Apple Appeals EU Tax Ruling, Says It Was a 'Convenient Target' (reuters.com) 122
Apple has launched a legal challenge to a record $14 billion EU tax demand, arguing that EU regulators ignored tax experts and corporate law and deliberately picked a method to maximize the penalty, senior executives said. From a report on Reuters: Apple's combative stand underlines its anger with the European Commission, which said on Aug. 30 the company's Irish tax deal was illegal state aid and ordered it to repay up to 13 billion euros ($13.8 billion) to Ireland, where Apple has its European headquarters. European Competition Commissioner Margrethe Vestager, a former Danish economy minister, said Apple's Irish tax bill implied a tax rate of 0.005 percent in 2014. General Counsel Bruce Sewell and Chief Financial Officer Luca Maestri outlined in an interview with Reuters at Apple's global headquarters in Cupertino the company's plans for its appeal against the Commission's ruling at Europe's second highest court. The iPhone and iPad maker was singled out because of its success, Sewell said. "Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines. It allows the commissioner to become Dane of the year for 2016," he said, referring to the title accorded to Vestager by Danish newspaper Berlingske last month.
'convenient target'? LOL! (Score:4, Insightful)
They had to start somewhere, right Luca?
It might as well be one of the worst offenders, ie. You.
Re:'convenient target'? LOL! (Score:5, Insightful)
Obviously the most convnient targets for tax evasion litigation are tax evaders. But it's nice of Apple to point out that they are indeed in that pool.
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And don't get me started on the nonsense it takes to get an app on Apple's store.
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In fact you pick the worst and run the case to conclusion by which time you have set a precedent. It then becomes easier to bring all the others to book because all the grounds for appeal on technicalities and what the actual EU law/regulations mean have been worked out in case one.
It makes no sense whatsoever to run dozens of similar cases at the same time all appealing over the same technicalities.
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It would make more sense to try to establish a precedent with a defendant which had fewer resources.
Nah, they'd have to go after Apple eventually.
Might as well start with the toughest case. If you can win against Apple then everybody else will lose almost by default.
PS: Governments have plenty of resources, too.
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So, in the absence of any evidence, people just concoct conspiracy theories.. News at 11.
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Then McApple has nothing to.. what could they possibly hide?
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The majority of companies that have received fines from the European Commission are European. Europe does not treat regulatory action as a means of protectionism, like the US does.
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If the EU is to be viable they need this (Score:1, Flamebait)
Re:If the EU is to be viable they need this (Score:5, Informative)
To point 1: Have you even read a single history book on Europe? The current post-war period is probably the longest stretch of general peace Western and Central Europe has ever had.
To point 2: How is a common market and currency contributing to cultural homogeneity? Is the US homogeneous? Is China? Is Canada?
To point 3: The population of the EU is over 500 million people. Why does 200,000 employees seem so outrageous?
To point 4: There are a common set of rules governing the Common Market.This adds a layer, but the benefits of companies being able to trade on that open market largely unimpeded by tariffs and other trade restrictions more than make up for extra regulation.
To point 5: The European Union is a creature of treaty, a multilateral treaty between all its member states. It isn't a national government, so trying to compare it to one is absurd.
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Think a
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I would say yes, that within economic integration, there would have inevitably been a slow march towards renewed conflict. The Germans and French, through the various iterations from the collapse of the Carolingian Empire as a unified political entity, have spent centuries at each others' throats. Economic integration between Germany, France and the Low Countries has been absolutely critical to this extended period of peace.
NATO's role has been unifying as well, but by and large its purpose has always been
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It is hard to say and your points are justified.
But remember, after the first world war, another war of such a scale seemed unthinkable to many.
Thus one of the quotes at the foundation of the pre-predecessor of the EU was "to make war not just unthinkable, but impossible".
What you consider "constant turmoil" is just discussion, negotiation (sometimes a bit heavy-handed), conflict of interest etc.
Do you hear (except maybe at football/soccer games) of people from one EU country being beaten up by members of a
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In my experience, within Europe it is a relatively widely held opinion that the EU (and its precursors) did indeed play a big role in supporting peace and prosperity on the continent. (Which does not at all negate the support of the US.)
But perhaps a clearer example than western European peace might be the Balkans. I believe that the prospect of entering the EU has played a non-trivial role in helping convince the Balkan states to finally bury the hatchet for real. (Similarly the prospect of entering the EU
It's about the law, not about success (Score:2)
The issue is not that they're successful, but that they were breaking the law. Sure, the amount due may have been less had they been less successful, but it would not have changed anything about the legality of their construct.
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If you understand the situation, Apple aren't being accused of breaking the law. It's the Irish government who the EU says is in violation of the law by making illegal tax deals to attract companies.
Furthermore, the EU isn't ordering Apple to pay the taxes, it's ordering the Irish government to collect the taxes. While the result is the same, the party being accused of wrongdoing is different.
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Ireland's arrangement with Apple violates European directives, hence it is illegal and the taxes should be re-assessed without the illegal arrangement. It's that simple.
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I wonder how far $14 billion would go to pay for Ireland to break away from the EU....
Re:EU has no remit on taxation (Score:5, Informative)
WRONG, WRONG, and WRONG again.
I will point you to the following article on the supremacy of EU law over national law.
https://en.wikipedia.org/wiki/... [wikipedia.org]
I will then point you to the third amendment of the Irish constitution, which enshrined this primacy of EU law into the Irish constitution.
https://en.wikipedia.org/wiki/... [wikipedia.org]
The EU has *VERY* strong rules on state aid. The Irish government gave Apple a special tax deal, that was not available to everyone. This has been found to break those state aid rules and is therefore illegal under EU law and as EU law has primacy over Irish law as confirmed by the third amendment to the Irish constitution then it is illegal.
It is amazing the crap people spout about this sort of stuff without the first clue as to what they are talking about.
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I forgot to mention the third amendment to the Irish constitution was approved 83.1% for to 16.9% against in a referendum on the 10th May 1972 on a turnout of 70.9%. So the Irish people voted heavily for it with a absolute majority of 58.9% of registered voters in favour.
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I will then point you to the third amendment of the Irish constitution, which enshrined this primacy of EU law into the Irish constitution.
Thing is that doesn't even matter. I mean the EU doesn't care if you pass a law which says that you can break the EU's rules: if you keep breaking the rules then you'll be kicked out no matter what your local laws say.
And of course there's no legal, moral or sovereign right to be a member of someone else's club if you refuse to abide by the rules.
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Why does EU restrict itself to competing companies in Ireland?
They EU hasn't just gone after Ireland or Apple. They've gone after many governments and companies. You just haven't been paying attention. You REALLY mustn't have been or else the irony of going after Ireland while The Netherlands [bloomberg.com] has the EU presidency would not have gone unnoticed.
Lesson... (Score:2)
Not paying taxes is theivery! (Score:3, Insightful)
Every dollar or euro Apple doesn't pay has to be paid by somebody else.
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Oh, god, I think you just made half the Americans on this site have a seizure or at least severe spasms...
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Irish tax revenue in 2014 was around 55 billion euros by the way.
LMOL (Score:3)
Because your experts aren't biased *eye roll*
"The low rate is achieved by Apple telling U.S. tax authorities that the profits are earned by Irish units. Meanwhile it tells Ireland the profits are not earned in Ireland. "
"Sewell said the fact that an entity was a holding company with no employees on its books did not mean it was inactive and it could be actively managed by employees of its parent company." http://www.reuters.com/article... [reuters.com]
Wow just wow. I guess Apple learned at the knees of Goldman Sachs. Pay your fucking taxes hippie!
well duh (Score:1)
Well duh, of course you're an easy target
Apple is one of the most profitable companies on the planet (if not THE most profitable)
They earn millions or even billions of Euro revenue each year and pay less tax than a jar of Marmite. So yeah, it was pretty obvious Apple was doing a massive (moral, if not also legal) tax dodge.
So they are admitting guilt, then? (Score:5, Insightful)
Re:So they are admitting guilt, then? (Score:4, Interesting)
on the premise that everyone else is doing it
But this goes to the root of the EU's case. They claim Ireland gave Apple a special break. Ireland says that this break is available to any company based in Ireland. No special treatment, no violation of it's EU treaty. No back taxes owed.
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Starbucks and the Netherlands take offence that Apple and Ireland think they are being singled out, and so do several other companies, ironically enough most of which funnel quite a lot of their profits to Benelux.
Actually in Europe... (Score:4, Informative)
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Can't Ireland AND those corrupt assholes both be breaking the rules? How does misconduct by the President of the European Commission make Ireland's illegal tax deal with Apple alright?
I know how to make yourself less of a target. (Score:1)
you might try something like PAYING YOUR TAXES!
Re:Time for Apple to "pay their fair share" (Score:4, Interesting)
Eh... Are you seriously equivocating Apple, a multibillion dollar global megacorp with 'liberal do gooders'? Really? Yeah I get it, plenty of liberals use Apple products, but I've never seen people - on the right or on the left - claim that Apple as a company is in any sense liberal. Their tax-evasion as well as lack of any charity work whatsoever are quite well known, so I don't know where this notion of Apple as a 'liberal' company is coming from.
If anything, stories like this further go on to prove that Apple is just as unethical and uncaring as most other companies of their size.
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It doesn't matter whether the people running it claim to be conservative or liberal, if they're running the company against liberal positions (tax-evasion and shitty treatment of employees for example) then they - and hence the company itself - are not liberal.
Pro Tip (Score:2)
When you are one of the world leaders in hoarding cash, it tends to make you stand out a bit when the Tax Man comes looking.
It becomes especially obvious when more than 90% of your entire cash reserves are overseas.
I would expect all of the players that use offshore tax havens will eventually be in the spotlight.
Apple just happens to be one of the first because their arrogance against paying taxes via tax havens will be used as an example for the rest.
A win against Apple would significantly decrease the amo
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Except that's not really what happened. Both Ireland and Apple knew this tax deal would almost certainly eventually end up in the courts, seeing as the deal violated EU rules that Ireland had agreed to as part of its membership in the Common Market. This is more like you and your accountant cooking up a tax avoidance scheme, knowing that the IRS might eventually catch up with you, but you taking the gamble on the possibility that they won't (and tax authorities often take years to finally take down shady ta
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cooking up a tax avoidance scheme, knowing that the IRS might eventually catch up with you
This doesn't make sense. Tax avoidance is perfectly legal. It's tax evasion that isn't And if you are complying with the law, the worst the IRS can do is to change the law (at the direction of Congress) and plug your loophole going forward.
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They weren't complying with the law.
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They weren't complying with the law.
Yes, they were. Irish law. The issue of Irish law not complying with EU treaty is a matter between Ireland and Brussels.
You made yourself a convenient target (Score:2)
By trying to circumvent the law. You could not have become a convenient target by playing by the rules.
Not actually tax evasion (Score:1)
Guys, a lot of you are talking about tax evasion, which is not the point here. No one is accusing Apple of not paying the tax that they should to Ireland.
This is a case of illegal government subsidizing. Ireland has illegally (at least according to EU) given Apple an unfair tax and by doing so have illegally given state funding to Apple. This is not allowed in EU. The ruling is that Apple must have the standard Irish company tax, which leads to the enormous sum.
Whether this is right or not is a legal battle
The common man takes it again (Score:2)
Apple cannot even afford to put audio jacks in their phones anymore and these now these eurotrash bullies expect them to pay their taxes too!
You were a "convenient" target... (Score:2)
So no one here wants to tax Apple? (Score:2)
I can't believe the number of Apple supporters here. Come on! Apple is like every large scoundrel with lawyers, not only do they make billions, they like to fake victim status. Frankly they are a disgrace and they need to be told off. Have you seen how they tread employees?
I get that some people here don't like governments to have money, but govs are pretty much free to raise any tax they want anyway. Like death, taxes are a fact of life. Either you and I pay it with our hard-earned cash or some enormous, s
EU courts (Score:2)
Re:Both b... (Score:5, Interesting)
No rules where changed retroactively - they were in place when Apple and the Irish government decided the rules did not apply to them and those rules continued to apply ever since. Irish tax law does not trump EU directives agreed to by the government of Ireland and US tax law is utterly irrelevant to the tax obligations of an Irish company.
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Ireland's rules have been the same for 25 years (Score:3, Insightful)
The EU has just recently decided to reinterpret their laws to ban the rules Ireland has had in place for 25 years, and then do so retroactively to arrive at $14B.
I'm fully in favor of the EU shutting down this obvious tax shelter scheme, but: (a) society can't function if laws are reinterpreted retroactively, and (b) it's fundamentally uncompetitive to apply this revised reinterpretation to Apple alone.
Re:Ireland's rules have been the same for 25 years (Score:4, Informative)
The EU has just recently decided to reinterpret their laws to ban the rules Ireland has had in place for 25 years, and then do so retroactively to arrive at $14B.
People don't reinterpret anything. The laws have been in place and were unchanged. If someone is in legal grey area it's their due diligence to seek clarification. Failing to do that and continuing to work in a law that isn't 100% clear can lead to an unfavourable outcome when an interpretation is sought in the court about a specific circumstance.
This is literally how every law works. But by all means, point me to an interpretation of the law that was given to Apple to allow their practice by the EU courts. When you do also call up Apple because if they had such a thing this would be a very open and shut case for them, which is not what it looks like.
The rule interpretation was changed retroactively. (Score:1)
For 25 years there wasn't a peep from the EU that Ireland's tax laws constituted illegal state aid. Then they change their interpretation--towards a single US company--and now they want that company to pay years of back-taxes.
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For 25 years there wasn't a peep from the EU that Ireland's tax laws constituted illegal state aid. Then they change their interpretation--towards a single US company--and now they want that company to pay years of back-taxes.
There wasn't a peep because the tax rates were applied fairly to all companies. Apple then negotiated a special "Apple only" deal which applied only to them which the Irish were happy to do to have Apple's EU HQ in the country. That deal constituted being state aid of the type which is illegal in the EU for all member states.
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Re:Both b... (Score:5, Insightful)
Irish and US tax law are in this case both superseded by EU tax law in this case. So that argument is completely irrelevant in this case.
Remember by becoming a member of the EU the Irish agreed that their tax laws would be compliant with EU law. The commission found that Irish tax law was not compliant with EU law and as EU law is supreme Apple and Ireland are in trouble.
Sorry Apple cry me a river that you can't afford decent tax lawyers.
There is no 'EU tax law" (Score:1, Interesting)
https://europa.eu/european-union/topics/taxation_en
"The EU does not have a direct role in raising taxes or setting tax rates. The amount of tax you pay is decided by your government, not the EU."
They even admit it themselves.
Their remit is: Cross border value added tax (introduced under the remit of 'free trade') and European Union withholding tax (introduced under anti-money laundering). Any claim to legislate on tax is done by leveraging another directive.
What they're doing here is trying to pretend tha
financial advantage? (Score:2, Informative)
That's simply false, taxation across the EU is not set by the EU and corporate tax rates are not level across the EU or even within each nation state.
Corporate tax rate:
Austria 25%
Belgium 34%
Czech 19%
France 33% (36.6% above 3.5 million euros)
Germany 30.175% to 33.325%
etc. etc.
The rates are not required to be level across the EU, and they are not level even within each nation state. Taxation simply isn't within the EU remit, and your broad "no financial advantage" has no legal basis.
Apple does not receiv
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Really. the EU has *NO* rules on tax? Want to explain the following Wikipedia page on Value Added *TAX* then?
https://en.wikipedia.org/wiki/... [wikipedia.org]
Anyway the point is that preferential tax breaks liek the one Apple had from Ireland have been ruled as state aid and the EU does have remit over that, and there are *NO* exceptions to the state aid rules. Clearly the EU has at least *SOME* powers over even corporate tax rates in member states.
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Wasn't his/her statement simply that "Taxation simply isn't within the EU remit", i.e. that the EU cannot collect taxes? That holds quite true, even if they have rules requiring countries to follow a harmonized VAT system.
The rules in effect here, though, are not regarding taxes, but fair competition within the trade zone, and special tax-rates are seen as providing unfair advantages to individual companies; yes, that means taxation and rates are affected by the fair competition rules, but outside of that t
Re:There is no 'EU tax law" (Score:5, Insightful)
What they're doing here is trying to pretend that can legislate tax laws based on the free trade and competiton directives.
Ireland agreed to abide by the EU's rules as a condition for joining. One of those rules is an exceptionally clear one about state aid. Quoth the EU:
State aid is defined as an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities
Now, Ireland's free to set a 0.0005% tax rate or whatever it is they do, but they're not free to give one company an advantage over the others. I cannot see any vaguely reasonable argument that selective tax rates are not a breach of state aid rules. Note that there's no exemption for taxation in that rule.
Don't like it? Well, Ireand's free to leave the club because they're a sovereign nation and then they can give state aid of whatever amount they loke to whomsoever they like.
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So you want to punish only half of the knowing participants in a crime? Brilliant logic.
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Hm. I don't like Apple (and apparently, you do not like me for some reason) but it seems to me that Ireland is the entity responsible for that 14 Billion, not Apple.
Ireland told Apple that they could pay x% in tax. Ireland is a sovereign nation. Ireland is responsible for following any treaties it may have with other entities.
The only Apple product that I have left is an iPad 2 (I gave away everything else) so this point of view is not biased for Apple. I would love to visit Ireland and I love their red hea
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Hm. I don't like Apple (and apparently, you do not like me for some reason)
Apparently. No idea why though!
Ireland is the entity responsible for that 14 Billion, not Apple.
Well, Apple accepted the $14 billion in state aid. Bear in mind that Apple's gross revenue is comparable to the ROI's GDP, so we're not talking about the little guy who got the "ok" from a government and went ahead. We're talking about a huge deal negotiated by both.
Ireland is a sovereign nation.
And Ireland is free to leave the club if i
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Apparently. No idea why though!
My guess is I went on a rant about something stupid and my agressiveness was taken as assholeishness. I have been having "issues" with the contents of my blood so I have been acting somewhat irrational at times. But this is not what I should be talking about right now...
How's that logical? The EU doesn't want the money. This money is not owed to the EU, and the EU is not trying to get the money from Ireland. The contention is that Ireland gave Apple $14 billion illegally and now Ireland have to get that $14 billion back off Apple.
The summary indicated that the EU was going to take a few billion from Apple. Either I misunderstood it, or it was worded to intentionally evoke that (mis)understanding. Regardless, we are both on the same boat here. Ireland needs to talk to
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Who said the EU raises taxes? The EU, as the inheritor of the European common market, sets the general rules about how taxes will be applied. It has to, because otherwise you would get exactly what happened with Apple; find a friendly EU country that will give you an absurdly low tax rate, but then enjoy unimpeded access to the rest of the Common Market.
Do you even understand what the European Union or the European common market is?
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Yes, the outcome was pre-determined, because Ireland was violating the terms of its membership in the Common Market. This is like a thief caught red handed bemoaning the fact that the "fix was in".
Re:Tax evasion (Score:5, Informative)
While it might be unwanted on the moral/ethical compass, tax evasion is not illegal.
It is illegal. That is what defines tax evasion. When legal means are used to avoid paying tax, it is called tax avoidance.
Apple played by the rules, and the Irish government agreed on it
That does not make it legal. By making this arrangement with Apple, the Irish government violated EU directives it had previously agreed upon.
The EU desperately needs more cash, so they try all sorts of things, including these tricks
Enforcing the law in this case will not result in a single cent going to the EU. They are forcing the government of Ireland to collect the taxes Ireland is owed. Moreover, I don't think the EU is desperately in need of cash. I don't know where you get that idea from. The EU budget has been more or less stable for a long time.
This is a sign that the EU is cracking up.
This is a sign that you don't know what you are talking about.
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They will because once all this is settled and the Irish government has actually collected the back taxes, the EU will promptly fine the Irish government for breaking EU state aid rules, aka special tax breaks are state aid and that is not allowed under the EU rules (this is ruling Apple and Ireland have lost on) and fine them somewhere near the amount of illegal state aid that Ireland gave to Apple in the way of a special tax deal.
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the EU will promptly fine the Irish government for breaking EU state aid rules
Under what mandate, exactly?
I don't think you understand how the EU works. It works on a budget and is a political union that comprises 28 countries. The countries can use EU to pass laws that apply to all countries, but EU itself holds no power - the power comes from the member nations.
It's primarily a legislative body, not an executive one.
Ireland is a net recipient of funds channeled through EU, so it's possible (although not plausible) that a country could sue to get a larger piece of the cake based o
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Hum, I know I have a much much better idea of how the EU works than the vast majority of people......
I think you will find the EU "fines" member states for failing to comply with directives all the time. Well perhaps not all the time, but it would certainly not be something new.
But specifically this year a fine for illegal state aid
http://www.shippingherald.com/... [shippingherald.com]
No mandate my ass.
Let's put it another way, what would be the point of banning state aid if the country giving illegal state aid could keep the g
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Strictly speaking, it was Ireland that broke the rules. The effect is that Apple's tax deal violated EU rules, and therefore Ireland must collect the taxes from Apple.
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tax evasion is not illegal
<pedantic mode=on>Actually, it's tax avoidance that is legal. Not evasion.</pedantic>
The EU desperately needs more cash
Which is funny because they claim that Ireland should be collecting this tax. None will be going to the EU. If the Irish want, they could take it and grant a one time payout to every Irish citizen. And then they'd be right back where they are today.