I'm quite sure Apple thinks it's not a special treatment....
... but just the one is entitled to receive just because it's Apple.
Unluckily for them, Vestager is still there...
Apple has appealed against the European Union's 2016 decision to impose a €13bn tax bill on the iPhone maker's Irish subsidiary. The case is part of a wider EU crackdown on multinationals' tax arrangements but hinges on issues of competition law and state aid. The EU demands that Apple pays the missing billions to the Irish …
Does Apple Ireland actually license Apple IP to the Apple subsidiaries in the rest of Europe? No, but the tax laws are so broadly written that this dodge can be used to hide profits in low-tax jurisdictions. I don't mind the low-tax jurisdictions themselves, but they shouldn't be abused to transfer profits from higher-tax jurisdictions.
Who said that Apple was doing anything illegal?
Ireland 's taxes are within it's remit and Apple has done nothing more than taken advantage of what is on offer. The fault instead lies with the EU for entering an area that is outside of it's remit.
If it wasn't for the tax advantages of being in Ireland, none of the big companies that have their European HQ's there would have gone to Ireland. I'm talking about: Google, Microsoft, Facebook, Paypal, eBay, LinkedIn, Accenture, Johnson Controls etc etc etc.
It's a simple choice for the Irish gov't: run the lowest corporate tax regime in the EU and accept lower corporation tax receipts, in exchange for a massive domestic employment boost and inward investment. These foreign companies employ over 1/2 million people (Irish citizens and EU citizens working in Ireland) nearly a quarter of the entire Irish workforce who all pay income tax there and spend their money locally, and these companies still pay over 3/4 of all its corporation tax take. Hence Dublin in sometimes referred to as the EU's Silicon Valley.
That's why the Irish gov't itself is fighting this. It's worth more to them in the long run to forego the €13bn windfall and not scare off all these companies employing its citizens and propping up the entire economy.
The problem is the "sweetheart deal" thing. Jenny McDonough who runs a eight-lorry transport company out of Donegal doesn't get the "practically no Corporation Tax" deal Apple and the big multinationals are offered by the government. Under EU law either the Irish government gives everyone who operates a company in Ireland the same tax deal as Apple and co. gets or Apple pays the same rate as Jenny does. Tax subsidies for large companies like this are banned in the EU to prevent a race to the bottom by smaller countries. Irish Corporation tax is one of the lowest in the EU at 12.5% and that's not a problem but Apple and co. weren't even paying that reduced amount.
The 13 billion Euros tax bill amounts to the difference between what Apple should have paid under Irish tax laws and what they actually paid. If a big company did that in Britain there would be an uproar and questions about who authorised it, what sort of personal backhanders were involved etc. In Ireland it's business as usual.
"Ben there, Dunn that, bought the Taoiseach."
The 'sweetheart deal' was grandfathered in. The EC was aware of it, and was ok with it. When this blew up under Vestager, Ireland changed its laws to get rid of the opportunities to create the classic dodge, the Double Dutch Irish Sandwich. Apple changed *its* structures to comply and of course be as tax efficient as possible. The problem is that the EC (under Vestager's direction) decided to institute retroactive relief, insisting that Apple pay 13 billion for supposed under-taxation in years past. You don't simply go at it that way. That's why Ireland and Apple are fighting this. Apple's not fighting the 13 billion (that's change it finds down the back of Tim Cook's office sofa in Cork), it's fighting the retroactiveness of the decision.
I suspect that if Vestager had said "from this date, your 1980's tax deal with Ireland is null and void, make sure you are compliant", then Apple wouldn't have made a fuss, and Ireland wouldn't have either.
Apple and Eircom have moved their Europe / Ireland HQ's to Jersey. UK has refused to implement some EU directives on Transparency, Money Laundering, Offshoring etc. See also Isle of Man, Gibraltar, Bermuda, British Virgin Is, Cayman etc. There is a reason that some Elites in the Tory Party want a No Deal Brexit and why under Theresa May a motion for a deal without a backstop was also defeated. The problem is that all the Anti No Deal majority can't agree on what deal they are for, which is why EU is worried about a Singapore off the European mainland.
Singapore and Panama are actually reforming.
The Swiss have passed most of the EU banking & tax legislation into law.
This case is about historic underpayment, where Apple didn't even pay a tenth of Ireland's Corporation Tax. The manufacturing is now virtually gone in Cork, Apple has most stuff made in China now. They borrow money using offshored assets as collateral to spend in USA to avoid USA tax, then claim the interest as an overhead of doing business in the USA!
Except that there is no evidence for the political agenda you mention - that is just hard-left agenda narrative.
Switzerland has voted twice to reject the EUs interference.
Others are reforming tax policy - but mainly due to changes in the USA. The main issue here is that the EU is seeking to extend its remit into matters of tax via the back door - an area that teh Federalists see as their remit.
The Swiss Government threw out the People's Referendum on EU Immigrant rules and Movement. They simply told the people that the EU rules were reasonable and that the Referendum proposal was unworkable. They'd have lost grants and staff in Swiss Universities.
The Swiss only joined the UN in recent memory, and gave Women full vote not long before that, so no surprise they have not joined EU yet.
They won't either. They like their independence and neutrality. In many respects they will accept the appropriate EU regulations and directives, but many they do not need to apply (and don't). It suits them the way things are right now.
Just pointing out some conflation here (despite my upvoting you):
1. The UK has pointed out (rightly) that the British Overseas Territories and Crown Dependencies (such as IoM, the Channel Islands, BVI, Bermuda, Caymans etc) are self-governing and that only *they* have the right to decide what they implement. None of them are members of the EU, neither are they counted as being part of the EU because they're not. Some have certain... benefits (such as the classic reduced VAT thing that had the Channel Islands turn into the biggest VAT-free consumer market in the EU). As such, the Westminster government telling them what to do is interference in their internal affairs. This is not to do with Brexit and the Tory elites, but a centuries-old pact that remains in place. Should the pact change? Absolutely. Should the Crown Dependencies and British Overseas Territories reform? Absolutely. But for some this is their bread and butter and rightly they'd object to having to kill their income stream. ;-)
2. However, you are quite correct in surmising that the incoming EU directive on financial transparency would put the cat amongst the pigeons. The different exposés definitely pointed at a culture of 'wink wink nudge nudge' and 'we won't ask too much' in some jurisdictions, but at the same time showed that the difference in cultures causes this... Like the Swiss, the UK have the view that if it's not specifically forbidden, it's fine, whereas many other nations (like German and the Netherlands) have the view that unless it's not specifically permitted, it's assumed to be forbidden. Add to it the fact that some cultures (such as the Swiss, Dutch and Germans) expect you to be honest, while the English believe that if they pay the bare minimum they must pay, the rest is inconsequent. So the dissonance in cultures causes loopholes. Big ones. Ones that allow Double Dutch Irish sandwiches (which the Dutch won't fix because they'd prefer a small slice of a pie than none at all, and that drives the Dutch public nuts because they *know* that's wrong and allows for financial/taxation abuse).
The European Commission should defer to the Irish government in this regard. If Ireland says "we're ok with that", then the EC should pressure the *government* to do something. Ditto for any Irish business feeling wronged by the sweetheart deal Ireland gave Apple. If course, if the impetus that drove Vestager to start this investigation in the first place comes *from* Irish companies complaining bitterly to the EC that Apple got this deal and it's making them anti-competitive, then that's a different story.
As for Apple using its assets offshore as collateral... is it legal? Yes. Is it tax-efficient? Yes. Would you do it if you had the opportunity to? I bet you would, unless you do feel guilty/morally obliged not to :-)
It's so hard to understand that has nothing to do with the illegal state aid accusation?
EU accused Apple and Ireland to enter an ad-hoc deal which allowed Apple not to pay the lawful Irish company tax rate but an abysmal lower ones - on taxes owed to Ireland only.
Say Italy had offered FCA, when it formed, a special 0.0005% company tax rate to avoid it selecting UK and Netherlands as its legal and fiscal residences. That would have been an illegal state aid.
While the fact FCA selected those residences to pay less taxes is OK under current EU rules (until they are modified - as happened with the "sandwich", which won't be usable starting next year), as long as nor UK nor Netherlands offered "behind the door" ad-hoc deals.
Except that's not what's happened. What *has* happened is that Apple did use the classic double Dutch/Irish model, with *one* difference: Whereas all other multi-nationals used two separate companies (literally different company registrations, etc etc), Apple was allowed to use one with two internal branches doing the same thing. This apparently is what Vestager says is not fair (because her investigation claims that it was not offered to others). But all that is now null and void anyway because Ireland changed its tax laws to make such vehicles obsolete. Apple now complies appropriately (and uses a Jersey company for some of its business *ahem*).
Except that there was no subsidy - the tax applied to the revenue passed through the Irish businesses which is lawful under international laws.
If the EU continues down this route there is no reason why the USA and others can not impose sanctions on EU businesses.
That's not the only reason. At the time a lot of these U.S. companies set up, Ireland was also a lower wage environment compared to the UK (that changed around 2000, though), but also English speaking (of a sort), so easy for the yanks to deal with.
Add to that the Netherlands, Cyprus, much of the Nordic members, etc.
The issue is not English - that is widely spoken, the issues are technical expertise, corporate law, taxation, other costs of investment/operations, attitudes and get-up & go.
Nope, sorry: it is not about a subsidy, it is the EU trying to force Ireland to change it's tax policy to include taxation of non-resident business income.
So in short - it is the EU interfering in a sovereign tax matter - that is why Ireland is appealing the judgement.
> "in short - it is the EU interfering in a sovereign tax matter"
And that, in a nutshell, explains Brexit. The 1975 referendum to join the "European Community" of like minded but independent sovereign states, in a loose trading block, was never about handing over that level of control.
Talk to the old timers who voted in it. They'll tell you they never voted for the EU as it is now, and would never have voted to join if they'd been told the truth about how it would turn out.
Or indeed dig out old TV footage of the original EC referendum for & against debates. The Join side explicitly denied it would become what it has.
That's why so many older people voted to leave, because whilst they voted to join, they never wanted nor voted for the EU, and the Brexit referendum was the first proper chance they had to say so.
What defies reality and common sense is Apple and others expecting that a set of loopholes that allow them to pay effectively ~0% taxes for their operations in the EU will remain open forever. The EU addressing the issue (at long last) is a step in the right direction.
It's an attempt by the EU to retroactively apply interpretation (not laws) to an existing arrangement.
The EU is using subjective methods to override clear existing law. Apple and other global companies will apply existing law to the best of their ability. They try to minimise their costs (including tax) because if they didn't do that they'd be sued by their owners (shareholders) for negligence.
"It's an attempt by the EU to retroactively apply interpretation (not laws) to an existing arrangement."
"to override clear existing law"
NO, and NO.
As per EU rules, It's illegal for the Irish government to allow a company, regardless of it's size or the employment it creates, to pay far less tax than what the rest of companies in the country pay. That's the rationale for this -long overdue- action by the UE.
>Well, there goes my idea of reducing tax on companies which employ more people at a better living wage.
Well, they could actually pay their employees more, this would have the effect of reducing the net profits subject to corporation tax... It would also mean the government would receive more 'tax' in the form of personal taxes - so a win-win situation... Somehow I don't expect the bean counters will see it that way...
Provided their employees are in the UK/EU, they should get some discount. Ideally, once an employee reaches a specific salary (not too low nor too high) then the company no longer receives a tax discount/rebate/whatever on that employee. They should employee more people at better wages.
Ireland did not do anything illegal, and it complied with international tax law. Apple did not do anything illegal by taking advantage of what was on offer.
The EU is interfering in the matter of taxation which is outside of its remit and applying judgement retrospectively.
>"As per EU rules, It's illegal for the Irish government to allow a company, regardless of it's size or the employment it creates, to pay far less tax than what the rest of companies in the country pay."
I am sorry, this is not correct. Under the EU rules a special tax regime or tax exemption would be considered a form of state aid. The state aid is generally prohibited in the EU, however if one asks them nicely, it is ok (meaning, if it is approved by the Eurobureacrats following the established procedure, then it is legal). The current list of approved state aid recipients can be found e.g. here:
Ford, Coca Cola, Fiat, Renault, Dell, Amazon, Volvo, BMW, FIAT, Peugeot, Samsung, Johnson&Johnson, Pfizer, Nissan, Skoda, Glaxosmithkline, Rackspace, HP, Sony, Barclays, IBM & a lot of other big names are among the recipients of 'legal' state aid.
The forms of 'legal' help include, among others, 'tax benefit', 'tax allowance', 'tax credit', 'tax relief', 'tax grant', 'tax premium' and 'tax exemption'.
The problem with Apple is, the European Commission determined Apple's Irish tax arrangements to be 'incompatible' (not approved) state aid, and asked Apple to return the monies plus interest (as free use of the monies is also a form of state aid). They are not accused of tax avoidance, they are asked to return the 'state aid' where the due process was not followed.
The Irish Government are apparently more than happy to keep the existing scheme since it is much more beneficial for the Irish finances in the long run than getting the 'aid' back and risking quickly losing the largest and most competitive part of the economy, becoming [again] yet another indebted EU country with no jobs. I hope this is not what the EU bureaucrats are trying to achieve.
Sometimes I wonder if the EU economy would be better off competing as a single block with other large economies rather than trying to ensure that all economies inside the block are 'equal'. For example, by making sure that foreign investment and high-tech jobs prefer to stay in the EU rather than go to China/Asia.
"The EU Commission is trespassing into areas beyond anti- competitive matters into tax rates applied by Member States to businesses based in the territories."
In your opinion, exactly what part of "having a company paying a small fraction of the taxes other companies have to pay in the same country" falls out of anti-competitive behaviour?
"Taxation laws are outside the remit of the EU"
Unless they conflict with anti-competition laws. Said anti-competition laws aren't just EU laws, but are also included in Irish laws, as per EU rules member countries laws must include and comply with EU laws.
"The arrangement was legal under Irish and international law"
Actually it isn't even legal under Irish law (see my last paragraph), it isn't legal under EU law, and regarding international law, please be a little bit more specific.
"Yet tax rates are not within the EU's remit"
Tax rates themselves aren't, but state aid is.
"The European Commission has ruled that tax arrangements between Ireland and Apple were in breach of the EU's state aid laws"
(Quoted from the original 2016 article in ElReg regarding the EC ruling: https://www.theregister.co.uk/2016/08/30/eu_commission_rules_on_apple_ireland_tax_sweetheart_deal/ )
@Zolko: "They can't ask for 10% tax from one company and 0.005% from another."
Why not? They can apply different tax rates to people earning different salaries, having different number of children, etc. They should be able to apply different tax rates to different businesses, e.g., employing different number of people, operating in different industries (that may be regarded and strategically important/beneficial/etc. for the economy as a whole), and so on.
The above is a general statement, not related to conditions of Apple/Amazon/Google in Ireland specifically, implies legal transparency, and does not take into account conditions that may or may not be imposed by the EU (aid, etc.). The point is that there is in general no principle that would specify a linear tax rate for all people or all legal entities.
Sure, but the rules must be in law, compatible with EU rules, and equal for everyone.
You can't make ad hoc rules for a specific entity behind a closed door. The latter is illegal state aids under EU rules.
Would you like to be taxed more than your neighbour, everything the same but your neighbour knows the right people, and got a "special deal" you can't have?
@codejunky, I read it the other way round!
The down votes were from the Brexiteers who don't believe the reality that EU member states actually retain sovereignty and decide the matters on which they are happy to agree with each other through the EU. In this case Ireland had agreed not to allow unfair competition and with the Apple sweetheart deal has been found to have been lying...
"The down votes were from the Brexiteers who don't believe the reality that EU member states actually retain sovereignty"
I find that harder to believe as sovereignty over tax has obviously been handed to the EU for this to be an issue.
"In this case Ireland had agreed not to allow unfair competition and with the Apple sweetheart deal has been found to have been lying..."
The interesting problem I find with the Ireland/Apple thing is the wrong people being fined. Surely if the Irish gov made such a deal it is the Irish gov at fault and needing to be punished. I wonder how long until business (and maybe people) have to check with the EU instead of the member country.
I find that harder to believe as sovereignty over tax has obviously been handed to the EU for this to be an issue.
I see, you're obviously being a little thick, this is about 'fair competition' between member states, something the EU28 agreed would be policed by the EU.
The EU isn't saying anything about whether Ireland's tax rates are fair or unfair, just that Irlenad failed to apply its tax laws openly and equally; giving Apple a private sweetheart deal. this quite clearly fall within the remit the EU28 members agreed.
The interesting problem I find with the Ireland/Apple thing is the wrong people being fined. Surely if the Irish gov made such a deal it is the Irish gov at fault and needing to be punished.
Once again being a little thick...
The EU is telling the Irish government they are at fault because they made the sweetheart deal and thus should have collected the tax according to their published tax laws. Hence the Irish government have had to ask Apple to comply with Irish tax law and pay the outstanding €13bn tax bill. Apple has paid the tax bill, but dispute whether they should be liable for the back taxes and has been funding the Irish government to fight the EU on their(Apple's) behalf...
"I see, you're obviously being a little thick, this is about 'fair competition' between member states, something the EU28 agreed would be policed by the EU."
Except that it is not; the arrangement was legal under Irish and International Tax law, taxation is outside the remit of the EU, Member States have not pooled their sovereignty over taxation, the EU is arguing that Ireland should have considered the earnings of Apple businesses not domiciled in Ireland not the actual offer, and the EU is attempting to apply a judgement retrospectively.
>Except that it is not; the arrangement was legal under Irish and International Tax law.
The arrangement was only 'legal' under Irish law if you accept that the Irish government is above the law and hence can make private arrangements that disregard the public laws and which are not publicly debated or voted upon by the Irish legislature.
>taxation is outside the remit of the EU, Member States have not pooled their sovereignty over taxation,
The EU isn't demanding the Irish change their tax rates and rules, just apply the rules they have published, in line with their commitments made to the EU28 on "fair competition" and which the Irish government enshrined in Irish law.
> the EU is arguing that Ireland should have considered the earnings of Apple businesses not domiciled in Ireland not the actual offer, and the EU is attempting to apply a judgement retrospectively.
Because the Irish government did not apply the published rules about foreign earnings to Apple Ireland. I think what you are missing is that in Ireland there is a tax efficient corporate structure through which foreign earns can be passed; Apple didn't use this approach and instead passed their non-dom revenues through the business that was set up to do business in Ireland and hence was liable to pay Irish taxes on ALL of its earnings.
"I see, you're obviously being a little thick, this is about 'fair competition' between member states, something the EU28 agreed would be policed by the EU."
Sorry you think that but you have just said in your response quoted above that they handed over tax sovereignty. Pls reread before thinking I am being thick.
"The EU is telling the Irish government they are at fault because they made the sweetheart deal and thus should have collected the tax according to their published tax laws"
"Hence the Irish government have had to ask Apple to comply with Irish tax law and pay the outstanding €13bn tax bill."
The EU dictated to Ireland that they must demand money from Apple that Ireland did not by sovereign tax law apply to Apple. Irish tax law is to allow Apple this deal (regardless of if we agree with it). Ireland made this decision not Apple.
"Apple has paid the tax bill, but dispute whether they should be liable for the back taxes and has been funding the Irish government to fight the EU on their(Apple's) behalf..."
Because the EU is punishing Apple for tax it does not owe under agreement with Ireland. The EU taking issue with Ireland and its handling of tax.
@codejunky: Apple are not being "punished" - they are, at present, being asked to pay what anyone else with that amount of taxable assets would be expected to pay. So, the same, pro rata, as a computer repair shop in Cork. That is restitution, not punishment.
Of course, this is being examined by the highest court in the EU now, and the conclusion is far from certain. The case, and its judgment, will be studied by tax lawyers for years to come. Textbooks will be being rewritten as a result.
"Apple are not being "punished" - they are, at present, being asked to pay what anyone else with that amount of taxable assets would be expected to pay."
Aka Apple has an agreement to pay tax in the country. They did that. They are now being told by the EU to pay more tax than they agreed to pay. The astounding proof of this is Ireland (the country they have that tax agreement with) are even telling the EU this agreement stands. So Apple is being punished, the country taking the tax (above the agreed tax) doesnt want it but the EU is dictating money from Apple it doesnt owe to the country that didnt tax that much because the EU dictates so.
"That is restitution, not punishment."
Yes it is. I dont care if you agree or not with the tax deal but the EU doesnt. So the EU should be punishing Ireland not Apple because Ireland made the agreement. It isnt Apples fault, they followed the law. I can understand Ireland getting it in the neck from the EU but not Apple.
>Pls reread before thinking I am being thick.
You are being thick! :)
>Irish tax law is to allow Apple this deal
No it doesn't, hence the private sweetheart deal. Which is the real problem, a sovereign government without proper checks and balances can't not easily be called to account and thus is free to consider itself above the laws it sets and whilst it may publicly seem to be for fair competition, behind closed doors they act capriciously and dispense favours. With Vestager, the Irish government have discovered there is someone out there who is prepared to call them out and with the backing of the EU28 can actually make life difficult. Naturally, Ireland could IRexit, but if you want to be a member of a club it is advisable to abide by the rules...
>Ireland made this decision not Apple.
It would be a mistake to think that Apple are an innocent party in this.
"No it doesn't, hence the private sweetheart deal"
Again, Ireland made the deal with Apple therefore Apple is complying with the rules and regulations of the country. In a sovereign country this issue stops and is dead, the only one to get any diplomatic prodding/slapping is the country not the lawfully acting company.
"sovereign government without proper checks and balances can't not easily be called to account and thus is free to consider itself above the laws it sets and whilst it may publicly seem to be for fair competition, behind closed doors they act capriciously and dispense favours."
Who are these checks and balances? In a sovereign country that would be the people and the government. A state in the US is not sovereign, it shares sovereignty with the federal government. As in this case Ireland isnt sovereign because they made their deal with Apple and now the EU is demanding Apple give money it doesnt owe (by agreement) and Ireland must take (it doesnt want it). So the one to blame is Ireland.
The punishment is hitting the wrong entity.
"It would be a mistake to think that Apple are an innocent party in this."
Why? It gets a deal, that is its agreement to pay tax. It has been doing that. If its a dodgy deal it is Ireland who made the deal and should be the target of punishment. Otherwise Ireland can keep doing this and the EU keep voiding agreements after the fact and punishing effectively the victims
>The punishment is hitting the wrong entity.
The 'punishment' the EU has handed out to Ireland is: collect the 13bn from Apple, because you should have collected it, your GDP figures were lower than you (the Irish government) reported to the EU and thus your contributions to the EU will be increased and you are required to pay the amounts in arrears sooner rather than later.
>If its a dodgy deal it is Ireland who made the deal and should be the target of punishment.
It takes two to tango, Apple is not innocent - "the lady doth protest too much". Remember for the sweetheart deal to exist Apple needed to be complicit...
They realize it won't last "forever". But every little (year) helps, and they realize the cogs in governments work slow (and there are ways to make them work in the opposite direction, not necessarily by greasing them, but, like with Ireland, by providing alternative incentives (employment) combined with threat (non-employment if they move to a more... "flexible" country).
That would be regressive, and selective. It would no doubt bring sanctions on EU businesses - possibly quite severe - such as blocking sales of microprocessor technology or restrictions on what businesses are allowed to export to the EU - especially given that Apple has not broken international taxation laws.
As far as Ireland is concerned, the EUR 13 Billion will be beneficial as it would allow it to avoid or at least cover the cost of the EUR 4 Billion bailout that has been lined-up for it, but the problem is that allowing the EU to interfere in it's sovereign tax laws means that it's competitiveness and attractiveness to both USA and other non-EU domiciled firms that trade in the EU is on the line. That would not go down well in a country that has still not recovered from the last financial collapse.
Maybe closer to 800, see Henry II, though true that Elisabeth I consolidated English rule, due to practically an Irish Civil War* removing the last independent rulers. She also instigated the idea that British included the English to bolster her transatlantic claims in France, though it was in James's rule that there was the first successful English/British North American colony.
(* The William&Mary / James III thing was an English rebellion fought in Ireland. William was backed by Catholic troops and Mary was James's daughter. 1690 was not a Protestant Victory over Catholics, some Irish people had backed the English Rebel who had agreed to pass reign to Mary. The Cromwell thing was the English Civil war spilling over to Ireland, not nice. The 1920s Irish Civil War was the worst, more people killed than in War of Independence. SF/IRA lost that, but continued the tradition in the North till 1998).
Britain is the name of an island.
If you're going back 500 years then you're covering multiple nation states during that period and greater precision will be required.
I'd also suggest that during past 300 years the UK has very much cared about Irish sovereignty, albeit primarily seeking to prevent it.
"Well that's what they voted for when they joined the EU."
No, it is not what they voted for; Ireland joined the Common Market in 1973 - a trading block, not a sovereign state. Ireland voted for the Lisbon Treaty the second time around but that did not cover the EU taking control of taxation matters in sovereign member states.
If this case is decided in the EU's favor and the money Apple put in the escrow account goes over to Ireland, the EU's next action will be to demand most of it to compensate all the other EU countries that were affected by Ireland's sweetheart scheme causing Apple (and many other companies) to funnel their EU wide earnings through Ireland.
I can't imagine that Ireland would be fighting so hard against collecting that money if they thought they were going to get to keep it all.
>I can't imagine that Ireland would be fighting so hard against collecting that money if they thought they were going to get to keep it all.
I got the impression that it was Apple that were fighting - they want their £13 billion back - and so are 'assisting' (or is it arm bending) Ireland to face off to the EU28.
Interestingly, this case will reduce (slightly) the monies the UK 'owes' the EU27...
Both Apple and the Government of the Irish Republic are challenging the judgement - Ireland because of the risk of a precedent being set by which Ireland - and all other EU Member States - lose control over its corporate tax rate which leads to the "levelling of the playing field" that will see its rates go from 12.5% to closer to the French 34%.
What good would that do them, when the UK is no longer even a 'half member' of the EU? The reason they chose Ireland is that they need a base for their EU operations and it had the best tax treatment. Suggesting they choose the UK for their EU operations with hard Brexit coming in a month is like suggesting Hong Kong as their base for EU operations.
Well, given that the UK currently is the biggest money-laundering haven in the EU (yes, you heard that right... have a look at how property in London is the perfect vehicle to launder money), becoming the biggest money-laundering haven just off the coast of the EU would be (a cynic says) a boon for anyone wanting to do business ;-)
Yes, but why Apple is in Ireland and not in UK? Because it has to take advantage of both free flow of capitals among EU countries, the low Irish tax rate to start with - the "special deal" is an added bonus, far easier to obtain in a small country than in a far larger one - and other specific loopholes like the "Double Irish With A Dutch Sandwich".
Once UK is out of EU, the free flow may be interrupted, even if UK slash the company tax rate - to launder money, you have to bring money there first - and at Apple's scale, money laundering goes far beyond some real estate tricks.
the government, ANY government wants to be re-elected (and stay in power forever). It helps to be re-elected, if people who are employed and not looking for scapegoats for losing their job because the government made their employer pack their bags and moved elsewhere.
btw, not defending apple and any government, just stating the bleeding obvious. Sure, you would want to have it both ways (employment and fair amount of taxes, but somehow, it doesn't happen, does it? :(
And where Apple could go remaining in EU? Bulgaria? Cyprus? Even Luxembourg is more expensive (unless you got a deal from Junker too, of course).
I don't think the EU countries with company tax rates comparable to Ireland are more attractive to those who chose Ireland for its position, language, etc.
Anyway Apple could be hit by the same rules anyway.
Don't forget other EU governments need to be re-elected too, and their citizens may be tired of countries like Ireland cheating... especially now Ireland could need help after Brexit.
They can only claim Ireland is "cheating" if what they did is against EU law. Setting a lower corporate tax rate isn't. To the extent Apple got a sweetheart deal from them it may be - that's what is getting decided now.
Even if the EU upholds that $13 billion judgment, Ireland still has the lowest corporate tax rate in the EU which will mean it is still the most attractive place for a company to keep its HQ (plus the language advantage for US companies) and they'll still use the free movement of capital the EU allows to move all their profit into Ireland so it can be taxed at that lower rate. If the EU thinks that's "cheating", they'll need to change their laws and harmonize corporate taxation across the EU - and that probably means they'd need to harmonize personal taxation and VAT across the EU as well because often corporate tax rates and "loopholes" are set in tandem with other taxes (less of tax A means more of tax B)
Good luck getting the whole EU to agree to waive their sovereignty over all taxation to bureaucrats in Brussels.
"Cheating" here means offering some companies "sweat deals" behind a closed door.
Again, no one is is complaining about the Irish 12,5% tax rate. But Apple never paid that - it got an ad-hoc far lower one which Vestager believes under EU rules equates to an illegal state aid.
EU is exactly asking Apple to pay the 12.5% tax rate.
And I can't see why Ireland should not waive sovereignty to en elected Parliament in Brussels, in a Union about which it very well know the rules (and sent a lot of money to save Irish banks...) , but it's OK to wave sovereignty to Apple....
Moreover, we have chips ready to watch how the sovereignty of the UK parliament will be destroyed by a guy put in the PM place by an elite of party members....
... given that the EU Commission is arguing that this was unfair and anti-competitive State-aid, yet this is a matter of Corporation Tax rates which is not within the EU's remit and and entirely within the sovereign jurisdiction of the Republic of Ireland?
"this is a matter of Corporation Tax rates"
You've been repeating this same lie all over this discussion, but that doesn't make it true. It's a matter of competition rules, because, FYI, a government giving big tax breaks to a single company (or to a small subset of companies) falls squarely into anti-competitive behaviour.
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