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Apple Takes On EU's Vestager In Record $14 Billion Tax Fight (bloomberg.com) 72

Posted by BeauHD from the what-to-expect dept.
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.
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Apple Takes On EU's Vestager In Record $14 Billion Tax Fight More

Apple Takes On EU's Vestager In Record $14 Billion Tax Fight

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  • Retroactively changed the rules?? (Score:5, Interesting)

    by Daemonik ( 171801 ) on Monday September 16, 2019 @08:20PM (#59201290) Homepage

    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.

    • 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? :(

    • Re: (Score:1, Insightful)

      by ShanghaiBill ( 739463 )

      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)

        by Richard_at_work ( 517087 ) on Monday September 16, 2019 @10:01PM (#59201486)

        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]:

        "Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."

        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 .

        • Re: (Score:2, Insightful)

          by Shinobi ( 19308 )

          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

        • So Apple now has to pay the tax that the Government of the country it was incorporated in said it didn't have to. Rather than fine the Government of Ireland (an EU member), who said everything was fine, go after Apple because - money?

          • 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.

            • So, effectively, Ireland cannot set its own tax rates. If what you say is correct, then Apple should pay Ireland - not the EU. And any penalty should be decided upon by Ireland - not the EU. This just proves that the EU fundamentally eliminates the concept of individual countries, making them nothing more than cultural curiosities for different language, clothing, and food.

              • 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:

                The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission's first request for information in 2013. Ireland must now re

    • 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

      • 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

    • have a lot of banking laws written with something along the lines of "If you think you're committing a crime you are". e.g. violating the intent of the law is punishable. I wish the US would do something similar. I'm so tired of companies getting off on technicalities when if I violate even small laws they nail my ass to the wall.

  • U.S.A. (Score:2, Interesting)

    by reanjr ( 588767 )

    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.

    • 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.

      • 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

        • 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

    • There's no such thing as stability or fairness when the maffia/terrorists are involved.
      Even when they call their organization government.

  • Quit whining and pay your taxes like the rest.... (Score:5, Insightful)

    by Proudrooster ( 580120 ) on Monday September 16, 2019 @08:28PM (#59201302) Homepage

    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.

  • Now all EU nations can do is watch US brands grow.
    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.

    • Re: (Score:2)

      by Nadir ( 805 )
      Ahem, the WWW was invented at a EU-funded organization. Now, that was a failure.

  • Something smells fishy (Score:4, Insightful)

    by tiananmen tank man ( 979067 ) on Monday September 16, 2019 @09:57PM (#59201476)

    With zero retail stores in Ireland, apple makes enough revenue to have to owe $15 billion in back taxes.

    • Re: (Score:3, Insightful)

      by Cmdln Daco ( 1183119 )

      Yes, there's definitely something very fishy about them claiming that much earned revenue in Ireland.

      • 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)

      by AmiMoJo ( 196126 ) on Tuesday September 17, 2019 @05:49AM (#59202322) Homepage Journal

      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.

      • Re: (Score:2)

        by jbengt ( 874751 )

        Apple invented the scam where they incorporate in Ireland and funnel the profits from other EU countries there via some BS "brand licencing" stuff.

        Well, to be fair, Apple didn't invent that scam.

      • 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)

    by sdinfoserv ( 1793266 ) on Tuesday September 17, 2019 @12:06AM (#59201662)
    Poor, Poor Apple... Employing (c) 1 million workers in China contracting through FoxConn. Benefiting from working in a country with zero labor, employment, wage an hour, environmental, or intellectual property laws or benefits paid... Workers, some under age, chained to desks, living in communal dorms to produce product to meet marketing imposed deadlines...
    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.
    • If Apple is so terrible, why don't you go there and create better jobs for the people?
      • The real question is why doesn't Apple bring their labor to America and pay Americans decent wages?
        Answer: because then Apple wouldn't have a near Trillion $$$ market cap...
        • How dare they lower prices!
          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.

    • 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.

  • 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

    • The problem with Chineese workers is their government, not people who create jobs for them.
      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

    • 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.

      • My following sentence was badly phrased:

        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 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).

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