European Commission: We've called off the lawyers over Ireland's late collection of Apple back taxes

The European Commission has decided to withdraw court action against Ireland over the delayed recovery of €14.3bn worth of back taxes that were ruled as illegal state aid, it has confirmed. Back in August 2016, competition commish Margarethe Vestager told Apple to cough $13.1bn in taxes it had swerved due to an arrangement …

[Anonymous Coward]

Weren't there protest in Dublin about hosuing costs recently?

So Ireland is not that green fairy land where everybody is happy people think? Maybe investing some of those money in affordable housing - for those not so lucky to work for a foreign megacorp - would be a good idea, instead of just trying to loo tax-avoiding friendly? Or have an education system not run by the catholic church (another megacorp, anyway)?

[I ain't Spartacus]

Re: Weren't there protest in Dublin about hosuing costs recently?

As I understand it, Apple were paying the corporation tax due on their Irish profits. It was profits made in the rest of the EU single market that were being assigned to a head office that was supposedly in no country, and therefore due for no tax. So it's not like the Irish government were failing to collect all their tax taht was due. The argument is that they were "stealing" the corporation tax due to the other EU member states - had Apple been HQed nationally in each of them - and so owing corporation taxes there. But of course the whole point of the EU Single Market is to to be able to operate seemlessly across multiple countries, and thus only have to pay your taxes in one place.

As happens the real problem here is the US and their stupid deferred payments on corporation tax earned abroad. Basically under the US system you don't pay any tax on foreign profits, until you bring that money back onshore to the US. At which point you can then deduct whatever corporation tax you've paid them (if they're a country with a dual taxation agreement). Result, all these huge corporations have been stashing vast cash piles offshore, in the desperate hope that they could get a windfall special one-off corporation tax deal - and then bring all this money back at a nice low rate. It's the combination of US corporation and divident taxes combined being too high (both are set at roughly 35%) + a stupid deferrment rule that was just begging to be abused - and the one-off special rate they got given during the dot.com bust to repatriate money that led them to hope for another. This is one problem that Trump has actually talked sensibly about fixing - apparently even he is capable of doing something not completely stupid once-in-a-while...

[Anonymous Coward]

"As I understand it, Apple were paying"

You understood it wrong. Try to hold it in a different way.

[Anonymous Coward]

@ !Sparctacus - your conclusion is wrong

The US corporate tax law was changed late last year, so the US no longer taxes overseas profit at all, which was already the case for every other country (except one or two tiny ones, IIRC)

But you are totally 100% utterly wrong in your conclusion that it was the US handling of overseas taxes that led to Apple seeking such a deal with Ireland, and pretty much every other major US company using similar schemes to dodge UK or EU taxes to whatever extent possible.

The tax law change that removes what you point to doesn't eliminate any incentive for US companies to try to avoid taxes in other countries. Indeed, it makes it even MORE worthwhile to attempt to avoid foreign taxes, as previously the best you could hope for was piling the money up and eventually getting to bring it home at a reduced rate if you waited long enough and got a compliant administration willing to do another repatriation holiday like Bush II did. Now you can bring it home at the ultimate reduced rate - 0% - and bring it home immediately to be turned into dividends/buybacks so every dollar of avoided/minimized foreign tax is even more valuable.

[Loyal Commenter]

Re: Weren't there protest in Dublin about hosuing costs recently?

Apple have their EU headquarters in Cork. For those that know anything about Irish geography, Cork is a good few hours drive South-West of Dublin, and Apple being based there is unlikely to be that cause of elevated housing prices in Dublin.

Now, if you were to talk about the other tech companies in Dublin, which bring people into the city, and the previous collapse in the housing market about ten years back, when loads of newly built houses in "ghost estates" had to be demolished, making developers understandably reluctant to build new housing, then you might be getting closer to the root causes of those housing protests.

[Anonymous Coward]

Re: Weren't there protest in Dublin about hosuing costs recently?

So you mean the Irish government is not responsible for Dublin also (it was just one example of something that may need government intervention), and the money raised in Cork can't be spent elsewhere as needed? Strange ideas, about government, you have...

[Alan Brown]

Re: Weren't there protest in Dublin about hosuing costs recently?

"loads of newly built houses in "ghost estates" had to be demolished, "

Mostly having to do with shitty construction quality making them illegal to occupy rather than an actual dearth of occupants.

[Potemkine!]

Next step: CumEx

Dozens of banks stole literally above €55b of taxpayers money. It's time to get it back.

(I would love to see the culprits being convicted too, but I'm not a naive kid anymore)

[I ain't Spartacus]

Re: Next step: CumEx

I'd never heard of this, and just briefly looked it up. Apparently the first 6 people have now been charged, with presumably more to follow. But it's really unlikely that it'll be €55bn of tax missing - that's an absurdly high amount of money. It might be the tax on €55bn of transactions of course - but I've not seen the figures.

[MiguelC]

Re: Next step: CumEx

According to Le Monde's article (in french), €55bn is the total net amount in lost taxes over the last 15 years

[RegGuy1]

Helping out a mate?

Well if the UK totally cock up Brexit it will hurt Ireland, so any extra money they can get will be good. Good luck to them.

After all, haven't we here been saying these naughty US tech companies need to pay more in tax? Clever lot, those europeans![1]

[1] Guaranteed to earn multiple downvotes from Brexiters. Hey ho. :-)

[Anonymous Coward]

Re: Helping out a mate?

Given that the best reasons the EU can give the UK for not leaving is that they won't withhold life-saving drugs or impose a worthless 4-day animal quarantine (ours used to be 6 months - and do you remember who had the lowest incidence of infections animal diseases?), I guess allowing Ireland off the hook for this is the least they can do for them.

How anyone can believe an organisation willing to threaten to turn us into a third-world nation should be allowed to run a chimps tea party, let alone a multi-nation Union, is beyond me. But if it can get Tory voters to agree with the Labour Party and the Labour voters to agree with the Conservative Party then Barnier, Junckers et al must be good for something...

[Loyal Commenter]

Re: Helping out a mate?

do you remember who had the lowest incidence of infections animal diseases?

I guess the report in the news yesterday of the new case of BSE on a Scottish farm passed you by then.

...and if you think the EU is trying to withhold drugs and other imports (such as 60% of our food), the root of that problem is not with the EU, it will be with our own customs and border checks, which, if we leave the EU with no deal will not be up to scratch, meaning the trucks bringing stuff into this country won't be able to leave with any goods going back to the continent, in turn making their round-trips uneconomical. Nobody's going to pay for an empty 22-tonner to sit on a ferry between Dover and Calais for six hours when the margins in the logistics business are already slim. Even less so have a full truck sit at Calais for 48+ hours while its contents are checked, hoping that they aren't perishable.

The only organisation threatening to turn us into a third-world nation is the Conservative and Unionist Party who got us into this ridiculous mess in the first place, with no plan A on how to sort it out, let alone a plan B. But then again, their rich tax-exile donors are doing quite nicely off the economic damage it is doing to our country, so they are happy.

[strum]

Re: Helping out a mate?

>How anyone can believe an organisation willing to threaten to turn us into a third-world nation

The UK has 'threatened to turn us into a 3rd world nation' - not the EU. We have chosen to set up barriers, they haven't.

[rtfazeberdee]

Re: Helping out a mate?

"How anyone can believe an organisation willing to threaten to turn us into a third-world nation " - get real. thats a UK self-imposed shot in both feet. change your reading matter, Daily Mail/Express don't deal in facts.

[julian.smith]

Turning the UK into a third-world nation

No need to threaten to turn the UK into a third-world nation - it IS a third-world nation

[phuzz]

Re: Helping out a mate?

"do you remember who had the lowest incidence of infections animal diseases?"

Would it be one of the countries with a natural sea border all the way around? Why yes it would. Ireland has indeed generally had a low incidence of infectious diseases, lower than the UK, which incidently is the usual route of infection for Ireland.

[Barry Mahon]

Re: Helping out a mate?

The article says the money was paid to the EC....??

Why?? Was it not due to Ireland?

[Pascal Monett]

So does that mean that Apple had indeed received preferential treatment ?

Or is this just another magnificent political example of "we're not guilty of what you said, but here's the money to bury it anyway" ?

[DaLo]

Re: So does that mean that Apple had indeed received preferential treatment ?

Currently under appeal, hence why it has gone to the EU (in Escrow) and not Ireland.

If appeal is successful Apple will get it back, if not the money, I believe, will go to the Irish government.

Come back in 10 years for the answer.

[John Brown (no body)]

Re: So does that mean that Apple had indeed received preferential treatment ?

"If appeal is successful Apple will get it back, if not the money, I believe, will go to the Irish government."

Not forgetting that this wodge of cash, if ending up in Irelands treasury, affects their GDP for the relevant years and in turn ups the the payments made to the EU for those years too. So not all of it will end up in Ireland if the Apple appeal fails. The EU will want their pound of flesh too.

[Barry Mahon]

Re: So does that mean that Apple had indeed received preferential treatment ?

Ah, that explains why it has been paid to the EC, answers the question posted above. Original posting was misleading.

[PhilDin]

Re: So does that mean that Apple had indeed received preferential treatment ?

Nothing was buried. Apple and the Irish government both disagreed with the position of the commission but since Apple were told to pay, they paid. The money is in escrow so that if Apple successfully appeal, they can get it back. It hasn't been trousered by some bureaucrat in return for dropping the issue.

[Wolfclaw]

14.3B will buy Jean-Claude Drunckered a lot of wine !

[Bonzo_red]

Wasn't the point of the escrow fund that the money would be paid back if the case against Ireland was not upheld? If so, I guess Apple now get a nice fat cheque.

[I ain't Spartacus]

No. The Commission have called off the lawyers over Ireland not having collected the money from Apple - because supposedly it took them a year to set up the escrow account.

The appeal agains the Competition Commissioner's ruling on the tax advantage Apple were given is a separate case, also to be hard in the ECJ, and that's still ongoing. If Ireland win, then their tax agreement was fine, and Apple get paid back. If Ireland lose, then their tax arrangement was anti-competitive and they are "forced" to keep the money. At which point they could give every Irish Citizen a couple of thousand Euro and have a massive nationwide party! Or could decide to hold the Olympics - that should about cover building the venues and all the bribes to the IOC. Or host a World Cup perhaps? Anyone for a giant gold statue of an iPhone in the centre of Dublin?

I suppose they could even spend it sensibly...

[IJD]

Does anybody seriously think Apple's tax dodge was legitimate? Having all EU profits assigned to a shell company theoretically based in Ireland (so no US tax payable) but headquartered in the US (so no Irish tax payable)? No doubt some Apple tax accountant thought this was a splendid wheeze, but it's clearly not what any of the governments intended to happen, and they can't really complain when they get found out and sent a massive bill.

[I ain't Spartacus]

I assume that Apple always thought US corporation tax was due eventually. After all, they borrowed something like $40 billion in order to pay dividends - while holding something like $150 bn in off-shore funds. They were just hoping for a tax holiday, like was given in the dot.com bust to get US companies to invest some of their off-shore cash piles then.

Most damningly of all, they announced the week after they lost the Irish case, that they were going to repatriate just about the exact amount of cash to the US that they'd be able to offset all the US corporation tax against their bill to the Ireland. Clearly as a way of trying to generate a conflict between the US government and the EU about all the tax revenue the US were "losing".

But clearly they took the fucking piss with the bit of the tax plan where the Irish tax authorities signed off on an Apple subsidiary that had no geographical location at all, in order to avoid any tax for sales to the rest of the EU.

Personally I think the Commission missed a trick. They should have ruled that the extra tax be paid to Narnia - created a new EU state called the Republic of Narnia - and produced a giant wardrobe and then forced Cook to walk into the wardrobe with one of those massive cheques (or even a huge suitcase full of money), in order to pay it. Televised of course. Extra points for dumping loads of fake snow on him before he could walk out, or even having him chased away afterwards by a giant lion.

Sorry, am I being silly? It is Friday afternoon.

[Jay Lenovo]

Taxes and Freedom of Religion

In Ireland, Apple is a corporate god, omnipresent and always with you. There is no location. God pays no taxes.

The iPhone, the iPad, the "i" stands for Irish, Apple's chosen people.