Apple Takes On EU's Vestager In Record $14 Billion Tax Fight (bloomberg.com) 72
An anonymous reader quotes a report from Bloomberg: Apple fights the world's biggest tax case in a quiet courtroom this week, trying to rein in the European Union's powerful antitrust chief ahead of a potential new crackdown on internet giants. The iPhone maker can tell the EU General Court in Luxembourg that it's the world's biggest taxpayer. But that's not enough for EU Competition Commissioner Margrethe Vestager who said in a 2016 ruling that Apple's tax deals with Ireland allowed the company to pay far less than other businesses. The court must now weigh whether regulators were right to levy a record 13 billion-euro ($14.4 billion) tax bill.
A court ruling, likely to take months, could empower or halt Vestager's tax probes, which are now centering on fiscal deals done by Amazon.com and Alphabet. She's also been tasked with coming up with a "fair European tax" by the end of 2020 if global efforts to reform digital taxation don't make progress. Vestager showed her determination to fight the tax cases to the end by opening new probes into 39 companies' tax deals with Belgium on Monday. The move addresses criticism by the same court handling the Apple challenge. A February judgment threw out her 2016 order for them to pay back about 800 million euros. At the same time she's pushing for "fair international tax rules so that digitization doesn't allow companies to avoid paying their fair share of tax," according to a speech to German ambassadors last month. She urged them to use "our influence to build an international environment that helps us reach our goals" in talks on a new global agreement to tax technology firms. After the 2016 EU order, Apple CEO Tim Cook blasted the EU move as "total political crap." "The company's legal challenge claims the EU wrongly targeted profits that should be taxed in the U.S. and 'retroactively changed the rules' on how global authorities calculate what's owed to them," reports Bloomberg.
A court ruling, likely to take months, could empower or halt Vestager's tax probes, which are now centering on fiscal deals done by Amazon.com and Alphabet. She's also been tasked with coming up with a "fair European tax" by the end of 2020 if global efforts to reform digital taxation don't make progress. Vestager showed her determination to fight the tax cases to the end by opening new probes into 39 companies' tax deals with Belgium on Monday. The move addresses criticism by the same court handling the Apple challenge. A February judgment threw out her 2016 order for them to pay back about 800 million euros. At the same time she's pushing for "fair international tax rules so that digitization doesn't allow companies to avoid paying their fair share of tax," according to a speech to German ambassadors last month. She urged them to use "our influence to build an international environment that helps us reach our goals" in talks on a new global agreement to tax technology firms. After the 2016 EU order, Apple CEO Tim Cook blasted the EU move as "total political crap." "The company's legal challenge claims the EU wrongly targeted profits that should be taxed in the U.S. and 'retroactively changed the rules' on how global authorities calculate what's owed to them," reports Bloomberg.
Retroactively changed the rules?? (Score:5, Interesting)
Why, that's something only corporations or Mitch McConnell are supposed to get away with!! The nerve!
It's not as if Apple used their army of lawyers and accountants to dream up the Double Irish with a Dutch Sandwich to get out of paying the taxes they owe for doing business in the EU.. or as if they actually pay a dime in taxes in the US on their billions. Tell us your sad hobo story Tim, while you pay off your tax debt out of the mountain of cash Apple is sitting on, you deadbeat.
Re: Retroactively changed the rules?? (Score:1, Troll)
Quite frankly I'd rather have Apple not pay the taxes. It's not Tim's money they'd be collecting, but taking money out of the shareholders, which for a company with Apple's rating includes millions of pensioners, lots of shareholders, and stakeholders in various financial instruments. They know how to spend it waaaaay better than the crap politicians in Brussels anyway. If you want to tax products your citizens buy, ad a sales tax. If you want to tax digital goods they consume, ad a VAT tax. The reason they
Re: Retroactively changed the rules?? (Score:4, Informative)
So does that reasoning apply to *every* shareholder-owned company? And if yes, who the hell foots the bill for roads, public services, police and military, etc? You know, all that stuff that shareholders and businesses alike really like having even though they don't like paying for it?
Re: Retroactively changed the rules?? (Score:1)
The local citizens. You're asking companies in other countries to pay your taxes just because your consumers use services from those foreign companies. If the company was a small boutique shop selling a good, you wouldn't expect it to have to file and pay taxes in hundreds of countries with tens of thousands of tax localities. Would you? No. The citizens file and pay taxes on the goods they purchased and weren't charged taxes for. In this case, they are trying to charge a company for profits made from peopl
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No, you pay that to the government where you made the profit, even if you make profit in a number of different locations and so pay taxes in a number of different locations.. The devil is in the details.
Presumably, a small boutiqu
Re: Retroactively changed the rules?? (Score:2)
No. Even a small online retailer (some just sell what they have in their storefront) can make profit in many jurisdictions according to you. But in accounting rules, you make the profit from where the good ships. Once you ship the product, it's recognized as revenue. That happens where you hand the shipper the good, not the country where the buyer lives.
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Yet Apple's headquarters are in the US, it's where the bulk of it's development occurs and where the majority of it's business is conducted. It's Irish offices exist purely for the purpose of the tax scheme they cooked up.
Therein is the lie of your argument. Apple could have 50,000 US employees and 3 people in a shack on the beach in Bermuda but swear without flinching all their business is conducted through that shack if it gets them out of paying taxes.
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EU citizens do pay sales tax and VAT (same thing).
iPhones are already ±25% more expensive in europe than US.
Any more factual inaccuracies you'd like to mention?
Re: Retroactively changed the rules?? (Score:1)
It's not inaccurate to say they are more expensive because of taxes. There are regulatory duties to selling a phone in those countries. Import duties as well, among other taxes and currency markets as well. Now these taxes... it ads up. But the taxes should be known to the locals so they can assess the effectiveness of their government tax schemes, rather than incorrectly assuming the cost difference is due to them being gouged by the retailer.
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But you did not say that. You said "If you want to tax digital goods they consume, ad [sic] a VAT tax. The reason they don't is support for the Eurozone will fall fast once they start taxing individuals. So what do they do? They go around taxing corporations instead . . . "
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Apple has hundred of billions of dollars in cash, it's not paying it out to shareholders. It could repatriate that money if it wanted to, but it doesn't.
Anyway, what about the poor pensioners in Ireland who are missing out on â13bn of tax revenue that could help pay for the services they need, or give their state pensions a boost? They are fairly owed that money.
Re: Retroactively changed the rules?? (Score:2)
Not if Ireland felt it was better to bring the jobs in for economic growth than it was to have the tax revenue.
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millions of pensioners, lots of shareholders, and stakeholders in various financial instruments
Yeah? Fuck them, it's not their money. They only got good share prices because Apple didn't pay taxes but did use facilities and infrastructures paid by many more people than apple has shareholders. So again, fuck apple shareholders.
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Not saying that there aren't problems, but fuck, dude! Think shit more than one or two hops out, don't be so intellectually fucking lazy!
So wait, i as an european should give apple a tax break because you have a fucked up pension system? Fuck off.
It's like calling an airstrike on a hospital because a shoplifting suspect ran inside.
LOL Yeah, as if making apple pay what they're due will tank that company and take the whole population of the us with it. And this is not about 'shoplifting' either. It's about a very large company thinking they can do what they want. So fuck them. And if people have been made financially dependent on them then fuck them too. Should have made a better choice. Hey, it's not my fucked up system so dea
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This argument is why 401(k)s are awful policy.
No, the only reason it's a problem is a lack of anti-trust actions to prevent insanely-huge multinational mega-corp monopolies from forming and thereby allowing a handful of multinational mega-corps to control so much of the economy that any action taken against them that seriously affect them hurts regular people badly, even worse than the corps are hurt, as corps feel no actual pain. People feel pain. At worst, Apple (or MS, Google, Amazon, FB, etc) goes through some restructuring and the top management t
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Which tax did Apple not legally pay at the time the profits were earned? That's the whole issue here - you cannot go and retroactively change laws then fine people for not following a law that didn't exist. Apple paid all taxes legally due in the past, but that wasn't good enough for the EU - so they wanted to retroactively change the tax laws then fine Apple for not following them.
I guess you'd be OK with us retroactively establishing a law that states that anyone who writes "fuck apple shareholders" mus
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The article states pretty clearly that at the time Apple was doing it's tax scheme it was already illegal. Part of the EU bylaws state that member countries aren't allowed to give corporations sweetheart deals on taxes, which is what Ireland did. Nothing was retroactively changed regarding the laws.
Even if they had retroactively changed the tax code (which they didn't), don't apply US legal theories to EU policies, they can decide if they want to do retroactive changes if they want and their voters suppor
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Re: Retroactively changed the rules?? (Score:2)
Ireland of its own free will joined a club with rules, and in doing so agreed to abide by those rules. It is free to leave the club (though see UK; not an easy process specially for the UK and Ireland unless both leave at the same time) if it no longer wants to abide by the rules of the club. Though unless it is in said club there would be no Microsoft office in Ireland.....
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Tell us your sad hobo story Tim, while you pay off your tax debt out of the mountain of cash Apple is sitting on, you deadbeat.
What did I do? :(
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Ex post facto laws are a violation of the principles of democratic rule-of-law government.
Yes, Apple exploited a tax loophole, but it was legal under EU law at the time for them to do so.
The EU can change the rules, but they should not be changing them retroactively.
It is easy to cheer for capricious and unprincipled government because you don't like the victim, but once the principles of fair governance have been abandoned, you may be the next victim.
Re:Retroactively changed the rules?? (Score:5, Informative)
Theres a difference between "changing the rules" and saying "your interpretation of the rules are wrong, and you still owe money under the proper interpretation"....
The original ruling on the matter [europa.eu]:
It was never legal under EU rules, Apple and Irelands interpretation of the rules was faulty, so repayment is due as the original rules still apply .
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It's ShanghaiBill. Him, AHuxley, DNS-AND-BIND and a few others here have their heads shoved up their asses that they can't do anything other than make shit up
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Apple was complicit in coming to the original agreement, so yes they should pay the original tax - this isn't a case of the government voluntarily and unexpectedly offering Apple a lower tax rate, Apple was heavily involved in the legal aspect.
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No, Ireland cannot set its own tax rates because they signed up to fiscal rules when they entered the EU and the Eurozone.
And Apple *is* paying Ireland, not the EU - the ruling does not issue a fine against Apple, it requires Apple to pay the correct tax over the period that the fiscal rules were in place.
From the original ruling I linked to above:
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Actually. the point is that Apple (and others) used the EU's own laws and rules to reduce their tax load, and the EU didn't like it - so it retroactively changed the laws. That's the problem - you play by the rules (as arcane as they may be), and if the EU doesn't like the result, they will go back and change those rules and then fine you for not playing by the new rules that didn't exist when you played in the first place.
You don't like double Irish or Dutch moves? Great! Change the rules, and enforce t
Re: Retroactively changed the rules?? (Score:2)
They didn't change the rules. It just took time for the rules to be enforced. Specifically Ireland was giving special rates of tax to Microsoft, (if every company in Ireland had the same rate it would have been fi e) which is state aid and against EU rules. Punishmemt for Microsoft is to pay the back taxes. Punishment for Ireland is they where understating the size of their economy, so will now have to pay more into the EU and when its all finished that will be back dated too. However first Ireland has to c
The EU and Europe in general (Score:2)
U.S.A. (Score:2, Interesting)
That's the entire value proposition of the American system: our laws are stable and fair. If you choose to operate in Europe for all the benefits, this is the risk you open yourself up to. I - for one - hope the tax bill sticks.
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Well done.
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Two out of three [europa.eu] of those are members of the EU... but do tell us how they don't operate out of those countries and the EU. I'm sure that it'll be fascinating.
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I assume it'll be something like that:
Apple is not operating out of the US because they are a Californian company...
Not holding my breath though for a response from guruevi...
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It was called the Tribbles? Doesn't Paramount or whomever now owns the Star Trek IP claim ownership of that?
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This is almost as bad as the people who say Puerto Rico shouldn't get funds to rebuild because they're not part of the U.S..
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Apple didn't even 'operate' in the EU, they operated in the US, Ireland and the Netherlands and adhered to the local laws. The EU came afterwards and claimed that Apple somehow had to fill the coffers of the EU, not Ireland or the Netherlands.
It's also a case about the EU member countries' sovereignty being usurped by the EU just to keep the failing EU government system operational by increasing taxes on anyone that has any money.
At one point the Irish had this little fight over a European government usurping their sovereignty, it was called the Troubles and was all about when Great Britain joined the EC and purposefully blocked Ireland out of the trade with GB.
Oh boy.
1) Apple operated in Ireland (EU member) and the Netherlands (EU member) to take advantage of the EU "single market" to do business with companies all over EU without trade barriers. Yes, Apple operated all over the EU from Ireland and the Netherlands.
2) Local laws did not allow Ireland to dole out tax incentives to a single company (that is a US discipline). Ireland was obligated to implement EU directives (create local laws) - and they have done so. Then Ireland (leeching on the rest of the EU) cho
Re: U.S.A. (Score:2)
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This is bullshit. The EU law has not changed even one bit. State aie was illegal before apple signed the deal with Ireland and illegal after Apple signed the deal with Ireland. Ireland having a local law does not alter the fact that Ireland's law was illegal given their membership of the EU and Apple's exploiting of it was illegal too.
Re: U.S.A. (Score:2)
The law doesn't have to change for it to be unstable or unfair. Imagine the same scenario in the U.S. It's almost impossible to imagine this at every step of the process. It's tough to imagine the federal government telling states how to tax things. It's tough to imagine a court that would uphold the law based on state sovereignty. It's absolutely ridiculous to think that the U.S. would ask for state back taxes from a company which was operating within the law of the state they reside in.
This is why America
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The law doesn't have to change for it to be unstable or unfair
the law is perfectly stable and fair. Member states cannot give state aid and continue to be members. It's pretty straightforward and hasn't changed in decades.
Imagine the same scenario in the U.S.
Precisely the same scenario, sure, the US has different laws. Other scenarios where state and federal laws disagree? Remember a few years ago when state legal marijuana business couldn't use any banking services because it was federally illegal to sell
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Even when they call their organization government.
Quit whining and pay your taxes like the rest.... (Score:5, Insightful)
Breaks my heart to hear a corporate CEO for a company that probably pays zero taxes anywhere on planet earth cry about paying taxes.
If you want to sell premium products in the 1st world countries, you should be prepared to pay some taxes my friend.
The EU failed at computers (Score:1)
People enjoy US products and buy them.
For games after work, for work, for education.
What does the EU do?
Try some competition, innovation? No.
More taxation. Attempts an international tax environment.
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What did people all over the EU do when given the freedom to buy?
They looked at trusted US brands.
Users then paid their own money for US products, software, services and hardware.
What did EU nations do?
Add another EU nation tax.
Start talking about an international tax.
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It is in the EU
Thats why it can only be taxed....
Something smells fishy (Score:4, Insightful)
With zero retail stores in Ireland, apple makes enough revenue to have to owe $15 billion in back taxes.
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Yes, there's definitely something very fishy about them claiming that much earned revenue in Ireland.
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Not as fishy as claiming it in the USA to Ireland, and in Ireland the USA, but somehow the US is okay with that tax fraud, but the EU was not.
Re:Something smells fishy (Score:4, Informative)
Apple invented the scam where they incorporate in Ireland and funnel the profits from other EU countries there via some BS "brand licencing" stuff. Effectively their subsidiaries in other EU countries are all losing money because they have to pay crippling fees to Apple Ireland in order to use the Apple branding, and since corporation tax is paid on profits they pay next to nothing.
In this case Ireland also gave Apple an extra sweet deal to encourage them to move their HQ there. That's now allowed in the EU - the idea is that everyone is on a level playing field and that means no state assistance for specific businesses, so we don't get into a situation like the US where states and cities bid against each other in a race to the bottom just to get corporations to come there.
That's what Apple did, the EU said Ireland should not have done it, and now they owe Ireland all that back tax they didn't pay on the profits that they funnelled there from the rest of the EU.
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Well, to be fair, Apple didn't invent that scam.
Re: Something smells fishy (Score:2)
There is no scam to funnel it all through Ireland, thats the purpose of a single market. Does Apple scamming if all profits made in the USA are funnled through California? The scam was Apple and Ireland coming to a deal only available to Apple where by they paid a lower rate of tax than other companies. That has been judged to break long standing state aid rules in the EU. Note that Apple only have to pay 10 years back taxes (from the start of the investigation in 2013) and the scam went on for much longer
The Tax Man Cometh (Score:4, Insightful)
https://www.theguardian.com/te... [theguardian.com]
Tim Cook, just like Captain Cook, has enriched himself off slave labor. Now the civilized world has had enough of his worker abuse (don't even claim he doesn't know) and tax dodging... time to pay Cookie...Time to Pay.
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Answer: because then Apple wouldn't have a near Trillion $$$ market cap...
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I'm happy for the Chineese that are better off because of Apple.
Apparently they had no better option.
Very sad that they're so terrorized by their government.
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The US does not have the manufacturing facilities, expertise, talent, or local supply chain to produce the product. There's analysis out the wazoo to substantiate this. Google your answer.
Thieves complain they can't steal. Boo-hoo! (Score:1)
Listen, Apple: You mooching leeches tell some Chinese semi-slaves to build a device for you, tell them to carry it over here, use our infrastructure (like roads, police, etc), ... and barely do any actual work yourselves at all! ... Yet you don't just want the money for the *ACTUAL WORK* that those semi-slaves did... You want a *massive* stack of money on top! ("Profit") ... For doing fuck-all! Money that *we* *had* to work for! Unlike you!
And you have the fucking audacity, to refuse paying for that infrast
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If the exploitation is so terrible, why don't you go their, create much better jobs for them and get all the best employee's?
Cause that money to keep up that infrastructure, will need to come from *my* pocket too!
Not true, government use tax money as leverage to borrow more.
So the less taxes they get, the less money they can spend and the less destruction they can cause in society.
Trusting politicians and bureaucrats to pay the poeple who build and maintain infrastructure is a really bad idea.
Turns o
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You are thieves! *Literal* actual thieves!"
What's your definition of theft?
Here's mine:
Taking other people's property without permission.
All Apple did was find a way to avoid getting their property stolen.
It's not like the maffia (government) has a right to their profits.
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All Apple did was find a way to avoid getting their property stolen.
It should have been:
All Apple did was find a way to avoid paying some extortion money to the maffia.
I thought of a question to ask you; do you think the maffia will lower their demands for extortion money when they get more of it?
I had it with Apple (Score:2)
I am thoroughly disgusted by Apple's corporate persona. It's slimy, greedy and when it comes to making products, incompetent (but it doesn't matter because they have a captive buyer base).