back to article Screw EU! Apple to fight back over €13bn tax bill

Apple and the Irish government are to appeal a European Union ruling that it should pay up to €13bn (£11bn) in back taxes in Ireland – in a decision that will surprise no one. Back in August the European Commission ruled that tax arrangements between Ireland and Apple were in breach of the EU's state aid laws, and said that …

  1. djstardust Silver badge

    Apple

    Are a really horrible company obsessed with greed and margin. I genuinely hope they have to pay every penny due.

    1. Anonymous Coward
      Anonymous Coward

      Re: Apple

      If Apple fails then next on the list will be

      Microsoft

      IBM

      Adobe

      Oracle

      Google

      and a host of others.

      As the EU have stated, Apple is the biggest target so thats why they went after them.

      BTW, it isn't Apple that are in the wrong. It is the legal (according to Irish Law) deal they did with the Democratically elected government of the Irish Republic.

      The EU didn't like the sort of deal that apple and the rest have done with Dublin.

      Once BREXIT happens our Gubbermint can do those very same deals and the EU can go piss into the wind.

      All is good ja?

      1. Anonymous Coward
        Anonymous Coward

        Re: Apple

        [looks at list of companies...]

        So there's an upside after all..

      2. DaveDaveDave

        Re: Apple

        There wasn't any deal, though, that's the point. In which case the EU's case is ludicrous, and indeed it is, on any inspection, utterly laughable.

        1. Anonymous Coward
          Anonymous Coward

          @DaveDaveDave Re: Apple

          "There wasn't any deal, though, that's the point. In which case the EU's case is ludicrous, and indeed it is, on any inspection, utterly laughable."

          So you have read the 130 page report (http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38373) in a few hours after it was published on Monday and have looked at all the details and arguments and decided that it is ludicrous.

          Amazing, you must be a very expensive high-profile business commentator or very well versed international lawyer?

          Either that or you are clueless.

      3. Pen-y-gors Silver badge

        Re: Apple

        "Once BREXIT happens our Gubbermint can do those very same deals and the EU can go piss into the wind."

        Errrmmm....no actually. Well, technically yes, but most international trade treaties tend to include bans on that sort of thing as it would be unfair. You want to trade tariff-free with the EU? No state aid. If the idiots in the UK govt decided to go for that sort of help then I doubt many companies would come here as they couldn't sell UK made stuff abroad.

        By heck, and they told us this Wrexit thing would be easy.

      4. This post has been deleted by its author

    2. DaveDaveDave

      Re: Apple

      This isn't an argument about whether Apple owes tax. It's an argument about whether they owe it to the EU or to the US. The EU has made an absurd claim in an attempt to gain at the expense of the US, that really is all there is to this.

      1. allthecoolshortnamesweretaken Silver badge

        Re: Apple

        Dave, as I assume you are an American TaxpayerTM, I'd like to hear your take on this:

        Bloomberg, 2016-12-07: Americans Are Paying Apple Millions to Shelter Overseas Profits

    3. NoneSuch
      Coat

      Re: Apple

      If they are forced to pay that fine, date any check for the day after Brexit takes effect.

  2. W Donelson

    "created, designed and engineered" in the USA

    Aren't those words the same meaning, considering iPhones?

    I love Apple, but the tax system is very broken. They can be sued by their own shareholders if they don't take advantage of tax loopholes. Apple is a nice fat wealthy target for hungry lawyers.

    1. Lord Elpuss Silver badge

      ""created, designed and engineered" in the USA

      Aren't those words the same meaning, considering iPhones?"

      Yes, Yes, and No.

    2. Ucalegon
      Go

      Taking advantage of tax breaks is possibly not the same as falling foul of state aid, or is it?

      No, I've changed my mind. Lowering business taxation is the acceptable face of state aid.

    3. tweakpanda

      "created, designed and engineered" in the USA

      LOL VERY LOUD ... The hardware is completely made in asia ... only the apple and the ever-same-design is made in usa ... very boring ... very annoying ... and in future ... very dead ... for sure

      1. maffski

        @tweakpanda

        Except Apple can get away with charging twice as much as say Huawei for the same functionality. So that extra value is being "created, designed and engineered" in the USA.

    4. DaveDaveDave

      The tax system isn't broken, it's deliberately designed to work this way: corporation tax is a bad tax, and the EU tax laws were designed to encourage tax competition so as to drive it down to zero.

      There's no such thing as a tax loophole, thanks to the general anti-avoidance principle. Anything that's just a sham has no weight.

    5. Anonymous Coward
      Anonymous Coward

      "They can be sued by their own shareholders if they don't take advantage of tax loopholes."

      No they can't... Well technically they could be sued for painting their office white but it doesn't mean it is a legitimate lawsuit,has any weight or wouldn't lose in court. There is a myth created by business execs and activist shareholders that companies are required to commit morally questionable acts as to not do so would be a dereliction of their duty towards their shareholders.

  3. Anonymous Coward
    Anonymous Coward

    Just get on board already!

    Did you know that there is no reciept for any payment Jesus ever made. But year after year there is millions of tax forms proving Jesus gets paid. So what is all the fuss about people? I for one am grateful to have Jesus in my pocket, and if you're not, I'll pray for you this holy season celebrating the birth of our lord at www.apple.com/giveth/thy/lord

    Merry Christmas anyways...sinners

    - Adam

  4. Captain Scarlet Silver badge
    Paris Hilton

    Company's intellectual property held in Ireland

    So they pay tax in Ireland based on breach's of their intellectual property and sales in Ireland only?

    Feel free to correct me as it feels weird to hold your IP in a completely different country and claim its Created, Designed and Engineered in the USA

    1. DaveDaveDave

      Re: Company's intellectual property held in Ireland

      They pay tax in the US, because that's where the profits are made. The EU is trying to grab a share by insisting that the do-nothing vehicle in Ireland which allows Apple to sell to the EU single market is actually where the profits are made.

      1. Schultz
        Stop

        "They pay tax in the US, because that's where the profits are made."

        Erm, no, they sell phones internationally and make profit pretty much wherever they sell their products. And they don't really pay tax on those international profits, that's why they play the Irish sandwich game, routing all profits to this beautiful island. That's also why a Mr. Cook tries to convince a Mr. Trump that a tax holiday would be greatly appreciated.

        As the EU has a common market, it's absolutely legal that they avoid the punitive ~15% German tax rates and instead choose to locate their commercial endeavor in Ireland, but that does not excuse them from paying the punitive ~12% Irish tax rate, or the 35% US tax rate (there are international treaties to ensure that they don't have to doubly pay tax on their earnings). As there are some companies paying the Irish tax rate, but Apple didn't, they did get some unfair state-aid that wasn't offered to the local plumber.

        I believe the legal situation is quite simple, but it's also obvious that Apple would rather spend a billion Euros on lawyers than 13 billion on their tax bill. So buy the popcorn and prepare for a long show.

      2. JesC

        Re: Company's intellectual property held in Ireland

        This might be beneficial to you https://www.youtube.com/watch?v=BqsSyD5H9b8

  5. The Nazz Silver badge

    To reduce the legal delays and sheningans ....

    Firstly, seize all their equipment in Ireland*, then also seize their IP ( as it's Sooooooooooooooo valuable)

    Then let them argue the toss.

    Losing lawyers don't get paid (provided they're on Apple's side anyway)

    Soon put a stop to it.

    *isn't that what the coppers would do here, take all your compute stuff first, and maybe give you it all back, in working order, if you're very lucky?

    1. aks

      Re: To reduce the legal delays and sheningans ....

      So you're advocating that the EU police invade Ireland and seize private property there?

      The Irish Government and Gardai might have something to say about that.

  6. Pseu Donyme

    Unless they have radically changed their ways recently Apple's claimed "26% tax rate on its worldwide earnings" doesn't seem credible or at least it is very much at odds with the findings of the 2013 US Senate investigation which found that Apple had managed to arrange to be tax resident nowhere for its earnings outside the US.

    1. Malcolm Weir Silver badge

      Don't forget sales tax / VAT... or property taxes... you can be sure Apple didn't!

      1. aks

        Evidence?

        Where did you buy your iPhone without paying VAT? I'm curious.

        1. Ken Moorhouse Silver badge

          VAT zero-rated

          Apples are zero-rated in UK.

          ...unless they're being sold by this guy...

          https://www.youtube.com/watch?v=lBUJcD6Ws6s

          (pureed apples are standard rated)

        2. Anonymous Coward
          Anonymous Coward

          0% tax on your jesus phone

          Just go to Delaware, Oregon or New Hampshire to buy your kit. Applies to Samsung, Sonym HTC etc as well.

          No state sales tax in those states.

      2. LDS Silver badge

        Apple doesn't pay VAT. You pay VAT when you buy an iPhone. VAT is a tax paid by the customer, not the company. The company just collect it and turn it to the State.

        (Apple may pay some VAT on its non deductible expenses)

    2. DaveDaveDave

      Sigh. Not this claptrap again. Apple can't repatriate profits to the US without paying US corporation tax on them. It's holding some proportion of them offshore, but that only delays paying the tax on them - they can't be returned to shareholders that way.

      1. Pen-y-gors Silver badge

        Repatriation?

        " Apple can't repatriate profits to the US without paying US corporation tax on them"

        Except when a kind President thinks that it would be a good idea to have an amnesty and let profits be repatriated tax free or at a very low rate (plus a generous donation to his election fund). Now, which Prez seems the most likely to do something like that?

  7. aks

    The EU contend that Apple has received preferential treatment.

    As I understand it, the Irish tax rules apply to any company and that many other international corporations are using the same financial arrangements as Apple.

    There has been no suggestion that Apple have evaded tax. The argument is that they have used aggressive tax avoidance methods, but that's a UK law. All rules were cleared by the Irish tax authorities and by very heavy-duty lawyers.

    1. Anonymous Coward
      Anonymous Coward

      Apparently, the EU found that in Ireland, there are two sets of rules, one that works for companies doing local business, and one that works for companies doing international business. Meaning that small local companies pay MUCH more taxes than humongous international ones.

      So the ruling didn't say it's tax evasion, as it's not under Irish laws. It's Irish laws that are creating an unequal playing field, which is a big no-no in a fair pan-european single market.

      So yes, many other companies are doing it, and Apple and Ireland were not the first to be sued for doing just that. They're not the pure innocent little snowflakes they say they are.

      It has already been pointed out maaaaany times that they are free to have a single, low tax rate, as long as it applies the same to all companies, big and small, local and international.

  8. MrDamage

    What's the punishment if they lose?

    The EU tells Apple to pay Ireland even more monies that it doesn't want?

    1. Anonymous Coward
      FAIL

      That should be the main headline

      That Ireland is protesting alongside Apple against the EU, that's just horrendous that Ireland has a get out of jail free card on the tax (the EU made us do it).

      Apple apparently employs 6,000 people in Ireland there's no way that PAYE or employee taxation can be claimed to balance the scales, or even keeping the electorate happy.

      Epic fail for the Irish government.

      1. DaveDaveDave

        Re: That should be the main headline

        But Ireland's protesting because the CT isn't due there, collecting the CT would make Ireland poorer overall, and the entire thing is idiotic. The EU has just ignored express provisions of EU law in this case.

  9. Jeffrey Nonken Silver badge

    No wonder they've been trying so hard to beat up Samsung for their lunch money.

  10. P. Lee Silver badge

    Ireland has been operating as a tax haven

    EU is annoyed.

    Only small, disreputable hot countries, rich city-states and feudal fiefdoms are supposed to do that.

    I suspect the loophole was/is legally valid.

    1. DaveDaveDave

      Re: Ireland has been operating as a tax haven

      The funny part is that the EU's tax system was deliberately set up precisely so as to encourage tax competition as practised by Ireland in this case. Ireland could not have been more compliant with the spirit and letter of EU corporation-tax law.

  11. Anonymous Coward
    Anonymous Coward

    I detest Apple, but ...

    Deferred tax paid upon (eventual) repatriation to the US is *not* the same as no tax.

    Current funds are held in Ireland temporarily only. Hence Apple's stated claim of a 26% effective tax rate (unless they get Trump to propose a repatriation holiday/discount).

  12. Jove Bronze badge

    The real target is more likely to be Ireland's Corporate Tax rate with Apple being the pawn. I also do not understand why Ireland does not just reject the interference of the EU in matters outside of it's remit.

    1. LDS Silver badge

      Because illegal state aids are within EU powers. Italy has a big bank that's on the verge of collapse but can't easily pour taxpayers money into it because it would be an illegal state aid. The same reason other four smaller bank were left to collapse. I can't see why Ireland should be exempt from the same rules, especially since, unlike Italy, it gets more money from EU than those it pays...

      Apple and Ireland just have to publish the evidences the 12.5% company tax was paid... shouldn't be that difficult, right?

  13. pauleverett

    the question everyone should be asking, is would Apple be in Ireland, if the Irish Tax system, was not subsidizing them? The clear answer is no. The growth that Ireland has seen, came about by Ireland taking all the advantages that the EU offers, whilst screwing over all other member states over, by attracting corporations, on unequal terms. They have been having their cake, and eating it, at the expense of other states. IMO, Apple should pay up, and Ireland should either leave the EU, or comply. If they are not prepared to play by the same rules as the member states, then they need to think about how they would fare, without the EU. NOT good me thinks. I am frankly sick to the teeth of countries that want to reap the benefits of working together, but then take advantage and be quite happy to piss on their partners. That is not what a partnership is.

  14. pauleverett

    why take your coperation to irland?

    lets have a look at why any corporation would take their HQ to Ireland.

    1. Fantastic infrastructure ? no

    2. Highly educated workforce with the skills they need? no better than anywhere else.small population.

    3. plenty of housing ? not really.

    4. secure? not really. they depend on others to protect them.

    5. easy to get to? er no...

    4. cheep energy? hell no.

    5. English language? sorta, once you get used to it.

    6. A Gateway to the EU. yes.

    7. huge tax incentives? hell yes.

    there is no reason any foreign corporation would ever want to HQ in Ireland, other than massive tax advantages, and EU access.

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