our own island, somewhere near the Caymans, and we don't have any tax laws for businesses yet.

  9. Anonymous Coward
    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.

    1. The Godfather

      Re: Not so fast

      Yeah...but almost everyone does it.... Media and press selectively pick the ones to have a go at.

  10. 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?

  11. All names Taken
    Alien

    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?

  12. All names Taken
    Alien

    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?

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