Apple To Start Paying Ireland the Billions It Owes In Back Taxes

Last year, Apple was ordered to pay a record sum of 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally slashed the iPhone maker's tax bill. "But Ireland was rather slow to start collecting that cash, which led the Commission to refer the Irish government to the European Court of Justice in October due to Ireland's non-compliance with the 2016 ruling," reports Engadget. "However, the Wall Street Journal reports today that the country will finally start collecting those billions of dollars owed by Apple and it may start doing so early next year." From the report: Both Apple and Ireland have fought back against the ruling -- Ireland has said that the European Union overstepped its authority and got some of the country's laws wrong while Apple has maintained that the amount it's being told to repay was miscalculated. Both are continuing to appeal the decision and the money will sit in an escrow fund while they do so. Ireland has said that negotiating the terms of that fund is what has held up its collection of the money but the European Commission said that the action it has taken against Ireland for failing to follow the 2016 ruling will proceed until the money is collected in full.

what's the D

[originalGMC]

Black Taxes, White Taxes ... what's the difference?

Re:

[110010001000]

"Succeed" from the EU? That pretty much sums up your intelligence.

Re:

[Gussington]

"Succeed" from the EU? That pretty much sums up your intelligence.

Well at least it was a successful demonstration...

Re:

[Applehu Akbar]

What the fuck is "lede"?

such a word actually exists, though not as used here. In the old printed newspaper industry it was a variant spelling of "lead" as in "lead paragraph," spelled that way to avoid confusion with the heavy metal that was a daily part of their lives.

Re:Better Option

[serviscope_minor]

Apple should spend seven billion to provide arms to Ireland to succeed from the EU.

Fucking moron. Ireland doesn't need arms to leave the EU because it's a soverign country. All they have to do is invoke Article 51.

They won't of course because as they can see from their neighbour, it's an incredibly stupid idea.

Re:Better Option

[TheRaven64]

Yes, because leaving the EU is working out so well for the UK, I'm sure it will work out even better for a country with a much smaller economy, a large chunk of which is based on being a convenient place for multinational corporations to put their EU presence.

Lucky Ireland!

[WheezyJoe]

Apple (and a lot of other corporations, to be honest) pulled a LOT of tricks to keep from paying taxes in the U.S. and elsewhere. I suppose it's nice some country is getting a big corporation to pay up, and if it's Ireland, I'm certain it was a sweet deal to start with (just to get Apple to settle down there in the first place).

Here's hoping Ireland uses some of the money to finish some lovely road and railway and railway projects - they need 'em.

Re:

[HornWumpus]

Do you know how many 'drunk and disorderly' fines Ireland owes to the 'World Night Court'? It's a staggering figure.

Re:

[Anonymous Coward]

what Ireland is terrified of is their reputation of being a great tax haven is being tarnished which will not only stop the flow of big companies to Ireland it may make many think about leaving for greener pastures as why the fuck would you ever move a company to Ireland without that benefit.

Re: Lucky Ireland!

[Catbeller]

They're in financial hell from lack of taxes and won't tax because some other country will let Apple skate if they don't. We need international tax laws to stop this.

Re:

[Actually, I do RTFA]

That's what this article is about. The EU is enforcing their international tax laws on Ireland.

Re:

[TheRaven64]

Nope, the EU is enforcing Irelands tax laws on Ireland. Corporation tax rates in the EU are 9-35%, with around 15-25% in most places where you'd actually want to set up a company. Corporation tax rates in Ireland are 12.5% and 25% for trading and non-trading income. Apple's tax rate in Ireland is 0.005%. The EU is simply saying that Apple has to pay corporation tax at the rate that the Irish tax code defines it, not at a special Apple rate.

Re:

[Actually, I do RTFA]

if it's Ireland, I'm certain it was a sweet deal to start with (just to get Apple to settle down there in the first place).

That's the point. The EU doesn't allow "sweet deals" to get Apple to settle there in the first place. This payment are all the back taxes now that the deal Ireland gave them has been determined to be illegal and was unwound.

Re: Take the fecking money

[Catbeller]

So basically Ireland and other nations have been pauperizing themselves by refusing to collect taxes from a company that has a quarter trillion dollars in cash.
And they're fighting becoming wealthy by doing so.

Irexit next?

[slazzy]

Will Ireland exit the EU next?

Re:

[vadim_t]

No, why would they? Ireland voted against independence because they wanted to stay in the EU. They like it there.

Re:

[nitehawk214]

With Britain leaving of course they would want to stay.

Re:

[thegarbz]

I don't know. Has Ireland been showing suicidal tendencies? You think Brexit is bad? Imagine what it would be like for a country that has even less manufacturing and GDP and is even more dependent on bloc trade.

Re:

[TheRaven64]

A huge part of Ireland's economy is a result of being a country that has lower corporation tax rates[1] than most of western Europe, good connections to the rest of the EU, and is part of the common market and so can import / export with the rest of the EU without any tariffs or customs inspections. Remove them from the EU, and expect to see most big businesses leave.

[1] Not threatened by this ruling. They can keep their 12.5% rate for everyone, just not the special Apple 0.005% rate.

Re:

[david_thornley]

Another advantage is that Ireland is English-speaking, which is a plus for US companies. I'm really wondering what my company is going to do after Brexit.

Re:

[TheRaven64]

I wonder how important that actually is. Google, for example, has English-speaking offices in Germany, France and Switzerland. Having English as the native language makes it easy to recruit locals, but for high-skill jobs you're likely expecting people to relocate anyway, and Paris is a lot easier to persuade people to move to than Cork.

Finally!

[Michael James Battaglia]

I hate it when companies think it is OK to become filthy rich and not have to pay any taxes. Instead they move their money into some off shore account to avoid this. I guess Apple should think about putting them money back into the US and help OUR economy!

Re:

[viperidaenz]

How much did Google pay? (Hint: their fair share too)

FTFY

Irish play book

[whoever57]

1. Offer a sweetheart tax deal to very large company. Collect almost no taxes.
2. Get caught out by the EU.
3. Demand payment of back taxes from the large company.

This 13B euro is more than Ireland would have ever collected through its illegal low tax scheme over the next decades or more, so, even if no large companies chose to route their profits through Ireland, the country is still ahead on the deal and can blame someone else for the deal falling apart.

It's a brilliant move by Ireland!

Re:

[Actually, I do RTFA]

Seems like that could have been their plan. Did the EU fine them 13 billion to discourage Ireland from doing that?

Re:

[whoever57]

No. The EU just forced Ireland to collect the taxes.

I think a lot of people on /. had a problem understanding this simple concept: The EU didn't fine Ireland; instead the EU just told Ireland to collect all those lovely back taxes.

There was a threat of some kind of penalty had Ireland not collected the back taxes, but this has not yet happened.

Re:

[Actually, I do RTFA]

I understand that the EU forced Ireland to collect taxes. I just wasn't sure if they also fined Ireland. Because, otherwise, they're incentivizing exactly your (sarcastically stated?) plan.

Re:

[serviscope_minor]

Because, otherwise, they're incentivizing exactly your (sarcastically stated?) plan.

Except that if you're big enough to get such a deal then you probably have more lawyers on staff than Ireland and know very what your doing. Apple must have known full well it was a gamble.

Re:

[Actually, I do RTFA]

The fine wouldn't be because I'm worried about Ireland taking advantage of Apple. It's because (using France as an example), suppose Ireland and France are both trying to woo Apple. Ireland offers an illegal tax rebate, France does not. Eventually Ireland's tax rebate is overturned. Apple knew the risks, Ireland wins, but France (and the rest of the EU countries) lose out.

Re:

[nitehawk214]

Except that now Apple will quit bribing the politicians that let them set up the tax deal in the first place.

Re:

[whoever57]

Except that now Apple will quit bribing the politicians that let them set up the tax deal in the first place.

And how is that a problem? Seems like a bonus to me.

Re:

[viperidaenz]

Or Ireland did it knowing the EU would eventually make the companies pay up.
They get the best of both worlds then, the jobs that come with attracting the big companies and the taxes too.

Re:

[moronoxyd]

The EU does not demand taxes.
The EU demands that Ireland collects from Apple the taxes that Apple owes Ireland based on irelands tax rates.

The EU gets no money out of this.
Apple just has to pay the taxes that the Irish laws say they should have paid to begin with.
Ireland get's the taxes that they are owed.

Re:

[The Cynical Critic]

Ireland joined the EEC, which eventually evolved into the EU, in the 1970s with the intent of getting companies to move their European operations there by offering a lower tax rate than other countries. The rest of the EU/EEC was fine with this as long as they applied the tax rate evenly in accordance with the founding treaties of the EEC/EU, which Ireland had ratified and thus bound themselves to following.

However the problems began when it was discovered that Ireland had moved on from being a low tax a

Good

[DontBeAMoran]

The less money they have in their bank account, the more they'll have to actually work on making their Macs better in order to sell more of them.

Re:Not quite correct

[110010001000]

Soon to be irrelevant? Who is going to make it irrelevant? Keep sucking up to your corporate masters, I am sure they are going to be good to you.

Re:

[fluffernutter]

Is anyone forcing Ireland to be in the EU? Honest question. I thought they were there because they wanted to be.

Re:

[serviscope_minor]

Is anyone forcing Ireland to be in the EU? Honest question.

Nope. If Ireland want to leave, they merely have to invoke Article 51.

I thought they were there because they wanted to be.

They are. As we can now see (and how most of the world saw beforehand), invoking Article 51 would be an incredibly bad idea.

Re:

[Anonymous Coward]

Exactly one country is leaving, and it doesnâ(TM)t even want to any more, having firmly realized that was a jolly great mistake.

But Iâ(TM)m sure the facts wonâ(TM)t get in your way.

Re:

[youngone]

You fucking idiot.
Have a look here, and tell us how the EU is shrinking. [wikipedia.org]

Re:Not quite correct

[bloodhawk]

Ireland saw an opportunity to steal tax revenue from other countries in order to provide minor benefits to its own local economy. It got called out for it and now is whining about it. Ireland would be one of the countries to suffer the most should the EU dissolve or become irrelevant, they depend on it hugely to maintain their economy.

Re:

[PPH]

Simple solution: Ireland needs to impose a 500% tax on all domestically produced Champagne and Camembert. And then scream like hell when France undercuts it's tax revenues.

Re:

[TheRaven64]

That argument makes no sense at all. Ireland has low corporation tax rates. Their tax rate of 12.5% is one of the lowest in the EU. This makes Ireland attractive to multinationals that want to have a single presence in the EU and put their corporate income in a low-tax country. This is completely fine, within the rules of the EU, and no one is objecting to it.. They then offered a special deal to Apple, where they would pay only 0.005% tax. This is in violation of the state aid laws, that don't allow

Re:

[PPH]

They then offered a special deal to Apple

Nope. That deal is available to any corporation in Ireland. No tax on revenues from outside the country.

Re:

[PPH]

Ireland offered Apple a special deal.

Not really. Apple was just smart enough to ask how to structure their operations to take advantage of Irish law. Others have done the same, such as Facebook, Microsoft and Oracle to name just a few.

Apple simply took greater advantage of the law, amassing more offshore funds exempt from taxes than the others did. The whole 'special deal' b.s. is just something the EU tax authorities have put forth so as not to explain what sort of plea bargains they have offered others. And what the quid pro quo for those b

Re:

[AmiMoJo]

Can't.

It would be against EU rules on state aid and unfair targeted taxation. Would also go against harmonized tax levels for produce. Champagne is a protected name in the EU, which can only be used for wine from that region of France. Thus, there can be no domestic production in Ireland. Same with Cornish pasties and the like.

Re:

[PPH]

Champagne is a protected name in the EU

So the Irish tax will be on sparkling wine.

It would be against EU rules on state aid and unfair targeted taxation.

But that's what the French are doing. They are charging unfairly low tax rates for their domestic produce. They have driven poor Ireland out of the Champa.... er, sparkling wine business.

Re:

[AmiMoJo]

If true the it seems like Ireland would have a very good case to take up with the European courts, which are there to resolve these kinds of issue. You know, the ones that told them Apple has to pay tax.

Re:

[PPH]

Right. And then the EU's entire tax regime collapses in a giant case of reductio ad absurdum. Allowing the laziest and greediest nations to dictate policy.

Re:

[bloodhawk]

and that would get them precisely nothing, undercutting another countries tax rate is perfectly fine in the EU and they can scream all they want. What is NOT fine is giving specific companies tax deals that are not available to all companies which is what Ireland have done.

Re:

[bloodhawk]

LOL Ireland setting an example of thrift and judgement lol you aren't familiar with the state of the Irish economy I gather. hint while stealing this money they also had multiple bailouts from the EU over the last decade.

Re:

[Hognoxious]

He's probably American. For some reason they often consider themselves to be experts on countries they've never visited and couldn't even point to on a map.

Re:

[networkBoy]

well, we Yanks are experts at fucking it up and blaming the other guy, so... In this case I think it may be ok?
lulz... /quiet sobbing

Re:Not quite correct

[quantaman]

Apple doesn't owe any taxes in Ireland, as defined by the laws of Ireland.

Incorrect, the laws of Ireland recognize the treaties that make Ireland part of the EU. And the language of those treaties recognizes the authority of the EC on this issue.

If Ireland wants to change its laws to allow it to charge Apple no tax it can follow Britain's example and do so.

The EU, a soon-to-be irrelevant third party, saw a bucket of cash it wanted and is somehow coercing both parties to get an unjustified payout.

Also incorrect, the tax in question is being paid to Ireland, not the EU. The reason they EU is getting involved is the EU has rules to avoid countries engaging in a race to the bottom to attract major corporations. Ireland violated those rules.

Re:EU does not cover taxation

[The Cynical Critic]

Except the EU agreement EXCLUDES taxation. So EC's attempt to bring taxation under its authority has no legal basis.

The Treaty of Lisbon, one of the founding documents of the EEC, which Ireland ratified when they joined it in the 1970s and would eventually evolve into the EU, is pretty clear on this subject and the EU most definitely has the authority to levy sanctions, even kick a country out of the EU, for violating the treaties the EU is based upon.

Not sure how you somehow got it into your head that the EU somehow has no authority on taxation, but the EU is built on a number of treaties, some of them containing parts relating to taxation. Sure, the EU may not be able to set actual tax rates in countries, but the Treaty of Lisbon most definitely does ban special company-specific tax deals like those that Ireland and Luxenburg have over the last few years been caught making.

If Apple doesn't like paying taxes on it's profits it can sell it's stuff elsewhere and if Ireland wants to make these deals they can join Britain in leaving the EU, but until they do, this is the reality.

Re:

[quantaman]

the tax in question is being paid to Ireland, not the EU. The reason they EU is getting involved is the EU has rules to avoid countries engaging in a race to the bottom to attract major corporations. Ireland violated those rules.

What's to prevent Ireland from "hiring" Google to perform some token service for them and then handing all of the tax money back?

Two things, first, the company in this story was Apple.

Second is the same set of underlying rules, according to this: [engadget.com]

The commission says that lower tax bills create illegal "state aid", giving firms advantages over rivals.

So if the violation isn't taxes in specific, but rather the practice of giving big companies sweetheart deals, then handing the money back to Google would be an even more obvious violation.

Re:Not quite correct

[GuB-42]

The EU is not an irrelevant third party, it is the main reason why Apple is in Ireland.

Do you think Apple has such a presence in Ireland for the domestic market?

Ireland has signed and ratified a treaty to be in the EU, they didn't follow the rules, it is illegal.

Re:

[moronoxyd]

The EU, a soon-to-be irrelevant third party, saw a bucket of cash it wanted and is somehow coercing both parties to get an unjustified payout.

The money in question will not and never would have gone to the EU. It is taxes owed to Ireland, so when paid (not if) it will go into Irish coffers.

Re:

[viperidaenz]

They have the option of removing themselves from the EU. The EU is not forcing them to stay a member, but while they are they need to follow their rules.

Re:EU, mind your own business.

[Freischutz]

Ireland is in almost the unique position to ignore this particular EU directive. The EU will not kick them out.

No it is not. The EU is backing the Republic to the hilt in the N-Ireland border dispute with Britain due to Brexit and the EU has pretty much told them the EU will veto any offer the British make that the Irish Republic does not like. It is very much in Ireland's interest not to piss the EU off any more and the EU26 are already pretty pissed over Ireland's tax haven antics.

Re:

[The Cynical Critic]

Just no... Ireland isn't in any kind of special position and kicking them out at the same time as Britain leaves would actually make the whole brexit process a lot less complicated.

Ireland really does get more out of the EU than the EU gets out of Ireland. Ever since joining the EU Ireland has attracted companies wanting to do business in the EU with it's considerably lower corporate tax rate (12.5% right now when the rest of the EU ranges from about 20 to 30%) and if they get kicked out companies really

Re:EU, mind your own business.

[TheRaven64]

Yes, they can. It is entirely fine for Ireland to set their corporation tax rate to zero. It is not, however, fine for Ireland to set Apple's tax rate to 0.005% (not a typo), but keep everyone else's at 25/12.5%(non-trading income / trading income), because that's state aid to a specific company. This is in violation of the free trade treaties that Ireland signed with the EU, which (try to) guarantee a level playing field for companies competing within the single market.