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 …

[Vimes]

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.

[katrinab]

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.

[bazza]

@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.

[Phil O'Sophical]

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.

[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.

[alun phillips]

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?

[Julz]

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.

[Ubermik]

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

[Notas Badoff]

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.

[Anonymous Coward]

100% tax

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

[Bigkahuna456]

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.

[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.

[katrinab]

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.

[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.

[Mr Commenty McComentface]

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.

[steward]

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.

[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.

[katrinab]

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

[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...

[Anonymous Coward]

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

[steward]

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.

[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.

[Anonymous Coward]

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

[Bob Vistakin]

You're taxing us wrong

Someone had to say it.

[Lars]

@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.

[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).

[Andrew Moore]

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...

[Anonymous Coward]

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....

[Vimes]

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

[fajensen]

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.

[Vimes]

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.

[Paul Shirley]

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.

[Carl W]

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)

[veti]

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

Can you imagine how the reviews would go?

[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.

[CustardGannet]

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.

[kmac499]

..."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.

[Phil O'Sophical]

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.

[Dazed and Confused]

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.

[Phil.T.Tipp]

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.

[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

[Vimes]

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.

[fishbone]

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.

[I just wish to be anonymous.]

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

[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.

[Anonymous Coward]

>Such a nice ethical company.

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

[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

[sandman]

"A bastard bloody ukefuckinglele". That gets an upvote ;)

[Anonymous Coward]

"A bastard bloody ukefuckinglele"

Ukeleles in adverts, urgh. Lazy shorthand for cutesy, childlike (would be) innocence/honesty-symbolising "I'm just a simple down-to-earth guy/girl" tweeness. (Typically used in conjunction with its visual equivalent, intentionally washed out contre-jour lighting.)

Fauxcial media (#) flavoured crap.

This NSFW clip pretty much sums up why I wouldn't trust that affectedly cutesy paper-thin bulls**t as far as I could throw it. :-)

(#) I'm torn between my inherent dislike of the word "faux" and the succinct oh-so-cleverness of this phrase. :-/

[Bill Sticker]

Yeah, but...

Google are next on the list for a huge tax bill from the EU. Gosh, this could be fun to watch.

[TVU]

"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.

[Anonymous Coward]

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!

[Pseu Donyme]

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.

[Julz]

Re: re: Google and others

Oracle does the same...

[Naselus]

"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"

Not anyone who's posted in this thread thus far. In fact, I knida doubt anyone is under much illusion about all the tech giants being tax avoiding bastards of the first order. The point is rather more that 'but everyone is doing it' is the excuse of a five year old, and shouldn't be used to defend a multi-billion dollar company, even if you really, really like their phones.

[Hollerithevo]

Actually...

It's not neoliberalism, it's just capitalism. Liberalism always seeks to tax businesses where they think they can and should. Capitalism and pro-capitalism always seeks to reduce tax. For corporations, that is.

[toughluck]

Re: Actually...

I'm convinced by the argument that corporations should be taxed 0%, but all profits should be distributed to shareholders as dividend and taxed as personal income at that point.

The only reason corporations are taxed is because they're not doing that.

[Pascal Monett]

So, paying tax will destroy Europe

What it will destroy is your mile-high revenue generated by the difference between slave wages and the obscene prices you sell your stuff at.

Right now, the little people - you know, those serfs you expect to walk upon - could do with a little less bad news and a bit more local funding for stuff that actually needs to get done. You whine about destroying Europe, but you never hear "no" from your banker, now do you ?

What is destroying the economy of this world is the unjust pooling of money in the hands of the few who already have way more than enough, and their subsequent influence on law and political policy that ensures the status quo is not changed.

Pay your taxes - they fund roads, hospitals and schools and I doubt very much that that will destroy Europe.

[Anonymous Coward]

Re: So, paying tax will destroy Europe

What is destroying the economy of this world is the unjust pooling of money

Unjust PILING, not pooling.

Quoting "Hello Dolly": Money is like manure, you need to spread it to make new things grow. If money is sucked out of circulation in jurisdictions where most of the world R&D is done and PILED (not pooled) elsewhere no new things will grow.

The "transfer of money to R&D" aka "financing of californication" is pittance compared to the normal R&D spend of an average 2nd tier developed economy with thriving economy and working taxation. Just have a look at what was financed in the 60-es and 70-es (and not even in the USA). Have a look at what even G7 countries are capable of financing now. In fact, even the valley is producing very little now (using the trickle of money which flows back from PILEs). That is not surprising as it is handed in small VC deals. It is _NOT_ spread and most importantly very little of it goes to true R&D in universities and academia.

That is the real crime here, not anything else. And frankly, I have absolutely no sympathy to any of the master criminals - starting from Cook and Jobs themselves.

[Stoneshop]

Re: So, paying tax will destroy Europe

What it will destroy is your mile-high revenue generated by the difference between slave wages and the obscene prices you sell your stuff at.

Destroy? It's not an insignificant sum, but it's just a quarter of APPL's annual PROFIT.

Cook, stop moaning. Neither you, nor anyone employed by Apple* is going to be reduced to eating stale bread and wearing second-hand clothes.

* explicitely excluding supplier's employees, if that wasn't obvious.

[Version 1.0]

Politics as usual

It's not that politicians are corrupt that surprises me, they are politicians and you do expect that - what continuously amazes me is that they can be brought so cheaply. The root of this tax agreement is to enable a few of them to claim that they have created jobs and, on the side, to get to meet a few big name business people and get their pictures in the newspapers.

And for this they give it all way - it's easy, after all they're not spending their money are they? Pity about the healthcare service but you know, the money's not there to really keep it going ...

[Anonymous Coward]

Just Heating Up My Popcorn ...

... waiting for the FBI to help "leak" emails confirming the special deal between Apple and the Irish government.

There are always repercussions for refusing to comply.

[asdf]

Re: Just Heating Up My Popcorn ...

Wait what? The FBI is going to toe the treasury line and be anti EU on this. If they leak emails it will be showing all the obvious state aid given to Airbus or Volkswagen (nothing like a representative of Saxony being on the board), probably followed then by overseas leaks on Boeing, rinse repeat.

[esque]

Re: Just Heating Up My Popcorn ...

Little nit-pick: Saxony != Lower Saxony != Saxony-Anhalt

All three are German states, but Volkswagen AG is situated in and the company is partly-owned by Lower Saxony.

[Roland6]

Re: Just Heating Up My Popcorn ...

Wait what? The FBI is going to toe the treasury line and be anti EU on this.

Depends, on the outcome they are wanting. Perhaps some disclosure may be deemed necessary to encourage Apple et al to stop coming up with more and more inventive ways of hiding profits offshore and simply repatriate them to the states. Remember the US Treasury doesn't benefit from Apple holding profits offshore and using them to repay the 'loans' Apple took out to pay dividends...

[veti]

Re: Just Heating Up My Popcorn ...

Presumably because Apple is loudly resisting the FBI's efforts to backdoor their kit.

(Ooh err missus)

[J. R. Hartley]

Tim Cock

[Mage]

Two options

No corporation tax for any businesses anywhere: Tax share income, and tax profits on selling shares much harder.

OR

ALL businesses should pay same corporation tax everywhere.

The US claim that this is "robbing" the US tax payers is laughable, with 40% US Corporation tax, the Multinationals simply keep the profits outside the USA and borrow in USA if they need to spend there! In the unlikely event that Apple pays this bill, it will be out of the cash mountain they have no intention ever of bringing to USA under current USA tax rules!

The present global system and especially the silly USA 40% and taxation of US individuals living abroad is crazy.

Why am I having to prove to USA Tax people I'm not American, even though I'm not in America, for my personal sales outside USA because an American company is retailing for me?

It's the USA tax system that's broken, Mr Obama, not the EU.

I'll reserve my opinion about the Irish Government. though it sounds like that they have been suckered by the Big USA multinationals if they are not even paying the Irish 12.5% or what ever it is (which the EU is happy with, it's Ireland charging 0.5 to 0.05% tax that's alarming the EU!)

[Anonymous Coward]

Re: Two options

Well we can't change the friggin corporate tax rate because we have all these ignorant ass 3rd world poor red states whose politicians ironically are most for doing it but are incapable of doing anything but proving government is broken (especially when they are in it).

[Novex]

This head office that is only 'on paper' - don't we mean 'in the cloud'?

Oh, and 13bn Euros, that's pocket change if the reports of Apple's cash reserves are anything to go by.

[Paul Shirley]

Pocket change yes. The domino that starts the topple?

[Bob Dole (tm)]

I don't get it.

A business (doesn't matter who) made a deal with the local government. That company then followed the terms of the deal. No one forced said government to make the deal yet they did.

I'm struggling to see exactly how Apple now "owes" more. This is called negotiation and it's a fundamental part of how local governments literally EVERYWHERE operate.

Tell you what, how about the people who are so pissed off about this talk to their local governments and have them fess up to all the deals they've made to either entice new businesses to come in or to keep existing ones around. I think you'd be more than a little surprised.

[Luke Worm]

Re: I don't get it.

This kind of sweetheart deal is considered illegal state aid according to EU competition rules.

[Bob Dole (tm)]

Re: I don't get it.

Then this is something the EU needs to take up with Ireland directly.

If Ireland broke EU law by agreeing to a deal that they weren't supposed to then Ireland should be the one being pursued by the EU for any taxes they failed to claim.

If the EU does this then you can be sure all the other member states will go ahead and review any tax agreements they have in place or are considering. If the EU doesn't go directly after Ireland then there is little to no reason for a member state to care about the EU law. Meanwhile any and all foreign businesses will think twice about deals an EU member country might propose...

[bazza]

Re: I don't get it.

@Bob Dole (tm),

"Then this is something the EU needs to take up with Ireland directly."

That's exactly what the EU has just done. The "attack" on Apple is indirect.

[Bob Dole (tm)]

Re: I don't get it.

I'm just saying that it appears that Apple acted and negotiated in good faith believing that Ireland had the taxing authority that it claimed. It's one thing to say this agreement is now null and void going forward; it's quite another to reach back into time and change the application of a tax code to grab more money.

It just seems that the all of the EU member states are continuing to lose sovereignty with each passing year. Maybe that's what the people want; I certainly don't know, but things like this make Brexit look like it was a good idea after all from a business perspective. Certainly if I had a company with offices in the EU I'd be reviewing every agreement I made with a governmental authority with the possibility of moving those operations to friendlier climates.

[tgm]

Re: I don't get it.

it appears that Apple acted and negotiated in good faith believing that Ireland had the taxing authority that it claimed.

Hahaha! So Apple's army of tax lawyers are claiming ignorance of EU tax law? That's their defense?

"Sorry officer, but I bought this bag of weed in good faith believing that surfer dude over there had the legal authority to sell it to me. I didn't know it was illegal!"

[veti]

Re: I don't get it.

@Bob Dole (tm): First, as has been explained, the EU isn't saying Apple has done anything wrong. They're saying Ireland has done something wrong.

It is possible that Apple, being a resourceful company with no shortage of lawyers, knew that Ireland was exceeding its authority in the deal it struck. But that's conjectural, and unless it can be proven, Apple won't be punished. Merely required to pay the back taxes it owes, with no penalty or even interest charges.

"EU member states continuing to lose sovereignty" is one of those... slurs, I suppose is the best word, that relies on not thinking too carefully about what "sovereignty" is. It's the kind of thing Putin's people have been saying a lot recently, in their remorseless efforts to undermine the EU (which worked a treat with Brexit). But "being told off for breaking the rules you've agreed to abide by" is not a loss of sovereignty.

The fact is that - thanks to Brexit - we're just about to discover whether or not EU member states still have meaningful "sovereignty". If Britain is allowed to leave with a minimum of fuss and without punitive retaliation, then sovereignty is as good as it ever was, for whatever that's worth. If not - then the EU has overstepped its legitimacy, and the Brexiters were right all along. I'll be agog to see which it is.

[Teiwaz]

Re: I don't get it.

The fact is that - thanks to Brexit - we're just about to discover whether or not EU member states still have meaningful "sovereignty". If Britain is allowed to leave with a minimum of fuss and without punitive retaliation, then sovereignty is as good as it ever was, for whatever that's worth. If not - then the EU has overstepped its legitimacy, and the Brexiters were right all along. I'll be agog to see which it is.

Getting out is not the problem, it's renegotiating a deal as an outsider with the EU for when after we've left is the issue, given a lot of the promises of the Brexit campaigners made run contrary to basic conditions of non-member EU market access.

[Baldy50]

Re: I don't get it.

With regards to renegotiating a deal as an outsider, the EU has in place trade deals in with fifty non EU countries, so if Mexico can strike a deal and pay nothing in then so should we.

I hope May does a Thatcher on them at the negotiating table and I'd love to see Farage their too, he probably knows the workings of the EU better than any UK MP!

I suspect Tim Cook as many other business leaders supported the remain campaign, well you got something big enough to stand up to you and the EU is correct on this issue of a seriously dodgy tax arrangement.

Lagarde and the IMF also supported remain and she pays no tax whatsoever on her salary of over 300K Euros.

It's always good to see bureaucracy work for a change especially against huge corporations like Apple, wonder who's next!

[Dave Bell]

Re: I don't get it.

I don't disagree with that, but I would rather not be living in a country that conducts such an experiment.

There are signs that British governments are OK with the proles being experimental subjects, without asking for formal consent.

[AIBailey]

Re: I don't get it.

@Bob Dole (tm): First, as has been explained, the EU isn't saying Apple has done anything wrong. They're saying Ireland has done something wrong.

Apple will have been 100% aware that this "deal" was nothing more than a means to entice them to invest in Ireland by providing a means for them to avoid paying tax. The (non)existence of a phantom head office goes some way to proving this.

As you pointed out, Apple are not being punished, merely being "notified" that they've not been paying as much tax as they should. As for them "possibly" knowing that Ireland was bending rules, are we to believe that at no point over the past years have a couple of Apple accountants had a chat at the water cooler that goes something like "Y'know Bob, I'm pretty sure that our tax bill should be more than 0.005%, do you think I should mention it to anyone?". Anyone working in finance, especially within Apple, would be able to see that this is tax avoidance of the highest order.

[veti]

Re: I don't get it.

@ AIBailey:

"Tax avoidance of the highest order" is precisely what Apple's accountants and tax lawyers are paid to do, they wouldn't see anything troubling about that.

The question is whether they knew the Irish government was doing something that put it in violation of its own commitments. I think there's reasonable doubt about that, and I'll be astonished if it can be proven against them.

[gnasher729]

Re: I don't get it.

"If Ireland broke EU law by agreeing to a deal that they weren't supposed to then Ireland should be the one being pursued by the EU for any taxes they failed to claim."

You don't get it. Ireland isn't pursued to pay anything. Ireland is pursued to open its bank accounts and let Apple pay 13 billion into Ireland's bank accounts.

[Bob Dole (tm)]

Re: I don't get it.

@gnasher729: You don't get it. Ireland isn't pursued to pay anything. Ireland is pursued to open its bank accounts and let Apple pay 13 billion into Ireland's bank accounts.

And that is the fundamental problem I'm seeing. By extracting money from Apple the EU is saying that not only is Ireland's word not worth the paper it was written on but any other deal made by the various member states is also worthless. This is a very very bad thing.

[Voland's right hand]

Re: I don't get it.

@ Bob Dole (tm)

By extracting money from Apple the EU is saying that not only is Ireland's word not worth the paper it was written on

Ireland put its word in writing on the relevant Eu papers first. Eu is calling Ireland on ITS word. Further to this, its word in the conversation with the Eu which it is being called upon is part of signed international treaties and Irish laws (directly or indirectly through the principle of international obligation primacy which is in all Eu state constitutions except the only one that does not have any - Britain).

So while you are correct that this is a matter of "being called upon your word", you are unfortunately (quite deliberately I suspect) blind to the word which is of importance and at stake here. While I understand the overall "international treaties are toilet paper and we wipe our arse with them" attitude as seen in Brexiters and USAisians, I disrespectfully disagree.

Its word to Apple is an opinion of a tax clerk. It's word to Eu is the law of the land. I am surprised that you fail to see the difference.

[IT Poser]

Re: I don't get it.

@Bob Dole

While we don't have to like Apple doing everything they can to lower their tax bill as a for profit corporation they would be negligent not to. It is up to the tax authorities to ensure the tax structure is set up without loopholes. I haven't seen anyone claim that Apple practiced tax evasion(actually breaking the law) but instead practiced tax avoidance(getting the best deal you can for your shareholders).

I fail to see why so many people are downvoting you when it was the Irish tax structure that is at fault. Perhaps the people should have some kind of say in choosing the leadership that allowed to happen in the first place. Some kind of popularity contest where everyone gets a say would work as long as the people are willing to understand who is truly at fault.

[Yesnomaybe]

Re: I don't get it.

Simple solution to this really. Brussels cut £13Bn of EU funds going to Ireland. There. Balance restored.

[Roland6]

Re: I don't get it.

Then this is something the EU needs to take up with Ireland directly.

If Ireland broke EU law by agreeing to a deal that they weren't supposed to then Ireland should be the one being pursued by the EU for any taxes they failed to claim.

The EU has taken it up with IRE, that is why this has been labelled "state aid". In the coming months, the EU will recalculate IRE's contributions to the EU, taking into account the additional 13bn euro's and present IRE with a revised membership contribution. Additionally, other member states may receive rebates because of this. Unfortunately, I suspect the size of such rebates are likely to only change the circa £350m a day net the UK are contributing to £349m per day...

[Anonymous Coward]

Re: I don't get it.

>This kind of sweetheart deal is considered illegal state aid according to EU competition rules.

Just a coincidence the first company they are going after is a US company with the deepest pockets. Of course no sweetheart deals would ever be offered to an EU based company. Have a feeling the US tax man might start to disagree about that. If they are serious about tax avoidance they probably should have went after an EU company first to show its not a nation block trade issue which now it quickly could devolve into.

[Anonymous Coward]

Re: I don't get it.

>nation block trade issue which now it quickly could devolve into.

Probably not the best idea with the US economy remarkably strong and numerous Italian and a few German banks on their last legs not to mention with the other political challenges facing the EU.

[Dave Bell]

Re: I don't get it.

There are several big, questionable, deals in the EU. And every country in the EU is supposed to at least stay within the rather generous lower limits on tax rates, both VAT and corporation tax.

Apple, Paypal, Amazon, Starbucks, Google, they all take advantage of the tax differences and other details of international tax law. Until there was a recent change in VAT rules, those ebooks you bought from Amazon were taxed at a special, low, VAT rate. Now, for virtual goods, it's the country of the buyer which counts.

There are local taxes in the USA too, and it can get complicated. They affect where big businesses have their warehouses. Customers are expected to pay the tax on "imported" goods in some states, but enforcement is patchy.

What we're getting from the EU looks more like the Rule of Law than what has been happening. You have to wonder just what some British politicians are running away from.

[Anonymous Coward]

Re: I don't get it.

The problem is with the likes of Amazon, I get charged VAT at 20% on purchases even if I am outside the EU and by EU law, such purchases are not subject to VAT.

Go on, try buying something using your UK Credit Card from Amazon when you are physically in the USA and see if you can do it without paying VAT even if you ship to a US Zip code.

The saying about Death and Taxes is very true.

[Anonymous Coward]

Re: I don't get it.

I don't pay any VAT on CD's and Blu Rays I buy from Amazon.co.uk . The prices on the website reflect the lack of tax too. I am paying from Barclays bank too in GBP. I have lived in the USA for 17 years.

[Roland6]

Re: I don't get it.

Re: Just a coincidence the first company they are going after is a US company with the deepest pockets.

No coincidence, the companies that stand to gain the most from playing fast and loose with the EU tax rules are going to be those who's HQ's are ultimately outside the EU! Companies HQ'd within the EU have less scope to avoid paying taxes on revenues derived from EU sales...

As for the deepest pockets, well the EU has started to lift the lid on how they've managed to obtain such deep pockets...

[ascii bandit]

Re: I don't get it.

They have, repeatedly. This is not the first case!

But, its the first with a large american company.

Perhaps do research before posting?

[Anonymous Coward]

Re: I don't get it.

Of course no sweetheart deals would ever be offered to an EU based company.

Fiat got nailed before Apple. So did BP and quite a few other European corporations. Just their level of tax evasion was nowhere as astronomical as Apple - most bills are in the tens and hundreds of millions, not one of them is billion sized.

Next time please check your facts before you start yelling about your American uniqueness. You are not unique and you will be treated equal. That includes "you will pay your dues like everyone else".

Apple is probably the 40th (if not more) large multinational down the line to get into the knitting lady's sights and she will not stop there either. She is known to know no mercy and give no quarter. Just read up on her - she was one of two commissioners to pass their hearings with flying colours and be approved by a standing applause and that was for a reason.

[Anonymous Coward]

Re: I don't get it.

Its not that simple. Ireland is in the EU. The EU has tax rules for member states. Both Ireland and Apple broke them - probably knowingly. State aid is not allowed under the rules - which is what this ridiculous tax deal amounts to.

[Mephistro]

Re: I don't get it.(@ Luke Worm & AC)

I'd like to add that Eire also has laws against such "tax arrangements". Funny, the way politicians sometimes wipe they arses with their own countries laws and then shout bloody murder when they get caught.

Fuck'em all with a cactus!

[Anonymous Coward]

Re: I don't get it.(@ Luke Worm & AC)

Now - what has the cactus done to you in order to deserve such an awful ordeal?

[John 98]

Re: I don't get it.

The Irish government cut a deal with Apple which was and is illegal under Irish law. The executive overstepped the mark and is now being challenged in court. Poor Apple when they are paying no tax anywhere and were probably fully aware that their cosy deal was illegal? Come, sir!

[Pseu Donyme]

re: tax deals

There should be none, really. Instead, corporations pay tax on their profits at the non-negotiable corporate tax rate, same for any and all, where the bookkeeping rules for calculating the profit are likewise non-negotiable, same for any and all. As far as I can see this is what EU Commission is after here so that competition is not distorted due to company specific deals amounting to state aid.

[Bob Dole (tm)]

Re: re: tax deals

@Pseu Donyme: >>There should be none, really.

On the surface that sounds like a great way to level the field. Have all countries agree to a single corporate tax rate and presto no more issues.

The problem, however, is that there are a lot of different reasons for companies to put offices in various countries/states/cities. Availability of a particular talent, price of office space, etc. Often a country can't control those items effectively in order to encourage large companies to move in. So they fiddle with the bits they can control to make their bit of the earth more attractive. Tax is one of those things governments can directly, and immediately, control.

[naive]

Re: I don't get it.

What is unclear about this ?. Apple did not make a deal with just the Irish government, they made a deal BECAUSE they had the intention to funnel profits from other EU countries to the tax sinkhole they negotiated with them.

In the end, they could have known this was morally wrong, even when pressed by Wall Street to do so.

Now we have the ridiculous situation that the Irish government refuses 13 billion in taxes... when a government starts refusing tax money, something must be fishy.

I pay 60%-70% of my disposable income in taxes, so please let apple pay a bit more as 0.005% so my rates can be reduced (income tax + VAT + special taxes on gas and other ATF related items).

[CustardGannet]

Re: I don't get it.

@ naïve - "special taxes on gas and other ATF related items"

I'm guessing you're American, if 'Alcohol, Tobacco & Firearms' is a category in your annual budget.

[Bob Dole (tm)]

Re: I don't get it.

>>In the end, they could have known this was morally wrong

What do morals have to do with running a company? It's the responsibility of the governments to create (and follow) laws that engender the conduct they wish to see. In this case, not only did Ireland fail, but so has the EU by creating the very environment that allows this to be possible.

[Anonymous Coward]

This:

"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."

No, Brussels is doing a perfectly good job on its own...

Excellent... Despite the nay-sayers, we voted OUT of Europe and other member states are gearing up to do the bloody same. Europe is a failed experiment. Time to put us out of its misery.

[gnasher729]

Re: This:

"Despite the nay-sayers, we voted OUT of Europe and other member states are gearing up to do the bloody same. Europe is a failed experiment. Time to put us out of its misery.

Is that Farage and Johnson posting? In that case I fully agree.

[Teiwaz]

Re: This:

"Despite the nay-sayers"

- Could argue the exit voters are the 'nay-sayers', they said no to Europe.

Of course the UK has a long history of being the troublemaker in Europe, the UK leaving will probably minimise disruption for the other countries who are committed.

I get the feeling the right-wing is on the ascension again, like it was beginning of last century, I dearly hope the repercussions are not as bad this time around.

[Vimes]

Re: This:

they said no to Europe

Given the arguments in the cabinet it seems that they can't even decide what saying 'no to Europe' even means, let alone how to go about implementing it.

The furore around ministers getting upset with civil servants not acting on Brexit would be funny if the implications weren't so serious, and ignores the fact that they haven't even given the civil servants a policy to start implementing.

It seems odd that those that complained the most loudly about unelected bureaucrats before the referendum now expect those same unelected bureaucrats to do the job of government ministers.

It must be OK though - at least they're OUR unelected bureaucrats...

[Baldy50]

Re: This:

Down vote for talking bollocks!

'Of course the UK has a long history of being the troublemaker in Europe, the UK leaving will probably minimise disruption for the other countries who are committed.' Committed as into a mental hospital?

Recent polls of UE citizens show high levels of dissatisfaction within the EU zone.

https://www.washingtonpost.com/news/worldviews/wp/2016/06/07/beyond-britain-dissatisfaction-with-e-u-spreads/

What century do you think you are you living in BTW? Just curious.

The UK compared to other countries in the world today or in the past has never been far right wing and historically movements have even been outlawed when they posed a threat, we collectively as a people won't stand for that mentality, but will fight for our dignity, security, jobs and way of life, call it being a bit more nationalistic just like the French are and If anything the UK has helped prop up the EU and IMF.

Rant over.

[werdsmith]

Re: This:

Of course the UK has a long history of being the troublemaker in Europe, the UK leaving will probably minimise disruption for the other countries who are committed.

Yes, the UK has a history of not bending over and allowing itself to be shafted by continental Europe that goes back quite a few hundred years, possibly to 1066 as the last time this land was buttfucked from the continent.If other euro nations would just stand up for themselves and not hang back and allow the UK to stand up for them. It's not troublemaking, it's looking after its interests in the face of those that would take advantage.

The UK anus is only opened for the US these days.

.

[Julz]

Re: This:

Hum, look up the Glorious Revolution of 1688. There are others...

[Roland6]

Re: This:

Yes, the UK has a history of not bending over and allowing itself to be shafted by continental Europe that goes back quite a few hundred years, possibly to 1066 as the last time this land was buttfucked from the continent.

And if you read forward through your history, you would also note that the 'Normans' who came to Britain also objected to being buttf****d by the monarch residing in Paris...

[Voland's right hand]

Re: This:

And if you read forward through your history, you would also note that the 'Normans' who came to Britain also objected to being buttf****d by the monarch residing in Paris...

Bollocks, what do they teach kids in history classes nowdays.

Isabella (The French She-Wolf), wife of Edward the 2nd Plantagenet, applied to buttf*** continental France on behalf of her then underage son, the future Edward the Third. She was also obnoxious enough to be the only one not show up in person and send an underling on her behalf. Her representative rightly (or wrongly - depends whom do you ask) got told off that "Lilies do not knit" by the other Peers of France.

So there were no attempts to _BUTF***_ the Normans whatsoever at any given time up to and until the point where they decided that they are entitled to have all of France as their b**ch. In fact, French monarchs went out of its way to ensure that the oath of allegiance taken by the British monarch on behalf of its estate in Normandy is acceptable and applies to Normandy only during the years between the Conquest and the sorry incident at the Peers of France meeting on who should inherit after all local direct heirs of Philip the Fair kicked the bucket leaving Edward the Third the only direct descendant (albeit over a female line).

[Steve Davies 3]

Re: This:

What other EU states are preparing to leave?

I'd love to know. I'm sure others would too.

[Vimes]

Re: This:

'Preparing to leave is probably' the best way of putting it.

And we'll probably never get past the 'preparing' stage...

http://jackofkent.com/2016/08/brexit-a-story-of-a-brainstorm/

[Jason Bloomberg]

Re: This:

Europe is a failed experiment.

Assuming you mean "EU"; did you read that somewhere and now parrot it as a hollow sound-bite or can you justify such an assertion?

Just saying it's so doesn't make it so.

[Uffish]

Divide and Conquer

You can bet that the 'lobbyists' will be out in force throughout Europe picking and scrabbling at any and all signs of unity.

[asdf]

Re: Divide and Conquer

Yep whole lot of other sweet heart deals in other EU countries even with non US companies about to get looked at carefully in retaliation.

[Slx]

You'd kind of wonder why a company that is hugely profitable is still so obsessed with tax avoidance. It's hardly like they're living by the pin of their collar. I know they were in the 1990s but, at this stage it's a bit nuts.

[Rich 11]

You'd kind of wonder why a company that is hugely profitable is still so obsessed with tax avoidance.

Greed.

[asdf]

>You'd kind of wonder why a company that is hugely profitable is still so obsessed with tax avoidance.

No for the shareholders (including a lot of non 1%ers with their 401k/IRAs) as long as the tax avoidance is legal.

[Tom 7]

for the shareholders??

I'm not sure what benefit the shareholders get having all that money in an offshore bank. Its kind of funny money there - cant spend it, cant move it in case it gets taxed. If I was a shareholder I certainly wouldnt want my money to be securely inactive out of reach.

You'd think and inventive company like Apple would think of some clever way of making money from that money - perhaps cutting the corners off.

[Anonymous Coward]

Re: for the shareholders??

The shareholders get all sorts of goodies, such as stock buybacks, higher share valuations, better dividends and part ownership of a company that can borrow all the money it needs to build new products and make even more money.

Apple is a golden goose. The EU is asking Ireland to help carve it up.

Somehow, I don't think this will end well. Apple holds many cards, and can always pull up stakes perhaps even dragging other overweight geese in its wake.

I am sure another EU country will be happy to host Apple HQ and offer an equally friendly tax clime (and take the jobs that come with it).

Apple can also cough up the tax to Ireland and carry on, while it continues lobbying for the above.

It might even convince a friendly new US administration (think Trumpsters) to let it repatriate its cash mountain and jobs back into the US of A.

Meanwhile, EU politicians on 300 K tax-free salaries will continue to bleat that they can't get enough tax revenues while hundreds of thousands of brand new refugees join the ever-growing queue of EU welfare recipients. This sounds like a desperate attempt to distract people's attention from the real problem: since Brexit, the Euro and all it represents is looking like an increasingly shaky option for nations struggling with massive public debt, large youth unemployment, diminishing prospects, wars brewing on its borders, an upswing in far-right-anti-EU sentiment, etc.

Is this really a good time to start quibbling over a tax bill?

[Magani]

Corrections and Clarifications Column

Our previous headline:

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

should have read:

Making us pay tax will DESTROY APPLE, roars Apple's Tim Cook

We apologise for any inconvenience, misunderstanding, lack of income, etc, etc

[Chris G]

Re: Corrections and Clarifications Column

I was wondering if Tim Cook has to drop his trousers when he speaks, so that his voice isn' t muffled. Or does he have vented strides?

[Anonymous Coward]

Some humour is found in all this.

"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,"

I have a feeling that EU outsider Switzerland will have had rather a good laugh at US mewling that the EU is giving itself supranational taxation powers.

As for the matter at hand - let's just say that if your overall tax bill is below, say, 10%, you KNOW as a corporate that you're sitting on a time bomb. The only uncertainty is who exactly will light that fuse, and when. Apple has been gaming the tax system for so long that it is likely they will cause laws to change as such escape routes are no longer politically acceptable. The US is probably mostly upset that the EU beat them to it..

[asdf]

Re: Some humour is found in all this.

>The US is probably mostly upset that the EU beat them to it..

No the US can't fix anything because politicians that dare compromise get primaried (replaced) by increasingly more insane opponents.

[Anonymous Coward]

Re: Some humour is found in all this.

increasingly more insane opponents

I was about to say that it would be hard to surpass Trump in that respect, but I then recalled I thought the same of Bush, Palin - OH MY GOD.

Type amongst yourselves, I have to lie down for a bit..

[Munchausen's proxy]

Re: Some humour is found in all this.

"I was about to say that it would be hard to surpass Trump in that respect, but I then recalled I thought the same of Bush, Palin - OH MY GOD."

Just realize the ones at the national level represent the most mainstream. I think you probably don't ever want to look at some of our state and local lawmakers, unless you think living in Lovecraftian horror would be nice.

[hitmouse]

Even with this massive tax advantage, Apple has not invested in support for its products in Europe, either at the design or post-sales level.

I tried to get iTunes support in France, only to be switched through to Ireland, and then finally to an "ïnternational" guy in Apple HQ who admitted that he frankly knew very little about any of how Apple's products worked outside the US.

[asdf]

IMHO Apple's services and software have always been a bit subpar (infinite bouncing beach ball anyone, iTunes redefining the term bloat, etc) especially compared to their hardware (what they really excel at).

[Anonymous Coward]

an "ïnternational" guy in Apple HQ who admitted that he frankly knew very little about any of how Apple's products worked outside the US.

That may explain the unholy mess that international App Stores are - ever tried moving? As soon as you do, you're faced with a choice: either "move" App Store, which has as yet undocumented consequences for the apps you already bought (will they continue to work? How about updates?) but staying with that store is made impossible too as it only accepts credit cards from the country you have just left.

I'm toying with the idea of lobbing that one at the EU as an unreasonable restriction to freedom of movement, just to see Cook having to explain that one (or fix it, of course, but apparently it's not important enough to drop some of that large stash of cash on that they have offshored).

I love Apple gear as it's generally very good, but especially in the area of services I am *not* a friend. Their software is generally OK too - that is, until you encounter iTunes, or you need to send an image attachment with Mail which insists on doing it inline instead (the reason I stick to Thunderbird instead).

[Fruit and Nutcase]

Dear Tax Inspector

Lets discuss the figures over a long lunch

Apparently everyone could pay 0.005 per cent tax if they only asked

[Fruit and Nutcase]

Dear TC

We have low taxes and a cheap and easily exploited workforce. You'll feel right at home.

Let's do lunch

TM

http://www.dailymail.co.uk/news/article-3765888/Britain-opens-door-Apple-Downing-Street-says-iPhone-giant-welcome-EU-orders-pay-11BILLION-tax-Ireland-sweetheart-deal.html

[AndyS]

Re: Dear TC

Daily Mail? Really?

[Fruit and Nutcase]

Re: Dear TC

@ AndyS

I know - it was one of the items that came up when I googled, and it did cross my mind at the time, but thought no one would notice! Hangs head in shame...

[foo_bar_baz]

Re: Dear TC

I thought Ireland was useful for avoiding tax on EU sales precisely because it is a member. How will this work for a non-EU UK?

[Fruit and Nutcase]

Re: Dear TC

@foo_bar_baz

I suppose it really depends on what single market rights the UK negotiates/is left with after all the horse trading

[ecofeco]

So which politicians are getting kickbacks?

The only reason, THE ONLY REASON, any politician would reject a billion+ dollars coming into the government treasury is because they are getting kickbacks to prevent it.

So who is it then? Sorry, I meant which ones. Plural.

[Anonymous Coward]

I pay tax, you pay tax

Apple should pay tax!

Shonks!

[Anonymous Coward]

Who else?

EMC has a huge manufacturing plant outside Cork, do they have the same tax arrangements?

[pip2]

How it was reported in the Irish Times on Mon 29 Aug

Here is a snippet.

------------------

Headline: "Apple faces tax demand as EU to rule Ireland deal was 'illegal'."

Subheading: "Windfall will not be used for schools or health but will pay down debt. Commission set to make decision as early as tomorrow or Wednesday"

Body: "The Revenue Commissioners will be required to raise a tax assessment on Apple in the coming months when the EU rules that the technology giant's tax arrangements in Ireland were illegal under state aid rules, as is expected in the coming days.

The Apple tax bill, expected to amount to hundreds of millions of euro, is not likely to be transferred to the State immediately, however.

Instead, it will be held in an escrow account pending appeals of the EU's decision by Apple and the Irish Government. Ministers will continue to insist Ireland did not offer Apple a special deal.

Even if the appeals are ultimately lost and the cash reverts to the Irish State, it will not be used for budget spending or investment, according to the sources who have been briefed on the issue.

Instead, it will be treated as a windfall gain and the Government will be requred to use it to pay down the national debt.

'At no point will we have extra billions to spend on schools and hospitals', one Minister said.

The European Commission is expected to make public in the coming days, a ruling that Apple's tax arrangements in Ireland consitituted illegal state aid."

--------------------------

My response to this is:

1. It is reassuring to me to see that the EU is strong enough to take on Apple, albeit indirectly by challenging Ireland's arrangement with it. In 2015 Apple reported the biggest annual profit in history with net income of $53.4bn; an enormous profit greater that made by ExxonMobil in 2008.

2. The Irish Times seems to offer good quality journalism.

3. I get the impression from this, and from the rest of the paper, Ireland seems a much better run country than Blighty. I don't know Ireland very much and I can't comment on whether there was a special deal. It seems to me hard to imagine a UK minister saying 'At no point will we have extra billions to spend on schools and hospitals',

[etabeta]

Confiscate all of Apple's assets, and ban the sale of all their products in the EU. Tim C(r)ook is worse than the mafia.

[Anonymous Coward]

APPL paying tax, is it?

You will, you will, you will!

[Fruit and Nutcase]

White Cat

"Making us pay tax will DESTROY EUROPE, roars Apple's Tim Cook"

from his bunker in Cupertino. Any idea if he was stroking a White Cat at the time?

[Anonymous Coward]

I wouldn't worry Apple our neoliberal shills will be happy to give you a tax credit and zero tax to move to the UK post Brexit. Of course you'd have to offer the odd executive directorship or two for ex MP's once they've left parliament. In return we'd even let you rob the pension pot and reward you with some knighthoods. A free yacht could be in the offering.

[James Katt]

This ruling completely obliterates any argument against Brexit.

Once Brexit completes, this ruling also becomes moot. Ireland will not have to pay attention to it. It will be able to set its own tax rate independent of those in other European Countries.

[Anonymous Coward]

Sovereignty

It seems that the EU has asserted it's power to set Ireland's tax code. Kind of makes you wonder if Ireland actually needs an elected government at all.

Not that I was ever overly enamoured with Ireland's beggar-thy-neighbour tax-haven-within-Europe approach.

[Anonymous Coward]

Re: Sovereignty

But they aren't doing that.

They are saying that the deal that was worked out with this mysterious HQ function of Apple that had no physical presence, no employees etc. amounted to illegal state aid.

i.e. They haven't said Ireland needs to change its tax code, just enforce the one they already have properly

[Anonymous Coward]

Re: Sovereignty

> But they aren't doing that.

Yes, they are, Ireland is happy with the arrangement, and such arrangements aren't particularly uncommon with multinationals which have complicated tax issues. It is unusually extreme, but then it is up to Ireland to set it's tax code and allow or disallow that. Except it isn't any more.

I agree that it amounts to state aid, but it is Ireland that has broken that law and should be fined, not Apple forced to pay tax.

Consider how the payments are actually being forced, it is a tax payment to Ireland. A tax payment Ireland has not demanded and isn't legally required under Irish law. It isn't a fine for illegal state aid which would be paid to the EU itself. That is, it is a tax imposed by the EU and not a fine for an offence.

I do agree that these shenanigans are beyond the pale, but Ireland has been doing this for a while, there's a reason the silicon bog exists and it isn't because the Irish are so good at IT.

[Roland6]

Re: Sovereignty

@ZanzibarRastapopulous A tax payment Ireland has not demanded and isn't legally required under Irish law.

It would seem you haven't fully grasped the issue: IRE is a member of the EU, as a member it has agreed to a set of rules around competition and state aid, which it is required to enact in it's national laws. It is this last bit that has had some people getting over excited about loss of 'sovereignty' and such like.

So the EU has shown that IRE has not been following its own national laws on competition and state aid. Hence the Irish government, for whatever reason, hasn't placed a tax demand on Apple IRE for the monies Apple IRE's own accounts show have been paid to the totally fictional "head office".

[Dr_N]

Re: Sovereignty

"It seems that the EU has asserted it's power to set Ireland's tax code."

With that level of understanding is it any wonder the UK voted Brexit?

[Commswonk]

Re: Sovereignty

"It seems that the EU has asserted it's power to set Ireland's tax code."

As others have said, it hasn't. However, if Ireland and / or Apple fights this (and I suspect win or lose would make little difference) it would amount to an open invitation for the EU Commission to introduce EU wide legislation that would enable the EU to set Tax Codes (whether corporate or personal) in member countries. And, furthermore, the tax thus levied would be paid straight to Brussels, not the member countries. I suspect that quite a few member countries would support that in the hope that Brussels might be more inclined to bail them out than other individual countries are.

Once upon a time we had banks that were deemed "too big to fail". We seem to approaching a point where there are companies that are "too big to tax", and I sincerely hope not that just doesn't happen, but that it is actively prevented.

[nematoad]

Re: Sovereignty

"It seems that the EU has asserted it's power to set Ireland's tax code."

They can't. Tax is one of the things that the EU has no power over. If you look up Margrethe Vestager's title she is the European Commissioner for Competition. Not tax. This is not a tax matter. By giving Apple special treatment concerning the tax due it is alleged that the Irish government has given unfair advantaged to Apple to the detriment of their competitors.

There are no fines, Apple is not accused of wrong-doing. It's just that tax that should have been paid has not been and the EU has now instructed the Irish government to collect the sums due .

Ireland will appeal this ruling as they seem to be mortally afraid that Apple will pull out and leave a lot of people without the well paid jobs they have.

[Anonymous Coward]

Re: Sovereignty

> This is not a tax matter.

Isn't it? It seems the EU is forcing Ireland to levy a tax that it doesn't want to.

If it were a breach of some other law, then one would expect a fine to be demanded from the guilty parties, in terms of competition that would be both Ireland and Apple who have conspired in their anti-competitive actions.

> This is not a tax matter....

> ...the Irish government has given unfair advantaged to Apple to the detriment of their competitors.

> There are no fines

> It's just that tax that should have been paid has not been...

So it's not a tax matter but a breach of competition law by Ireland, but there are no fines for that just a tax that must be paid, even though it's not a tax matter.

You are right that the EU can't set tax in member states, but in practice that is what it is doing here. Yes, they're jumping through hoops to call it something else.

What should have happened is that the EU should have fined Ireland for breaching state aid rules.

Indeed that is the process that was used when France was accused of providing illegal state aid to Groupe Bull.

[herman]

Interpretation of Acts

Simple people read a single act and think that it explains everything. A lawyer reads all the acts, because acts are interrelated and affect each other. This is a case where one tax agreement is overruled by another trade agreement. It is a very common occurrence.

[Greymouser]

Gotta say that Margrethe Vestager, the EU competition commissioner is great! One of the few (only?) effective EU people I can think of. So far she's taken on Google/Alphabet, Apple, Fiat, Starbucks, Amazon and Gazprom amongst others. Shame we can't have her come and work for our country.

[Anonymous Coward]

Shame we can't have her come and work for our country.

Fix your gun laws and more would consider it. Yours is not a bad country, but you do have to clean up a couple of very ugly things. That said, he who is without sins and all that (or she, if we are to believe Monty Python's Life of Brian :) ).

[jzl]

Corporation tax is the problem

Why tax corporations at all? They're ultimately just vehicles for conducting business on behalf of shareholders.

Corporation tax should be abandoned and rolled into dividend tax, capital gains tax, etc.

[Nikki Radir]

Re: Corporation tax is the problem

"Why tax corporations at all?"

- because of the privileged legal status they have, particularly with limited liability. This is what makes share-owning capitalism work, and has enabled much of the economic growth seen in developed countries. Shareholders can invest in a company with good confidence, knowing that they won't be bankrupted if it fails.

The downside is that the collapse of a company often creates large external costs. Look at corporation tax partly as companies' contribution to collective insurance for this, and partly as their fee for all the public goods (education, infrastructure, legal system, etc.) that enable them to operate.

[jzl]

Re: Corporation tax is the problem

So you're saying it's effectively a tax levied in response to shelter from failure?

That's an interesting perspective. I'd never looked at it that way before.

[Nikki Radir]

Re: Corporation tax is the problem

@jzl

"So you're saying it's effectively a tax levied in response to shelter from failure?"

Yes, but I should have made it clearer that this is a reason why I personally think corporation tax is a reasonable and purposeful one - I didn't mean to imply that this is why such taxes have been enacted. You've just made me aware of another area I'm ignorant of - what was in the minds of legislators, around the world, when they decided to tax corporations?

[IT Poser]

Re: Corporation tax is the problem

If we get rid of corporation tax what would all the corporate tax accountants do for a living?

It really doesn't matter if we tax profits before or after they are distributed. The tax could go away but there is a special interest that will do everything they can to ensure it doesn't. The same applies to far too many laws on the books.

[The Travelling Dangleberries]

Re: Corporation tax is the problem

There is a very simple solution. Replace the current method of calculating corporate tax. Corporate tax will now be levied as a fixed percentage of all sales/leases etc of goods and services in the country concerned. Then rename the tax to "Permission to Trade in the Market" tax as that, in effect is what corporate tax is.

It works like this : if Apple sell a million iThings in the UK it pays say 2% of of the gross value of all sales to the UK government. If Samsung sell a million sThings in Germany it pays 2% of of the gross value of all sale to the German government. If Huawei lease a million hThings in France it pays 2% of of the gross value of all these lease contracts to the French government.

Easy to calculate and an end to the discussion as to where profits are made.

No doubt this new regime will produce a flock of bleating complaints from the big corporations, but we let them bleat. The big corporations have proven themselves time and time again to be manipulative serial tax avoiders who show no concern for the citizens of the countries they operate in. So why should we cut them any slack now?

Yes, let them bleat, for we need roads, hospitals and schools for our children too.

[sikejsudjek]

Re: Corporation tax is the problem

Companies benefit from a workforce that has been well educated and is healthy, a country that has good infrastructure and stable Government. All of that costs money, and its not unreasonable to expect businesses to contribute along with other tax payers.

Would you prefer that the cost falls instead on those less able to pay, and that the profits are withdrawn out of the country to a tax haven ? If so, you are advocating an economic model that is unstable, moves wealth from the majority to a bus load of mega CEO's, and reduces investment in the productive economy.

Its because of these neoliberal doctrines - which have almost no support from most economists, that we have such low growth despite austerity. At present 80 people own 51% of planet earth's wealth. If you want that trend to continue try to work out what's likely to happen from history. Hint - it doesn't end well for the rich, and it will continue to lower wages and living conditions for the rest of us.

[Jonjonz]

Re: Corporation tax is the problem

The core problem is that assets are not taxed. Home owners and property holders are taxed. But industry assets are totally tax free, and where multinationals store all profit that they want to avoid taxes. Tax stocks, bonds, real assets, not just salaries and "income."

[Anonymous Coward]

Re: Corporation tax is the problem

Why tax corporations at all? They're ultimately just vehicles for conducting business on behalf of shareholders.

Don't forget corporations are taxed on profit, not total income.

This also encourages the corporation to make investments in additional workers, infrastructure, etc (that provides benefits to the economy) that reduce the taxable income.

[deconstructionist]

Will the real APPLE stand up

What a low life company apple is and Mr. cook is a veritable skank , the living and working conditions of workers in their eastern plant are nothing less than criminal, some of the moves with app developers have been nothing less than theft , it bullies anyone in it's way and makes scientologists look left of liberal.

Why you people buy these products is beyond me like mr cook I hope you sleep well knowing your helping to destroy life's.

Never buy Apple .

[Anonymous Coward]

Re: Will the real APPLE stand up

Do tell us how you really think :).

However, in the interest of balance you should then also look at the others that you'd use instead. Apple gets kicked for being the only one who actually takes the trouble to open that can of worms, but you should ask the same question of others too. They must ALL become more open.

[Steve Davies 3]

Re: Will the real APPLE stand up

So never buy Apple. Good for you.

I really do hope that you will also boycott the likes of

Amazon, Adobe, IBM, microsoft, Google, Dell and a host of others who also have 'HQ's in Eire.

Oh and don't forget Starbucks.

What you gonna buy then?

[deconstructionist]

Re: Will the real APPLE stand up

what are you on about !.... I am talking about the slave labour practices of apple which even greedy swines like Amazon, Adobe, IBM, microsoft, Google, Dell would not dream of doing, still would not want to get human suffering in the way of your snap chat or twitter.

And Tim cook says apple always do the right thing ...they never have.,

I buy product's from companies that don't destroy other people life's for a profit...don't know about you

[Anonymous Coward]

Re: Will the real APPLE stand up

I buy product's from companies that don't tell anyone they destroy other people life's for a profit...don't know about you

FIFY. I think you're trying to do the right thing, but you need to do something about that naïvety, charming as it is.

[Peter2]

Apple now have to pay 13 billion to Ireland. Ireland doesn't want to charge this because Apple are blackmailing them with the job losses thing.

The average wage in Ireland is 26,800. This multiplied by 6000 comes to a wage bill of 160million per year. 13,000,000,000 / 160,000,000 = 81.25 years worth of salary for Apple's Irish staff.

Isin't it worth simply hitting Apple with the full tax rate and then paying the laid off Apple staff to read the newspaper for the rest of their natural lives? Given that they probably tax employees as well and would get non trivial interest on 13 billion if you just left it in a bank, one suspects that 13 billion would actually last longer than 82.25 years.

[Joe Gurman]

False arithmetic

For one thing, I'm certain Apple's employees in Ireland, being in the tech sector, make somewhat more than the average salary. But the really failure in your reasoning is that €1 in salary ends up being a lot more than €1 in the economy. An Apple employee buys a pint (or anything else with VAT), and the government collect son that. But the pint also pays part of the barman's salary, and he spends money on things with VST as well, and so on and on. I suspect it still comes to considerably less than the billions cited, but perhaps a bit closer.

[Anonymous Coward]

Re: False arithmetic

But the really failure in your reasoning is that €1 in salary ends up being a lot more than €1 in the economy.

No, it's not a failure. Your failure was to not read his post.

If they paid the money to the laid-off employees, the then employees would STILL SPEND IT AS IF IT WAS SALARY.

In fact, I'll go one step further and mention if they paid the laid-off apple employees in one lump sum, then then time value of money shows a better impact on the economy than if apple had just been paying wages.

[JJKing]

Tax inequality

Tim Cook get $135 Million bonus and pays $71 Million tax.

Apple Australia has $8 BILLION in sales and pays $85 Million tax. Something not quite right there.

Arrogant bastards.

[Anonymous Coward]

Re: Tax inequality

I can't quite follow what your complaint is: that Tim Cook has to pay too much tax on his bonus?

:)

[IT Poser]

Re: Tax inequality

@ JJKing

So we should charge the full tax rate on all earning and not just profits then?

How would you feel if you had to pay the full(and too low IMHO) capital gains rates on the entire value of a stock when you sold it?

The idea is to only tax the gains as otherwise effective rates on investment will be over 100% and no one would bother doing anything.

[John Sanders]

Some would say that this is an oversimplification

But this proves that there are two standards, one for us and another for the very rich who can afford these tricks, then they use the profits to rig the game even more in their favour by buying themselves political favours (H-1B visas, shhhhhh)

http://fortune.com/2016/08/24/apple-tim-cook-fundraiser-clinton/

"And fuck you common people, we know better than you, we're royalty".

[Seanie Ryan]

Irish myself, but i think this ruling is a bit dumb and opportunistic.

The only reason they are going after companies like Apple is because of the vast amounts involved.

They never heeded them when they were a loss making enterprise, not too long ago.

Anyway, surely its the laws in all the OTHER countries that need to change if they want the taxes collected at source of sale country?

Just make it a condition of doing business in that country that you have to make sales figure returns and pay X. Otherwise you cant sell here.

in reality though, this will drag on for years and be in and out of appeals and the only people making the $$$ will be the lawyers (as usual)

[ritey]

what an arse

[Potemkine]

B'stard

"Remember my friends, God is dead. Marx is also dead. But the market lives. The market must become your new God."

[Anonymous Coward]

So I assume the next European treaty will include centralised control of corporation tax? - possibly with some exclusions for certain German industries perhaps?

[Anonymous Coward]

The peaseants pay tax, the wealthy get money from governments.

Suggesting the company Apple is a great employer can only be done if one does not look at the amount of money generated for the few compared to the number of people they employ.

Facebook and Google are similar. FB claims to be worth more than a quarter of a trillion dollars, more than Walmart. Meanwhile Walmart, certainly no great example of the kind of companies we need to advance our society, employs over 2 million people directly, FB 12,000.

Apple meanwhile worth over half a trillion employs a mere 60,000 give or take the most recent layoffs and most spin off jobs go to those workers with the fewest rights, and countries with the fewest environmental laws. .

If companies are not longer employing us, and not paying at least the same tax rate as us, why are "our" governments giving them so much support? Why are we supporting them by continuing to vote in systems that act in their interest and not ours? Why are we not acting or at least voting in our own interest?

[James Katt]

Time to punish Volkswagen - then Ireland can break from the EU

1. The US Department of Justice can now aggressively prosecute Volkswagen instead of mildly handling it as it is now. It can seek punitive fines for fraud and breaking EPA law on a massive scale that are triple the damage. So Volkswagen potentially faces bankruptcy because of a $80 BILLION FINE from the United States. Tit for Tat. Or as President Roosevelt said, speak softly but carry a BIG STICK. Hammer it to Volkswagen.

2. When Great Britain - and Ireland - completely separate from the European Union - this judgment will become moot. Ireland will no longer have to pay attention to the ruling. It will be INDEPENDENT and can set its own tax laws. This ruling further hammers to the British that they want no part of the European Union.

[Anonymous Coward]

Re: Time to punish Volkswagen - then Ireland can break from the EU

Yay, because we don't want elected officials telling us what to do (you did vote in the European elections?) when we can get unelected corporate lobbyists to do it for us instead. So much more efficient.

And actually we won't get to set our own tax laws because we live on planet Earth (though I expect a new Exit movement to start soon, promising us Elysian fields on Proxima B). We will still have to play the game nicely if we want to trade and compete. An ex-EU Ireland could set it's tax rate at whatever it wants, but the companies will have long unscrewed their brass plates and moved off to somewhere that lets them trade with the EU without barriers.

[Nikki Radir]

Re: Time to punish Volkswagen - then Ireland can break from the EU

1. What has Volkswagen got to do with this? And in any case, why is it in anyone's interest to bankrupt them?

2. Is there any prospect that the ROI will leave the EU? I don't think so. Ireland can and has set its own tax laws. The EU ruling is not about what tax laws Ireland has created, but that it has acted anti-competitively by giving special treatment to Apple. Do you think that when the UK leaves the EU it should set up shop as (even more of) a tax haven? Do you think that such a tactic will benefit the UK in the long run?

Are you a tax lawyer? An Apple executive? What interest do you have in Apple paying a tiny fraction of the tax that other companies pay?

[Steve Davies 3]

Re: Time to punish Volkswagen - then Ireland can break from the EU

Since when did Eire vote to leave the EU?

When the UK leaves (with all the EU against it but thankful for the exit) The Republic of Ireland will still be a member.

Or are you a Daily Flail reader?

[Aggrofish]

Hang on

Has anyone stopped to consider what taxes Apple does actually pay? Corporation tax is but one of many taxes that a business has to pay but can be managed through investments etc etc.

I imagine with business rates, VAT and employee contributions they probably still pay a hefty price.

[Commswonk]

Re: Hang on

I imagine with business rates, VAT and employee contributions they probably still pay a hefty price.

Yeah, right... Companies do not pay VAT; the final customer pays it; the company merely acts as a collector. Business rates? The same as the business next door with identical premises. Employee contributions? The same as the company next door with the same number of employees on comparable salaries.

In fact every bill a company pays - salaries, utililties, VAT, corporation tax is actually paid by its customers, in this case the bewitched fools who only have to see something with a little i as its initial letter to palpitate until they have bought one.

Apple is pissing up everyones' backs; they are raising two fingers to all the other companies that either can't or won't play the same trick, and we are all the losers because of it.

It's high time that Apple and all the others playing the same game were brought to heel, an act that might just include Vodaphone now I come to think about it.

</rant>

[IT Poser]

Re: Hang on

You seem to be referring to tax incidence. No matter what we call a tax, even if we call it corporate tax, the bill is always paid buy a living breathing human, not the legal structure that is a coroparation.

http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/Publications/Working_Papers/Series_09/WP0917.pdf

[Nikki Radir]

Re: Hang on

I expect your main point hangs on that paper's identification of a link between increasing corporation tax and lower wage settlements, from which you deduce that the tax is in effect paid by a company's employees?

[Setting aside my skepticism about economic modelling...] The passing on of costs from one person (or legal entity with quasi-personhood, as in the case of a corporation) to another is just an inevitable part of our economic activities. For example, over the years, my modest increases in salary and the UK government's rather lower increases in tax band thresholds have come to mean that - come bonus time in the New Year - I'll be taxed at the higher rate (40 not 20%). For 2017 this means (say) that we won't be replacing the garden fence as well as my clapped-out old car. A local fencing company won't be getting an order. But the UK Treasury will be getting about £1.5K more.

From my POV, there is purpose and good sense in levying tax on corporations. They enjoy many legal privileges and huge benefits from publicly-funded goods, which enable firms to operate effectively, attract investment and to take risks in innovation and new products. I agree that such taxation should not be punitive or counter-productive (noting in passing that the USA has one of the highest rates...). Perhaps the paper you quote could also be used to make a case for allowances to be set against corporation tax, based on the number of employees it has in that jurisdiction?

Returning to the main issue under discussion, we have for the time being at least to acknowledge the existence of corporation tax and its part in funding national budgets, managed by democratically-elected governments. I would contend that, to allow firms _like_ Apple - those with the economic clout and the mobility afforded by the type of business that they're in - to escape most of their tax liabilities, is not just to allow unfair competitive advantage, or to further impoverish countries still recovering from the shocks of 2008/2009*, but also to relinquish an essential part of democracy.

* Can we agree that the price of bailouts and austerity measures is mostly being shouldered by ordinary citizens?

[IT Poser]

Re: Hang on

"Can we agree that the price of bailouts and austerity measures is mostly being shouldered by ordinary citizens?"

There is no way I can disagree with that. No matter how we write the rules it is people that end up paying the tax. Corporations are creations whose original purpose was to protect wealth not invested in the business should the business fail.

My biggest problem with corporate tax is the complexity. Due to this complexity it is easy to find loopholes which result in tax avoidance(not evasion as that is illegal and a different issue). I prefer the KISS method of government since if there are no loopholes then they can't be exploited.

[Nikki Radir]

Re: Hang on

@IT Poser

" ...if there are no loopholes then they can't be exploited."

I also think that KISS should be applied to all matters of government, law-making and regulation - as far as is possible.

It seems to me that the huge complexity of UK tax law is not accidental; that, under governments of different stripe for many decades now, it has been written, in part, to allow or even facilitate tax avoidance for various powerful, special-interest groups with effective lobbying or even direct, personal access to lawmakers. Further, in recent years (see 'Private Eye' articles in their hundreds) there has been such an incestuous relationship between the large accounting firms and first the IR, then HMRC, that we have effectively seen the regulation shaped, if not directly written, by the same group of people that advise rich individuals and large companies on how to minimise their tax burden.

Tax efficiency in itself is not blameworthy; it makes perfect sense to pay only what is properly due, and no more. It also makes sense to profit from incentives specifically put in place to encourage particular types of investment and economic development. However, what we see is that a whole realm of nebulous artificiality has sprung up, in which people are making their entire, very lucrative careers. Here activities take place, contracts are drawn up and companies are brought into being, operated and wound up for the sole purpose of tax avoidance.

I think that something can be done about that, and would love to hear commentary from economists, lawyers and accountancy experts - those who have no personal interest in maintaining the 'nebulous realm'. Is it beyond the wit of humankind to devise company and tax law that supports and rewards genuine business activity, and disallows the rest?

Granted, sensible changes to international agreements will suffer tremendous inertia and resistance from vested interests. There must though be many changes (and especially simplifications!) that can be effected domestically. Even to my inexpert eye, the methods of avoidance I see reported seem absurd in the extreme; but to plug the loopholes again and again would simply be to ratchet up the arms race of deceit and complexity in avoidance. There needs to be radical change, starting with the expulsion of anyone and everyone with a conflict of interest from HMRC and adequate funding for proper inspection and enforcement. Then a non-denominational public inquiry.

[JimS]

Re: Hang on

VAT doesn't count, they're just collecting it for whichever country they sold the gadget in. In actual fact, they probably profit from VAT, as it's not instantly collected by governments and likely gains interest for them? Someone with better knowledge than me might know better.

I bet they get a deal on any business rates as well.

I can see the EU introducing a EU wide standard corporation tax rate because of this, in fact that's probably the whole idea of kicking up such a fuss now. I wonder if they will go as far as banning corporations if they don't toe the line - "Don't want to pay taxes <insert evil corporation>? Then you can't sell your product in the EU" kind of thing.

[Nikki Radir]

Re: Hang on

That's not the point. Other businesses still contribute just as much, proportionally, as their activities also generate the taxes you mention. However, many of them cannot (or, incredibly, "do the right thing" and do not) avoid corporation tax. Hence Apple and the other stateless tax-dodgers gain an unfair competitive advantage.

Huge corporations do not need special deals; they can afford to look after themselves, whatever the jurisdiction. We collectively, however, need there to be a level playing field for genuine competition. Taking part in a race to the bottom on tax deals with big corporations is a mug's game. A few countries can get away with it for a while, but if pursued by many countries it simply results in the impoverishment of all the underpinnings of civilised and prosperous societies. Firms like Apple want to have their cake and eat it - to benefit by drawing employees from an educated population, having use of publicly-funded infrastructure, a reliable legal system, etc. - but not to contribute to the same.

However, it is up to us (via our governments) to set the proper conditions for a healthy business environment. We could wait years, decades even, for international tax regulations to be overhauled - or we could insist that the price of doing business in our own country (ROI, UK, USA, Germany, Japan, wherever) is to adhere to basic, sensible principles. Profits made from activity in a country should be taxed there; domestic subsidiaries owned by a multi-national should not be paying to the parent as if they were a franchisee; the incorporation of companies with no trading or administrative purpose should not be allowed; prices charged to different, local subsidiaries for goods and services from their parent company should be the same everywhere; artificial loans with the purpose of generating unreal 'costs' should be outlawed - and so on.

In the UK (and I suspect elsewhere), we seem to have forgotten the value of democracy and have largely become disengaged from the process (and I don't mean just turning up to vote once in a while). Just think - they've got the tax lawyers but we've got the numbers.

[Slx]

Simple really..

Simple really : They'll launch the iPhone 7, everyone will coo over it for weeks and forget this sorry incident ever happened.

It's the Mom Corp school of Public Relations.

[martinusher]

Its only the tip of the corporate iceberg

Apple are only one of the many multinationals that have relocated or inverted to Ireland to effectively avoid tax. If Ireland was forced to collect all the money it should get at regular rates then the streets of Dublin would indeed be paved with gold -- they wouldn't know what to do with all the loot.

[Cynic_999]

Morality cannot apply

ISTM that taxation is a purely arbitrary set of rules created by a government for the purpose of funding that government. The only moral questions are about how transparent the taxation is, and how the government uses the money it raises in taxation - but the tax rules themselves have no moral context whatsoever, except perhaps that *all* taxation amounts to "demanding money with menaces".

So by all means question the morality of stealth taxes and a government that uses the taxes to fund illegal wars and grandiose projects that have little use rather than using the money as its purpose is purported to be (to benefit the population), but whether a government does or does not impose taxation on any particular entity or person (whether by accident or design) is not a matter for *moral* debate, nor is there anything immoral about not paying taxes that you do not have to pay.

Incidentally, taxes were not originally imposed on employees. Income tax was introduced as a temporary measure for the sole purpose of funding the Napoleonic war, and it was promised that it would be rescinded as soon as that war was over. Good to see that the standard of politicians' promises have not changed ...

[Anonymous Coward]

Well, the EU (Germany) will need to find more and more clever ways to obtain money with the UK leaving... It was already under funded. Goodbye EU.

[Shane McCarrick]

Including interest- its actually closer to 21 billion........ Keep in mind this is over a 10 year period......... The conservative figures of the Irish Revenue Commissioners- came up with a figure of just over 19 billion- the higher 21 billion takes into account prevailing interest rates over the period in question........

[darklord]

Nothing new here move on

This is only doing what Motorola and Dell did back in in 1989. in order to get business into Ireland.

EU should keep their noses out I am not a fan of apple. but this is nothing to do with Europe politics more of who didn't get a back hander.

[Roland6]

Re: Nothing new here move on

What is new is that the (current) EU Competition Commissioner now has the backing of EU treaties, teeth and the willingness to use them with Rottweiler tenacity...

What people are overlooking is the extent to which EU competition rules have been tightened over the years. Remember the UK government in recent years has several times had to get deals approved by the EU competition commission so as to avoid them being classed as 'state aid':

BDUK - Effectively a deal with BT

Deal with EDF over Hinckley Point

...

Whilst some may call this a loss of sovereignty, the question is, if you want to be a member of a club then you have to accept the rules - but then it is the fully joined up members who write and agree the rules; a point lost on many Brexit fanatics...

I suspect that the current owners of Motorola and Dell are glad that 1989 is probably too far back for the EU to investigate and are now rapidly double checking more recent activity to ensure that all is above board ie. tax efficient and can't be seen to be 'state aid'.

[Someral]

A.O.I. - the head office company that takes the profits and has no Earthly address so cannot be taxed anywhere is a bad joke that needs dealing with.

EU is simply showing how Apple and Irish government allowed this ridiculous fiction to run for so many years. The huge amount of money is only way it can be clearly shown.

[Jonjonz]

What a load of crock

To big to fail, all over again. Hey we are your rich overlords. We are different from you, if you tax us fairly, we just might fail, or at the least stop handing out token jobs and pittances to charity.

Ignore the man behind the curtain, we know whats best.

[You aint sin me, roit]

Bono must be confused...

He defended Ireland's 12.5% tax rate, but moved U2's operations to the Netherlands so that they pay around 5% tax.

Then U2 arrange, via Apple, to force an album onto all iTunes users "for free".

And now he finds out that they could have sold that album for cash and if he'd taken up the options to pay microtax that Tim Cook says are available to all, they could have saved wodges of tax while remaining based in Ireland!

All while doing his utmost to end global poverty...

[Anonymous Coward]

Only the Americans can make decisions on law and order, they right the rules.

In fact, America is the god damn law in this world.

What does the EU think it is?

The little people pay tax, Apples billions are Apples business backhanders to friends in high places (Washington, Dublin etc..)