back to article Apple to Europe: It's our job to design Ireland's tax system, not yours

Apple has filed its defence against the European Commission's claim it owes €13bn in back taxes in Ireland. Apple on Monday filed a defence in which it dismissed the very idea of the US$13.75/£11bn bill, calling for the total or partial annulment of the European Commission decision that set the case in motion and suggesting …

  1. ratfox

    Fascinating

    I suppose we are to believe that Apple generates all of its wealth in the Cayman Islands.

    1. stu 4

      Re: Fascinating

      It's a fascinating insight into the way american corporations think - they THINK the world should fit them, and is there only to help them make money.

      They think this for good reason, as it's the way america works - basically a corporate oligarchy where laws exist only to allow corporations to succeed. A democracy of sorts, but only if you agree that at the bottom of a democracy - lies corporations, not individuals.

      So they are shocked and astounded when they try these same tactics on 'not america' (the officially recognised name for the rest of the world by americans I think)... WHAT ? I am EvilCorp! I have do what I want. Kill that man! Kill his family! Your laws do not apply to me puny non american moral - it's legal in america, and we dont give a shit about your so called 'country' laws.

      Even within american laws you can see this weird 'american's first' bigotry.. there are one of the few countries where your human rights differ depending on whether you are 'emurican' or a filthy foreigner (e.g. right to privacy, rights to search. etc)

      1. netminder

        Re: Fascinating

        sadly, this is hard an American-only trait. Get used to it because many non-American companies operate on the same rules & this brave new world we live in makes it easy for them to do so.

      2. Anonymous Coward
        Anonymous Coward

        Re: Fascinating

        > way american corporations think

        Keep thinking decent size corporations belong to any one country in any way. Blame this on the %1ers not the majority of Americans who actually didn't vote for our current ass clown government.

      3. Anonymous Coward
        Anonymous Coward

        Re: Fascinating

        That's because they're invoking the golden rule: He who has the gold makes the rules.

        Why do you think Google is making a massive investment in London? Because it's supporting Brexit? I don't think so. It makes it impossible for governments to tax the big corporations without "repercussions".

        1. wayward4now
          Holmes

          Re: Fascinating

          "That's because they're invoking the golden rule: He who has the gold makes the rules." Don't forget the other rule: "Life is a shit sandwich and the more bread you have the less amount of shit you have to eat." So true.

      4. Spaceistheplace

        Re: Fascinating

        Which is why the US is defined as a capitalist society. That capital goes above political authority. Of course this was reigned in during the Roosevelt era, only to be overturned later.

        1. Alan Brown Silver badge

          Re: Fascinating

          " Of course this was reigned in during the Roosevelt era"

          It was reined in on several occasions in US history. At least major anti-trust 4 interventions in the 19th century alone.

    2. Oh Homer
      Facepalm

      "profit-generating work happens elsewhere"

      Yes Apple, that's exactly the point. You do all the work elsewhere, then funnel all the profits into a tax haven.

      So Apple's defence is, essentially, "But your Honour, how exactly are we supposed to rob the bank without a shotgun?" - seemingly oblivious to the fact that the shotgun part is actually inconsequential, because more fundamentally they shouldn't be robbing the bank at all, with or without a shotgun.

      No really, I get it. Apparently Apple doesn't, however.

      1. Anonymous Coward
        Anonymous Coward

        Re: "profit-generating work happens elsewhere"

        Easy. Run a bank.

    3. Chris Miller

      Re: Fascinating

      International business taxation, by treaty and general agreement, assumes that profits should be taxed where they are generated. For Apple, that's mostly Cupertino. The trouble is that California has some of the highest levels of corporate taxation in the world (close to 40%), but they only apply if and when those profits are repatriated.

      So Apple (and many other US multinationals, Apple's just the biggest) are holding most of their foreign-generated profits offshore in the hope that business tax rates will be reduced. It looks like The Donald may do exactly that, in which case expect a HUGE (one-off) rush of profits back to the US and a HUGE flood of taxes into the US Treasury.

      1. Peter Gathercole Silver badge

        Re: mostly Cupertino

        I think that this assumes that the majority of the value add for Apple products is due to the design work (IP) that is done during product development.

        It totally ignores the value add associated in the taking of raw materials, and manufacture them into the finished devices.

        It also ignores the value add of the marketing and distribution network, although you could say that it did include the premium that people pay just to buy an Apple device.

        The IP argument is really a diversionary one, because it assigns a value to a largely intangible asset. This allows them to claim that the majority of the cost is an arbitrary value that they can essentially say comes from the lowest tax jurisdiction they can find.

        IIRC, Starbucks did something similar by using one of their hierarchy of companies in a low tax jurisdiction to buy coffee on the open market, and then sell it to their operations in other countries at a stupid markup, along with licensing charges for branding. This allowed them to move profits to the low tax jurisdiction and claim that in most countries, their profit levels were so low that they did not need to pay much corporation tax. This became even more offensive when you think that the coffee never went near the country that supposedly added to it's value.

        What did the Cayman islands actually add to an iPhone beside being the arbitrary 'owner' of some IP?

        1. Chris Miller

          @Peter

          The cost of manufacturing an iPhone is less than 1% of the list price. Selling, general and administrative (SG&A) expenses are about 7%. Apple run a 40% gross profit margin, most of which is 'earned' in Cupertino.

          http://www.cultofmac.com/455536/advertising-budget/

          http://www.independent.co.uk/news/uk/home-news/iphone-7-costs-apple-make-manufacture-a7329016.html

          1. JLV
            Boffin

            Re: @Peter

            >The cost of manufacturing an iPhone is less than 1% of the list price.

            Do you have any numbers to back that up? I find it really hard to believe that just the CPU and the screen, by themselves, would not be more than $10. Even in YUUUUUGE volumes. Heck, how much is Qualcomm's pound of flesh?

            This case is aggravating and Apple's arrogance is immense, but let's try to stick to reality nevertheless.

            1. really_adf

              Re: @Peter

              >>The cost of manufacturing an iPhone is less than 1% of the list price.

              >Do you have any numbers to back that up?

              Chris's second link says an iPhone 7 32GB with list price £599 costs £174 to make, of which £170 is components and £4 "manufacture". Presumably the letter is just assembly.

              It's not clear if the £170 includes licensing costs such as Qualcomm's "pound of flesh" you mentioned. Or even the sundries supplied with the phone (I'm not sure what they are these days).

              Lies, damned lies and statistics.

              1. JLV

                Re: @Peter

                Sorry, even that doesnt make much sense. Foxconn assembles, right? So, presumably, whatver Foxconn's charges Apple is the cost of manufacturing, to Apple. Telling me Foxconn makes < $10 / phone?

                By any non-clickbait metric, i.e. not by a publication calling itself Cult of Mac, the accounting concept you are talking about when you are contrasting it to SG&A is cost of goods sold. That would include pretty much all the bill of goods plus the labor and assembly costs. Not whatever weird cutaway slicing they are using to make a non-existent point.

          2. Joe 35

            Cost of manufacturing an iPhone is 1% of sales price - NOT

            You omitted the cost of the components ($220) and did your maths on the assembly price ($4) only.

            Which is why your assertion is so far off the mark "its not even wrong"

        2. katrinab Silver badge

          Re: mostly Cupertino

          Yes, obviously some of the money is earned elsewhere, but look at why people pay premium prices for something with an Apple logo on it. It is because they consider it to be a better product than kit from other suppliers. Where is the work done to make it a superior product? Mostly it is in Cupertino.

          1. John Brown (no body) Silver badge

            Re: mostly Cupertino

            "Where is the work done to make it a superior product? Mostly it is in Cupertino."

            It depends on what you mean by "work". The design "work" and ideas may be done in Cupertina, but the revenue generation happens by one bit of Apple licensing the Apple IP to other parts of Apple to be allowed to make and sell the Apple devices. This happens in the low tax places such as Ireland. So, if you define "work" has being the bit that makes all the money (which is the primary reason for running most business') then very little "work" occurs in Cupertino, most of it happens in Ireland.

            Of course, the US might want to ask Apple US why they give away their valuable IP to Apple Ireland and then let Apple Ireland earn billions from that "worthless" IP

            1. katrinab Silver badge

              Re: mostly Cupertino

              Sure, but if Apple Ireland was an independent company with separate shareholders, how much would it have to pay for an exclusive license to the IP developed in Cupertino?

      2. netminder

        Re: Fascinating

        The whine is always that the US has one of the highest corp tax rates in the world. Ireland is often used as a comparison because their rate is so low. The deal is though that because of all the tax breaks companies pay LESS in taxes in the US than they do in Ireland. The repatriation dodge is just that, a dodge. They will not bring that money into the US until they can do it for free, or nearly free. There will be no great windfall for the government.

      3. rtb61

        Re: Fascinating

        Profits are generated at point of revenue, not the point of cost. Not Americans can not steal other countries taxes and social services, even though they routinely do through acts of extreme violence and coups.

        So all taxes should be paid at the point of revenue, where the customers are and all cost ie foreign taxs records to substantiate costs and prevent off shoring profits are also required.

        Note fail to provide foriegn tax records and lose those costs as tax deduction and pay full taxes on all revenue.

    4. Eric Olson

      Re: Fascinating

      There's a weirdness to how all countries do their tax structures, be it businesses or personal. The US system is a joke, but the EU system isn't great either, and has numerous loopholes that allow the Apples of the world a chance to avoid billions in taxation.

      A better question is what purpose do we expect corporate taxation to serve? Is it a fairness thing? A way to reduce personal income taxes and therefore a political calculation?

      This is a serious question, because if we arrive at why?, then we can at least put together a less insane system... maybe.

  2. John Smith 19 Gold badge
    Unhappy

    Of course not. Apple generates all its money in the internet

    Which of course is nowhere.

    Which is where they pay their taxes.

    Apple once again showing why they pay their CFO $60m+ a year.*

    For the colossal set of balls to spout this sort of arrogance.

    *Well of course it's not really "pay" exactly because that would mean he'd have to be taxed at that level.

    1. LDS Silver badge

      Re: Of course not. Apple generates all its money in the internet

      It's also no surprise its CFO is from Italy, the EU country with one of the highest tax evasion rates and corruption... Apple always hires the best ones...

  3. wolfetone Silver badge

    It proper annoys me that the Irish Government don't want the money. That €13 billion could be pumped in to training skilled workers to improve the economy, instead of the reliance on semi-skilled workers who can get shafted by the likes of Dell when they want to move their manufacturing facilities to other parts of the EU.

    But nooooooo. That's far too good of an idea for it to make any financial sense to the friends and buddies of those sat in the Dail.

    1. LDS Silver badge

      You mean the same government which is under scrutiny for police corruption?

      1. Alan Brown Silver badge

        Is police corruption in Ireland as bad as in a country which just promoted the person responsible for the killing of a brazilian electrician, issuing of fabricated press releases and the subsequent coverups into the top policing position in its largest city?

    2. JetSetJim Silver badge

      I imagine they're scared that if they go along with it and get this one-time windfall, all the big companies (no idea how many there might be) with sweetheart deals to stay in Ireland will skedaddle to the next corporate hideaway, and their tax revenues plunge.

      1. Duffy Moon

        Exactly. We have a situation where no country wants to drive the greedy rich people/corporations away, so they can pretty much dictate their own terms. This is not acceptable when even the poorest people must pay tax (at least VAT and the like).

        I can't see the situation changing unless there are global agreements on such matters. I'm not optimistic about such an agreement happening any time soon (if ever).

      2. Scuby
        Joke

        Like the UK in 2019

      3. LDS Silver badge

        "will skedaddle to the next corporate hideaway"

        No, because they have actually no other place to go inside EU with lower tax rates than Bulgaria or Hungary - and I can see none of those companies going to Sofia or Budapest - or they would be already there.

        Again, EU is not complaining about the 12.5% Irish corporate tax rate. It's complaining Ireland applied a much lower tax rate specifically to Apple (and maybe a few others). Illegal state aids means some specific companies are favored using specific rules applied to them only. If Ireland applies a 0.004% corporate tax rate to any company, EU can't complain.

        1. Mage Silver badge

          Re: "will skedaddle to the next corporate hideaway"

          Indeed, Apple paid less than 0.5% tax. Not the regular Irish 12.5% which EU doesn't object too. "State Aid" is the polite name for the generous deal.

        2. Greymouser

          Re: "will skedaddle to the next corporate hideaway"

          Not sure why they wouldn't move to Sofia or Budapest if there's a lower tax rate there. They seem to be in Ireland mainly for the tax rate, and there's a reasonably large population of English speakers in Bulgaria/Sofia.

          Unless all EU countries standardise their corporate tax rates and ban sweetheart deals, then companies like Apple would presumably move to wherever offers them the best deal.

          I think Amazon are "based" in Holland where they only pay a tiny tax rate, so it isn't only Ireland who do it.

          I find it hard to believe that a tax agreement could be made in the short or medium term, and a more likely (and scarier) option is that Trump reduces the US corporate tax rate, or does a special deal, and all that money floods back into the US where Trump can show off what a great deal he's made, and suddenly has loads of cash to spend.

          1. LDS Silver badge

            "Not sure why they wouldn't move to Sofia or Budapest if..."

            Exactly because they're less appealing places for doing this kind of business - from language (Magyar is quite an interesting one to learn...) to services, infrastructures, etc. Especially executives and upper management don't like to be sent in places they perceive "not adequate".

            Also, Hungary and Bulgaria are not in the Euro - which means not only employees would be paid with the local currency (making it far less appealing for hiring abroad), but it would also complicate all the financial transfers and the accounting these companies do inside the Eurozone - which probably account for the larger share of revenues.

            Amazon is in Luxembourg (another country that made special deals....), AFAIK - although Holland is often used to transfer money to Caribbean tax havens.

            Anyway, when Trump will reduce the corporate tax, it will be reduced so much there won't be much cash to spend left. It already happened in the past.

          2. billse10

            Re: "will skedaddle to the next corporate hideaway"

            "Trump can show off what a great deal he's made, and suddenly has loads of cash to spend."

            one of the scariest aspects of that is exactly what would he spend it on?

            1. codejunky Silver badge

              Re: @ wolfetone

              Looks like I started something there. LDS and Lars defending the euro because they had to bail out Ireland, with Ireland locked into the euro currency. The currency undervaluing Germany yet overvaluing Greece. How many people cried over the sterling fall yet Germany is in very much in that situation while Greece isnt allowed to do that to its currency (and is paying for that painfully).

              As for HAL-9000, yes Apple could move (as well as others) if the reason they are there is the deal. And be aware the EU is already worried that the UK will drop our tax rates further.

              But wolfetone your comment that brexiters dont deal in truth is amusing. That suggests truth in the remain campaign didnt and yet I am well aware that both official campaigns did. The good news for us is we will be free of the EU and be able to do as we please with our own tax laws.

              1. LDS Silver badge

                Re: @ wolfetone

                Actually I wasn't defending the Euro. I was stating some facts:

                1) Being in the Eurozone helps to make Ireland appealing for company HQs that have to deal with the Eurozone itself (as long as it exists), and to find employee willingly to relocate. Being paid with a weak currency always at risk of devaluation doesn't make a job appealing.

                2) Ireland got a lot of help when it entered a big crisis because it was in the Eurozone, and it couldn't be left to itself easily - just like Greece. Now Irish economy is growing - despite the Euro or thanks to the Euro?

                Moreover, devaluation helps only if you're a manufacturing exporting country and/or you can offer a lot of cheap labour. Otherwise, it just cripples your economy further, because everything you import costs a lot more, and you can't attract production from outside. Even if Greece returns to the dracma and heavily devaluate it, what will it obtain? Would manufacturing move to Greece (hint: corruption and other issues alike don't help)? What could Greece export more? Just Greeks savings would be wiped out, and all imported goods would cost a lot more, pushing fixed income people even more towards poverty.

                Same of Ireland - what benefit would have devaluating its currency? Some more tourists? Cheap Guinness abroad? I don't like it anyway <G> But it could lost company HQs, exactly because of the weak, unstable currency.

                1. codejunky Silver badge

                  Re: @ wolfetone

                  @ LDS

                  "Actually I wasn't defending the Euro"

                  Kk my bad.

                  1) When compared with not paid at all devaluation wins. As found over the Eurozone, where the currency is too strong for some countries they are tanking and suffering serious unemployment. Last I heard the labour cost in Ireland fell (few years ago) and it is not a moment of pride to be crawling to the EU and IMF for bailouts. The low tax rate is one of the prime selling points for Ireland and not something to be ashamed of and their labour costs came down anyway just not through devaluation.

                  2) Despite the Eurozone I would say. From what I remember reading of the crisis they were forced to bail out French and German banks or risk being thrown out of the EU. The deal with the EU and IMF forced budget and wage cuts. Without the Euro and the EU interference both Ireland and Greece would have been able to default on what they couldnt pay and by now be fine. Instead Ireland is fighting for its tax incentives and Greece cannot repay the loans and continues to be abused for it.

                  "Moreover, devaluation helps only if you're a manufacturing exporting country and/or you can offer a lot of cheap labour."

                  Devaluation is about the actual value of the currency (as Venezuela has found). Their actual rate cannot stand, the black market rate is the market rate of what their currency is worth. If a currency cannot move with its actual value then bad things happen such as very visible pay cuts until people work for the price their labour is worth including (as the Eurozone has found) unemployment. Had the Greeks defaulted and left the Eurozone they would most likely be fine now (barring stupid policies). Instead savings are being wiped out and serious unemployment may cause much greater damage as young people are struggling to get jobs. That is severe damage.

            2. Kiwi
              Trollface

              Re: "will skedaddle to the next corporate hideaway"

              "Trump can show off what a great deal he's made, and suddenly has loads of cash to spend."

              one of the scariest aspects of that is exactly what would he spend it on?

              Orange paint, and a supply of something that brings new meaning to the term "bad hair day"? Or maybe he'll use it to organise a terrorist hit in Sweden(?) so next time he goes public about one, it will have actually happened?

              (El Reg, stop taking notes from Mozilla/MS and stop farting around with the page layout, was great how it was last week tyvm!)

        3. Voland's right hand Silver badge

          Re: "will skedaddle to the next corporate hideaway"

          No, because they have actually no other place to go inside EU with lower tax rates than Bulgaria or Hungary

          Hungary has 27% percent VAT, strange taxation which varies every year as Orban looks to fix the balance and it has a long standing issue with being at war with the Eurozone banks after the government mandated haircut on the Euro-valuated mortgages. While companies will invest there, nobody will move shop there, because the various other financial factors add up to an overall worse deal than the Irish 12.5%.

          Bulgaria is actually not as unfeasible as it seems. Economy and taxation are relatively stable. I do not think the rates quoted on Wikipedia are correct though. If memory serves me right, the income tax is 25%, not 10%.

        4. Alan Brown Silver badge

          Re: "will skedaddle to the next corporate hideaway"

          > I can see none of those companies going to Sofia or Budapest - or they would be already there.

          Actually they are. The largest ramp up of technical jobs in the EU is happening in both countries along with Romania.

          Buda and Pest are separate cities now btw.

    3. Anonymous Coward
      Anonymous Coward

      Of course the Irish government knows full well that the only reason the likes of Apple and Dell placed their operations in Ireland was because of the extremely generous tax treatment they received, and if the EU Commission unpicks the Apple deal there could be a rush to the door. So it's €13bn now versus a continuing stream of cash from a host of other tax "minimisers".

      1. ArrZarr

        To be fair, Ireland is a fantastic place for datacentres to be placed due to the ready availability of suitable (Cold, flat and rainy) land.

    4. codejunky Silver badge

      @ wolfetone

      "It proper annoys me that the Irish Government don't want the money. That €13 billion could be pumped in to training skilled workers to improve the economy"

      Maybe the gov wants the money and the jobs. They could kill the golden goose in one swift move which would not only make other companies potentially fly away but also give the EU the impression that their desire to harmonise taxation might work/be acceptable. Or the gov can be sensible and weigh up if they want the continuous tax money, the jobs and so the various tax paid by the company to the workers.

      As for using it to improving the economy. Ha. Not while tied to the Euro.

      1. Voland's right hand Silver badge

        Re: @ wolfetone

        They could kill the golden goose in one swift move

        No they will not. The golden goose is wearing a 1 foot thick flack vest in the form of the lowest BASE tax rate in the Eu. So as long as the commission even-handedly enforces the collection of the BASE rate Apple has nowhere to go. It has to declare all Eu revenue somewhere and Ireland WILL remain that place.

        In fact, it has already started to declare that revenue at BASE rate for the last year (resulting in Irish GDP suffering from a noticeable jump which was not in the forecast).

        Irish politicos are suffering from a first degree idiocy here. They do not need to resist, they need to take that ruling accept it with glee and then start a discovery tour around Europe looking for other sweet deals to make sure they are still the lowest corp tax rate by far.

      2. PNGuinn
        Pirate

        Feksit

        Do we detect another nail for the eu coffin being slowly forged?

      3. LDS Silver badge

        "As for using it to improving the economy. Ha. Not while tied to the Euro."

        Do you understand that companies are also there because Ireland is in the Euro, and if outside the Euro, Ireland would have been already gone bankrupt? EU and ESFS funded Ireland with many billions only because it was in the Euro... it's easy to complain about the Euro while getting a lot of them while advantageous, right?

      4. Lars Silver badge
        Happy

        Re: @ wolfetone

        "As for using it to improving the economy. Ha. Not while tied to the Euro.".

        Try to get over it, or do you still believe the EU was going to force the Euro upon you as the Brexiters claimed.

        Just get over it although it's a bigger currency than the Sterling, and by the way I cannot have too many of them.

        The Eurozone is a monetary union of 19 of the 28 European Union member states.

        Free up your mind, think about the Rand for instance.

        1. wolfetone Silver badge
          Coat

          Re: @ wolfetone

          "Just get over it although it's a bigger currency than the Sterling, and by the way I cannot have too many of them."

          You can't say that, no matter how true it is. Because Brexiters don't deal in truths.

          £350 million per day for the NHS anyone? No? What do you mean that was a lie? It was on the side of a bus!

          1. david bates

            Re: @ wolfetone

            "We'll need an EMERGENCY BUDGET literally the day after if you vote to leave..."

            Hmm...

          2. Anonymous Coward
            Anonymous Coward

            Re: @ wolfetone

            Ever wondered where the £350million a day figure came from?

            It's what the previous lot claimed to be spending on the NHS... Strangely, when the Coalition got in, they discovered that the "official" figures for a lot of things were, ah, "slightly at variance" with what was on the books and even more so with Reality(TM).

            And whose Truth do you refer to? The EU, whose own accountants have gone on record as refusing to sign off the accounts? The Remainers, who claimed the sky would fall on our heads as soon as we decided to leave? Funny how certain groups always manage to attend protests while the rest of us can't because we're too busy working to keep them in the manner to which they feel they are entitled...

      5. HAL-9000

        Re: @ codejunky

        They could kill the golden goose in one swift move which would not only make other companies potentially fly away

        Do you honestly believe these vampiric, blood sucking vultures would flyaway from one of the lowest corporate tax hideouts in the largest market outside of the good ol' US of A, and the 'not so communist' China, to setup office in Budapest? Your conjecture is facile at best.

        Or perhaps the Irish government, merely have to be seen to be opposed to the notion, while privately wondering what to spend the wind-fall monies on.

      6. Schultz
        Stop

        codejunky: "Ha. Not while tied to the Euro."

        I don't know, Ireland seems to do pretty well in the growth department:Ireland to be EU’s fastest-growing economy in 2016. I don't think you can blame the pound for that.

      7. This post has been deleted by its author

    5. junglesnot

      "... shafted by the likes of Dell"

      And yet you probably didn't mind when Dell moved its assembly line from Bracknell to Dublin, huh?

      1. wolfetone Silver badge

        Re: "... shafted by the likes of Dell"

        "And yet you probably didn't mind when Dell moved its assembly line from Bracknell to Dublin, huh?"

        It's a bigger hit to the economy of an Island of ~3 million when a company like Dell leaves compared to the economy of a country with ~60 million.

        1. Roland6 Silver badge

          Re: "... shafted by the likes of Dell"

          t's a bigger hit to the economy of an Island of ~3 million when a company like Dell leaves compared to the economy of a country with ~60 million.

          Much depends on the location of the supply chain and other feeder/spin-off businesses. In a country of 60+ million there is greater opportunity for such associated employment, witness both the motor and aerospace industries. Also you're forgetting the message stock markets et al would take from a company the size of Dell relocating from UK to Ireland, as the UK is embarking on Brexit...

          So we in the UK (and N.Ireland) actually want the EU to crack down on Ireland and dissuade companies from thinking of significant relocation of facilities out of the UK into the EU...

          1. LDS Silver badge

            "So we in the UK (and N.Ireland) actually want the EU to crack down on ireland and dissuade..."

            I'm sorry you're late. Now EU has to incentivize companies to relocate out of UK into EU...

    6. Franco Silver badge

      I used to work with a lot of Irish people in Glasgow, and they had a saying where Irish politics was concerned. "Don't tell my Mother I'm a senator in the Dail, she thinks I play the piano in a whorehouse."

      1. Anonymous Coward
        Anonymous Coward

        "and they had a saying where Irish politics was concerned."

        Wasn't Eire the country where politicians were handed their bribes at racecourses so they could claim they were the result of successful betting? At least one Taoiseach is said to have had no bank account and a house full of banknotes.

    7. DrXym Silver badge

      "It proper annoys me that the Irish Government don't want the money. That €13 billion could be pumped in to training skilled workers to improve the economy, instead of the reliance on semi-skilled workers who can get shafted by the likes of Dell when they want to move their manufacturing facilities to other parts of the EU."

      The Irish government wouldn't be entitled to the money. If they took receipt of it then all of the rest of Europe would be in line demanding a cut of the cash. I expect Ireland's cut if that happened would be a lot less than 13 billion, amounting to revenues within the state as opposed to revenues collected from other states.

      Secondly, Ireland has hundreds of thousands of people working for multinationals. It would be tempting to sell one of the multinationals out for a chunk of cash but it might have serious consequences in the long term.

    8. fajensen Silver badge
      Joke

      It proper annoys me that the Irish Government don't want the money.

      ... Maybe they keep their secret stash of pedo-porn in The Cloud?

      Politician (p) meets Silicon Valley Political Community Organiser and Singularity Evangelist (a):

      a) "..You know how it is in business, guv? On have to prioritize and allocate capital most effectively, If we have to pay all of that in taxes then we cannot also afford security and Russian Hackers will surely be hacking your accounts and influencing the next election ..."

      p) .... "b.b.b.ut - I dont have an iCloud or any Cloud account, how does this concern me",

      a) "Sorry guv, our records show you have had one since 1985 ... and I hear there is some right naughty stuff in there guv, i'd say close to illegal, prison time illegal like, disgusting stuff too, of course this is nun of me business ..."

      ... hands over envelope of screenshots ....

      p) "Sniffle! How did I get into this mess, I my wife hears ... How does this go away?"

      a) "See, guv, that *IS* my business, making all of them nasty things that can just happen in life go away all quietly like ... taxes are nasty things, aren't they, guv?"

      p) "Anything, Anything ...."

      a) "Of course, guv, but a little less will do for now ... just a favour really"

  4. James 51
    Joke

    I have never understood how telling the courts they are too stupid to understand why they are wrong is regarded as a winning tactic. I k ow, it's all fake laws!

    1. wikkity

      RE: fake laws

      Nowadays they are called alternative laws.

  5. AMBxx Silver badge
    Stop

    What happens if they refuse?

    Surely, the final option for the EU is to prevent Apple selling within the EU? Would they really go that far?

    1. lglethal Silver badge
      Unhappy

      Re: What happens if they refuse?

      One can only hope!

      But considering that they let them get away with not using a Standard USB socket on the Iphone for charging (directly violating EU law), my confidence is pretty low...

      1. Anonymous Coward
        Anonymous Coward

        Re: What happens if they refuse?

        What's a standard USB aocket?

        1. lglethal Silver badge
          Facepalm

          Re: What happens if they refuse?

          Micro USB or USB-C are the currently accepted charging sockets, or ports if you prefer.

          That wasnt so hard now was it?

          1. Saltee
            Paris Hilton

            Re: What happens if they refuse?

            That went right over your head didn't it ...

            https://xkcd.com/927/

      2. Anonymous Coward
        Anonymous Coward

        Re: What happens if they refuse?

        Quote: "But considering that they let them get away with not using a Standard USB socket on the Iphone for charging (directly violating EU law), my confidence is pretty low...".

        I'm not one to defend Apple (I don't like the company at all myself), but this is just not true.

        To make it clear, there is no rule in the EU that dictates that a USB socket must to be fitted to mobile devices. None, period.

        The 'Common EPS' rule, which is what your presumably referring to, only stipulates that mobile devices need to comply electrically with the USB battery-charging specification, AND that a standard USB charger must be able to be used to charge the device.

        But, and this is the key bit, it does not stipulate how that charger needs to connect to the device and never has.

        To retain compliance with the 'Common EPS' rules, when there is no USB socket on the device itself, then the manufacturer has to provides an adaptor with the device, that would enables a standard USB charger to be used to charge it.

        So as long as Apple provide a USB adaptor, then they are still compliant with the rules. They do, so they are, and anyone stating they are not compliant, is simply incorrect or ill informed, (or both).

        1. lglethal Silver badge
          Happy

          Re: What happens if they refuse?

          OK I was not aware of that specific wording, my apologies.

          It does however, raise the question of how that EVER became the law. I can understand allowing a grace period or something similar, before everyone has to switch, but damn, that wording basically invalidates the whole idea behind the Common EPS rules. I guess I shouldnt be surprised since we're dealing with politicians here...

      3. gnasher729 Silver badge

        Re: What happens if they refuse?

        "But considering that they let them get away with not using a Standard USB socket on the Iphone for charging (directly violating EU law)..."

        You should know that is nonsense. The charger is absolutely standard. The cable must have USB at one end and whatever you need at the other end, and that's what an iPhone charger has. You can easily charge a Samsung phone by swapping the cable for a Samsung cable. Or you can easily charge an iPhone using a Samsung charger. These Apple chargers are absolutely fine and conforming with EU law.

    2. LDS Silver badge

      Re: What happens if they refuse?

      Actually, IMHO, the Commission can fine Ireland for not complying with EU rules. I don't believe it could fine Apple directly.

      Apple applied to the court to block the Commission ruling because of course it's Apple that have to shell out the 13bn, not the Irish government.

      What could really scare Apple is:

      "Finally, all Commission decisions are subject to scrutiny by EU courts. If a Member State decides to appeal a Commission decision, it must still recover the illegal state aid but could, for example, place the recovered amount in an escrow account pending the outcome of the EU court procedures." (see http://europa.eu/rapid/press-release_IP-16-2923_en.htm).

    3. Roland6 Silver badge

      Re: What happens if they refuse?

      The issue is currently between the EU and the Irish government. Thus the only real issue is that the EU has effectively placed a tax demand on the Irish government and unless the Irish government can defend their position, ie. the tax treatment of Apple et al is available to all, the Irish government will be liable for the amount the EU has assessed they owe.

      As has been noted, there is no EU treaty that contains an article about expulsion. Hence there is simply an on-going issue of whether the Irish government pays the demand or simply delays.

      As for Apple, it has no part to play in this action, hence by taking it upon itself to start this new action to try and annul a decision by the EU against the Irish government, it has opened itself up to a full blown anti-competition investigation by the EU...

  6. Potemkine Silver badge

    There are two kinds of lawyers:

    The ones who know the law and the ones who know the lawmakers.

    1. Anonymous Coward
      Anonymous Coward

      Re: There are two kinds of lawyers:

      "The ones who know the law and the ones who know the lawmakers."

      I make that one type.

      1. John Brown (no body) Silver badge
        Thumb Up

        Re: There are two kinds of lawyers:

        Hah! yes, I was going to say almost the same thing. It's a a case of 1 +1 = 1

  7. Velv
    Coffee/keyboard

    Apple Ireland “carried out only routine functions and were not involved in the development and commercialisation of Apple IP which drove profits,” says Plea 4.

    So pay the tax where the profits were actually made and not in a low tax jurisdiction so as to avoid paying it you fucking blood sucking leeches

    1. Missing Semicolon Silver badge
      Happy

      So if Apple did nothing especial in Ireland

      ... does that affect the VAT shenanigans they do? I seem to remember that that assumes the IP is in Ireland.

      1. psychonaut

        Re: So if Apple did nothing especial in Ireland

        "VAT shenanigans"

        theres a good name for an irish tax lawyer....sorry, who? Pat Shennanigan? I CANT HEAR YOU PROPERLY? WHAT? YES I AM HOLDING THIS IPHONE CORRECTLY, WHAT? GOBSHITE? NO THATS THE GOVERMENT

        etc

    2. Wensleydale Cheese

      'Apple Ireland “carried out only routine functions and were not involved in the development and commercialisation of Apple IP which drove profits,” says Plea 4.'

      That sounds awfully like they are admitting that the taxes should be paid elsewhere.

      IANAL but it looks like they have shot themselves in the foot with that plea.

    3. Anonymous Coward
      Anonymous Coward

      @Velv

      Sounds like you want the EU to change their laws, which make it easy for companies to move profits from high tax to low tax EU countries. Apple is far from alone in doing this, even companies based in the EU do it.

  8. Anonymous Coward
    Anonymous Coward

    Ireland doesn't want it's £11Bn windfall

    The EU have taken issue with the illegal state aid from Ireland to Apple, which is understandable. What I don't understand is why the EU is going after Apple directly. This does seem to mean that the EU is trying to override Irish tax law, and goes some way to validating the lawyer's arguments.

    The £11Bn bill should just be presented by the EU to the Irish government in the form of a fine. I don't see why the Irish government should be ending up with a windfall as a reward for their wrongdoing anyway. The Irish government can then choose whether to absorb the costs of the ill-advised tax deal or try and recover the costs from Apple - and the resulting appeals etc. can remain between Apple and Ireland.

    1. RealBigAl

      Re: Ireland doesn't want it's £11Bn windfall

      They're going after Apple to set an example.

    2. Roland6 Silver badge

      Re: Ireland doesn't want it's £11Bn windfall

      What I don't understand is why the EU is going after Apple directly.

      They're not, yet... They (the EU) are going after the Irish government. For reasons best known to itself - although LDS in his comments is probably not far off the mark, Apple have decided to go after the EU...

      The £11Bn bill should just be presented by the EU to the Irish government in the form of a fine.

      They will in due course, currently the Irish have a little time to try and defend their tax system, before their EU contribution gets recalculated...

      What is interesting about the Apple court documents is that they go on-and-on about Irish law, forgetting that the issue is about Irish law contradicting EU law, which the Irish government has agreed takes precedence...

      1. Commswonk

        Re: Ireland doesn't want it's £11Bn windfall

        Perhaps it doesn't, but on a not unrelated point did Ireland ever repay the emergency loan that it got a few years ago? IIRC it came to something like 80bn Euros, with the UK providing a little over £3bn?

        If the money has been repaid then all well and good, but if it hasn't then Ireland has no business making sweetheart deals with anyone, saying that it doesn't want the tax that is due.

        Can we have our money back please?

        1. Kristian Walsh

          Re: Ireland doesn't want it's £11Bn windfall

          You'll get it back when it's due. Payments are on schedule, and a total of £315 million in interest has been paid to HMG since the loans were first issued.

          https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/559311/Loans_to_ireland_oct_web.pdf

        2. MrBlack

          Re: Ireland doesn't want it's £11Bn windfall

          Why not do a little research, so you don't come across so clueless ? It really isn't all that hard to do.

  9. John Smith 19 Gold badge
    WTF?

    Illegal state aid

    Meanwhile HMG spent 3 years eventually handing over a paltry £60m to Reaction Engines,and in the process changing the rules so REL had to get a prime contractor on board first IE forcing REL to accept a BAe to buy in up front.

    But holy s**t 12% tax down to 0.004% tax. F**k me sideways.

    That's better than the deal Bernie Eccleston got for his alleged tax evasion of £2Bn.

  10. Anonymous Coward
    Anonymous Coward

    Profit-generating work

    "Apple need not pay tax in Ireland because the real profit-generating work happens elsewhere"

    So, Apple pays full tax on profits made in these other locations where this 'profit-generating work' really happens, right?

  11. Dieter Haussmann

    The classic definition of fascism is a government operated by corporations. Fascism is foremost a financial system.

    1. Kristian Walsh

      That is nothing like the "classic" definition.

      Fascism isn't "rule by corporation". Fascism is concentration of control. It strips corporations of their freedom to operate in their own interests, just as it strips the general population, religious organisations, the media and the legal system of those same freedoms. Like every other structure in a fascist state, corporations become an instrument of the rulers' power, but they are not the source of that power.

      Under fascism, you do what the leadership wants, or you go to prison and are replaced by someone who will do what the leadership wants. That applies to you whether you're a journalist, a builder, or the head of a corporation.

      Both Hitler's Germany and Stalin's Russia were fascist states. The surface rhetoric was different, but they themselves designed that rhetoric, so why should we believe it at face value? Take away the claimed ideologies, and you see that they had the same structure: a concentration of power around a single figurehead leader, with every facet of the nation coerced into obeying the will of this small ruling clique.

      Fascism is also not a financial system, except that regardless of the financial structures used, all the riches of a nation ultimately flow to the rulers: to go back to Hitler again, the NS regime in Germany promised protectionism and nationalisation before election, but once elected, started with extensive privatisation and free-market deregulation, then later veered towards a protected, centrally-planned economy once the regime had decided to go to war. Across all these economic positions and forms of financial regulation, however, it remained a fascist government.

      [query to the judging panel: does comparing Stalin to Hitler count as an instance of Godwin's Law?]

  12. Anonymous Coward
    Anonymous Coward

    I am 68 years old and am living in the past. I think it is still 1984. What Apple is saying sounds a lot like new think and new speak to me!

  13. ecofeco Silver badge

    You have problem with Corporate Communist Capitalism©®™, comrade?

  14. Anonymous Coward
    Anonymous Coward

    Why Apple doesn't really care that much

    Let's illustrate the point with some made up numbers. Let's say Apple does business in three countries, the US, Ireland and country X. They make $3000 in the US, $2000 in (or funneled through) Ireland and $1000 in country X. They pay 40% in the US, 1% in Ireland and 20% in country X.

    Their tax bill for last year would then be $3000 * 40% + $2000 * 1% + $1000 * 20% = $1420. They'd carry a future tax liability of $2000 * (40% - 1%) + $1000 * (40% - 20%) = $980 on their books for when they bring that income from Ireland and country X back into the US.

    If the EU made Apple pay 10% instead of 1% to Ireland, they would pay an extra $180, for a total of $1600. However, their future tax liability would DROP by that exact same $180! In the long run their tax liability would be the same.

    There's one catch - they could be collecting interest on that $180 while it sits overseas. In fact they do, they invest those huge overseas cash holdings. They're in super conservative investments though, and Apple earns an average of about 1% on that cash. Which in this example would be $1.80/yr.

    Of course, the EU isn't trying to make Apple pay an extra $180, but an extra $13 billion, upon which they currently earn around $130 million a year. Most of us would go to court to hold onto $130 million per year in income, even Bill Gates. If they lose, they're only out the cost of their lawyers, and they probably have most of those guys sitting around or on retainer anyway. Wouldn't you rather have them fighting the EU than sue Samsung again? Especially if you voted for Brexit, and hate the EU anyway :)

  15. secret goldfish

    Apparently....

    ........Apple think that if anyone is owed money it is the US government.

    Is this the new strategy now that Gump is president and talks of reducing corporate tax rates?

    Are Apple just chasing the lowest and latest dodgy tax deal......again?

  16. Ted Treen

    Place the blame where it belongs!

    If a company is acting outside the law, then use the law to prosecute them.

    If they're operating legally, then blame the lawmakers and change the law.

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