back to article Making us pay tax will DESTROY EUROPE, roars Apple's Tim Cook

Forcing Apple to pay the same tax rate as other companies will lead to the destruction of Europe, according to its not-entirely objective CEO Tim Cook. "This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe," Cook said in a …

I wonder how the Irish government will explain to it's own people that it doesn't need that extra €13bln when austerity has already caused so much damage and is continuing to do so?

And if this sort of ruling applies to the whole of Europe, will large corporations really bother moving when the advantage in doing so is likely slim to non-existent? The process of moving people and facilities represents a big cost in itself and one they'd have to justify to their own shareholders.

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They pay 12.5% tax on the profits generated by the 6000 employees in Ireland, and 0% tax on the profits generated by employees outside of Ireland. They should, under EU law, be taxed in the country the profits are generated in, but under US law, where they claim the real money is made, the tax law says that tax should be paid in the country the company is registered in, ie Ireland. The reason they pay almost no tax is because they argue that their Irish employees generate almost no profit for the company, and the vast profits generated by the non-Irish employees don't get taxed anywhere.

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@katrinab,

I'm not sure why your post has attracted downvotes, it seems to be a clear and dispassionate explanation of how the system works.

Personally speaking I think those companies who argue that such practises are "legal" are missing the point. "Legal" (a very objective statement about what's allowed) is not the same as "popular" or "moral" (both very subjective things). The point they're missing is that "unpopular" or "amoral" practise can easily result in new laws that can outlaw such practises. That's democracy, and in these times of shortages it's easy for an ambitious politician to stoke up the populist fires over such issues. That then runs the risk that compliance with future laws might be more expensive in the long run than compliance with what has merely been a "moral" obligation today.

Of course this judgement from the EU doesn't yet represent a change in law and probably isn't going to result in action against Ireland if they choose to ignore it. But it must surely count as a warning sign that the time remaining for such practises is short, and that "normalising" tax affairs now might in the long run be the cheapest option.

And, crudely speaking, €13billion / 4000 staff = €3.25million each. If Ireland lost Apple's business in their country by imposing the tax rate suggested by the EU then they'd have plenty of money to spend on those now out-of-work former Apple employees.

Of course there's far more than just an advantageous tax situation to attract business to Ireland. English speaking, well educated work force, pretty well run country, part of Europe, fantastic weather - there's a lot to recommend the place. Ok, I may have made up the bit about the weather... So extra tax or not I can't see any particular reason why Apple would want to move their European business elsewhere.

It'll be interesting to see what happens next. If Apple start making noises about pulling out of Ireland, the Irish may simply decide that they no longer have anything to lose and change their tax laws. OK, that might not ensnare Apple's fleeing billions but it'd certainly trap Google, Microsoft, etc.

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Anonymous Coward

if I had to guess

>The process of moving people and facilities

The only thing that will be moved will be the shell corporations and a whole lot less money will come into the Irish and UK banking sector as it will probably move to some other offshore entity. Good thing all that ill gotten Russian dosh will keep coming though.

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Facepalm

You're taxing us wrong

Someone had to say it.

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Unhappy

Sorry

When I saw your message shortly after posting, I thought to myself "maybe I should post asking why there's no icon for "Don't kill the messenger!"" Now I'm sorry I didn't. Some people are so instantly angry they splat the 'splainer.

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unpopular" or "amoral" practise can easily result in new laws that can outlaw such practises. That's democracy,

Unfortiunately it's also part of the problem. Every time a country introduces more laws to "fix" this problem they also introduce a new set of loopholes that someone (probably in another country) will take advantage of. We get warts, on warts, on warts.

It's even harder to do when you have to deal with several dozen countries which all have their own fiscal frameworks, but all like to pretend they're part of the same system, hence the double dutch irish sandwich or whatever it's called now.

It would be a great deal better to remove tax laws, and simplify the whole process. Unfortunately politicians don't like doing that.

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Anonymous Coward

100% tax

Let's tax everyone and everything 100%... problem solved.

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No idea why you were downvoted, that was as good an explanation of how the tax system works as I could have given and I'm a qualified tax technician.

The law as it stands at the moment is an ass. but it the law.

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Anonymous Coward

Note quite true. The double irish (not taxing non-dom companies) is part of what Apple has been doing, and that is available to all multinationals. However this case is due to the Irish government giving special loopholes only to Apple, over and above what applied to all companies.

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Anonymous Coward

Tax technician? Does that mean you're outranked by Tax engineers?

Does that also mean that Tax is a physical object that needs maintenance?

Can you upgrade Tax with your own hardware or is everything glued in at the factory and sealed?

Does it have a removable battery?

How many USB-C ports does Tax have?

If I put the wrong fuel in will it stop working?

Tax technician...pssh.

As a title thats up there with "public facilities coordinator" or "refuse collection officer" and "executive assistant".

Bog scrubber, bin man and tea maker.

Im tired of stupid titles.

As I work for myself I simply refer to my job as "Techie". Nothing more. Im not the CTO, CEO, Operations and Technical Affairs Committee Chairman, Senior Helmet Shining Executive, Chief Executor of Scripts and Cron Jobs or anything else.

Just an honest straight up techie.

Anyone else posting bullshit titles think twice, have some dignity.

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@Vimes, The Irish government will have to take this to court and they will win, or lose. This will take time. Cook says what he has to say as he works for the shareholders. The "destroying Europe" he could have left out, as it's silly. Apple will operate in Europe in the future too and they have no problems paying taxes when they are forced to do it.

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Tax technicians are outranked by tax accountants. They collect and process all the information required to prepare the tax return under the direction of a tax accountant, then it is checked and signed off by the accountant.

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Anonymous Coward

Oh, I don't think the Irish are stupid for not wanting that €13bn. The money itself would be great, I'm sure, but it would severely damage- if not destroy- Ireland's tax haven status that they've built much of the economy on.

Not that I'd have much sympathy for this personally.

The Irish (and their vested interest chums at Apple) are apparently complaining that this interferes with "their" sovereignty.

Would that be interference in the same scheme that relies on other countries' cooperation in what is effectively a legal fiction that these profits get recorded in Ireland rather than the country they were actually made in?

I'm sure that other countries would be happy to let Ireland have their "sovereignty" back in exchange for not being able to expect them to pander to the re-allocaction of profits by companies doing business in *their* country to Ireland.

Of course, this would destroy the whole scheme and most others which are entirely dependent on leaching direct and indirect benefits at pennies on the Pound/Euro/whatever from other countries in exchange for help with tax avoidance. But you're still entirely free to tax profits on the iPhones/iPads/Apple IIs being sold in *your* country- just no-one else's- so I'm sure that'd be okay.

If Ireland is worried about the jobs- and indeed, their economy- that are dependent on this, well- those jobs are dependent on the aforementioned scheme (and others) and thus are being indirectly subsidised by other parts of the EU anyway. Let's not pretend otherwise.

Ditto the EU state aid rules. You're quite happy to benefit from the EU when it's in your favour, but you don't want to play along with rules that stop you playing favourites. Again, no-one's stopping you from enacting an "Iexit" (uuuurrrrgh) if that's what you want.

(Disclaimer: Maybe I don't have the right to complain about this since I belong to a country that'll be dragged out of ^w^w^w leaving the EU anyway thanks to two of its neighbours in the United Kingdom of Little England and its Minor Provincial Chums. Doesn't mean I have to be impressed by such schemes, though).

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Anonymous Coward

@ AC

Technician : A person who is trained or skilled in the technicalities of a subject.

So Tax technician seems a perfectly valid title.

It seems you (the AC) are the one who has an incorrect/limited view of what a 'Technician' actually is.

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The main issue would seem to be that the Irish government have passed tax laws which results in multinational businesses that generate profit in foreign countries not being subject to taxation on that overseas profit, only on the profit made in Erie. This is not the situation in other countries. The UK for instance, currently gives businesses credits for tax paid in foreign countries and then taxes you on the rest, at normal UK business tax rates. The USA, I think just taxes you again on the lot as worldwide income and doesn't bother with the niceties of double taxation that you might have to shoulder. Other countries, mostly, have similar arrangements. The Irish are effectively running as a multinational corporation tax haven in the EU.

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Flame

Tax Technicians

"Tax technician? Does that mean you're outranked by Tax engineers?

Does that also mean that Tax is a physical object that needs maintenance?"

"Tax technician...pssh."

"Anyone else posting bullshit titles think twice, have some dignity."

Does it hurt to be that much of a muppet? Seriously? Ok, I get protecting "Engineer" and getting all stroppy about stupid titles using the word engineer (I for one get extremely narked off) but ffs, you may wish to go and check what AAT stands for. Formed in 1980 it's one of the primary "non chartered" accountancy professional institutions.

You just insulted over 130000 very qualified, hard working individuals. Now get down off your high horse and apologise for being epically wrong.

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Anonymous Coward

"Just an honest straight up techie."

'Bell-end' seems to be a pretty fitting title, too. Did you consider that "Tax technician" might have been tongue-in-cheek? I'm guessing not, considering the rant you went on.

Anon, as I'm posting from work.

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Indeed, and when the article says "And Ireland is currently sticking to its guns, saying it will appeal the ruling." I'd like to point out that it's the Irish Government/Revenue and not the Irish people that are sticking to these guns. We look at our underfunded and cut schools and hospitals and think, "You know what, that money would come in handy...". Might help out with the homeless issue too...

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Anonymous Coward

Accounting technicians have been around since before computers were invented. Stop being so own-job-centric.

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Re: if I had to guess

"The only thing that will be moved will be the shell corporations and a whole lot less money will come into the Irish and UK banking sector as it will probably move to some other offshore entity."

I think that you'll find that London is one of the biggest tax-haven loving, money laundering friendly, shell company loving places in the world.

http://truepublica.org.uk/united-kingdom/city-london-centre-global-crime-scene/

https://www.rt.com/uk/268072-tax-avoidance-city-london/

http://www.independent.co.uk/news/uk/crime/london-is-now-the-global-money-laundering-centre-for-the-drug-trade-says-crime-expert-10366262.html

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Boffin

Ever heard of the Oxford English Dictionary?

A technician - according to the OED - is " A person knowledgeable or skilled in the technicalities of a particular field; esp. an expert in the formal or practical aspect of an art, sometimes with implications of a corresponding lack of creativity."

Quotes dating to 1833 (were there any USB ports available then?) relate technicians to fields including linguistics, music, dance, culture, and poetry. Strangely enough, no quotes relate to computers or electronics (the most recent quote being from 2006.)

It would seem that someone who criticizes the title "tax technician" is himself the generator of bovine by-products.

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Re: Tax Technicians

"Ok, I get protecting "Engineer" and getting all stroppy about stupid titles using the word engineer (I for one get extremely narked off) "

Actually, "Engineer" - according to the OED - extends about as far as "Technician".

"4. With preceding modifying word: a person considered to have specialized knowledge or skills in a particular field, esp. one who attempts to influence or manipulate human affairs according to scientific or technical principles." (dates to 1720, referring to "spiritual engineers".)

" 5. An author or designer of something; a plotter, a schemer." ( dates to the 16th century with Middle English, with another quote from 1998.)

I think people worried about "protecting" words need to either take a chill pill or at least consult the OED first.

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Tax technician is not tounge in cheek. You can find out how to become qualified as one here - http://att.org.uk/

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Special treatment

That's exactly the point are arguing Apple they've not had any special treatment,which position the Irish government appear to support. I wonder if they do win on appeal will that open the floodgates to other companies suing the Irish tax authorities because they have been paying more than 0.005‰ affective tax rate?

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These kind of back door deals go on all over the world and the deficit in tax they cause is then burdened onto the ordinary working class people instead whilst he companies profits fund lavish lifestyles for company executives and shareholders

But surprisingly or predictably "ordinary working class people" don't seem to get very annoyed about such things for a variety of reasons and as a result don't take to the streets to force a change in the status quo

We are often told that nothing can be done because such companies would just relocate and stop selling their products there, but the thing there is that people wouldn't magically just shrug and not want a tablet PC or mobile phone anymore if apple was removed from the market place or was penalised with huge import duties they would just buy something else instead and other companies would be clambering over each other to fill that void

Similarly if for example starbucks was forced to pay their fair share of tax and as a protest closed all their shops in a country the demand for overpriced mediocre coffee wouldn't just vanish, it would remain and other companies that DID want to abide by the essence of tax laws rather than hiding behind the details would fill that void too

So the problem isn't that governments hands are tied and theres nothing they can do, the problem is I suspect politicians lining their own pockets along the way and putting their own self interest and the interest of people who make cash donations to them personally or their political party above the best interests of the voters

So until that is changed nothing else is ever likely to improve

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Anonymous Coward

Holy shit. 20 downvotes.

This is the promised land for Trolls. The feeding is good here.

I think the 20 downvoters missed the sarcasm...

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The process of moving people and facilities represents a big cost in itself

How? Apple's mythical head office had neither people or facilities.

The more pressing concern is not the past and retrospective taxes, but the future, when Brussels admits defeat on retrospective taxes, and sets the rules for the future....

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Their HQ in Cork apparently has 4,000 people working there.

The technology giant’s Cork base now employs 4,000 people with a further 2,500 people employed indirectly “in the local area”, according to Apple. Only the UK has more Apple employees than Ireland, although this is due to its 37 Apple retail stores, which employ an average of 100 retail staff per store.

The Cork office, which has been open since 1980 and was once primarily a manufacturing site, is Apple’s only global corporate headquarters outside the US. The majority working there are now engaged in non-manufacturing roles such as finance, supply chain management and customer support.

http://www.independent.ie/business/irish/25pc-of-apples-european-workforce-based-in-cork-30487720.html

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retrospective taxes

I don't recall the definitions of what constitutes illegal state aid changing very much over recent years, so to me it would seem likely that whatever arrangement they had was just as unacceptable then as it is now.

Personally I fail to understand how this is a retrospective tax when the rules seem to have remained pretty much unchanged, and the only difference between now and then is the willingness to enforce them.

Add to the mix the fact that large corporations often have access to well funded and competent legal & accounting teams. When you take that into account it ends up being rather difficult to believe that somebody in one of those teams didn't raise the questionable nature of the arrangements *before* the investigation even started.

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The problem is simply that tax authorities worldwide have been trained to negotiate with the rich, by the rich running governments. Now we have truly independent 'well off' eurocrats doing what's right for the ordinary people instead.

It's like you could be well paid to do "the right thing". Am idea that will never catch on in this country.

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Apparently, though, we voted to leave these truly independent 'well off' eurocrats to do what's right for the ordinary people of mainland Europe (and Ireland)

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Would you take a job where the description of your duties said "do the right thing"?

Can you imagine how the reviews would go?

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Anonymous Coward

@Vimes "I don't recall the definitions of what constitutes illegal state aid changing very much over recent years"

Maybe the 2013 change enabled this:

http://ec.europa.eu/competition/state_aid/overview/index_en.html

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Maybe the 2013 change enabled this:

If that's the case then if anything it strengthens the case against Apple IMO. The majority of the complaint seems to be around behaviour in 2014. If the change was introduced in 2013 and Apple had competent accountants working for them at the time then they should have been aware the deal wasn't tenable and was likely to be challenged.

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Their HQ in Cork apparently has 4,000 people working there.

It's all in The Cloud, see: Those 4000 people are fully visualized and only instantiated whenever and where-ever someone is looking.

Thanks to visualization, businesses can have a HQ *everywhere* one is needed for a puff piece of political favor. Saves a lot of resources, that.

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Anonymous Coward

Doing the right thing

Funnily enough if you go for a job at RBS it is one one the things they score you on.

i.e. Give an example of where you have 'done the right thing' by a customer.

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..."Would you take a job where the description of your duties said "do the right thing"?"....

I believe the medical professions (for humans and animals) aspire to this aim.

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Devil

Re: Doing the right thing

"if you go for a job at RBS it is one of the things they score you on"

...and presumably tell you that you've failed the interview.

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Would you take a job where the description of your duties said "do the right thing"?

That's actually quite explicit in my terms of employment, it's called "behave ethically", and I could be disciplined/fired if I don't.

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The problem is simply that tax authorities worldwide have been trained to negotiate with the rich, by the rich running governments. Now we have truly independent 'well off' eurocrats doing what's right for the ordinary people instead.

More likely these "truly independent" eurocrats have been motivated by a different set of "rich" who are running other governments/EU bureaucracy. Presumably ones who are managing to benefit from this particular arrangement.

As we've recently seen ex "truly independent eurocrats " have managed to fine very lucrative jobs the moment they've stopped being eurocrats.

This makes believing they are truly independent a little more difficult.

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And don't forget the lobbying efforts of large companies that influence legislation,regulation, and elections. As an American I like to see the process corruption spread out a little so we don't have all of it here.

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Shirley you're a slavering statist bootlick, secretly in love with the stamping jackboots of the unelected eurostazi and their grossly undemocratic anti-sovereign overreach. Naturally, given your flagrantly europhile proclivities you mean insisting on a high-tax, high-spend regime - intent on propping up the unsustainable 'progressive welfare state' - 'Do the right thing', my arse.

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Please pay up and share some of the mile high cash mountain.

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Anonymous Coward

Such a nice ethical company. Glad I've never bought anything made by them. Nor will I ever do so. Austerity for the 99%, tax evasion for the 1%. Neoliberalism is not capitalism. Its a rigged market, state subsidised, unfair, and unsustainable.

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Anonymous Coward

>Such a nice ethical company.

Yeah really Google (and their newest business model clone Microsoft) are so much better.

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TVU
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"Such a nice ethical company. Glad I've never bought anything made by them. Nor will I ever do so. Austerity for the 99%, tax evasion for the 1%".

^ Ain't that the truth. I have zero sympathy for Cook's outrageous bleatings or for his parasite tax planners because their deliberate and unethical tax avoidance scams means that us ordinary punters alone pay the price of austerity.

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Some of these morons really believe Apple is alone in taking advantage of Ireland's tax law, and Google and others are paying much more. Talk about denial. Apple is TOTALLY taking advantage of Ireland's laws, but don't act as if they alone are doing it!

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re: Google and others

The Commission needs to start somewhere. Actually it started with Amazon, BASF, Fiat and Starbucks. I trust Google. Microsoft, ... will be dealt with as well.

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Anonymous Coward

>>Such a nice ethical company.

>Yeah really Google (and their newest business model clone Microsoft) are so much better.

When did he say they were. We all know that they're all cunts and they're all at it. It's easy to spot them by their adverts:

- An abundance of white & bright colours

- A popular pop song from the past stripped down and played very slowly in a way that manages to be patronising

- A bastard bloody ukefuckinglele

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