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Apple To Be Investigated By the EU Over Tax Affairs 155

Posted by Unknown Lamer
from the coffers-running-dry dept.
mrspoonsi (2955715) writes "The European Commission is to open a formal investigation into Apple, Starbucks and Fiat in relation to tax arrangements with three EU countries. The firms' arrangements with Ireland, the Netherlands and Luxembourg will be investigated. Announcing the move, tax commissioner Algirdas Semeta said that 'fair tax competition is essential.' Last year, a US Senate investigation accused Ireland of giving special tax treatment to Apple. The European Commission will look at whether the companies' tax affairs breach EU rules on state aid. Competition Commissioner Joaquin Almunia said: 'In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes.' Countries in Europe cannot allow certain firms to pay less tax than they should, Mr Almunia added."
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Apple To Be Investigated By the EU Over Tax Affairs

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  • Re:Click bait ? (Score:5, Informative)

    by Richard_at_work (517087) <richardprice@noSPAM.gmail.com> on Wednesday June 11, 2014 @10:04AM (#47211863)

    Because its much much much larger than the other two companies mentioned, and the fact that Apple is directly named is of more interest to us tech geeks here on Slashdot than either Starbucks or Fiat...

  • I'll explain this (Score:1, Informative)

    by EuclideanSilence (1968630) on Wednesday June 11, 2014 @10:16AM (#47212013)

    Since some people feel let their moral affections and prejudice against rich individuals (sometimes deserved, sometimes not) cloud their judgement , I'm going to explain what's going to happen and why.

    (1) EU Government makes a big deal about "cracking down" on rich individuals because it makes the general public happy and the general public doesn't bother to double check anything anyway

    (2) Big ceremony with lots of speeches

    (3) Meeting between large companies representatives and lawmaker's staff. They have one topic of discussion: "How can we lower your tax burden while making it look like we are raising it?" There are two main reasons for this (a) They don't want to lose campaign funding from the companies (b) They don't want the companies moving even more of their operations overseas (your personal morality be damned, no one who matters cares at all) and leaving unemployment and a net lower tax revenue (c) Rich people spend a larger proportion of their income on economic progress like starting new companies, you spend your money on beer and video games

    (4) They will come up with a brilliant idea like larger taxes on repatriating corporate money (larger companies simply won't repatriate directly, but send the money to bank accounts first in the form of income) or a tax on company growth that sounds like it only affects large companies but only serves to destroy new competitors, or something brilliant like raising corporate income on income reported locally (except they already did that but got caught so they'll find a new trick).

    In the end, if the game plays out correctly, low income individuals will still payer higher taxes, large companies will pay less taxes, but it will sound a lot like the opposite is occurring. You'll be happy and the economy will be slightly less screwed than if we listened to you and made companies actually pay 30% - 40% of their income directly to the treasury trough.

  • Pointless PR stunt. (Score:2, Informative)

    by pla (258480) on Wednesday June 11, 2014 @10:20AM (#47212065) Journal
    This will end up as just another pointless "look, we actually do something!" PR stunt, with the inevitable outcome of a token "no admission of wrongdoing" fine that amounts to 30 seconds' worth of Apple's profits and probably doesn't even pay for the "investigation".

    I don't like that multinationals have perfected the art of gaming the world's tax systems, but I highly doubt Apple (and others) actually broke any laws here. Intra-company licensing fees make it trivial to shuffle both income and expenses around the world to the most favorable jurisdictions; and tax havens like Ireland that use territorial taxation make it too easy to pick a destination for reporting profits.

    We don't need an investigation, we need serious tax reform. As a complete no-brainer, we could solve 99% of the problem (and not just the tax problem, but also the "3rd world child slave labor as a manufacturing strategy" problem as well) by simply disallowing cross-border cost allocation. You sell something in the US? You only get to offset that revenue (for tax purposes) with US expenses, and no, you can't sell yourself Indonesian-made iPads and call it a US expense. You have legitimate expenses? You'd damned well better have domestic profits to offset them, then, or you get to eat them. Can't afford your slave workforce anymore? Cry me a frickin' river.

    But that will never happen, because no one in power seriously wants the situation to change. You think the EU doesn't understand the benefit they get from a massive influx of capital via Ireland (even if not taxed directly, it still moves around the economy)? I have a bridge to sell you. Even US leaders have no motivation to act, because it takes a hell of a lot less effort to control a welfare-dependent population than a self-sufficient one. As they see it, the higher the unemployment rate (or better, the higher the full time minimum wage employment rate - Someone has to serve Larry Ellison his lattes and Obama his chili-dogs, after all), the better.
  • by dominux (731134) on Wednesday June 11, 2014 @10:56AM (#47212399) Homepage

    This is a very well known scam
    http://en.wikipedia.org/wiki/D... [wikipedia.org]

    the UK parliament is rather upset about it, assorted companies have been asked grumpy questions about their tax avoidance, in particular Google. The problem is closing these loopholes requires a lot of international cooperation and it isn't generally in the interests of the smaller countries to play ball.

  • by roman_mir (125474) on Wednesday June 11, 2014 @11:23AM (#47212619) Homepage Journal

    As always when it concerns the economy /. is mostly full of complete nonsense. Apple is a wealth GENERATION engine, no iPhones, no iPads etc. are taken from anybody by Apple and 'extracted', they are created by Apple and then redistributed into the population. As per usual the socialists completely miss the entire point of the economy and of free market capitalism, which is the engine that produces wealth at the rate higher than any other methodology ever discovered by humans on this planet.

    When a company creates new products it creates the wealth. In fact the entire point of a company to combine scarce resources in such a way as to produce maximum amount of wealth at the minimum expense and Apple is EXCELLENT at it obviously, otherwise they wouldn't be where they are.

    Extraction is what governments do, not productive businesses.

The only possible interpretation of any research whatever in the `social sciences' is: some do, some don't. -- Ernest Rutherford

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