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EU Hits Apple with $14.5 billion Tax Demand


Claire.

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3 minutes ago, Grey Area said:

Yes and we have seen some of these, one big one in the UK being Starbucks.  But there is a major difference, between those corporations actively engaged in tax avoidance and that of Apple.

I don't see any difference. Apple created a shell corporation that existed on paper only so they could write up all profits as belonging to that non-existent company, which wasn't subject to tax because it had no actual presence. That's no different to what other corporation have tried in the past in an effort to avoid tax.

3 minutes ago, Grey Area said:

i just don't see the timing, or the excuse that resources prevented the EU from getting to them until now being valid, so the EU has been chasing so many corporations it has taken them 25 years to get around to them?

The EU commission requested the tax details from Apple and the Irish govt in 2013. Prior to that they were probably dealing with other companies as well as perhaps not being fully aware of the tax situation of Apple in Ireland.

3 minutes ago, Grey Area said:

And yet they sat silent when Ireland first struck the tax agreement with them 25 years ago?  These large corporations pay an army of lawyers and accountants and economists to handle their finances, and yet they somehow managed to be blindsided by this action?  Even though the EU has been doing this to so many other corporations that they have only now got around to dealing with Apple?

How many corporations do you know will volunteer to pay more tax than they think they should pay? Apple had a deal with the Irish govt. As far as Apple and it's army of legal experts were concerned that deal was ironclad. Guess what?

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3 hours ago, Leonardo said:

The US Fed is throwing a tantrum because, if Apple has to pay more tax to Ireland it's parent corporation HQ in the US won't be able to declare as large a profit, thus meaning the US tax service loses out on some income.

Thank you for the explanation Leonardo,  but if you are talking about profit,  that usually comes after taxation (unless you meant revenue or ebitda?),  so the US Fed shouldn't be bothered. 

Anyway,  I got what you meant and agree,  but my point was that it shouldn't be US Fed's business nonetheless and for sure they shouldn't retaliate. 

True that US taxes could be lower,  but retaliation implies revenge and there's no reason why they should exert it on EU companies. 

If the tax income will be lower than expected,  why try to get it from EU companies and not US ones? 

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7 minutes ago, Parsec said:

Thank you for the explanation Leonardo,  but if you are talking about profit,  that usually comes after taxation (unless you meant revenue or ebitda?),  so the US Fed shouldn't be bothered. 

Anyway,  I got what you meant and agree,  but my point was that it shouldn't be US Fed's business nonetheless and for sure they shouldn't retaliate. 

True that US taxes could be lower,  but retaliation implies revenge and there's no reason why they should exert it on EU companies. 

If the tax income will be lower than expected,  why try to get it from EU companies and not US ones? 

It's all one-and-the-same. To have to pay this tax in Ireland it would have to count the amount of revenue earned to pay tax on was made in Ireland, not the US.

To be honest, I think the tax should be paid at the point of sale - probably other EU countries - and not where the HQ company resides and declares it's revenue/profit, but regardless, this tax should be paid in the EU on the revenue generated in the EU and not shunted back to the parent corporation in the US to be declared there.

I think the way the IRS in America calculates corporation tax on overseas earnings is that it charges the difference between the tax rate in the US (25%?) and what was paid in the overseas territory. Obviously then, the higher the tax paid overseas the less the IRS can take from the corporation in the US.

Edited by Leonardo
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2 hours ago, Leonardo said:

I don't see any difference. 

Well I think you point out the major difference here:

Quote

Apple had a deal with the Irish govt.

 

2 hours ago, Leonardo said:

The EU commission requested the tax details from Apple and the Irish govt in 2013. Prior to that they were probably dealing with other companies as well as perhaps not being fully aware of the tax situation of Apple in Ireland.

Ok sorry 22 years.

2 hours ago, Leonardo said:

How many corporations do you know will volunteer to pay more tax than they think they should pay? Apple had a deal with the Irish govt. As far as Apple and it's army of legal experts were concerned that deal was ironclad. Guess what?

None of course, but that is not the real issue here.  Corporations will always try to earn as much as possible for as little as possible, and that is the system we have nurtured for decades.  So much so it's likely that such practice is as important to an economy as actual revenue.

As for ironclad, well it has taken so long to respond to this its not surprising Apple felt secure.

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9 hours ago, toast said:

Thats a nice dream or do you really believe that a country would decrease the tax rates for Average Joe just in case blue chip companies would pay the full rate? Especially Ireland, with a government debt to GDP of 93.80 percent of the country's GDP in 2015 ?

Haha... Dream? i think you mean fantasy mate. No its pretty established that a government needs X amount of dollars to run itself and if a segment of the economy doesn't make a fair contribution then the remainder will have to take on more of the tax burden. In this case Ireland has attracted an American multinational and promised it back door entry into the EU in exchange for jobs. 

Ireland is stiffing the EU with this deal and even America. Even though Irelands workers and average tax payers don't have to make up the tax short fall, someone else will. Hell i'd like to pay 0.005% in the dollar as my tax contribution and I'm sure you would too too... and if everyone else was on the same tax rate as Apple then governments just wouldn't have enough to run on. 

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13 hours ago, DieChecker said:

EU politicians...... "Pish... It's only Irish workers....." Not like their target is Germany or France...

Well Apple can move all they like but they're on the EU radar now and if they wanna make profits in the EU they will now have to pay a fairer tax rate. 

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6 hours ago, Silver_Lyre said:

Well Apple can move all they like but they're on the EU radar now and if they wanna make profits in the EU they will now have to pay a fairer tax rate. 

The actual people employed don't need to be in Ireland. They could work out of Morocco, or Barbados, and sell the same products in the EU. The problem wasn't selling products, but profits going back to the US. So, if Apple decides to close up shop in Ireland, and pay zero tax at all. Then it is really the Irish who are going to loose long term. Workers who will be out of a job, and draining off the government.

Apple doesn't need to have a corporation within the EU, it does so out of convenience. If the convenience is gone, they'll probably be gone also. 

 

Edited by DieChecker
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Just now, DieChecker said:

The actual people employed don't need to be in Ireland. They could work out of Morocco, or Barbados, and sell the same products in the EU. The problem wasn't selling products, but profits going back to the US. So, if Apple decides to close up shop in Ireland, and pay zero tax at all. Then it is really the Irish who are going to loose long term. Workers who will be out of a job, and draining off the government.

 

I agree. Ireland will lose out if Apple goes away. But does it really matter for the EU? The EU just has to introduce a new tax for multinationals at the point of sale and the job is done. Apple's products and services just became more expensive to absorb the tax. But don't you think that Apple will need some type of presence in the EU if it want's to continue to work there?

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19 minutes ago, DieChecker said:

Apple doesn't need to have a corporation within the EU, it does so out of convenience. If the convenience is gone, they'll probably be gone also. 

 

Well Im not sure about that. In any case, Apple will have to comply with the EU and its directives.

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28 minutes ago, Silver_Lyre said:

Well Im not sure about that. In any case, Apple will have to comply with the EU and its directives.

True enough. If they want a corporate presence, they will have to play by their rules.

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8 minutes ago, DieChecker said:

True enough. If they want a corporate presence, they will have to play by their rules.

...in any case mate, can you imagine no apple iPhones being sold in the EU? I can't so i guess Apple has some grounds to negotiate some type of compromise. :) 

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says it all actually ~

1436080_525_350_w.jpg

~

Group: BusinessViews
Credit: TOM
Source: Trouw - Amsterdam, Netherlands
Keywords: APPLE TAX TREE EUROPE USA IRELAND 090116
Provider: CartoonArts International / The New York Times Syndicate

  • The New York Times Syndicate Cartoon - Business link

~

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Some EU insiders claim this is a political move; a fight for the EU's survival against euroskeptics like the Brexiteers.

The European Commission denies that its shock demand that Apple Inc. hand 13 billion euros in back taxes to Ireland is, in the pungent phrase of Apple CEO Tim Cook, "total political crap". But, say senior EU officials involved, the decision certainly has a strong political element, even if Competition Commissioner Margrethe Vestager says she is confident her case will stand up to Cook's appeal on its legal merits alone. Brussels' political target is less corporate America than eurosceptics at home who threaten to pull the EU apart if it fails to show alienated voters it can act in their interests.

Read more: Reuters

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On 9/3/2016 at 3:01 PM, DieChecker said:

EU politicians...... "Pish... It's only Irish workers....." Not like their target is Germany or France...

Right to the point... I'd like to see Apple taxes in Germany... I have sneakin' suspicion, $#!t might be worse than in Ireland.

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  • 3 weeks later...

Haven't they got the Memo, the UK is leaving the EU.

Careful EU, you take a bite out the apple and how hard would it be to move Apples HQ from cork to London. they have the facilities and space. surprising how soon after the EU's tax grab Apple announce this. 

Quote

Apple to create London home at Battersea Power Station.

The iPhone and iPad maker will move 1,400 staff from eight sites around the capital into what it calls “a new Apple campus” at the Grade II* listed former electricity generator.

Its employees will occupy all six floors of office space in the brick “cathedral of power”, which is being painstakingly restored after 33 years standing derelict on the banks of the Thames.

In a statement to the Standard, Apple said it was looking forward to the 2021 opening of “our new London campus” as staff relocate to “this magnificent new development at one of the city’s best-known landmarks”. It added: “This is a great opportunity to have our entire team working and collaborating in one location while supporting the renovation of a neighbourhood rich with history.”

the Battersea site will be one of its biggest in the world outside America. The Californian giant, the world’s most valuable company, will be the largest single tenant in the 42-acre complex of homes, offices, shops and leisure facilities.

  Battersea Power Station development

 

Edited by stevewinn
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