Apple faces multibillion EU tax bill

[Independent voter]

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

-- Tim Cook, Apple CEO

[Deathquoi]

Basically, this is not what Ireland is doing. What Ireland is doing is offering you to pay lower taxes on money you earn outside of Ireland.

Basic mechanism:

Apple opens an office in Ireland. (Netherlands alwo work)
Apple then opens a subsidiary in, let's say, France.
Apple-Franceearns XXX millions of benefit a year
Apple - Ireland then makes Apple-France pay for the right of using the Apple name. very expensive deal, around XXX a year, the same as the benefit.
Apple France does 0 benefit and doesn't pay taxes in France
Apple Ireland gets to pay the taxes on the money earned in France in Ireland at Irish rates. (Except they now redirect it to Netherlands for the second tax evasion part. It's known as "double sandwich")
Guess what ? the french won't really like it. At a basic level, Ireland is stealing tax money from other EU countries. It was legal so far, but screwing people legally is still screwing them.

Then the ones that don't like it should take it up with the entity that allows the legal "screwing". It's not Apple's fault that favorable legal conditions allow them to exploit loopholes like that. If you don't like loopholes, get upset that they exist, not that companies are saving money by using them.

[Zan15]

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

-- Tim Cook, Apple CEO

200 billion in offshore cash says something different

[FeedsOnDevTears]

I know $19 billion sounds like a big scary number, but its really not. Its a tiny drop in the bucket.

2015 American Household Credit Card Debt Study

	Total owed by average U.S. household carrying this type of debt	Total debt owed by U.S. consumers
Credit cards	$15,310	$712 billion
Mortgages	$171,775	$8.37 trillion
Auto loans	$27,188	$1.07 trillion
Student loans	$48,986	$1.26 trillion

American Household Credit Card Debt Statistics: 2015 - NerdWallet

http://www.bloomberg.com/news/articl...n-at-companies

A report last year by analysts at JPMorgan Chase & Co. estimated that all U.S.-based companies had $1.7 trillion in accumulated offshore profits. In the data compiled by Bloomberg, 83 companies had about 75 percent of last year’s total, which suggests that the total for all companies now exceeds $1.9 trillion.

At a thirty-five percent tax rate that's $665 billion in taxes that US companies are dodging. That's not a tiny drop, it's a huge part of the buckett.

We need to start throwing CEOs and board members in jail for crap like this.

- - - Updated - - -

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

-- Tim Cook, Apple CEO

Tim Cook is a lying sack of shit. Apples does a lot to dodge taxes here, too.
http://www.informationweek.com/gover...a/d-id/1323729

By attributing the cost of the IP stored in Ireland to the jurisdiction of Ireland, Apple was able to evade US taxes. "Apple's cost-sharing arrangement facilitated the shift of $74 billion in worldwide profits away from the United States from 2009 to 2012," concluded the Business Insider summary of the Subcommittee report.

Look at that! Apple in the US says "oh, no, all that R&D is legally in Ireland.". And Apple in Europe says, "oh, no, that was all work done in the US."

And then lobbies to let it dodge more.
https://thinkprogress.org/as-it-lobb...i=7d4a1de515e4

Fuck Apple.

[Dsc]

I love it. Apple loved globalism and backed Leftist agendas. Now pay up suckers. You earned lmao!

[Independent voter]

Why now? Apple says it's been doing business in Cork Ireland since the 1980s.

[Deathquoi]

http://www.bloomberg.com/news/articl...n-at-companies



At a thirty-five percent tax rate that's $665 billion in taxes that US companies are dodging. That's not a tiny drop, it's a huge part of the buckett.

We need to start throwing CEOs and board members in jail for crap like this.

- - - Updated - - -



Tim Cook is a lying sack of shit. Apples does a lot to dodge taxes here, too.
http://www.informationweek.com/gover...a/d-id/1323729


Look at that! Apple in the US says "oh, no, all that R&D is legally in Ireland.". And Apple in Europe says, "oh, no, that was all work done in the US."

And then lobbies to let it dodge more.
https://thinkprogress.org/as-it-lobb...i=7d4a1de515e4

Fuck Apple.

Hey, buddy, maybe you should learn the difference between dodging taxes and minimizing exposure. Dodging taxes, or tax evasion, is a crime. Minimizing exposure through legal loopholes is not. You don't know what you're talking about.

[caervek]

Why now?

Because now is when the EU is finally moving in on tax evasion.

- - - Updated - - -

Tim Cook is a lying sack of shit.

Indeed, there is no way Apple didn't know the deal they were getting from Ireland was illegal, they just never cared while they were getting away with it, now it's time to pay the chickens because the piper has come home to roost ^^

[Afrospinach]

I am not so sure about settling for "pennies on the dollar"; it isn't Ireland telling them they have to pay it. It is the EU saying it must be paid so as to stop Ireland acting in effect as a preferential tax haven within the EU.

Yeah ireland is standing with apple is the gist I got from the news reports.

I love it. Apple loved globalism and backed Leftist agendas. Now pay up suckers. You earned lmao!

The EU is protecting the free market. Leftist?

[caervek]

Yeah ireland is standing with apple is the gist I got from the news reports.

Ireland's problem is if they make Apple pay up then they are effectively admitting their own law breaking.

[Dsc]

The EU is ran by unaccountable beurocrats robbing county's blind as they use "free shit" to slaves to stay in power. Apple was a long time Globalist and Leftist agendas supporter. I love seeing them pay "their fair share". I will make money as it tanks..

- - - Updated - - -

The EU is ran by unaccountable beurocrats robbing county's blind as they use "free shit" to slaves to stay in power. Apple was a long time Globalist and Leftist agendas supporter. I love seeing them pay "their fair share". I will make money as it tanks..

The only thing better is if Apple bricks every device in the EU, and holds nudes of the politicians gathered from ICloud hostage.
/Popcorn

[alexw]

Then the ones that don't like it should take it up with the entity that allows the legal "screwing". It's not Apple's fault that favorable legal conditions allow them to exploit loopholes like that. If you don't like loopholes, get upset that they exist, not that companies are saving money by using them.

This is exactly what the commission have done. They have closed the loophole. But more than that, to prevent apple from finding another loophole and moving to it (then another then another then another) in an endless game of whack-a-mole where apple wins every time, they have decided that they have to pay back the taxes on what was obviously a tax dodge in the first place. This cuts off the tax dodging by the MNC's at the knees. If they can't get x years of zero taxes before what they are doing is discovered and fixed, which is how the system worked up to now, then there is no incentive whatsoever to exploit these loopholes as they will have to pay back what they dodged anyway.

- - - Updated - - -

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

-- Tim Cook, Apple CEO

I'm lying my head off -- Tim Cook, Apple CEO


Taxes are not based on where you do R&D but where the real underlying economic activity takes place. Now some of that is based in CA but by no means all of it.

Apple isn't being taxed on these non-US profits in the US. They are currently sitting in an offshore account worth hundreds of billions in the Cayman's.

[Rasulis]

Keep in mind that they are talking about tax on profits generated in Europe, China, Africa, India, etc. Not profits generated in the U.S.

Also, even the U.S. government is against the EU judgement. First the EU is breaking the agreement between a sovereign country and a corporation. Which is unprecedented. Second, the amount that is owed is retroactive 13 years. Again unprecedented. Last, but not least, more money to Ireland, is less money for the U.S., because foreign tax is deductible.

Both Apple and Ireland are planning to appeal the decision. That will take several years. The ironic part is that the money won’t be going to EU, it will be going to Ireland, and Ireland is very much against this judgement.

[Breccia]

So, what, about a week's worth of sales when the new iPhone hits?

[ranzino]

Yeah ireland is standing with apple is the gist I got from the news reports.

....

Yes, Ireland is on appeal AFAIK. the multibillion verdict is not valid until the case is settled and THAT could take some years.
Nothing to see here, move along.

[alexw]

Keep in mind that they are talking about tax on profits generated in Europe, China, Africa, India, etc. Not profits generated in the U.S.

Also, even the U.S. government is against the EU judgement. First the EU is breaking the agreement between a sovereign country and a corporation. Which is unprecedented. Second, the amount that is owed is retroactive 13 years. Again unprecedented. Last, but not least, more money to Ireland, is less money for the U.S., because foreign tax is deductible.

Both Apple and Ireland are planning to appeal the decision. That will take several years. The ironic part is that the money won’t be going to EU, it will be going to Ireland, and Ireland is very much against this judgement.

This is just nonsense.

Ireland broke EU law which supersedes Irish law on these matters and this is just one of many such occasions where an EU nation is being taken to task. Its not "unprecedented". Moreover your whole argument on this makes no sense. You are in essence arguing that state laws should have primacy over federal law, and that because a state has agreed to allow people to break federal law the very fact of that allowance means they should be allowed to continue to do so. That's just well bonkers level absurd.

No making them pay the tax owed is not "unprecedented". You are in essence saying if someone is convicted of tax fraud they should not pay back the tax they dodged because of the very fact that they dodged them. That's another bonkers level absurd argument from you.

That it might be tax deductible in the US at some future point is irrelevant. Company's pay taxes on revenue in the nation those revenues were generated. In this case it isn't the US nor is it Ireland (the EU ruling basically states this and that individual EU nations should attempt to claim back the taxes dodged which would reduce the amount owed Ireland). Thus you are arguing that the whole basis of taxation on underlying activity should be overturned. Do you understand the profoundly destabilizing consequences of what you are suggesting?

Perhaps it may go to Ireland perhaps it may not. The ruling as written encourages EU member states to go claim more tax from apple and thus reduce the amount payable to Ireland.

“In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple’s decision to record all sales in Ireland rather than in the countries where the products were sold. This structure is however outside the remit of EU state aid control. If other countries were to require Apple to pay more tax on profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland.”

[Fugus]

This is exactly what the commission have done. They have closed the loophole. But more than that, to prevent apple from finding another loophole and moving to it (then another then another then another) in an endless game of whack-a-mole where apple wins every time, they have decided that they have to pay back the taxes on what was obviously a tax dodge in the first place. This cuts off the tax dodging by the MNC's at the knees. If they can't get x years of zero taxes before what they are doing is discovered and fixed, which is how the system worked up to now, then there is no incentive whatsoever to exploit these loopholes as they will have to pay back what they dodged anyway.

Not exactly, even if they are forced to pay it back, they still have a huge incentive to continue the game of whack-a-mole as it stands.

In order to get rid of the incentive, you have to inflation adjust the money dodged or they are paying progressively less back year after year compared to when they owed it or they take on a huge enough punitive fine on top of it to counter balance it.

If they racked up 13 billion owed back over decades and only had to pay the 13 billion back, than the 13 billion is wealth today is worth a great deal less in wealth than it was over time.

Kinda like if you owed a friend $100 for 10 years and you only paid him the $100 back, when that $100 he borrowed was worth about $119 now (Using the CPI Inflation Calculator). So that 13 billion over the course of those years would be worth several million more than that now.

[caervek]

Yes, Ireland is on appeal AFAIK.

Because the Irish government doesn't want to admit that it deliberately broke the law.

[Annamarine]

And this is why brexit happened. When a unelected group of people can dictate tax policy to a sovereign nation that's a problem. More countries in the EU will leave as more of this shit occurs

[Deleted]

And this is why brexit happened. When a unelected group of people can dictate tax policy to a sovereign nation that's a problem. More countries in the EU will leave as more of this shit occurs

No it's not and you've missed the entire point why this is a problem. You don't think countries should obey the rules they've signed up for ?
And no again, its not about tax policy that's the main issue.