EU Finance Ministers Line Up Behind $21B Tax Ruling Against Apple (herald-dispatch.com) 302
An anonymous Slashdot reader quotes the Associated Press: Dutch Finance Minister Jeroen Dijsselbloem urged Apple Saturday to "get ready" to pay up, as he and counterparts from other EU nations lined up behind a finding that the technology giant owes billions of euros due to more than a decade of improperly low taxation. Apple's bill could reach 19 billion euros ($21 billion) with interest, and both the company and Ireland, Apple's European headquarters are appealing the European Commission ruling. But on the last day of an EU finance ministers' meeting focused on ways to harmonize tax rules for international companies, Dijsselbloem told reporters that these "have an obligation to pay taxes in a fair way."
"International tax loopholes are a thing of the past," he said. Apple will have to pay back taxes both in the United States and Europe, he added, "so get ready to do that." Philip Hammond, his British counterpart, said the EU was keen "to make sure that international corporations pay the right tax at the right place. That's the fair way to do it, and we are going to make sure it happens."
Austria, France, and Italy are reportedly also watching the case closely.
"International tax loopholes are a thing of the past," he said. Apple will have to pay back taxes both in the United States and Europe, he added, "so get ready to do that." Philip Hammond, his British counterpart, said the EU was keen "to make sure that international corporations pay the right tax at the right place. That's the fair way to do it, and we are going to make sure it happens."
Austria, France, and Italy are reportedly also watching the case closely.
The spirit of the law (Score:5, Insightful)
This is where push will come to shove.
You can have whole divisions of lawyers covering each and every aspect of the fine print to the nth level but the bottom line is;
Tax laws, breaks and reductions are not there to be professionally manipulated to the extent that you pay nothing.
Due to loopholes, exploitation and poor oversight megacorporations have had an unfair advantage for decades.
Apple execs will throw a hissy fit because they know they manipulated every legal loophole to pay less. "It's legal" they shout. The intent not to pay tax to any meaningful degree is fucking the rest of us over. The rest of us can decide to call BS and slap you with a fine to pony up what you owe.
Welcome to the iTaxes you owed us and never pay ALL THOSE YEARS -they are magical.
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Welcome to the iTaxes you owed us and never pay ALL THOSE YEARS -they are magical.
The same PCI EIDE card cost $20 for PC or $100 for Mac "back in the day", as it were. Looks like the world is about to get its share of the Apple Tax.
Re:The spirit of the law (Score:4, Informative)
The same PCI EIDE card cost $20 for PC or $100 for Mac "back in the day"
Back in the day, Macs came with OpenFirmware and so required different ROMs on the PCI cards. This typically added to the cost (the FORTH code in OpenFirmware provided a complete interface, whereas the tiny bit of PC BIOS code did far less and so required a smaller ROM chip) and had a far smaller market to amortise the run over. Amusingly, given your argument, quite a few companies I know bought graphics cards from Apple, because they worked fine in any OpenFirmware system and Apple sold you precisely the same card as Sun, but at a quarter of the cost. For a few models, the hardware was the same, so you could get the PC version and reflash it with the OpenFirmware firmware, but that typically voided the warranty and didn't always work.
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Back in the day, Macs came with OpenFirmware and so required different ROMs on the PCI cards.
Yeah, but the real reason why the hardware was so very much more expensive wasn't simply the fact that it had an OF ROM. It was that it had an OF ROM, and the market was minuscule, so the handful of customers had to pay for all of the R&D. You paid a tax for specialness.
Amusingly, given your argument, quite a few companies I know bought graphics cards from Apple, because they worked fine in any OpenFirmware system and Apple sold you precisely the same card as Sun, but at a quarter of the cost. For a few models, the hardware was the same, so you could get the PC version and reflash it with the OpenFirmware firmware, but that typically voided the warranty and didn't always work.
Yeah, my argument wasn't that Apple was the most egregious example of overpricing, though. Sun was definitely worse, especially once they got to the PCI era. Then you got a fancy processor yes, but with a bunch of garbage PC components (
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Look at Apple's net profit margins compared to pretty much everybody else in the same industries.
Don't try and convince me they don't gouge their customers. Their customers seem content with it, which is their choice, but it's still very blatant.
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Another thing I forgot to mention...
When I pay tax I do so according to my tax code. Generally speaking people get a different code and pay taxes differently based on their age, their marital status, disability or other factors. Why is that important? because once most of us know our tax code and salary we pay tax accordingly.
Here is what we do not do; look up all the tax codes in different countries and try to align ourselves in such a way that we can leverage different tax benefits under different cod
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Ireland is defending Apple because the Irish government knows that allowing companies like Apple to pay a pitifully low level of tax is the only way to get large international companies to employ people there.
The real effect is to undercut the attempts of other countries in the same economic block to collect reasonable taxes.
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> Due to loopholes, exploitation and poor oversight megacorporations have had an unfair advantage for decades.
Actually, it is worse then that. Decades? Try Centuries. Before corporations were invented in 1602 there were trusts. How do you think the Catholic Church bought land let alone people in the B.C. era??
https://en.wikipedia.org/wiki/... [wikipedia.org]
When US Corporations were declared a legal person in the 1800's and again in the 1900's ...
https://en.wikipedia.org/wiki/... [wikipedia.org] .. th
http://www.npr.org/2014/07/28/... [npr.org]
Re:The spirit of the law (Score:4, Insightful)
Umm, the Catholic Church didn't exist in the "B.C. era". Unless you're using BC differently than the rest of us....
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It's the only courageous thing to do (Score:2)
Law of Unintended Consequences (Score:4, Funny)
Brexit just might work out after all.
Since the EU clearly believes corporations operating on its soil should actually pay taxes, an opportunity is raising its one-eyed head. Maybe the UK can set itself up with Jersey and the Isle of Man to become the Cayman Islands of the North.
Worse weather. Better tax haven. Everybody wins!
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And... how exactly would Britain be able to help multinationals dodge taxes on profits earned in EU countries?
Re: Law of Unintended Consequences (Score:2)
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The EU would just stick tariffs on goods from the UK and on profits exported there. That's the whole point of this and of the new tax rules being drawn up - tax is paid where profit if made, not where the company has an office for tax purposes.
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Actually, that is exactly what happens now, and is the entire cause of the "problem".
Apple Ireland acquires an iphone for $x, then sells it to Apple France for $y, then the end user buys it for $z.
$x is close to the cost of production, including expenses for design, etc in the US. $y is close to $z, multiplied by the number of units sold, it covers the cost of operating in France, with a slight profit margin.
Since Apple beat them at their own game (they literally wrote the rules), now they want to change t
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If Apple had any balls, they'd pull out of Europe, push a firmware update to brick any devices there that they can reach, and literally burn to the ground any assets that they are unable to smuggle out.
Ah, the rage of the thwarted ideologue!
Imagine how intimidated other multi-national trading blocs would be by such a performance! Thank goodness the countries comprising such organizations don't have weapons, armies and places where they make law. That might mean Apple could wind up with its assets froze
This is complete crap, and should not be possible (Score:2, Insightful)
Maybe this deal was against EU regulations, maybe it wasn't.
Why should apple have to pay back taxes to the EU?
If Ireland broke EU regulations, then Ireland is the one who should pay up.
If I unknowingly buy a stolen car and the police find out, I lose the car.
I don't suddenly have to pay an additional fee for having the car for 6 months.
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They are not paying it back to EU. They are paying it back to Ireland.
Eu don't collect business taxes, and I don't think any companies pays tax to EU.
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The EU are the ones harmed. Ireland chose to harm itself.
It's more akin to Ireland choosing to sell products in its supermarket at zero profit, thus not paying EU tax due on it and putting the EU supermarket providers at an disadvantage when competing. It's anti-competitive, not theft.
As such, Ireland aren't the ones directly harmed - they chose to do it voluntarily - but the EU sellers who had no idea this was happening and could not compete, were harmed and will be compensated.
The Irish people, however,
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Then they can get sued for subsidizing apple, but that is a different issue in my eyes.
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Re:This is complete crap, and should not be possib (Score:5, Insightful)
The US funds their 'Greek states' by funneling federal money over to them and reducing their sovereignity even further in the process. 'Schengen' is there in the US -- do you need a passport/visa to cross state lines? Who takes care of immigration in the US? And finally, the only civil war the US had was about leaving the union, a thing we're now going through with Brexit. No war in sight.
I'm not really clear on what you're arguing for here. Should the EU be structured more like the US, reduce sovereignity, and start building up the military to force Great Britain in line? Or should the US get rid of the dollar so that every state can devalue their own currency when they're in trouble? Please explain what the right structure of the EU would be, one that the US can follow without civil wars.
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It's what happens when you give up your sovereignty, ie via EU accession. The greedy authorities that you subjected yourself to get to decide things for you.
The correct path, if you don't like this, is to leave the EU, as Britain has chosen to do.
Not this bullshit again. Tell me, how did we give up our sovereignty if were were and are free to leave at any time? Here's an answer: we didn't. This has to be one of the absolute stupidest ideas of the entire issue that "sovereignty" means you can do what you wan
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If I unknowingly buy a stolen car and the police find out, I lose the car. I don't suddenly have to pay an additional fee for having the car for 6 months.
Different countries, different laws. If you unknowingly buy stolen goods in the Netherlands, you get to keep them.
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I remember one time when I got my year's income tax records from my employer and was filing my taxes, and using the amounts that they gave me, I was eligible for a substantial refund. I submitted this when I filed my return and received said refund. About 2 months later, however, I received a notification that there had been an error, and although I was not being charged any interest for the intervening time, I still had to pay
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Your company is not the one who determines how much tax you are supposed to pay.
The Irish government is the one who determines how much tax apple should pay.
If they misinform apple, then that is their fault, not apples.
If the EU disagrees with Ireland, then they should demand the money from Ireland, not apple.
Whether or not Ireland tries to get the money form apple should be up to them.
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No... it is the Irish government that is supposed to tell Apple how much to pay. The amount is determined by the EU. My company is supposed to tell me how much tax I am supposed to pay, if they get it wrong, I still owe the amount that I'm supposed to pay.
hopefully the US will come to its senses (Score:3)
Corporate taxes in the US are too high; that's why these profits have been kept offshore for so long. Most Republicans and Democrats, including Obama, recognize that.
The major political candidate who says she wants to raise corporate taxes is... Hillary. Although, to be fair to Hillary, she is probably lying.
Brexit (Score:2)
I would imagine the Brexit supporters are loving this.
This isn't only about money, but competition (Score:2)
Re:Ex post facto (Score:5, Informative)
Except that it's not ex post facto. It's a step towards stricter enforcement, and that's why Ireland is also being spanked pretty hard right now, because the deals they made were in contravention of existing EU legal frameworks and treaties, and were as such illegal and thus invalid. It's enforcement of the actual law, not of an illegal and underhanded deal between irish politicians and various megacorps such as Apple, Microsoft, Alphabet and a whole crapton of others.
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To me, the interesting question is: what is the statute of limitations in this case? If taxes are like murder, then there is no expiration date on prosecution and governments can dig infinitely deep into the past seeking back taxes. If it is seven years, how much of that $21B pre-dates the limits of back-collection? I am anticipating some back-room horse trading that will settle on a negotiated start date for tax liability under the new enforcement interpretation of the existing laws.
Re:Ex post facto (Score:5, Interesting)
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Which is why unenforced laws are such dangerous things.
When we are all criminals, we can all be arrested at the discretion of the authorities.
How many pages are added to the US federal/EU law books every year?
Re:Ex post facto (Score:4, Informative)
Ireland ratified the Treaty of Lisbon on October 21, 2009 (Dáil Éireann) and October 22, 2009 (Senate). Presidential assent was granted on October 27, 2009.
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Ireland actually joined the EU in its prior state as the EEC in 1973. And the rules that got Ireland in trouble here were in place way back then as well.
The Treaty of Lisbon is just another treat expanding the EUs constitution.
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Ireland was an EU member before Apple was (recently) profitable.
Re:Ex post facto (Score:5, Funny)
In my opinion it takes a lot of "courage" to ask them to pay those taxes. That's quite "innovative" if you ask me. The EU is not just thinking outside the box, they're "thinking differently" . And other puns...
Re:Ex post facto (Score:5, Funny)
In my opinion it takes a lot of "courage" to ask them to pay those taxes. That's quite "innovative" if you ask me. The EU is not just thinking outside the box, they're "thinking differently" . And other puns...
Apple's lawyers had a referendum on the subject, but apparently they held it wrong.
(moar bribes pls)
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Maybe the EU will settle for a restoration of the headphone jack?
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And a standard micro-USB charging port without any adapter.
Re:Ex post facto (Score:5, Informative)
A lot of people outside of Europe (and to be fair, even Europeans) doesn't understand how the EU works. Ireland can't simply decide to stop obeying EU treaties any more than a US state is allowed to all of a sudden decide that someone no longer have to pay federal tax. If that happened, you can be sure that the IRS would demand the taxes be paid in full after they found out about it.
Re:Ex post facto (Score:5, Informative)
That analogy doesn't quite hold, because the taxes are paid to Ireland, not the EU. It's more akin to one US state deciding that a company doesn't need to pay state taxes. This kind of thing is completely legal in the USA, which is why states in the US have seen a race to the bottom for various tax rates. The problem with the ruling is that, until a few months ago, everyone thought that this was legal in the EU too. It has, however, always been illegal for an EU nation to subsidise a particular company (with a few carefully regulated exceptions).
The recent ruling is saying that an agreement that says that Apple doesn't have to pay $21B that it would normally have had to pay is equivalent to the Irish government giving Apple $21B. I have a lot of sympathy with that interpretation (you give me $1 and I give you back $1 is very similar to you not giving me $1 in the first place), but it's a little bit surprising that this kind of clarification would happen after decades of lots of similar deals. It's also quite surprising that Ireland hasn't been fined: If this is illegal state subsidy, then the state providing the illegal subsidy is more in the wrong than the company accepting it, yet it appears that their punishment is to receive $21B that they didn't expect. I would be very happy to be punished by the EU in exactly the same way...
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Ireland has not been fined yet. It is very likely that this is going to be the second part of this ordeal, which is why they're fighting the whole thing tooth and nail because they know if it stands, the next thing happening is them being fined heavily and instantly any and all international corporations seeking shelter in Ireland will bail, resulting in Ireland becoming Greece squared.
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Re:Ex post facto (Score:4, Insightful)
They can still set whatever tax rate they like. What they cannot do is set a different tax rate for a specific company.
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Both Apple and Ireland claim that the tax rate always applied to everybody and not just to a specific company. Furthermore, Apple claims to be current on all of their Irish taxes and to, in fact, be Ireland's largest tax payer.
The EU claims that none of these statements are true.
It'll be interesting to see which side is closer to the actual truth once the facts slowly become public.
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Ireland can't simply decide to stop obeying EU treaties any more than a US state is allowed to all of a sudden decide that someone no longer have to pay federal tax.
Sure they can, they're a sovereign nation, just like the UK always was ans is. However, it's considered polite to invoke Article 50 first but no one will come over there in force and stop them if they don't bother with that article. However, they'll lose all the perks of being in the EU if they don't stick to the rules and that's worth more to
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Ah, but the converse holds true... take for example a law that may be poorly written may appear superficially to outlaw an apparently completely innocuous activity... and when a person does this activity, by the same reasoning as you've presented, they should be held accountable for breaking said law, and face applicable punishment. But if in fact the law was never intended to o
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But what apple did was not legal in the past.
If you have a illegal deal, you have no deal is a basic of most legal systems.
Re: Ex post facto (Score:2)
The EU ruling is that the Irish arrangement is illegal. Always was.
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It depends (of course, lol.) If they did something explicitly (not implicitly) allowed by law - that would be true. If implicitly allowed (i.e. there's no law that says you cannot do that) then it's certainly arguable.
The EU would likely argue (likely very successfully) that Apple behavior is not explicitly forbidden, but instead implicitly forbidden by other laws (which they will traipse out at that time.)
The whole thing is academic at this point because everyone and their dog knows that this is exactly
Re:Ex post facto (Score:5, Insightful)
Sorry, but no. Apple (and Ireland) thought that a certain law was meant to be what they wanted it to be, and now got informed that they got it wrong.
Like, say, you going to jail for killing your mother in law because according to your definition she's not a human being, and the law disagreeing with you.
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Except that they are selectively applying their reinterpretation of what is/isn't legal or they would have chosen a target like Total who has sales that dwarfed Apple's yet payed zero french corporate taxes.
Re:Ex post facto (Score:5, Informative)
They didn't change the rules afterwards. Irish politicians and corps like Apple, Microsoft, Alphabet etc made deals that were in contravention of existing EU treaties and laws. This trial, that has taken years to come to this verdict, goes back to strict enforcement of old treaties and laws
Re:Ex post facto (Score:4, Insightful)
Re:Ex post facto (Score:5, Insightful)
If you don't pay your taxes, there doesn't need to be a judge or trial to collect those back taxes.
Apple could fight this ruling at a hearing, in front of a judge. But they know they'll just lose.
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If you don't pay your taxes, there doesn't need to be a judge or trial to collect those back taxes
So if some politicians whip up the mob into enough of a frenzy by claiming you've done something wrong, no due process for you. Got it.
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Do you understand that the court system is part of the government too? And it wasn't "the mob" who said Apple did something wrong.
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You're joking, right? Please tell me you're joking.
Did you really just equate Apple having to pay taxes with the Holocaust?
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They didn't change the rules afterwards.
I'm sorry, I don't think you know what the word "change" means... you keep using it wrong...
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Could you please indicate which EU law was changed?
Right, there was no change of law. The law ruled on existed for many years, even prior to the existence of the EU.
Re: Ex post facto (Score:2)
Don't be so naive. Company-specific tax deals have been made by EVERY EU member since forever and continue to be made right now. Somehow, the EU isn't suing my country (Finland) for offering a tax deal to a chinese company that is considering opening a biodiesel refinery here.
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OK then, How come Total which had sales that awarded Apple's can get away with paying no corporate taxes in France and NOT be concerned with these ex-post-facto reinterpretations? It's not "he's doing it so I should be able to do it too", it's "why are you selectively interpreting the law and what basis do you have for condemning me and giving him a free pass?"
Re:Ex post facto (Score:5, Interesting)
This is a remarkable display of ignorance and stupidity. I've seldom seen so much wrong in one comment.
Apple has to jack up their prices to pay for this huge financial hit. Every future consumer of Apple products is hurt.
The 'hit' is on their profits. That means that they can leave prices untouched and still not lose money.
Since this is a tax payment it'll also be offset against any tax they pay when repatriating their profits back to the US. So it's not even additional cost to them, it's just payment to Ireland instead of the US Government.
The only people that lose out from this are the US taxpayers.
The EU gains power from a legal precedent, which it will use to abuse other companies.
The EU were already enforcing the treaty obligations against state subsidies anyway, including ones comparable to this.
So no new legal precedent.
Also no abuse. The only abuse in this whole sordid tale is Apple's abuse of the tax laws.
The EU gains $21 billion, equal to 9% of Ireland's GDP.
No. Ireland gains $21 billion. Although Ireland is in the EU, none of that money goes directly to the EU.
(Some of it will likely get there indirectly).
This money will be used to grow the EU bureaucracy, enabling it to further abuse everyone living in the EU.
Holy shit. I voted for the UK to leave the EU and even I don't describe the EU as abusing everyone living here. Since the money wont reach the EU, no, it wont expand the bureaucracy.
Another tax haven, where decent people can escape thieving government, is lost.
Decent people couldn't take advantage of the special terms Apple negotiated, so nothing is lost. Apple is a company and not people, and is pretty fucking far from decent, so again nothing is lost.
And you consider that a good thing.
Hell yes.
Absolutely.
Completely.
It's awesome. Fantastic. Magnificent.
Any other questions?
Re:Taxation (Score:5, Informative)
No, Ireland can set any tax rate as it wants. Nothing in the EU takes that right away from Ireland.
What Ireland is not allowed to do is to provide reductions for specific companies. EU laws try to create a fair playing field.
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Actually, EU member countries do have limits on what their level of taxation is. Specific taxes have specific minimum and maximum values. That is all part of the EU treaties. In my opinion, one of EU:s main achievements is its work against tax competition of countries.
But, let's keep in mind that Ireland joined EU and those treaties willingly and they can also leave EU if they so choose.
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That's not entirely correct. For example sales tax has to be within a band. In exchange there is no sales tax on goods moving between EU countries, it's just paid at the rate where the seller is and that's it.
As you say, it's about making a level playing field and harmonisation to enable companies to do business anywhere in the EU easily.
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My statement didn't concern sales tax, but thank you for the reply. I was not aware that there is a band for sales tax in the EU. After a little search, I found that there is only a lower rate of 15% and a special lowest rate of at least 5%. See http://ec.europa.eu/taxation_c... [europa.eu]
That there is no sales tax on goods moving between European countries is not completely correct. A private person buying goods in another European country is required to pay sales tax in the country where they buy the good. Regarding
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Every EU member nation has special tax breaks in place for specific companies. Maybe the EU is trying to change what everybody does regularly, by singling out Apple and Ireland, but they are doing just that: making an example of one instance of something everyone does.
However, Ireland was one of the few places specifically allowed to do this (though that might have changed with the Treaty of Lisbon). The EU in the early days didn't want its member nations to be third world shitholes, and made special allo
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Funny thing is, they cannot.
If they would do that, their budget deficit would be above 3% which is not allowed by the EU. This to avoid countries to create an unbalanced budget and in case of financial problems asking the EU for a bailout (not that that isn't happening, but that is another discussion).
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Ireland has signed various treaties that make them part of the EU, including economical/financial treaties. And these treaties are at least 20 years old, so they are not Ex Post Facto changes. What the verdict actually means is a stricter enforcement of already-existing treaties and laws, which deals between Irish politicians and Apple, Microsoft, Alphabet etc have contravened.
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Ireland can set any tax rate it likes. So long as it doesn't let one company off of paying that tax rate for no real reason.
That's called state-aid, and that has to be declared.
If France were charging Ireland twice as much tax for milk as they charge other EU countries, you'd be up in fucking arms about it.
When Ireland does it to the EU, that's alright, though?
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So long as it doesn't let one company off of paying that tax
The Irish tax codes that Apple relied upon are available to any company based in Ireland that receives income from outside the country.
https://en.wikipedia.org/wiki/Double_Irish_arrangement [wikipedia.org]
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Read what you post.
The EU courts DECIDED that these rules are basically unfair, just after Ireland rearranged them to comply with "international best practice", after granting amnesties to companies who were using them.
THIS IS EXACTLY WHAT THE EU ARE SAYING WAS ILLEGAL ALL ALONG and why Apple have to pay back SO MUCH money.
Ireland made up laws that let certain companies off of paying tax, only in Ireland, against international laws.
And Apple didn't even then pay the tax in Ireland on the Irish taxes, becaus
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Nope, Ireland is free to set it's own tax rate to whatever it likes. It's also free to give tax breaks to anyone. No one will invade and stop them because Ireland is a sovereign nation.
However if it wants all those really neat free trade and movement deals and a nice stable currency with the rest of the countries in the EU, it needs to stick to the rules it agreed to in order to get access. And that means applying the rules retroactively if they "forgot".
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Re:Retroactive Taxation (Score:4, Interesting)
By that reasoning, if you make an honest mistake when filing your taxes and this mistake is not caught by the government when you submit your tax return netting you a substantial larger income tax refund than what you should have rightfully received, then you should be able to keep any money you get from them, and not have to pay any of it back when they discover the mistake? While you may not actually be guilty of tax fraud in such circumstances, are you going to argue that you should be able to keep everything that they sent you? You shouldn't be charged any interest for the intervening time between when the taxes were filed and when the mistake was discovered, of course, but why shouldn't you have to pay the difference back?
This actually happened to me, by the way... It was actually my employer's mistake, but it was unintentional on their part as well. I still had to pay back the difference between what they sent me and what I should have received. (Without interest penalty though... as long as I paid it back within a certain time of the date that they sent the notice of the error).
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Re:Retroactive Taxation (Score:4, Informative)
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I don't think there are many tulips in Sweden, where IKEA actually is from.
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So? I'm from Germany, but my passport says Canada. IKEA may well be "from" Sweden, but they're as Swedish as Swedish Chef on Muppet Show.
Re:The Dutch have no great lessons to teach us (Score:4, Insightful)
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Thanks, I guess I shouldn't have called you guys " tulip-growing windmill lovers", when everyone knows you're really Swamp Germans. /jk
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http://www.economist.com/node/... [economist.com]
Um, the whole point is that IKEA *IS* the "charity".
Re:Surprising! (Score:4, Informative)
Well, in this case the people (Ireland) that stands to collect appealed...
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The Netherlands have a similar case (concerning 25M€ to be paid by Starbucks) where they're trying to get out of caiming back taxes so this is wilful ignorance on his part.
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