[HN Gopher] Apple must pay 13B euros in back taxes, EU's top cou...
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Apple must pay 13B euros in back taxes, EU's top court rules
Author : kklisura
Score : 394 points
Date : 2024-09-10 08:03 UTC (14 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| InsomniacL wrote:
| Seems wrong that Ireland cheated the system to attract tech
| companies then also gets a huge payout.
| csomar wrote:
| The idea was that these big companies will move back to the big
| centers (Paris/Frankfurt) once they have to pay the same taxes.
| That didn't happen (surprise) and Ireland is now ending up with
| a tax deluge and high value tech companies.
| quonn wrote:
| The idea was that these big companies and the Irish
| government obey the law.
| fullspectrumdev wrote:
| What's interesting is the deal Apple got was fine under
| Irish law at the time.
|
| Nobody foresaw how things would pan out literally decades
| later.
| izacus wrote:
| Irish law yes, EU law no.
|
| It's like saying that you couldn't forsee a state law
| overriding a lower level region/county law.
| piltdownman wrote:
| That's not how the EU works. To give just one major
| example, our constitution regularly overrules EU law -
| Ireland has to go to referendum for Treaties - e.g. The
| Lisbon Treaty.
| quonn wrote:
| EU law has precedence, period.
| piltdownman wrote:
| No, no it doesn't. The primacy of EU law is completely
| negated in a number of fairly basic instances - the
| common market first and foremost.
|
| Specifically for Ireland, we are the only EU member state
| that are obliged to hold public referendums on Treaties.
| Ratification of the Treaty in all other member states is
| decided upon by the states' national parliaments.
|
| Ireland, Netherlands, and Luxembourg also have veto
| powers when it comes to EU wide regulations. That's why
| Article 116 exists. You don't know what you're talking
| about.
| izacus wrote:
| Your interpretation just lost in court, so who here
| doesn't know what they're talking about?
| piltdownman wrote:
| It's literally enshrined in German Case Law as
| 'Identitatsvorbehalt'.
|
| The Polish constitutional court OUTRIGHT ruled that EU
| law does not supercede national law. Thus, primacy of EU
| law is wholly rejected in Poland.
| https://www.euronews.com/2021/10/07/polish-court-rules-
| some-...
|
| I could go on, but responding to Dunning-Kruger
| commentary is a Pyrrhic battle at best.
| izacus wrote:
| Why are you talking about Poland in Irish case now? :)
|
| A case which questions the ability of EU to override
| Polish consistution. Did you establish that corporate tax
| law is a consistutional issue? And note that the decision
| the tribunal has made that redress for differences
| between EU law and Polish law will have to be handled by:
| leaving EU, changing the constitution or changing the EU
| law. I'm not sure Poland wants to push that.
| izacus wrote:
| There are whole parts of EU law that always precede local
| law without the need for local harmonization.
|
| At least read up on basics of how EU works if you're
| going to debate law.
| quonn wrote:
| > literally decades later.
|
| So given the time value of money, Apple still has an
| unfair advantage?
| piltdownman wrote:
| All tax treaties and agreements between countries
| (including intra-EU) are bilateral country to country
| agreements. Most are refreshed every 3-7 years based on
| OECD (or EU) recommended standards. Ireland's laws and
| treatment are 100% compliant.
|
| Rather than competing and reducing their tax rates
| countries like France prefer to moan, as politically they
| can't be seen to favour big bad businesses.
|
| This of course was no problem with the EEC where Germany,
| France and the other ex-colonial powers made out like
| bandits selling their coal and steel to Ireland and the CT
| being paid there.
|
| Enter an English-language dominated SaaS economy from the
| 90s and they got caught out as they were more interested in
| domestic economic protectionism than dealing with the
| realities of a paradigm shift towards tech. We pivoted
| completely to an information economy and service based
| economy from a predominately agrarian one. Now have a look
| at the tech job market in 2024 in Dublin versus Paris,
| Frankfurt, Berlin, Barcelona etc..
|
| If any one of our EU or the other non EU countries were
| really dissatisfied with Ireland, they have the right to
| withdraw at any time.
| quonn wrote:
| Look, it's nice that Ireland is finally not a poor
| country anymore.
|
| That's primarily due to EU politics and support.
|
| It is, however, economically nowhere even close to France
| or Germany, no matter how large you think the "tech job"
| market there is [0].
|
| > If any one of our EU or the other non EU countries were
| really dissatisfied with Ireland, they have the right to
| withdraw at any time.
|
| Who should withdraw from what?
|
| [0] For the facts regarding economic strength, read this
| document by the central bank of Ireland.
| https://www.centralbank.ie/docs/default-
| source/publications/...
| piltdownman wrote:
| How could we be? We're not a post-colonial power like
| France or Germany who spent years exploiting the African
| continent in egregious human rights violations. It is
| literally only since 2021 that we have reached our pre-
| English Genocide population levels of 1851
| https://www.theguardian.com/world/2021/aug/31/ireland-
| popula...
|
| Germany has 20x our population, France is not far off it.
| Neither has anything close to the job market per capita
| in the IT and Services sector that Ireland has.
|
| As for us dragging ourselves up, that has more to with
| our special relationship with the US. The EU were
| initially helpful with infrastructural development,
| access to a Common Market, and to drag us out of the
| Vatican Law era, but we gave up a huge amount of fishing
| rights to do so - massively enriching spain, portugal and
| france who had overfished their own waters. Note also
| we're not part of Schengen, but maintain a CTA (Common
| Travel Area) with the UK.
|
| Eventually the EU took the legs out from under us in 2008
| and forced us at gunpoint to bail out unsecured german
| bondholders to maintain the integrity of the Euro and
| prevent a contagion run on German Banks.
|
| Irelands FDI sector was highly developed in the late 80s
| and combined with entities like Enterprise Ireland -
| ranked first in the world of venture capital investors by
| deal count in 2020 - hammered home the advantage via our
| highly-educated English speaking workforce and relatively
| low cost of living. Even now the number of investments
| completed by Enterprise Ireland was 42% more than its
| nearest competitor, French sovereign wealth fund
| Bpifrance.
| quonn wrote:
| Germany was never a significant colonial power and did
| not extract much value from them. Especially not compared
| to Spain, Portugal, the United Kingdom, France, the
| Netherlands or Belgium.
|
| > Germany has 20x our population, France is not far off
| it. Neither has anything close to the job market per
| capita in the IT and Services sector that Ireland has.
|
| If you say so. And yet those employees are payed less.
|
| These jobs exist because Ireland gave US companies large
| tax breaks and because it is an English-speaking country.
| Otherwise they would perhaps been based in the UK before
| Brexit.
|
| It's good that Ireland attracts business, but encouraging
| tax dodging is not the way and this particular judgement
| is an opportunity to acknowledge this.
| piltdownman wrote:
| We encouraged or facilitated nothing of the sort.
|
| The commission has caved to political pressure and has
| fabricated a state aid case. The original general court
| ruling was unequivocal.
|
| This ruling has been overturned by the ECJ - absolutely
| shamefully; with the entirety of their case is that
| Apple, and Apple _alone_ were the beneficiary of state
| aid. That is demonstrably untrue.
| quonn wrote:
| So according to you everyone is wrong, all the courts,
| all the other EU countries (which unjustly are wealthier
| than Ireland due to colonialism), the commission and the
| court and of course the decision taken by it.
| csomar wrote:
| > It is, however, economically nowhere even close to
| France or Germany, no matter how large you think the
| "tech job" market there is [0].
|
| Shouldn't they then keep their low-tax environment so
| that they can catch up to the rest of Europe ;)
| realityking wrote:
| > All tax treaties and agreements between countries
| (including intra-EU) are bilateral country to country
| agreements.
|
| That is completely wrong on multiple levels.
|
| - You're likely thinking of the double taxation treaties
| that follow the OECD model convention. These hardly get
| refreshed every 7 years. The German/Irish one is from
| 1962, the French/Irish one is from 1966, and the UK/Irish
| one from 1976. - The OECD's BEPS multilateral tax treaty
| has now 85 state parties, including Ireland - There are
| other example of multilateral tax treaties, e.g. the
| Nordic countries have a multilateral double taxation
| treaty - There's plenty of EU legislation around taxation
| covering predominantly VAT and excise duties bit also
| such details as the tax treatment of moving personal
| property between member countries or how royalty payments
| between associated companies are treated
| dachworker wrote:
| The law forbids the rich and poor alike from sleeping under
| bridges. The law in the EU is written the France and
| Germany.
| tankenmate wrote:
| "The law in the EU is written the France and Germany.";
| that is an overt oversimplification. Obviously France and
| Germany have more influence in the EU than other member
| states, but it is by no means a monopoly.
| Hamuko wrote:
| Ireland has a pretty big advantage for getting big American
| companies to settle there since it's the only place in EU
| where English is the official language.
|
| Well, technically Malta also exists, but I imagine that not a
| lot of companies are looking to set up on a small island the
| size of Kansas City.
| dachworker wrote:
| It's not just the language. It's also the culture. In fact
| I would say the culture is even more important.
|
| Germans and Americans wouldn't understand each other, even
| if they spoke the same culture. Their understanding of how
| life works, their worldview, their expectation of others,
| ...etc all of these are quite different. For example, a
| project is ongoing, but in the course of completing the
| todo list, it is apparent that a certain issue is going to
| prop up. An American would immediately jump on it, try to
| fix it and then make sure to boast about it at the next
| meaning to take the credit. A German would either ignore it
| completely because it is not part of his responsibilities
| or bring it up at the next meeting, but not before
| finishing the todo list as planned even if the last points
| are rendered obsolete by the emergence of this issue. And
| when the American starts presenting his solution at the
| meeting, the German will feel slighted and held out of the
| loop, and all sorts of confused that this guy acted so
| independently and out of line, without following procedure.
| Just an example. There are whole courses about the
| different corporate cultures and how people find it hard to
| work in different cultural environments.
|
| I am sure the Americans prefer to work with the Irish who
| although they don't have the same culture, I never heard of
| major issues in communication between the those two
| cultures.
| tankenmate wrote:
| Not just the culture; Irish law is based on common law,
| something that Ireland and the US share. Most other EU
| states use a civil law basis.
| eesmith wrote:
| I think you should be cautious about saying "Ireland cheated
| the system". The onus is placed more directly on the Irish tax
| authority, and then more broadly the government, and then more
| broadly the voting population, and only then the entire
| population.
|
| Consider how the ruling says "Ireland had renounced tax
| revenue, which had given rise to a loss of State resources".
| This means many people living in Ireland got less government
| resources than they would have, including people like children
| and immigrants who did not have the right to vote so cannot be
| said to have been involved in the cheating, even though they
| are part of Ireland.
|
| Legally speaking it's not a "payout" but "recovery of unlawful
| state aid."
| InsomniacL wrote:
| > This means many people living in Ireland got less
| government resources than they would have
|
| No it doesn't. Ireland did this deal to benefit from it. What
| they lost from direct tax in one area they gained in others.
| Had Ireland not made this deal, it's unlikely it would have
| become the conduit for Apple profits from around the world.
|
| The subject of the ruling contains "concerning tax rulings
| issued by Ireland in favour of Apple"
|
| Just because a country has children and immigrants does not
| absolve it of criticism.
| izacus wrote:
| Can you explain where exactly did Ireland gain benefit from
| not collecting these taxes?
| dylanredm0nd wrote:
| The jobs provided via Apple, FDI in Ireland, Tax paid by
| apple staff in Ireland... general spend?
| izacus wrote:
| There is just a tiny count employees in Ireland, mostly
| legal to run the sandwitch.
| InsomniacL wrote:
| > There is just a tiny count employees in Ireland, mostly
| legal to run the sandwitch.
|
| Utter nonsense.
|
| Apple Ireland has more employees than Germany, France,
| Belgium, Denmark, Netherlands, Norway, and Sweden
| combined.
|
| There are employment quotas for the tax arrangements.
|
| > https://www.apple.com/ie/job-creation/
| Supernaut wrote:
| That is completely untrue. There are over six thousand
| people employed in their Irish HQ.
| izacus wrote:
| That is a tiny amount in comparison to their 170.000
| person workforce, isn't it?
| Rinzler89 wrote:
| Because getting even <1% of Apple's, Google's, $FANGs EU
| wide tax revenue is a lot better than getting 0% of that
| revenue if they were to set their HQs in another EU
| country that would give them and even sweeter tax deal.
|
| And that's the problem right there. It's a constant race
| to the bottom between EU states where the EU taxpayers
| are the loosers and the corpos are the winners.
| izacus wrote:
| Would it be really 0%? Is there any grounds for that?
| Those companies are based in Ireland due to IP law, not
| tax law.
| Rinzler89 wrote:
| Can't companies abuse the IP law to wash other profits as
| IP costs?
| izacus wrote:
| Yep, this is why they were based in Ireland - due to
| their IP law. Which isn't quite the same as 0% taxes.
| zoobab wrote:
| The Irish patent box was at 0% tax till 2015.
| eesmith wrote:
| While <1% is correct it's over two magnitudes too large.
| Saying <0.01% would be more informative.
|
| "The EU head office said that Ireland granted such lavish
| tax breaks to Apple that the company's effective
| corporate tax rate on its European profits dropped from 1
| percent in 2003 to a mere 0.005 percent in 2014."
| https://apnews.com/article/apple-european-union-
| tech-b1575db...
| InsomniacL wrote:
| You can google why do countries give tax breaks.
|
| Are you suggesting that Ireland did not benefit from this
| illegal deal?
| izacus wrote:
| Yes, I'm suggesting that Ireland as a country did not
| benefit from this deal. That does not mean that some
| Irish individuals did not.
| InsomniacL wrote:
| Apple Ireland has over 60 open positions for roles like
| Machine Leaning or Data Analytics while similar sized
| countries like Finland, Lithuania, Croatia, Denmark,
| Slovakia, Austria, Hungary have 0.
|
| Apple Ireland is home to Apples only self-operated
| manufacturing plant in the world employing ~6,000 people
| building iMacs to order by hand (lol). There are
| employment quotas to meet for the tax arrangements which
| is one example of how Ireland as a whole benefits.
| fredski42 wrote:
| > You can google
|
| Can we write "search"? Google is hardly a usefull search
| engine anymore.
| eesmith wrote:
| > What they lost from direct tax in one area they gained in
| others.
|
| Where is your evidence? I quoted the court decision to
| support my position.
|
| The very existence of revolving door politics is an example
| of how conflicts of interest can exist which favor those in
| power, to the overall detriment of the population.
|
| Government officials and politicians are well aware there
| may be a cushy job for them with the big companies they
| once regulated, so long as those companies are happy with
| them.
|
| Thus I again caution on using "Ireland" in a way which
| blurs the difference between those in Ireland who gained
| from unlawful state aid and those who gain from its return.
| exe34 wrote:
| so they lost on the unit and will make it back in volume?
| oliwarner wrote:
| As Ireland are still saying, this EUR13bn (plus interest) is
| going to work against them.
|
| It's _supposed_ to work against them, as a chilling effect for
| any company trying to work EU states against each other for
| preferential treatment. I 'm sure Ireland will argue that
| they'll offer any multi-billion multinational this sort of
| treatment, but that's really the point. The EU doesn't want a
| race to the bottom and if EU-local businesses are unable to
| leverage this sort of accounting break, it's a massive leg up
| for external businesses.
|
| While this is a large lump, this fine covers a decade of
| accounts, and this final decision comes 32 quarters after the
| original fine. Each of those quarters could have paid this off
| from flat profit. They're doing okay.
| tankenmate wrote:
| While I largely agree, I don't think there is any fine
| involved; it is just a requirement for Ireland to collect
| taxes that the ECJ says Apple should have paid. Hence not a
| fine.
| oliwarner wrote:
| You're right, of course, but Apple and Ireland won't see it
| that way ;)
| Laaas wrote:
| It seems that Ireland giving aid specific to Apple and not others
| is the crux of the issue? Not sure how that's illegal.
| tomschwiha wrote:
| I guess there are some rules setup in Europe so countries do
| not try to "cheat" the system (getting benefits from membership
| in the EU, avoiding regulation). It's sort of people want to
| avoid taxes but demand perfectly maintained roads, etc.
| nsajko wrote:
| Ireland giving special benefits to a private company like Apple
| conflicts with the principles of a free and fair market.
| mutatio wrote:
| Because tax incentives do not exist in the EU, like the
| German car industry.
| jajko wrote:
| Of course it does. Now why EU should finance foreign
| company trying to circumvent local taxes like some chinese
| sweatshops vs local massive company that gives work to
| hundreds of thousands local people?
|
| US does exactly the same, also in car manufacturing. This
| is normal market behavior, countries protect their
| companies. Apple has nothing substantial in EU, completely
| foreign force milking the market and paying nothing in
| taxes. Now if they opened big factories and research
| centers, they would be treated _very_ differently but they
| prefer Foxconn or other chinese companies.
| mutatio wrote:
| Ireland having tax sovereignty was doing what it felt was
| best for itself, the low tax ecosystem it has fostered is
| in its benefit. Much like car and farming tax incentives
| favour Germany and France respectively.
|
| Now perhaps the EU as a entity is moving towards
| collective taxation policies, but it's not there yet and
| there's still an aspect of getting away with certain
| fiscal policies depending on any member nations "clout".
| Perhaps Ireland is mostly guilty of not having said
| clout.
| Nursie wrote:
| Good.
|
| Not because I particularly dilike Apple or big US tech firms (I
| have a whole bunch of Apple stuff right here), but because
| Ireland has been able to undermine the tax regime of the whole
| EU, by giving these sweetheart tax deals to big firms, who can
| then run their entire EU business from there.
|
| This gives an unfair tax advantage to the multinationals over
| homegrown EU companies, skewing the market.
|
| Is it Apple's 'fault'? That's not really the interesting question
| here, IMHO.
| Etheryte wrote:
| Yeah, agreed, Apple is simply doing what any corporation does,
| trying to do business as profitably as possible. The only tar
| bucket you should be having handy is for Ireland for trying to
| screw over the whole rest of EU.
| xbmcuser wrote:
| Why do you give Apple the leeway to do what a company has to
| and not Ireland to do what a country has to succeed that's
| very hypocritical of you.
| Etheryte wrote:
| Because Ireland has joined the EU and knowingly chosen to
| participate in treaties pertaining to the shared market. If
| Ireland wanted to leave the EU then it would be free to do
| so, then it can cut Apple all the tax breaks it wants.
| However as is, Ireland is trying to please two masters at
| the same time and the court cases seem pretty clear about
| how that is going for them.
| xbmcuser wrote:
| Apple willingly sold in the eu then found loopholes to
| save on tax. They created shell corporratioms to save on
| tax yeah Apple is correct and Ireland is only one in the
| wrong.
| whacko_quacko wrote:
| It's not, because Ireland chose to be part of the EU which
| its actions are undermining. Also, we accept the fact that
| in capitalism companies have the goal to maximize profit,
| but the purpose of a country is not to maximize tax income
| compared to others
| RickarySanchez wrote:
| Yeah the purpose of a country is to maximize the
| opportunity of its citizens which is exactly what Ireland
| is doing. They're not trying to maximize tax income
| otherwise they would have a higher rate
| jajko wrote:
| Ireland is part of much bigger bloc, and milking it hard
| since Apple couldn't care less about some irrelevant tiny
| island nation. The only interesting part of it, it can
| 'hack' into EU via dodgy tax deals that circumvent EU
| policies.
|
| Not 100% sure if its illegal, but its highly amoral, no
| questions there. Here in Europe we don't like that, money
| is _not_ above else, greed is _not_ good.
|
| The view on this topic boils down largely where your
| opinion on above stands.
|
| At the end, Apple is just another greedy amoral
| corporation, just like the rest. Which is fine on its
| own, but would be nice if some folks would be less
| fanatical about that brand and got a bit more... balanced
| view on reality.
| piltdownman wrote:
| And what part of Germany or the Benelux do you hail from?
|
| Also "money is not above else, greed is not good" is
| absolutely not the policy of the major economic powers in
| the European Continent. The 2008 banking crisis and the
| subsequent austerity imposed on Ireland by the IMF as a
| consequence of bailing out unsecured bondholder in
| European Banks in order to stop a contagion effect
| completely refutes that notion.
| moomin wrote:
| And it is welcome to leave the EU and cut whatever deals
| they like if they think that's gonna benefit their
| citizens. But they're not going to do that, because the
| value of being in the EU vastly outstrips the
| inconvenience of this judgement.
| xbmcuser wrote:
| A country purpose is to give the best living conditions
| to its population if that means collecting more tax
| without directly taxing it population then they are using
| the most optimum method just like apple with its shell
| corporations. My problem is with neither rather people
| giving apple and other corporations hand away absolution
| for their behavior just because capitalism
| surgical_fire wrote:
| > we accept the fact that in capitalism companies have
| the goal to maximize profit
|
| Not by committing tax avoidance.
|
| This is why stronger regulations and tax laws are
| welcome. I fully expect every corporation to pursue
| profit no matter how illegal their actions are, and no
| matter gow much damage they cause to society.
| RickarySanchez wrote:
| Well they're not trying to screw over the rest of Europe.
| They're just gaining a competitive advantage by offering
| favorable deals. Its something that countries have been doing
| for much of their existence. To claim their screwing over the
| rest of Europe is just anti-competitive nonsense. The
| Netherlands does the same stuff just not as successfully
| Etheryte wrote:
| Yeah no, there's a very big difference between being a
| country all by itself and being a part of the EU. If you
| want to be in the EU, you have to play by its rules, that's
| a part of the deal. You can't only get the upsides of the
| shared market, but not follow the rest of the rulebook that
| actually make the whole thing work.
| fransje26 wrote:
| > The Netherlands does the same stuff just not as
| successfully
|
| Well, that's absolutely not orthogonal to the "screwing
| over Europe" statement. That simply makes two countries
| trying to gain an unfair competitive advantage.
|
| Nicely hypocritical from the Netherlands by the way, as
| they are always the ones on their high horses complaining
| about the financial laxness of the southern and eastern
| European countries, while at the same time draining them of
| tax revenues through such constructs.
| Woeps wrote:
| Regarding the Netherlands, It looked like they where
| working and making good progress of dismantling this
| system. But in the end it was all a facade and feet
| dragging... Now I just hope that with our current
| government it wont get worse.
|
| But hey, we voted for these muppets. So if the EU again
| fines us we deserve it.
| surgical_fire wrote:
| Yes, every company will engage in tax avoidance if they think
| they can get away with it.
|
| Good that Apple was punished for it. It should happen more
| often.
| matthewmorgan wrote:
| What about Luxembourg?
| Yizahi wrote:
| All offshores should be either forced to increase min taxes,
| regulation and financial transparency (i.e. cease being
| offshores), or should be expelled from everywhere and
| sanctioned. I wonder how people aren't protesting this crap,
| which allows to directly steal their money. But whatever, I
| guess scary migrants working for slave wage are more
| important for people that multinational megacorps, as long as
| they are churning shiny new iphones and stuff.
| zoobab wrote:
| Biden pushed other countries to adopt a minimum corporate
| tax of 15%, but those taxi breaks on patent royalties might
| be another loophole. Anyone to clarify the link between the
| 2?
| Y-bar wrote:
| Which secret sweetheart deals does Luxembourg have?
|
| The secrecy and exclusivity were central to the judgement.
| The EU requires a level playing field for all companies,
| which is why individual governments striking secret tax deals
| not available to all companies are seen as an illegal thing.
|
| I bet if Ireland had opened the same tax deal they did to
| Apple, to all companies this would not even have been a
| matter for the courts.
| robertlagrant wrote:
| Isn't the EU specifically set up to allow competition
| between states on tax grounds?
| Y-bar wrote:
| Yes.
|
| The problem was not about the tax level, nor the inter-
| state competition. The problem was that it was _not_ a
| free and fair competition. The tax deal was not offered
| to all companies. Ireland secretly did this to only
| select companies, and it therefore crossed the threshold
| into [secret and illegal] state aid.
| dist-epoch wrote:
| Selling phones in Poland and paying taxes in Ireland is
| not competition, it's tax arbitrage.
| Supernaut wrote:
| That's... literally how every company in the EU operates.
| If Volkswagen, incorporated in Germany, sells a car in
| Poland, they're not required to pay a corresponding
| sliver of their net profits to the Polish exchequer. It
| all stays in Germany.
| beAbU wrote:
| Surely there is VAT on that sale that is paid to Poland?
| Supernaut wrote:
| VAT is a tax paid by the consumer, not the manufacturer.
| It's collected at the point of sale by the retailer and
| passed on by them to the local tax authority.
| kwhitefoot wrote:
| You are correct in essence but that is not exactly how it
| works.
|
| VAT is paid on the gross margin on each transaction. It
| only looks like the end user is the only one to pay
| because for that transaction the gross margin is the
| whole of the price. Car makers are to a large extent
| assemblers of ready made parts so some, admittedly small,
| VAT is certainly paid at various points in the supply
| chain.
|
| https://en.wikipedia.org/wiki/Value-
| added_tax#Comparison_wit...
| bluecalm wrote:
| VAT is physically paid by businesses in EU. At the end of
| the day it's a tax on final business to customer
| transaction (like sale tax). It's levied on a
| transaction. Saying one party pays it but the other
| doesn't is meaningless. It's added to the transaction and
| then collected by the business and transferred to
| government.
| mpweiher wrote:
| No.
| piltdownman wrote:
| Yeah this theoretical half-reading of wikipedia always
| leaves out the practical considerations.
|
| This level playing field lasts right up to the point where
| each individual government of the Eurozone is mandated to
| cover the losses of their private sectors, including
| banking. The days of Germany dictating to their neighbours
| how their countries should be run are over outside of the
| ECB and the Euro. If they have a grievance then they can go
| through the EU courts like Germany did with the Apple case.
|
| Big countries signed up to a common market without tax
| harmonisation and they would leave if it wasn't working for
| them, just like the UK did.
|
| Guess which country was forced to bail out Europe's banks
| and unsecured bondholders in the last crisis? We also don't
| benefit by the setting of ECB rates like Germany does, and
| we're going to get slammed as they rebalance their books
| following pandemic social payments.
|
| Ireland gets the blame for Apple not paying its fair share
| of taxes but the issues is entirely a US one: Apple is a US
| company, yet the US won't force Apple to pay taxes on its
| foreign earnings. In contrast, if you're a US citizen who
| resides elsewhere, you're still expected to pay US taxes...
|
| In France the statutory corporate tax rate is 33.3% while
| the actual effective tax rate is lower than Ireland's 12.5%
| at 8.2%.
|
| Luxembourg has a statutory rate of 22.5% but an effective
| rate of just 4.1%.
| zoobab wrote:
| Belgium has also only 3.75% tax rate on patent royalties:
|
| https://taxfoundation.org/data/all/eu/patent-box-regimes-
| eur...
|
| In Luxembourg, it's higher at 5%.
|
| I remember Netherlands had 0% at some point, but they might
| have changed it.
|
| In any case, multinational corporations pay peanuts in taxes
| using that scheme.
| mytailorisrich wrote:
| Surely an EU company, if big enough, could have moved to
| Ireland and negotiated a similar deal.
|
| I understand that the issue here is the nature of the deal with
| a specific company, but the EU does not want member states to
| have too much leeway to cut taxes in any case. They have set
| minima for corporation tax and VAT, for instance.
|
| Ultimately this is a question of competitive advantage and of
| ways for small, peripheric countries to survive and prosper. If
| everything was the same everywhere in the EU, then why would
| companies pick Ireland?
|
| The US have "domestic tax-heavens" and the country is not
| falling apart... The EU isn't at risk, either, including
| because of the huge VAT levels compared to corporation tax.
|
| Effectively, I think this boils down to powerful EU states who
| want to have high taxes and don't want others to undercut them.
|
| It's odd that the view here, at least among Europeans, seems to
| be that the higher the taxes the better when the issue is
| obviously much more complex.
| actionfromafar wrote:
| The US is a country, though.
| anonymous344 wrote:
| us is falling apart did u see how much they printed usd? the
| pay gap, vanishing middle-class, stealing resources from all
| over planet..
| riffraff wrote:
| > Surely an EU company, if big enough, could have moved to
| Ireland and negotiated a similar deal.
|
| yeah but "negotiate" is not how this is supposed to be,
| because it creates a non-level playing field. If I planned to
| move my single-person enterprise to Ireland I should be able
| to get the same deal as Apple did without having friends in
| the government.
|
| One can argue that countries should be able to do this, but
| EU countries have agreed not to do it.
| seydor wrote:
| > an EU company, if big enough, could have moved to Ireland
| and negotiated a similar deal.
|
| Probably not, because their home country would go after them
| / make Ireland liable. These kinds of schemes usually work
| across jurisdictions
| mytailorisrich wrote:
| Hmm, "move to Ireland" means "home country" becomes
| Ireland. Obviously. Companies can do that, and in fact they
| do that. Fiat merged with Peugeot and suddenly the company
| is headquartered in the Netherlands, not France or Italy,
| for similar reasons.
| seydor wrote:
| In that case the EU would deem the state aid that the
| company receives is illegal. This is actually what this
| ruling claims, that Apple received illegal state aid.
| mytailorisrich wrote:
| I understand but that's not really the point of my
| comment. This is just the first line that replies in
| passing to the previous one...
| seydor wrote:
| Ah well, the EU does have tax havens and it will keep
| them after this ruling. But there are limits because
| after all the EU can't be a fair open market if one state
| gives out so huge state subsidies.
| marcyb5st wrote:
| The major problem is that Ireland, Netherlands, and
| Luxembourg also have veto powers when it comes to EU wide
| regulations. Luckily they understood this was alienating the
| other EU members and so they conceded to a minimum of 15%
| taxation rate [1]
|
| [1] https://taxation-customs.ec.europa.eu/taxation/business-
| taxa...
| mytailorisrich wrote:
| Yes, they are small and weak and had to concede to the big
| and powerful... And "alienating" is exactly my point: Those
| big and powerful don't want others to set lower tax rates
| than they have.
| izacus wrote:
| No, the 25 other states don't want them to set those tax
| rates.
| surgical_fire wrote:
| This is not a bad thing. In isolation those countries
| would be weaker, and would have a lot less negotiating
| power against bigger countries.
| meiraleal wrote:
| The Netherlands is the 5th biggest EU economy.
| marcyb5st wrote:
| Fair, but then you should allow other countries tax stuff
| however they want. It's not fair saying "Ireland can
| lower taxes as much as they want for big tech, but
| countries that are food producers can't tax exports to
| Ireland a bit more to make up for the loss of income due
| to Ireland's taxation rate".
|
| And if you allow that, what is the point of the European
| Union?
| nonrandomstring wrote:
| Good. Because I _do_ particularly dislike big US tech firms who
| don 't pay their taxes and have absolutely no problem owning
| that emotional capital. This corrects an injustice and seeing
| that happen makes me feel better, without any need to
| rationalise or appeal to economics.
|
| btw: I also agree with your economic reasoning
| techpression wrote:
| Why is it Apple that has to pay for what Ireland did wrong?
| Genuinely curious here, it's not like Ireland is some random dude
| on the internet selling stolen goods and Apple should've known
| better.
| tomschwiha wrote:
| I guess it's within the power of legislation that the wrongly
| calculated taxes are now corrected.
| techpression wrote:
| Sure, but Ireland doesn't get the money, the EU does, so it's
| not actually correcting the taxes but rather redistribute
| them, which seems like a bit of totalitarian approach to
| regulation. Ireland did not want the money back.
| scandox wrote:
| Ireland gets the money. The EU is making Apple pay us. And
| yes we didn't want it - mainly for reputational reasons and
| partly because our argument was "we never done it".
| techpression wrote:
| I stand corrected then, thanks. I was under the
| assumption this is like most legal wins for the EU that
| it goes into the pot to lower member fees.
| dathinab wrote:
| oversimplified you can think of it as
|
| Ireland is required to collect the taxes it always should
| have collected
|
| (but waved to get a competitive advantage for attracting
| tech giants and giving them in turn a competitive
| advantage over EU based competition)
|
| as a side note tax benefits to attract companies aren't
| perse illegal but what Ireland did went far beyond what
| is healthy/acceptable for the EU
| noname120 wrote:
| First line of the judgement: "Ireland granted Apple unlawful
| aid which Ireland is required to recover"
| techpression wrote:
| But Ireland refused, so the fault still lies with Ireland in
| this case. I mean the EU is full of tax elimination or
| subsidies for targeted companies, far beyond this case, so it
| seems that this is more about Apple than the actual taxes.
| izacus wrote:
| What are you arguing exactly? This isn't punishment or
| fine, this is paying what they should have all along.
| techpression wrote:
| The target of the case is wrong, it should be Ireland,
| not Apple. Many companies have unique (to them) tax
| benefits across the entire EU, some hidden under things
| like "electricity subsidies". If the company pay what the
| country mandates, then the rest should be between the
| country and the EU, not the EU and the company.
| izacus wrote:
| The target for this case is Ireland. They lost the case
| and now need to fix what they charged wrongly. Again,
| what are you arguing about?
| tmtvl wrote:
| The argument is that because Ireland needs to recover
| money from Apple, Apple is going to have to pay that
| money, hence Apple is getting punished.
| noname120 wrote:
| They are not getting punished, as far as I know no fine
| whatsoever is required against them.
| soco wrote:
| Paying your taxes, even if late, is not a punishment.
| jajko wrote:
| They are setting up an example for other companies doing
| same. Fuck with EU taxes, we will fuck you up (and lets
| be honest here, 13 billions absolutely nothing for Apple
| given 500+ million wealthy market they cater to).
|
| Law often does that to perpetrators. Ireland tried to
| save the shady deal by refusing the money it should have
| received (corruption in plain sight, with these sums its
| not unexpected it goes to highest places plus something
| about saving nation's public face), so this is how they
| got about it.
|
| Not sure its 100% best process but overall a very good
| move and precedent for future.
| mdhb wrote:
| EUR13,000,000,000 is not "absolutely nothing". It's
| almost twice the entire EU defence fund budget.
|
| And just to be clear.. this is really an example of how
| badly Apple were actively robbing society through their
| tax avoidance bullshit.
| InsomniacL wrote:
| > It's almost twice the entire EU defence fund budget.
|
| The EU defence spend in 2022 was EUR240 billion.
| mdhb wrote:
| That's very interesting but not what I said.
|
| https://defence-industry-space.ec.europa.eu/eu-defence-
| indus...
| noname120 wrote:
| True, but IMO it's a bit misleading because you were
| using as a point of comparison something that sounded
| like the military budget of Europe without specifying
| that it's something completely different (that people
| probably never heard of -- at least I didn't and neither
| did my grandparent). I'm not saying it's intentional or
| anything, just wanted to point it out.
| InsomniacL wrote:
| If you're referring to a single pot of money that exists
| to support Research and Development, you would typically
| refer to that as "The European Defence Fund" as "entire
| EU defence fund budget" would be interpreted differently.
| tankenmate wrote:
| That is the amount spent by EU member states on defence;
| not what the EU itself spent.
| roel_v wrote:
| "13 billions absolutely nothing for Apple"
|
| LOL no there is not a single company or person in the
| world for whom 13 BILLION dollars is 'absolutely
| nothing'.
| InsomniacL wrote:
| > LOL no there is not a single company or person in the
| world for whom 13 BILLION dollars is 'absolutely
| nothing'.
|
| Apple's revenue last year alone was $383 Billion.
| tmtvl wrote:
| Isn't that more than the EU defence budget from 2022? Not
| gonna lie, I'm kinda a little scared now. I realise that
| there's less than a 1 in 1 billion chance Apple is gonna
| set up its own military and attack the EU, but still...
| tankenmate wrote:
| The EU doesn't have "defence budget", the EU isn't a
| sovereign country, the EU doesn't have any armed forces.
|
| What EU does have is the European Defence Agency (EDA)
| which is a body that organises collective projects and
| coordination on behalf of its members.
|
| The EDA's budget in 2023 was EUR44.8Bn.
| roel_v wrote:
| Combined defense budgets of all individual member states
| was 214 billion in 2023. That's 'spending budget', not
| revenue like the 300 something billion of Apple's revenue
| cited above.
| noname120 wrote:
| This means 3.39% of their worldwide revenue, and an even
| bigger share of their profits. It's not negligible at
| all, even though it's just collecting taxes late without
| a penalty.
| moss2 wrote:
| I think this is a common practice in every country. If the tax
| payer is at fault, the tax payer pays. If the treasury is at
| fault, the tax payer still pays.
| jeppester wrote:
| Apple is selling to the whole of EU. Is it unreasonable to
| conclude that they should have known to follow the EU laws
| rather engaging in a tax scheme offered by Ireland?
|
| I'm not entirely sure what to think myself about the fairness
| of this. But going forward I definitely prefer that
| corporations will have to be careful about engaging in unfair
| tax deals in the EU.
|
| Otherwise those corporations would just be looking for the next
| country to take advantage of - risk free.
| techpression wrote:
| Amazon got away with it and so did Fiat, smaller sums and in
| Luxembourg and Netherlands, still, company specific tax deals
| based in country specific laws. Apple clearly picked the
| wrong horse, but unless there's actual reform (which will
| likely cause a whole slew of other issues) the tax setup of
| multinational companies will carry on, maybe not risk free,
| but it's still a win for them long term no matter what.
| roel_v wrote:
| " and Apple should've known better."
|
| Of course Apple should've known better. Their lawyers warned
| them about the risks of these deals (I do not have internal
| knowledge, I just know they did, they do to everyone who enters
| into deals like this). For years (rather, decades) everybody
| bet on this being too widespread to be corrected like it is
| now. You can't really blame them for trying, but in the end,
| this is the corporate/tax version of 'fuck around, find out'.
| kasperni wrote:
| Some important context that are in every European media, but
| apparently not the American ones [1].
|
| Apple said in 2017 that it had an effective tax rate of 21
| percent on foreign earnings. The Commission said its effective
| tax rate on European profits was 1 percent in 2003 and 0.005
| percent in 2014.
|
| [Edit] To be fair to CNBC they did cover the tax structure Apple
| set up some years ago [2].
|
| [1] https://www.politico.eu/article/commission-scores-
| surprise-w...
|
| [2] https://www.cnbc.com/2016/08/30/how-apples-irish-
| subsidiarie...
| librasteve wrote:
| prior to brexit, the UK lost a ton of US inward direct investment
| to Eire ... Dell, Intel, Apple etc. the factors were Eire
| corporation tax was low and public policy was to footdrag in the
| attempts to set an EU minimum tax, fantastic lobbying by Irish
| representatives in Washington leveraging the big Irish diaspora,
| big subsidies that walked to the edge of the EU rules (as seen
| here), and an English speaking workforce with ability to bring in
| speakers of all national languages for EU wide customer support
|
| meantime the UK civil service was gold plating the EU rules and
| then came the brexit disaster
| HPsquared wrote:
| The UK government seems intent on getting the "worst of both
| worlds" out of every single issue.
| tailspin2019 wrote:
| The previous one seemed to. The jury is out on the current
| one.
| graemep wrote:
| AT best it will be similar. SO far the main difference
| seems to be a willingness to be harsher to old people and
| those on moderate (not minimum wage, but lowish to average)
| incomes.
| oliwarner wrote:
| > harsher to old people
|
| Old people _not on pension credit_.
|
| The old WFP was PS300 in the pocket of every pensioner,
| regardless of means and that's a stupid thing for a
| government to be paying for when it's trying to balance
| the books.
|
| I do accept the problem --as with many means-tested
| benefits-- is catching and supporting the people who
| don't qualify, haven't filled in the paperwork, and still
| vitally need the support the WFP gave them. The DWP has
| to be given the support to help people who need it, and
| quickly, especially in Y1.
|
| But I think they're getting way too much stick for this.
| graemep wrote:
| They are not getting anything as much stick as the
| Conservatives would have if they have done it. Every
| Labour supporting rag would have been going on about it,
| and my FB feed would have been flooded with people
| complaining about "uncaring Tories".
|
| I suspect we are going to get a lot of austerity and
| privatisation in the next few years simply because Labour
| can get away with things. Some good things may happen
| (IMO the NHS badly needs reform) but so will a LOT of bad
| things.
| Y_Y wrote:
| "Eire" is a weird exonym. The country this happened in is
| called Ireland (officially and colloquially). It's a republic
| and shares the island (also called Ireland) with a non-
| sovereign country called Northern Ireland. It's often referred
| to as the Republic of Ireland, which is a fine description, but
| not the official name.
|
| In the Irish language, the name of the country is "Eire", but
| saying that in English is like saying Magyarorszag instead of
| Hungary. The accent on the first letter isn't optional, and the
| pronunciation is difficult, it's hardly worth it.
|
| Please just say "Ireland".
| graemep wrote:
| Ireland can also refer to the whole island though, so it can
| be ambiguous.
|
| We have the same problem, even worse, with people calling the
| EU "Europe".
| Macha wrote:
| Do you also avoid using the names of Korea, Georgia and
| China?
| dtf wrote:
| The diplomatically neutral term is "the island of Ireland"
| for the whole thing.
|
| "These islands" refers to the British Isles, in the context
| of Anglo-Irish relations.
|
| It's some fascinating wordplay, born out of the Good Friday
| Agreement, trying not to step on various people's buttons.
| calmoo wrote:
| It's not really ambiguous. When talking about Ireland in an
| economic sense, we generally refer to the Republic of
| Ireland. Geographically you would say the island of Ireland
| if you were to include Northern Ireland.
| librasteve wrote:
| will do
| librasteve wrote:
| btw I think I got the idea that its the official name from
| the word Eire being stamped on all the coins
| Macha wrote:
| There was also a long tradition of the British government
| (and by extension, the BBC) using Eire as they didn't
| want to acknowledge the name Ireland in case it was seen
| as a recognition of claims on Northern Ireland. Since the
| Good Friday Agreement in the 90s however, that was
| resolved, and now even the British government uses
| Ireland and most style guides in the UK media advise
| people away from "Eire" (It slips through occasionally
| though).
| klelatti wrote:
| In fairness, the UK got a lot of 'opt-outs' which probably gave
| it a competitive advantage in certain areas.
|
| I can think of one set of EU rules where the UK used its
| considerable influence to secure major changes to the original
| proposals only for UK regulation to limit the benefits of those
| changes.
|
| Of course, those rules were later held up by the UK Govt as an
| example of where the UK could reap 'Brexit benefits'.
| ThePowerOfFuet wrote:
| Direct link to the full text of the judgment:
|
| https://curia.europa.eu/juris/document/document.jsf?text=&do...
| linotype wrote:
| What does "illegal" mean? Why is it in quotes? Did they break the
| law or not? If they didn't break the law, if they adhered to the
| deal they negotiated with Ireland, isn't this a dangerous
| precedent? You can just ignore deals because you (EU) said so?
|
| Edit: Please downvote me if you must but also post a comment
| about why I'm wrong. Thanks!
| ko27 wrote:
| > You can just ignore deals because you (EU) said so?
|
| Of course you can, because EU law has precedence over Ireland's
| deal in this situation.
| linotype wrote:
| Even if it was legal under the EU at the time? Maybe Ex Post
| Facto only applies in the US.
| simongray wrote:
| It wasn't legal at the time, that's what's just been
| established by the verdict.
|
| Apple (uniquely) having a near zero tax rate is considered
| illegal state aid to a company. Private companies are
| supposed to operate on the same terms within each European
| country.
| mpweiher wrote:
| It wasn't.
| jokethrowaway wrote:
| I guess what comes as a shock is how much control the EU has.
|
| At the same time, if bureaucrauts in Ireland were a bit
| smarter they could have just written in a special exemption
| for companies with certain specific requirements - which end
| up being Apple and a few big ones.
|
| Apple was also pretty dumb to go to Ireland while Malta,
| Cyprus and Bulgaria offer pretty low taxes out of the box. I
| guess they did that to access UK talent / lower language
| barrier even if the fiscal setup was riskier.
| kwhitefoot wrote:
| > they could have just written in a special exemption for
| companies with certain specific requirements - which end up
| being Apple
|
| That's not how the law works. The courts look at the intent
| behind the law, the spirit of the law, as well as the text.
|
| It might take longer and more argument but would eventually
| be struck down as well.
| bluecalm wrote:
| Or Ireland could just lower the tax for every company
| making it a level playing field. I am not a fan of EU
| economic ideas at all but I am happy they are starting to
| enforce this one. My country (Poland) has done such deals
| as well. Wanna start a small business? 19% corporate tax,
| 23% VAT, 19% cap gain tax. Some German car company thinking
| about opening a factory here? Let's offer 0 tax rate for
| many years + additional incentives!
|
| This really is demoralizing how they set rules for small
| guys but then give big incumbent companies everything they
| want.
| delusional wrote:
| CNBC likes to use quotes for emphasis. It's supposed to
| emphasize that the EU court believes the tax treatment from
| Ireland to be illegal.
|
| The EU isn't applying any penalty here, this is owed taxes that
| apple were not billed by the Irish tax authorities.
|
| Once you enter the EU, you forfeit part of your sovereignty.
| That's what Ireland failed to do here. There is no slippery
| slope. This is the very foundation of the union.
| droidist2 wrote:
| Is that what you'd call "scare quotes"?
| seydor wrote:
| > "We always pay all the taxes we owe wherever we operate and
| there has never been a special deal," he said.
|
| If that is true it should be easy to prove. Letting them pay
| peanuts is an insult to the whole of EU by the Irish government
| robertlagrant wrote:
| Insult-driven thinking is really, really low grade.
| justinclift wrote:
| So why do it?
| robertlagrant wrote:
| Me? I wasn't insulted.
| gzer0 wrote:
| I found some rather troubling aspects within the ruling itself:
|
| 1. Retroactive application of arm's length principle
|
| The Court's reliance on the arm's length principle, despite
| acknowledging it's not required by EU law, is problematic. As
| stated in paragraph 124: > "Article 107(1) TFEU
| gives the Commission the right to check whether the level of
| profit allocated to such branches... corresponds to the level of
| profit that would have been obtained if that activity had been
| carried on under market conditions."
|
| This retroactive application of a principle _not explicitly
| required by law at the time of the tax rulings_ is unfair and
| creates legal uncertainty for businesses.
|
| 2. Burden of proof
|
| The Court's criticism of the General Court's approach to
| evidence, as noted in paragraph 245, lowers the burden of proof
| for the Commission in State aid cases: > "As the
| Commission stated in recital 441 of the decision at issue, its
| approach is based on an infringement of Article 107(1) TFEU,
| which has been part of Ireland's legal order since its accession
| in 1973, and not on a failure to have regard to the framework
| defined at OECD level."
|
| This shift unfairly advantages the Commission in future cases and
| will lead to increased challenges to legitimate tax arrangements.
|
| But, overall, yes, I get the concerns about legal certainty and
| applying rules retroactively. They're valid points. But when I
| weigh everything, I still think this ruling does more good than
| harm. It's a big step towards fairer taxes and more transparency
| in how big companies operate.
|
| Yes, it might ruffle some feathers in the short term. But in the
| long run, it's setting us up for a tax system where everyone
| plays by the same rules - whether you're a small local business
| or a tech giant.
| skummetmaelk wrote:
| There's not much uncertainty for business really. If you're
| pulling the moves that Apple and other companies pull to
| "optimize tax", then you are with 100% certainty trying to game
| the system and violating the spirit of the law.
| yieldcrv wrote:
| That doesnt mean regimes we respect should retroactively
| apply new rules in unpredictable ways
| croes wrote:
| It's not a new rule.
|
| They just found that Ireland's tax rules from 1991 and 2007
| are illegal tax benefits according to the preexisting rule.
|
| Just because they took so long apply existing law doesn't
| make it retroactive.
| skummetmaelk wrote:
| Even if it was retroactive, which it is not, being punished
| for premeditated tax avoidance can hardly be called
| unpredictable.
|
| The central difference of opinion is of course whether
| outright gaming the system is acceptable regardless of the
| written rules being followed to the letter.
| Nasrudith wrote:
| The spirit of the law is a lot like hate speech in that it is
| not recognized as a thing by the legal system of the United
| States, so not everyone agrees with citing it. And I see some
| point in it, as 'spirit of the law' is something flat out
| abusible like the concept of Treason is without a
| constitutional amendment or body of law strictly defining it.
| Just like the concept of 'treason' can be abused to say
| declare criticism undermining the state, 'spirit of the law'
| could be invoked in that case to argue that literally
| anything which reduces government revenue is undermining the
| spirit of the law in taxation.
|
| I don't expect anybody from Europe to agree with that notion
| owing to different cultural notions. Just like how many have
| outright contempt to the notion of free speech.
| joe_the_user wrote:
| It is 100% untrue that "the spirit of the law" isn't factor
| in the US judicial system. The main way it enters
| explicitly is through courts taking into account the intent
| of the legislature. The most notable example of this was
| the way US courts interpreted the 14th amendment, which was
| far from it's literal statement.
| oblio wrote:
| > The spirit of the law is a lot like hate speech in that
| it is not recognized as a thing by the legal system of the
| United States
|
| This is about the EU which uses a completely different
| legal system than the US so any US legal reference is
| basically useless.
| izacus wrote:
| I find it interesting how in american corpspeak "uncertanty"
| pretty much always means "our lawyers can't find a way to avoid
| this law without getting caught" ^^
| linotype wrote:
| EU companies dodge and bend rules all the time. See: VW,
| AirBus, etc.
| Y-bar wrote:
| And they do get their day in the courts as well:
|
| From _today_ in a judgement pretty much identical to the
| one on Apple/Ireland:
|
| > Commission orders recovery of around EUR14 million in
| incompatible German State aid from Frankfurt-Hahn airport
| and Ryanair
|
| https://ec.europa.eu/commission/presscorner/detail/en/ip_24
| _...
|
| ---
|
| > On Friday, January 31, 2020, courts in France, the United
| Kingdom, and the United States approved analogous versions
| of a deferred prosecution agreement (DPA) between
| prosecutors and Airbus that include a combined fine of
| $3.96 billion for the aircraft manufacturer. The resolution
| ends multi-year investigations by the French National
| Financial Prosecutor's Office (Parquet National Financier
| or PNF), the U.K. Serious Fraud Office (SFO), and the U.S.
| Department of Justice (DOJ)
|
| https://www.ropesgray.com/en/insights/alerts/2020/01/four-
| ye...
|
| > Antitrust: Commission fines car manufacturers EUR875
| million for restricting competition in emission cleaning
| for new diesel passenger cars
|
| https://ec.europa.eu/commission/presscorner/detail/en/ip_21
| _...
| scott_w wrote:
| And it's wrong when they do it, too.
| drstewart wrote:
| So we should correctly call it "european corpspeak"
| scott_w wrote:
| > I find it interesting how in american corpspeak
| "uncertanty" pretty much always means "our lawyers can't
| find a way to avoid this law without getting caught" ^^
|
| Only if they're doing this.
| lupusreal wrote:
| Only if they use the word "uncertainty" in that way. Do
| they?
| izacus wrote:
| Yep, which is why they get the stick of courts as well.
| What a strange argument.
| linotype wrote:
| What's strange is to say it's only an anerican issue.
| izacus wrote:
| Which is why I didn't say that :D
| Nasrudith wrote:
| It is no surprise culturally that they do. When
| innocence/technical compliance with the law is no defense
| against the law why bother?
| immibis wrote:
| That's exactly right. Corporations need the law to be as
| predictable as a computer program, so they can find exactly
| where the loopholes are and slip through them. I'd be
| surprised if American politicians didn't make laws this way
| on purpose.
|
| A law that says "you aren't taxed on money you send to
| overseas subsidiaries" is trivially gameable. A law that says
| "don't evade tax" is not, so corporations hate not knowing
| which side of the blurry line they're on. An ethical
| corporation (as if that exists) would just stay clear of the
| blurry region and have no problem.
| Nasrudith wrote:
| Well yeah. The prime way they avoid the law is compliance.
| You would also be pretty pissed off if you couldn't avoid a
| law fining you for something you couldn't avoid.
| gadders wrote:
| >>Yes, it might ruffle some feathers in the short term. But in
| the long run, it's setting us up for a tax system where
| everyone plays by the same rules - whether you're a small local
| business or a tech giant.
|
| Yeah, but that only ever ratchets in one direction. Putting
| everyone on the same rules won't reduce taxes for anyone.
| freefaler wrote:
| I don't understand the ruling however, something doesn't make
| sense:
|
| - Apple goes to a country and makes a deal with that country
|
| - They pay the tax in the country and they comply with all the
| rules at that time in Ireland
|
| - After a few years the EU government says "hey, Ireland that's
| not a correct deal"
|
| - So they don't punish the Ireland government who didn't comply
| with EU regulation (as far as I understood) and retroactively
| charge the tax on Apple, who complied with all the regulation.
| Doesn't the burden of non-compliance be on the party that broke
| the EU rules and not the company who complied with all the
| rules?
|
| Several questions arise:
|
| - Was Apple breaking any rules in those years when they had the
| deal with the government?
|
| - How can any company be sure that if they comply with current
| tax laws they won't be back charged in the future?
|
| - Isn't that a bad precedent of "we change the rules now", but
| will punish you for you past behavior for non-complying with
| the new rules? (e.g. why don't charge back the increase in
| taxes for this year for the past 3 years)
|
| These are not related to the ethical/moral or fairness
| evaluation of the situation. It's unfair to charge different
| taxes at all, flat taxes should be the norm, not charge more if
| you earn more. However the legal logic doesn't seem to be
| there.
|
| Can you help me understand the situation?
| kwhitefoot wrote:
| They aren't being punished, they are simply being told to pay
| the tax that Ireland illegally said they didn't have to pay.
| noirbot wrote:
| That's a distinction without a difference. Presumably, if
| Ireland hadn't offered this deal, Apple would have done
| their business somewhere else. Sure, they may have paid
| some other country more taxes, but potentially less taxes
| than what they now owe Ireland.
|
| Apple isn't blameless here, but it definitely kinda feels
| like they got a little bit defrauded by the Irish
| government who now essentially is getting rewarded with
| billions of dollars for their illegal conduct.
| kwhitefoot wrote:
| Apple is a lot worse than merely 'isn't blameless'. They
| knew perfectly well what they were getting into and I'm
| confident that the current judgment would have been a
| scenario that their lawyers would have explored.
|
| I'm sure that if Apple thinks that they have been hard
| done by that they could sue the Irish government for
| damages in the Irish courts.
| immibis wrote:
| Apple knew it was evading tax and it's getting punished for
| evading tax. The law isn't a deterministic Turing machine.
| immibis wrote:
| > This retroactive application of a principle not explicitly
| required by law at the time of the tax rulings is unfair and
| creates legal uncertainty for businesses.
|
| I don't see any problem with this. They knew they were gaming
| the system, and knew they could get in trouble for it. The law
| is NOT a computer program where all outputs can be fully
| predicted from the source code - it also takes common sense
| into account.
|
| We should just pass a law that says gaming the system is
| illegal, then we won't need to find silly justifications
| against people who game the system, but silly justifications
| work too.
| Nasrudith wrote:
| I expect to see very abusive definitions of 'gaming the
| system' under such a law such that anything which is the
| slightest inconvenience is viewed as gaming the system. Just
| like how common sense isn't common.
| bjornsing wrote:
| Unfair and uncertain taxation is a European specialty.
| timomaxgalvin wrote:
| Taxation in Europe is much simpler and more certain than the
| US.
| Wytwwww wrote:
| Well after this ruling it's finally "fair" (well kind of)
| just still somewhat uncertain.
| bjornsing wrote:
| > Yes, it might ruffle some feathers in the short term. But in
| the long run, it's setting us up for a tax system where
| everyone plays by the same rules - whether you're a small local
| business or a tech giant.
|
| That would be a truly wonderful thing to behold.
| andy_ppp wrote:
| It would just be really good if companies stopped avoiding tax.
| Most countries are already pretty much bankrupt - it's worth
| thinking about for every debt (US National Debt is $35.35
| trillion!!) there is a rich person on the end of it with the loan
| as an asset earning interest.
|
| If companies avoid tax and rich people avoid tax it means more
| tax for normal people who work for a living.
| Iulioh wrote:
| Its just the prisoner dilemma.
|
| If you don't your competition will.
|
| We just need more spine in the country's legislation to close
| ANY loophole, because this wasn't illegal tax evasion, it was
| legal tax ellusion.
|
| The point is that EU judged this unfair by Ireland and that
| effectively it stole revenue from other European counties to
| favor jobs in ireland.
|
| Basically saying "you (country) can't have a lower tax rate
| than X" in our economic union.
|
| Smaller countries with few industries would benefit
| disproportionately from bigger companies moving here the HQ.
| moomin wrote:
| A good way of thinking about the EU is as a solution to the
| prisoner's dilemma.
| dantheman wrote:
| The EU is more of a problem than any sort of solution.
| kamikazeturtles wrote:
| Do they tax LVMH? Or fine it for monopolistic practices?
|
| The EU is a pretty one-sided solution to the prisoner's
| dilemma
| gpderetta wrote:
| > Do they tax LVMH?
|
| Any reasons to believe it isn't taxed?
|
| > Or fine it for monopolistic practices?
|
| Well, currently it is being investigated it seems:
|
| https://www.reuters.com/business/retail-consumer/french-
| poli...
| nolok wrote:
| And you can't bother doing a simple google search ? Their
| effective tax rate is about 27%, yes.
| jokethrowaway wrote:
| That will never work because the powerful will lobby the
| politicians to add some new loophole.
|
| The only solution is to NOT have taxes, NOT have a government
| and then the market is fair for everyone. Unless you are into
| anarchy / voluntarism you won't like this solution, so keep
| enjoying your broken system with increasing inequality
| between the top 0.01% who colludes with the government and
| the rest - while the middle class gets their money stolen to
| pay for both rich and poor.
| kwhitefoot wrote:
| Not having a government is the same as handing you society
| over to robber barons.
|
| Your solution would end with the reintroduction of
| feudalism as the only way that the rich and powerful can
| hold on to their wealth without it being plundered by the
| rich guy next door.
|
| Markets can only be fair if everyone in the market has the
| same degree of financial power. This can never happen in
| large scale anarchies. The only chance of it happening is
| by having strong regulation.
| Iulioh wrote:
| Given enough time Anarchy is just the State with extra
| steps and less rights.
| dgrin91 wrote:
| This is a very naive way of thinking about debt. Cash has a
| time value. Cash now is worth more than cash later.
|
| I have a mortgage. This mortgage is worth more than the cash I
| own. That doesn't mean I'm bankrupt. The mortgage is paid on a
| fixed schedule over 30 years, and during those 30 years I'll
| have a home and be able to accrue other assets. If I didn't get
| a mortgage then I would still be saving for my home.
|
| The same is true with the US balance sheet. It has accrued 35T
| in debt, but it's used that to fund it's operations. Those
| operations generate more for the US. As long as the US has
| enough to pay it's obligations over the next few decades there
| are no issues
|
| That of course doesn't change the fact that tax loopholes can
| be problematic
| sweezyjeezy wrote:
| I think it's rarely valid to compare countries' economics to
| your own personal finance, macroeconomics are a lot more
| complicated. Example: for employed people, going into (or
| avoiding) debt generally won't affect their yearly wages, but
| analogously it can for countries (e.g. well spent debt can
| stimulate economic growth).
| bbarnett wrote:
| The downside of state debt is the downward spiral.
|
| If you spend 1/2 your tax income on just servicing the
| debt, that means either fewer services for people, or
| borrowing yet more, just to keep things going.
|
| If you borrow more, then it gets even worse.
|
| I really prefer that 1/2 my tax bill doesn't go to interest
| payments.
| woah wrote:
| Let's say a city builds a bridge that doubles its tax
| income by opening up a lot of economic opportunities. It
| pays for this with a 35 year bond. During these 35 years,
| the entire additional income that the bridge generated
| goes towards paying off the bond. After the 35 years the
| bond is paid off and the city enjoys permanently raised
| tax income (not to mention better economy for residents).
|
| Was there a problem that the city spent 1/2 of tax income
| on just servicing the debt?
| bbarnett wrote:
| Yes.
|
| I could go into a lot of reasons, but I'll keep it
| simple.
|
| It is incredibly rare for governments to break that
| cycle. This has been demonstrated over and over. Thus,
| there is no end in 35 years. There is just perpetual 50%
| taxes to interest on debt.
|
| This means that as it is a persistent state, not
| perpetually losing 50% tax revenue would make an enormous
| difference.
|
| It's just not helpful.
| Mordisquitos wrote:
| > Example: for employed people, going into (or avoiding)
| debt generally won't affect their yearly wages, but
| analogously it can for countries
|
| While I do agree that personal finances are a bad analogy
| for state finances, that is not an illustrative example as
| to the reasons. An employed person can absolutely improve
| their yearly wage by going into debt, be it for investing
| in education to aspire to better paying positions, buying a
| car which increases their employment catchment area, or
| even --for a flexible definition of wage-- investing in
| setting up a business.
| sweezyjeezy wrote:
| I did say generally, but fair point :b
| Detrytus wrote:
| Generally, there are two types of debts: consumer debt,
| which you just spend and the debt you invest in something
| profit-bringing, like business.
|
| Average people generally only accrue the first kind and
| rarely the second.
| lowbloodsugar wrote:
| >The mortgage is paid on a fixed schedule over 30 years
|
| But now imagine that you are never allowed to pay it off: you
| only pay the interest. And the debt will be passed to your
| children, and their children. This is the US Govt debt.
|
| In feudal times, you worked for your lord and master. If you
| didn't pay, armed men would come and take your stuff. In
| modern times, you still work for your lords and masters, and
| if you don't pay, armed men will come and take your stuff.
| How they did this was to create an income tax, and then have
| their cronies in the house and senate spend more and more and
| never "pay off the mortgage".
| lotsofpulp wrote:
| In modern times, the lord and master is older generations
| (or soon to be old generations) that vote for greater and
| greater benefits and lower taxes for themselves.
| andy_ppp wrote:
| > This is a very naive way of thinking about debt.
|
| Well it's how this economist and Citibank's former number 1
| trader describes our debt based money system. So maybe you're
| the naive one here. Please watch this video and enlighten
| yourself: What is Money? https://youtu.be/_gcNMu40jqs
|
| > As long as the US has enough to pay it's obligations over
| the next few decades there are no issues
|
| This is rather my point, as more wealth is transferred from
| individuals and governments to the rich (who the tax system
| is largely optional for) there simply won't be that tax take
| to support the debt.
| lukifer wrote:
| > Cash now is worth more than cash later.
|
| This is accurate, regarding preferences for optionality, and
| how our economy currently works. But I think it's worth
| questioning the expectation that giving up that optionality
| deserves compensation, whether morally or practically
| (resulting in compounding "money-on-money returns", usually
| at low risk if sufficiently diversified).
|
| The Italian economist Silvio Gesell noted, that no other good
| besides currency works this way. Every other good with a use
| value (food, houses) tends to lose value over time (entropy
| being fundamental to the universe), and/or, to carry risk (a
| share of stock which represents unpredictable ROI). There is
| course an exception in land, which doesn't intrinsically
| depreciate, but whose value trends upwards thanks to location
| value (and which can be addressed separately via Georgist
| land tax).
|
| Gesell proposed a "demurrage currency" [0], which gradually
| loses value as it is held: the idea being, rather than being
| entitled to a return, retaining high long-term optionality is
| actually a privilege that one should have to pay for, since
| the real-world value it represents is depreciating. And the
| incentive to invest (whether at high or low risk) instead
| becomes to break even (with the rate of demurrage tracking
| what we currently call the discount rate).
|
| I have no idea if such a concept is practical in a trans-
| national, growth-dependent global economy (with deflationary
| crypto-currencies as a BATNA!); if anything, I'm fairly
| confident it's not. But it's at least worth thinking about:
| that it's not at all axiomatic that holders of value should
| be entitled to compensation for "forgoing consumption" (not
| only because the wealthy don't necessarily need such an
| incentive, but also because increased consumption can mean an
| increase in the velocity of money, and more total value
| created, per the multiplier effect, and the "hotel riddle"
| [1]).
|
| [0] https://en.wikipedia.org/wiki/Silvio_Gesell#Economic_phil
| oso...
|
| [1]
| https://www.econlib.org/archives/2012/01/an_answer_to_a.html
| yieldcrv wrote:
| Whaaaaat?
|
| A) These bankrupt countries are exactly why we should think
| twice about funding their spending habit, with reevaluation
| only when they address their spending habit
|
| B) These companies are tax compliant, barring when the ECJ
| rules against them
|
| C) if what you meant was equivalent taxation - _no amount of
| taxation of profits or income would fill these bankrupt
| countries budget holes_
|
| D) the countries tell you exactly how not to pay tax, they
| incentivize certain transactions and tax the remainder of funds
| that weren't involved. (The ECJ overruled an entire country,
| with retroactive logic)
| simonh wrote:
| >there is a rich person on the end of it with the loan as an
| asset earning interest.
|
| About half of treasuries are held by the Fed or foreign
| investors which largely means other governments and foreign
| companies. Most of the rest are owned by pension funds, banks,
| local government, insurance companies, etc.
| tivert wrote:
| >> there is a rich person on the end of it with the loan as
| an asset earning interest.
|
| > About half of treasuries are held by the Fed or foreign
| investors which largely means other governments and foreign
| companies. Most of the rest are owned by pension funds,
| banks, local government, insurance companies, etc.
|
| So what? That doesn't mean you shouldn't think about it in
| terms of a rich person, like the GP suggests.
|
| The modern capitalist system is a _very_ slippery thing to
| think about, and there are all kinds of traps to mislead
| people. For instance, facts like the one you point out can
| draw people away from understanding the truth behind
| scenarios where the rich are the group that greatly
| disproportionally benefits while not being the group that
| benefits the most in absolute terms.
|
| On a related note: IMHO the 401k is one of the greatest
| propaganda coups in the history of democracy. You have vast
| swaths of the public owning tiny, insignificant slivers of
| the overall pie; while the rich own big, disproportionate
| slices. But then the public votes to increase those tiny,
| tangible slivers by trading _much_ more valuable but less
| tangible things.
| the_optimist wrote:
| There is no such slippery-ness or slippage. The system is
| fundamentally assessable with basic accounting and Econ
| 101. No, the 401k is not a coup. No, class-warfare
| advocates cannot fundamentally create value, improve the
| economy, or the better state of individual well-being---
| either temporarily or permanently---by wealth transfer, and
| their efforts typically result in gross infringement of
| human rights. Typically in history these wealth transfers
| have greatest negative impact against the middle- and
| lower- tiers of wealth. The study of the encomiendas in
| Columbia is perhaps somewhat insightful.
| Epa095 wrote:
| Economy is a prime example of a field where a bit of
| knowledge is worse than no knowledge, and nothing is more
| deranged than someone who has completed Econ 101, and
| thinking they now understand the world:-P
| Aerroon wrote:
| Maybe governments need to stop spending 40-50% of the entire
| GDP?
|
| For example, the US federal government + state governments
| spend about $10 trillion a year. The US has a GDP of about $25
| trillion. And the US isn't exactly known as a high tax country.
| France is estimated to be at 58%...
| kasperni wrote:
| Universal healthcare and welfare systems aren't free.
| Aerroon wrote:
| The welfare systems (in Europe at least) don't work. They
| work if you're old right now, but once the young people of
| today become old they won't get anything meaningful out of
| it. At least that's the impression I have and everyone else
| my age has.
|
| And healthcare is unavailable anyway. Several month long
| waits to see a specialist.
| kwhitefoot wrote:
| So how come the US has worse health outcomes?
| Aerroon wrote:
| I'm not sure. I don't think anyone knows for sure, but
| obesity probably heavily factors into it.
|
| 53% of Europeans are overweight or obese. The same figure
| in the US is 72%. That's a 36% difference.
|
| More than that, 17% of Europeans are obese (BMI >30)
| compared to the US's 42%.
|
| The fact that the US has a life expectancy of 79.1
| compared to the EU's 81.5 years with that kind of
| difference in obesity levels is actually surprising. You
| would expect it to be lower than that in the US.
| qwytw wrote:
| > compared to the EU's 81.5 years with that kind of
| difference in obesity levels is actually surprising
|
| It's probably considerable higher in EU15 i.e. if we
| exclude all the poor (currently or previously) ex-
| socialist Central and Eastern European countries that
| have a lot of baggage
|
| Or at least men in those countries:
|
| https://ec.europa.eu/eurostat/statistics-
| explained/images/2/...
| nradov wrote:
| Worse in some ways, better in others. The USA generally
| has higher 5-year cancer survival rates, and shorter
| waits for specialist visits and advanced imaging
| procedures. Of course there's a high variance in outcomes
| based on location and affluence.
| badpun wrote:
| > shorter waits for specialist visits and advanced
| imaging procedures
|
| Those are not health outcomes, but merely services KPAs.
| The KPAs may be better, because a portion of population
| can't afford the services, so they don't have to be
| serviced at all.
| qwytw wrote:
| > can't afford the services, so they don't have to be
| serviced at all.
|
| If that's true how could:
|
| > The USA generally has higher 5-year cancer survival
| rates
|
| Still be true? Not providing any services to a
| significant proportion of population would result in a
| much lower average.
| paulddraper wrote:
| 43% vs 13% obesity is a theory
|
| Actually, given that, it's kinda remarkable the US life
| expectancy is only 2 years less.
| brunoarueira wrote:
| About public healthcare it's pretty similar on Brazil!
| Many people can't pay for specialists, exams and etc. So,
| they have to go early morning (when it's dark yet), wait
| on long queues and many of them when finally is attended
| the local doesn't have more vacancies and need to go back
| another day.
| badpun wrote:
| I know multiple people whose cancer was successfully
| cured (or, at least, treated) in the healthcare system
| you can "unavailable". The systems in Europe typically
| focus more efforts on critical care (like cancers), and
| less so on mere annoyances, hence the queues for non-
| critical stuff. Compare that with the US, where for a
| sizable portion of population, treating their cancer
| leads to being bankrupt and homeless.
| AlchemistCamp wrote:
| No but some countries such as Singapore provide them at a
| far lower cost than any western country.
| tway_GdBRwW wrote:
| Hmm, lots to dig into here.
|
| The expectation that government provides certain services...
|
| The nature of fiat currencies and what actually makes the USD
| worth anything or even usable as a medium of exchange...
|
| Basic economics. Government spending == business revenue; the
| money doesn't just vanish.
| paulddraper wrote:
| > the money doesn't just vanish
|
| Of course not.
|
| _Laughs in government contractor_
| jltsiren wrote:
| Those numbers are not directly comparable. GDP is a measure
| of added value, not spending. Public sector spending may be
| ~50% of the GDP, but private sector spending is something
| like ~200%, making public sector ~20% of the total.
| hartator wrote:
| Interesting. I always think private spending is GDP -
| public spending.
|
| Can you share where you get this numbers?
| darkstar_16 wrote:
| That's not even the same thing. The govt is bankrupt because it
| keeps printing money to get out of previous debt and other poor
| choices. The companies are following the rules and taking
| advantage of loopholes in the system.
| dantheman wrote:
| It's not a funding problem, it's a spending problem. Taxes are
| insanely high around the world.
| immibis wrote:
| Only for poor individuals like you and me. Taxes for rich
| people and companies are insanely low around the world.
| arez wrote:
| Countries aren't bankrupt, they can't really go bankrupt if
| they use their own currency. Countries are not businesses they
| don't need to make money to be able to spend.
|
| Tax shouldn't be seen as the countries income but as a tool for
| redistribution of wealth and to keep trust in the currency as a
| whole. If you don't have debt you don't have money, every
| printed dollar goes into the system and can be used in various
| things not only an asset earning interest
| superkuh wrote:
| Taxes don't fund government programs. Taxes are a way to
| mitigate the buying power of private capital when it comes to
| bidding against government for things. Governments just create
| money supply for programs. It's not tax money. That's just an
| old cliche.
| BadHumans wrote:
| Need a citation or some reading for this because it sounds
| like something you believe without cause.
| EasyMark wrote:
| While there is lots of tax fraud, I feel it's probably a drop
| in the bucket. Countries will have to either cut back on
| spending or borrow until they collapse under the weight of
| their own inept budgeting.
| pessimizer wrote:
| > It would just be really good if companies stopped avoiding
| tax.
|
| It would be great if everybody just stopped committing crimes,
| or being rude even when legal, altogether.
|
| But what are our alternatives other than just waiting for
| everyone to just do this? Also, how will everyone know how to
| just contact me to just find out when using the law to avoid
| taxes when you can is _just evil,_ when it 's _just the smart
| thing to do,_ or when avoiding a tax is _just justice, hard-
| fought and well-deserved?_
|
| It would also be just great if it were autumn all year, and if
| alcohol and sugar were just good for you.
| geodel wrote:
| Agree. I'd also like _tobacco free / alcohol free_ zones to
| actually mean they are made available free of cost to
| visitors.
| paulddraper wrote:
| > It would just be really good if companies stopped avoiding
| tax.
|
| You first :/
| fsflover wrote:
| Dupe: https://news.ycombinator.com/item?id=41498377
| InsomniacL wrote:
| Somehow Ireland gets a 13 billion euro payday for illegally
| subsidising Apple so they do business in Ireland.
| piltdownman wrote:
| <facepalm> You realise these are American companies exploiting
| American laws to circumvent their tax burden while operating as
| MNCs in Europe?
|
| The notion of Ireland somehow getting a '13 billion payday' due
| to malfeasance or illegality is fantastical beyond belief.
| EduardoBautista wrote:
| All the tax law says that if they bring the money to the US,
| they have to pay US taxes. So they just don't bring it to the
| US. There is no US law that requires you to move the money.
| InsomniacL wrote:
| "According to Commission estimates, Ireland had given illegal
| tax benefits worth EUR13 billion to Apple" - ECJ
|
| Ireland gave illegal tax breaks to attract business from
| other countries which it succeeded in, and now also gets the
| tax back.
|
| > fantastical beyond belief
|
| You might disagree with something I've said but it's
| certainly not "fantastical beyond belief"
| Wytwwww wrote:
| > MNCs in Europe?
|
| Why would you expect them to pay corporate taxes on all the
| income they make outside of the US? Would hardly make much
| sense...
| Rinzler89 wrote:
| The issue isn't with Ireland per se, as if Ireland wouldn't do
| it, then Netherlands, Luxembourg, Cyprus, Bulgaria or someone
| else will gladly take Apple's 13 billion at the expense of the
| other members of union.
|
| The right fix would be EU wide legislation to prevent EU member
| states of fighting against each other on who can screw over the
| taxpayers by providing the biggest tax breaks in exchange for
| corporations' bread crumbs in a race to the bottom, as this
| causes all EU taxpayers to loose and corporations to win, and
| then we wonder why we have no money for education, healthcare
| and infrastructure. Well of course we don't if you help big
| companies avoid paying tax and then your state budget relies
| only collecting tax from citizens and small business who can't
| dodge taxes.
| pulse7 wrote:
| Making a tax deal to pay only 1% or 0.005% for a specific
| company is an illegal aid - regardless of the EU member
| country ...
| zoobab wrote:
| I remember that Ireland had a 0% tax on patent royalties
| till 2015, and till 2020 for companies that used the scheme
| before.
| SanjayMehta wrote:
| I'm confused.
|
| So EU runs Ireland's tax system? What happened to sovereignty?
| How does this work?
| lm28469 wrote:
| What do you think a political and economical union does exactly
| ?
| SanjayMehta wrote:
| Lose sovereignty, it appears.
|
| Strange.
| lm28469 wrote:
| Yeah very strange... people get together, vote laws, and
| respect the laws they voted... how strange indeed
|
| You can be for or against the EU but none of that is
| strange lmao. You can't play the game for the nice rules
| and say "no" when the rules you don't like affect you
| Woeps wrote:
| No, the EU checks if the tax systems are fair and held to
| certain standards. In this case this special deal was only
| available to a select few companies.
| SanjayMehta wrote:
| Were these companies selected on the basis on employment
| numbers or revenue?
|
| AFAIK Apple doesn't have so many employees in Ireland that
| would generate enough revenue for a 13B tax bill. So they
| must have been booking offshore revenue via an Irish
| subsidiary.
|
| When I buy software licenses here in India I've noticed that
| the billing almost always is in Ireland.
| lm28469 wrote:
| Ireland doesn't produce anything of value by itself, it's
| full of ghost offices claiming revenues for the entire EU
| market.
| Supernaut wrote:
| That is completely untrue.
| lm28469 wrote:
| https://observer.com/wp-
| content/uploads/sites/2/2024/07/unna...
|
| https://www.politico.eu/article/ireland-gdp-growth-
| multinati...
|
| The country is a tax vessel, nothing more, remove the
| megacorps offices with barely any local businesses as
| well as the plane registrations and they drop right back
| somewhere bellow the average gdp per capita of europe.
|
| Ireland economy is 85% services, compare that to
| Germany's 68%
| steve_gh wrote:
| Yeah this is the way it works. The "pre-sales" of working
| out what you need is don e in whatever country you are in.
| Then at the last moment, when everything is prepared and
| the invoicing is ready, they transfer you to an Irish sales
| person who takes your payment.
|
| And voila, the sales are all done in Ireland
| jokethrowaway wrote:
| Other countries have deals that cover IP revenue or certain
| taxation tresholds which effectively give little taxation to
| multinationals, so discrimination is not enough to be
| considered unfair.
|
| They probably just screwed with the process and didn't get
| the deal in a generic enough format to be accepted by the EU.
|
| This incompetence will cost dear to Ireland as the next big
| tech companies will go elsewhere to sell to Europe.
| Nursie wrote:
| What's to be confused about?
|
| Treaties bind nations to behave in certain ways all the time,
| it's basically what they are for.
|
| EU membership is in effect a set of treaties that a member-
| nation signs up to, which create these supra-national bodies
| like the court and also a lot of trade and tax rules which get
| harmonised across the union. Ireland has signed these treaties,
| which give it access to the market and the benefits of being in
| the EU.
|
| If it wishes to set its tax rules without reference to the EU,
| it will either need to get the EU rules changed through the
| political process, or leave the treaties and treaty
| organisations.
|
| Yes, you can view this as ceding sovereignty, but in some ways
| every treaty does that.
| mrks_hy wrote:
| Another article: https://www.politico.eu/article/commission-
| scores-surprise-w...
|
| Full ruling:
| https://curia.europa.eu/jcms/upload/docs/application/pdf/202...
|
| Fascinating, how does that work? Can anybody explain in simpler
| terms how that was legal to begin with?
|
| > Both companies were incorporated in Ireland but not tax
| resident in Ireland. Those tax rulings approved the methods used
| by ASI and AOE to determine their chargeable profits in Ireland
| in relation to the trading activity of their respective Irish
| branches.
| red_trumpet wrote:
| Well, they had Ireland on their side.
|
| > "Ireland granted Apple unlawful aid which Ireland is required
| to recover," the Court of Justice said on Tuesday.
| Rinzler89 wrote:
| _> Well, they had Ireland on their side._
|
| This is one of the reasons the EU is set to remove the single
| country veto rule since it was open to abuse. You'll then
| need two countries on your side to alter the EU's rulings.
| jkaplowitz wrote:
| > This is one of the reasons the EU is set to remove the
| single country veto rule since it was open to abuse. You'll
| then need two countries on your side to alter the EU's
| rulings.
|
| There are definitely countries calling for this rule to be
| removed or otherwise reformed, but I wasn't aware that the
| EU "is set" to do it. My understanding is that this change
| would itself require unanimous agreement in order to make
| it happen (without effectively forking the EU in an extreme
| step no country has yet seriously proposed), and that this
| unanimous agreement is not yet present.
|
| Have I missed some recent major announcement on this point?
| I know the EU Parliament voted about this some months ago,
| but their wishes on this point will never become EU law
| through the current procedures without unanimous agreement
| from the member states.
| schmorptron wrote:
| Won't this lead to this-for-that alliances within the EU
| and might turn member countries against each other in the
| long run? "France didn't help us veto a decision we
| wanted, so we won't help them either on this other front"
| or a more straightforward "if you help us veto this tax
| decision we will help you veto something that would
| affect you later".
| Rinzler89 wrote:
| Definitely, but at least it's a step in not making vetos
| as easy as before.
| tpm wrote:
| For some issues unanimous agreement is already not
| needed. For example recently a law was passed in the
| Council with 20 of 27 votes (only with the help of an
| Austrian minister against the wish of her government).
|
| https://www.dw.com/en/eu-ministers-approve-contested-
| nature-...
|
| The full rules are here, 'of course' taxation still needs
| unanimous agreement: https://en.wikipedia.org/wiki/Voting
| _in_the_Council_of_the_E...
| jkaplowitz wrote:
| Yes, I'm aware that unanimity is not currently always
| required. But a claim that the EU "is set" to remove a
| rule is discussing a change to the status-quo rules in
| this regard, which I haven't heard about except as a very
| much not unanimously agreed aspiration of some
| legislators and some member states.
| anonymousDan wrote:
| Yeah this is not going to happen.
| red_trumpet wrote:
| I'm not sure I understand what you mean. AFAIU, Ireland
| just refused to demand the money from Apple. I'm not sure
| what that has to do with vetoes. Can you point to a
| concrete instance relating to the Apple case, in which
| Ireland used a veto?
| plorg wrote:
| That appears to be a summary of the ruling, although it
| contains a link to the docket:
| https://curia.europa.eu/juris/documents.jsf?num=C-465/20%20P
|
| Judgment:
| https://curia.europa.eu/juris/document/document.jsf?text=&do...
| mrks_hy wrote:
| Thank you, and sorry. Had the wrong link in my clipboard.
| aswerty wrote:
| From discussions in the past, I was under the impression there
| was general sense that if Ireland should have legitimately taxed
| them to this degree. That ultimately the taxes owed should
| probably be paid out to the countries where the sale occurs. As
| one country reaping the rewards of the tax for the entire
| European operation would be bizarre, when that country just has a
| medium sized support/sales operation (which was what Ireland was
| originally collecting tax on).
|
| Does this also have the knock on affect that these companies can
| now write off this tax so their owed US taxes are much less
| (assuming they ever repatriate these earning - which they have
| often avoided to avoid paying US tax)?
|
| Anyways, writing the above shows me how much I don't understand
| about these cases.
| ajsnigrutin wrote:
| > That ultimately the taxes owed should probably be paid out to
| the countries where the sale occurs.
|
| This is hard to implement in practice.
|
| Imagine selling in a country with 50% tax, and having a country
| with 10% somehwere, anywhere in the world.
|
| For easier math, let's say you buy dildos from a chinese
| manufacture for 1eur (including shipping), and sell them for
| 11eur to end customers. You've just earned 10eur, and you're
| taxed 5eur, giving you 5eur of profit.
|
| What you then do is open a company in a low-tax country, the
| company is "completely independent" and the owner (your cousin)
| works with both the manufacturer and you. You buy the dildos
| from your cousin for 10eur, he buys them from china for 1eur
| has them shipped directly to you, and you sell them for 11eur.
|
| So, your cousin earned 9eur, and will pay 10% tax on that (90c,
| 8.10eur of profit) and you earned 1eur, and will pay 50% tax on
| that (50c, 50c of profit for you).
|
| So instead of paying 5eur in tax, you only paid 1.40eur, and
| pocketed 8.6eur. Yes, there are some additional costs (another
| company + paperwork, some percentage for your cousin) but you
| still earned more.
|
| The same can be done with patents and licences, branding deals,
| etc. Company in rich country made 100M of profits... just have
| the company in a cheap-tax country charge them 99M for
| licencing, 1M gets taxed in the expensive-tax country, and 99M
| in the cheap one.
| Retric wrote:
| Multinational corporations have subsidiaries not cousins.
|
| A great number of tricks go away if you treat subsidiaries as
| a single company. Countries are reluctant to pierce the
| corporate veil, but it's all arbitrary rules.
| ajsnigrutin wrote:
| I was giving an example with 11eur dildos, you have cousins
| for that.
|
| And for every regulatory change will bring changes to tax
| avoidance... subsidiaries will just get "one more step"
| removed from the main company...
| Retric wrote:
| Ultimately profits flow to a single entity. Taxing 1
| levels down and stopping was clearly not the intent of my
| suggestion. If it's under the control of Alphabet/ its
| profits go to Alphabet treat it as a single entity
| Alphabet.
|
| The idea that subsidiaries, trusts, etc have any meaning
| whatsoever when collecting taxes is simply a loophole
| which can be closed at any time.
| fifticon wrote:
| That is not a fictional example, in case any might still be
| wondering. I worked many years for an
| american/canadian/global company in europe. The software WE
| developed would be owned by a separate company entity.
| Whenever we sold "OUR" software systems to our real local
| customers, "we" would 'borrow/rent' OUR software from that
| separate entity, at a hefty silly price. Incidentally, that
| silly price was so high, that "we" (our company entity) would
| consistently produce a loss each year (even though our parent
| entity was raking it in, through that separate entity and the
| silly-price money we were transferring to them). Those losses
| of course are tax deductible, so our company would
| consistently pay zero taxes or worse (I don't know if they
| were also able to trigger things like the state having to
| reimburse them..) It is/was, as far as I know, totally legal
| and totally disgusting :-/.
|
| The irony as I see it, was that the software was developed by
| us locally and used by local clients, but somehow ended up
| being "owned" by carribean islands.
| piltdownman wrote:
| That's basically how Hollywood accounting works, with some
| of the highest grossing films and franchises in history not
| paying a penny in tax due to showing a 'loss' on paper.
|
| Harry Potter and the Order of the Phoenix (2007) ended up
| with a $167 million loss on paper after grossing nearly $1
| billion. According to New Line's accounts, the LOTR trilogy
| made "horrendous losses" and no profit at all. Same as
| Forrest Gump, Men in Black, and Return of the Jedi.
|
| The Music industry is far worse in its financial
| machinations.
|
| With some minor exceptions, the companies involved in this
| are all American.
| zoobab wrote:
| Ikea does the same with everything they sell in their
| stores, the stores have to licence design rights from the
| Netherlands, where royalties are only taxed a few percent.
| All the stores imposable amount are reduced to zero.
| Supernaut wrote:
| > ultimately the taxes owed should probably be paid out to the
| countries where the sale occurs.
|
| As I wrote in another thread, that's not how business works in
| the EU. If Volkswagen, incorporated in Germany, sells a car in
| Poland, they're not required to pay a corresponding sliver of
| their net profits to the Polish exchequer. It all stays in
| Germany.
| afiori wrote:
| > their net profits to the Polish exchequer
|
| I believe that part of the reason is that they still pay
| other taxes (eg VAT) in the country of sale.
| Supernaut wrote:
| VAT is a tax paid by the consumer, not the manufacturer. If
| you buy an iPhone, it's you that pays the VAT on it, not
| Apple.
| hayd wrote:
| Isn't all corporation tax a tax on the consumer? For the
| consumer what difference is there compared to a tax on
| revenue?
|
| If there was a 20% tax on revenue, companies would
| increase prices in kind...
| afiori wrote:
| If you allow me some jest I would like to point out that
| at the checkout of my local stores I never saw officers
| collecting VAT, I usually just give all the due money to
| the cashier
| lucianbr wrote:
| All the money Apple gets come from customers, no? _All_
| of it. Do they print their own dollars or something? Are
| they subsidized by governments?
|
| Do the dollars that make up the profits, and the dollars
| that make up the taxes on profits, come from somewhere
| else than the dollars that make up the VAT?
| Supernaut wrote:
| I gather from your disdainful tone that you think you've
| just schooled me on something really fundamental, but the
| point you're trying to make is unclear to me. If you're
| asserting that VAT and the taxes paid on corporate
| profits are in reality one and the same, then no, that's
| wholly incorrect.
| samatman wrote:
| Yes, this is correct, although it may be more obvious to
| visitors than to residents.
|
| The evidence that this is correct follows: visitors,
| tourists if you prefer, can collect reimbursement for VAT
| payments, the first link I hit was Norway but this is
| very common if not universal:
| https://www.toll.no/en/tourist-in-norway/reimbursement-
| of-va...
|
| If VAT were a tax on the corporation, it would make no
| sense at all to reimburse it to specific consumers who
| are not obliged to pay it. That only makes sense when the
| tax is on the consumer, and merely collected by the
| corporation. Which is how VAT works.
| stoobs wrote:
| VAT is collected by the retailer and paid to the
| exchequer of the country of sale.
|
| The VAT sum is recorded at the time of sale, but the
| whole amount sits in the company finances until the VAT
| is settled with the exchequer.
|
| The company holds the VAT sum between collection and
| settlement, potentially benefiting from the temporary
| cash flow in that period.
| piltdownman wrote:
| Exactly. Was a great boon for 30 years for Germany as their
| domestic exports were the only game in town for cheap and
| whitegoods consumer hardware within the EU - e.g. Miele,
| Siemens, Bosch, Braun, Grundig, Neff, Whirlpool, Grundig...
|
| The second it advantages another EU country at their expense,
| however...
| bluecalm wrote:
| If you want to tax sells in a given country charge VAT.
| Corporate income tax is just a fundamentally bad tax. It's hard
| to enforce, even with good will it's hard to calculate (is
| paying $X for a license a legit expense or not?), unjust
| (buying more expensive things to provide the same service leads
| to paying less tax) it sets incentives to mix corporate and
| private use of resources, it incentivizes building holding
| companies to use losses of one entity to offset tax of another,
| it gives big players an advantage and it gives dishonest
| players an advantage.
|
| I think it should be 0 and we should tax use of resources and
| consumption instead. Then let countries compete to create
| business friendly environment. It doesn't provide enough
| revenue to be worth all the hassle with enforcement and
| accounting.
| s_dev wrote:
| Other countries aren't getting it -- afaik that was a
| possibility regarding fall back mechanisms should their primary
| argument collapse before this ruling. The EU has won their
| primary case and thus Ireland must be forced to collect an
| spend it.
|
| This is will force a political crisis as the government is
| complaining it has no money to build houses. So all the those
| comments saying other EU countries just has to sue Ireland to
| get some of that won't happen.
|
| If Germany gave state aid to Deusche Bank and DB operates in
| many EU countries it wouldn't make any sense for Spain to get a
| cut of that if they were forced to hand it back, even if the
| revenue was generated in other countries by DB this doesn't
| concern the state aid given.
| jajag wrote:
| > This is will force a political crisis
|
| no it won't
|
| > as the government is complaining it has no money to build
| houses
|
| no it isn't
| sgu999 wrote:
| I'm not Irish and I'm a lazy reader at this time so I won't
| search who's right, but the comment you are answering to
| was way more convincing than yours.
| vonzepp wrote:
| I'm Irish and the later is more correct. There isn't
| going to be a major political crisis over this. Irish
| corporate taxation is to the Irish electorate what the
| flag is to Americans. It's quasi religious.
|
| The government isn't really blaming lack of money on the
| housing crisis more they are claiming it takes time.
| bsboxe wrote:
| They're correct on both. The Irish government is running
| a budget surplus due to massive increases in the
| corporation tax intake over the last several years. The
| issue with delivery of housing and projects in this
| country isn't due to a lack of money, but a lack of
| capacity. The economy is already running at full capacity
| and there aren't enough workers available. Throwing more
| cash at things wouldn't have a material increase in
| output for several years until supply could ramp up.
| renewiltord wrote:
| I think people would revolt if you raised VAT to 30% and
| lowered corporate income tax to 0%.
| petesergeant wrote:
| So Ireland double-dipped here by luring the tech companies, and
| now it gets the foregone tax anyway. Does feel a bit like the EU
| should get the cash, not the state that was responsible for it
| sensanaty wrote:
| Correct me if I'm wrong, but the way I understand it, it's not
| really like Ireland is demanding Apple pay suddenly, the EU is
| saying that Apple owes Ireland the 13B and has to make up the
| losses due to Ireland & Apple colluding to strike an tax deal
| that is unfair (for all other EU members) for Apple.
|
| Ireland itself probably doesn't want to do this, since those
| deals exist for a reason.
| guappa wrote:
| > since those deals exist for a reason.
|
| Scam the rest of the EU countries?
| orwin wrote:
| To be exact, the ruling is that Ireland gave unfair advantage
| to Apple, compared to other companies. If Ireland want to set
| corporate taxes at 1%, it can, but it should be for all
| companies. Amazon notably didn't get the same deal Apple did,
| which is anti-competitive.
| throw310822 wrote:
| Shouldn't Ireland be fined 13 billion from the EU then?
| SirMittens wrote:
| This is not a fine, tho. It's just the amount that Apple
| would have paid in taxes, if the special deal didn't
| exist.
|
| The EU is not imposing any fines on Apple. They're just
| ordering Ireland to collect the taxes owed to them
| (Ireland), since the tax deal was found to be
| unfair/illegal.
| throw310822 wrote:
| Yes. Which if you think about it, is doubly unfair. First
| Ireland reaped the benefits of keeping Apple in the
| country; then it gets paid Apple's taxes anyway. Sure,
| this puts a stop to the practice and makes it much harder
| to sell such deals in the future, but for the moment
| Ireland had its apple cake and ate it, too.
| hirako2000 wrote:
| It would be unfair if the term was fair to begin with,
| but it wasn't, according to that court.
|
| What would be interesting is to see Apple revealing the
| cost of its lobbying, to claim a claw back. It won't.
|
| It turned out great for Ireland yes, it is odd the court
| didn't fine that country for offering illegal tax terms.
| throw310822 wrote:
| I think that the court ruled that it was unfair _to other
| countries_ , not to Ireland. Ireland gained from the
| deal, didn't lose anything.
| orwin wrote:
| No, it's unfair to other _companies_. The issue like I
| said was that Apple was taxed ~1%, when others were taxed
| ~12%, which impact fair competition.
| throw310822 wrote:
| True. In any case, not unfair to Ireland.
| Macha wrote:
| > If Ireland want to set corporate taxes at 1%, it can, but
| it should be for all companies. Amazon notably didn't get
| the same deal Apple did, which is anti-competitive.
|
| This was formerly the case, but actually now they no longer
| can set them that low, due to a deal by many countries to
| effectively force a 15% minimum. This was also largely
| aimed at Ireland's low 12.5% tax rate, which is being
| phased out as a result.
| petesergeant wrote:
| Sure, but here Ireland has gotten both the benefit of the
| illegal agreement _and_ will get the tax revenue. Those deals
| existed to attract large tech companies to Ireland, and
| create an ecosystem there, and I don't think that'll go away
| just because Ireland can't offer any new ones.
|
| Not suggesting that Ireland did this expecting to get both
| sets of benefits, but seems a little counter-productive that
| they are in fact receiving those.
| AnimalMuppet wrote:
| > Does feel a bit like the EU should get the cash, not the
| state that was responsible for it
|
| The EU court judges that a member country didn't tax a company
| enough, so the EU takes the money? That would be ripe for
| abuse.
| cryptonym wrote:
| Country should get the tax cash, then company and country
| should both be fined by EU.
| petesergeant wrote:
| No more so than any other fine the EU raises
| AnimalMuppet wrote:
| If the EU can judge that one country's taxes have been
| "unfairly low" for the last N years, and take what would
| have been the tax receipts for the last N years, they can
| raise a lot more than they do by fines. This is especially
| true if they decide to do it for all of the businesses in a
| country, instead of just for a few.
|
| I mean, look, the EU is still a place that is more or less
| governed by rule of law. All I'm saying is that, if the EU
| keeps the money, that creates the temptation to abuse it.
| petesergeant wrote:
| They didn't do that, they decided that specific tax deals
| made with specific companies were outside of the law
| AnimalMuppet wrote:
| Yes, I know that. That's all that has happened... so far.
|
| And I maintain that, to _keep_ it that way, it is good
| that the money not wind up at the EU, but rather at the
| member state.
| vitus wrote:
| There's a separate ruling for Google that was released at the
| same time:
|
| Docket:
| https://curia.europa.eu/juris/documents.jsf?num=C-48/22%20P
|
| Ruling:
| https://curia.europa.eu/juris/document/document.jsf?text=&do...
|
| And other news reports confirming the same:
|
| https://www.reuters.com/technology/eu-court-upholds-googles-...
|
| https://www.bbc.com/news/articles/cjw3e1pn741o
|
| CNN also has links to both (summaries of the) rulings:
| https://www.cnn.com/2024/09/10/tech/europe-ruling-apple-tax-...
| anonymousDan wrote:
| For non-EU readers, note that taxation is explicitly not a
| competency of the EU (i.e. Ireland can set its tax levels to
| whatever it wants). The only thing in question here is whether it
| was applying the same taxation rules to all companies, as
| granting special exceptions to certain companies could be viewed
| as state aid (which is not allowed). Ireland claimed it wasn't,
| the current (over-)ruling says otherwise. This case is also
| specific to tax rules from many years back. AFAIK the rules have
| subsequently been tightened and the exemption no longer exists.
| tiffanyh wrote:
| What's interesting is that it's common for governments to give
| tax incentives to companies that will result in driving more
| economic value for their region.
|
| Eg Ireland might give a tax incentive if a large Fortune 500
| company hires X people in Ireland.
|
| Question: does this ruling prohibit that common practice?
| afiori wrote:
| No, it just requires for the rule to exist and be used
| coherently.
| dtech wrote:
| Yes, that is exactly the kind of thing that Ireland did and
| is not allowed in the EU rules.
|
| You are allowed to make rules, but you can't offer deals.
| jemmyw wrote:
| Kind of. It's already prohibited, depending on what you mean.
| It would be legal to say all companies can have a tax break
| if they hire X people in Ireland. It's not legal to give the
| tax break to one company and deny it to another.
| noirbot wrote:
| It does feel a little weird then that Apple is being fined
| here then? It seems like Ireland did the thing that's
| against the rules by offering the deal, not Apple?
| Obviously they worked on it together, but it feels odd that
| Ireland has now essentially gotten all the benefits of
| offering this illegal deal by having Apple do business
| there and now also gets all the back taxes that Apple
| probably wouldn't have paid to Ireland if they hadn't
| gotten the deal.
|
| That seems like a bit of a perverse incentive for countries
| to offer deals they may know will get overturned later
| because they'll get the money eventually.
| tiffanyh wrote:
| That's exactly why I asked.
|
| If the government approached Apple, to offer them a
| special (specific to Apple) tax deal in exchange for X
| ... why is Apple now being held accountable for Ireland
| doings.
| ko27 wrote:
| Because in this area, EU has rule of law, not Ireland.
| com wrote:
| I don't think that rule of law means what you think it
| does.
| projektfu wrote:
| More helpfully, you probably mean EU law supersedes Irish
| law in this area.
| pyrale wrote:
| Because accepting a corruption bargain is as illegal as
| offering it.
| tiffanyh wrote:
| "Corruption" is a strong word here.
|
| Tax Abatements are a long, well understood practice
| that's been leveraged by city/state/federal governments
| for decades to incentivize desired outcomes.
|
| Look at Electric Vehicles (EV's)
|
| Both California and Federal government were giving tax
| incentives for individuals who purchase an EV.
|
| This tax abatement was used to incentivize the adoption
| of EV's.
|
| Is that "corruption?
|
| Absolutely not.
| Sakos wrote:
| ... Isn't it?
| pyrale wrote:
| Apple and Ireland maintain that is no record of "a deal",
| yet Apple paid 1% of what the law says they owed. The
| only beneficiary of that favourable situation is Apple.
|
| Let's be honest, if this happened in any "less reputable"
| jurisdiction, Apple would definitely be under FCPA
| scrutiny.
|
| > Tax Abatements are a long, well understood practice
|
| Yeah, the kind of "tax abatement" that is available only
| to a select few.
| dmurray wrote:
| > it feels odd that Ireland has now essentially gotten
| all the benefits of offering this illegal deal by having
| Apple do business there and now also gets all the back
| taxes that Apple probably wouldn't have paid to Ireland
| if they hadn't gotten the deal.
|
| Yes, there's a widespread view in Ireland that this was
| the best possible outcome: be seen to fight tooth and
| nail to prevent collecting the taxes, but get them
| anyway.
|
| > That seems like a bit of a perverse incentive for
| countries to offer deals they may know will get
| overturned later because they'll get the money
| eventually.
|
| I'm not so sure of this, though. The companies aren't
| fools and have better paid lawyers than the countries, so
| they won't enter these deals unless they rate their
| chances of getting away with it.
| noirbot wrote:
| Sure, I'm not saying this is going to be a likely fraud,
| but there's much more subtly illegal ways to offer stuff
| that may be worth the risk for a company and then the
| government then lobbies via backchannels for the EU to
| find it illegal.
| buildbot wrote:
| An interest free loan for years for 13 billion isn't too
| bad!
| hervature wrote:
| I haven't read this specific case but normally "back
| taxes" refers to the taxes, interest, and fees that are
| owed.
| awad wrote:
| I would guess that Apple's ability to get a return on its
| cash are likely to exceed the total of taxes, interest,
| and fees.
| BlackFly wrote:
| Sure, Ireland did wrong by insinuating to Apple that they
| could have special treatment when in fact EU law
| prohibits it, but Apple failed to pay the prevailing tax
| rates which can be demanded long after the fact. Ireland
| has sovereign immunity from tort in this case. They could
| legislate to waive their immunity for tax assurances
| which would create an interesting constitutional issue in
| the EU.
| ko27 wrote:
| It's simple, EU law says Apple had to pay taxes at that
| time. Apple's ignorance of EU law is not an excuse, this
| doesn't work for individuals, why should it work for big
| multinational companies? Ireland doesn't have the power
| alone to overturn these kinds of laws, unless, of course,
| they decide to leave EU.
|
| Apple's decision to put their trust completely in Ireland
| officials and sidestep the EU is their own mistake.
| Reminds me of when Trump tried to arrange a trade deal
| with Germany without EU, which was impossible.
| dmitrygr wrote:
| > Apple's ignorance of EU law is not an excuse
|
| > Ireland doesn't have the power alone to overturn these
| kinds of laws
|
| How was apple to know what ireland could and could not
| do? Why should they have to? Irish government said to
| apple that the rules are as such. The precedent this sets
| is that companies should not trust governments' words,
| instead each company should somehow interpret the laws
| themselves, each (surely) in their own way. Are we sure
| we want to set this precedent?
| noitpmeder wrote:
| Presumably these laws are published publicly, and apple
| has more an enough resources to hire enough lawyers to
| ensure they are in compliance.
|
| Ignorance of the law is not an excuse.
| dmitrygr wrote:
| five accountants will produce six results from the same
| input based on the same laws, all of which the IRS will
| accept. Laws are not code. They are not unambiguous and
| noncontradictory.
|
| And forget apple! This means that any company in
| existence now needs a lawyer who understands the Treaty
| of Lisbon! Just in case some EU country tells them to do
| X, they now need to know if said country can actually say
| so!
|
| I think you underestimate the damage of "we cannot trust
| the actual government to tell us what we can and cannot
| do"
| pyrale wrote:
| > I think you underestimate the damage of "we cannot
| trust the actual government to tell us what we can and
| cannot do"
|
| I wonder how these companies manage not to run afoul of
| US FCPA.
| yunohn wrote:
| Dude, seriously? You're acting like Apple was clueless
| here. This entire controversy is about Ireland and Apple
| colluding for over a decade to avoid paying corporate
| taxes anywhere else in the EU. Nobody involved was
| ignorant of the potential illegality, rather that was
| deliberately the point.
| rowanG077 wrote:
| Laws are also often intentionally written in such a way
| to be both hard to understand and ambiguous. Such rarely
| exercised laws are really only made manifest once tested
| by a court of law.
|
| It's basically impossible to protect yourself via the
| word of law. Because when the rubber hits the road the
| judge can interpret whatever they want. Unless there is
| precedent even the best lawyers are just guessing.
| dotancohen wrote:
| In the case of conflicting laws, who prevails? If the
| Irish pass a law that Apple can not pay certain taxes,
| does that not override EU law? Usually in cascading
| situations, the more local entity wins, n
| ko27 wrote:
| If there is a legal conflict, EU law trumps all, the same
| way federal law trumps local law in US. The highest court
| is always an EU institution. EU countries give up part of
| their sovereignty in specific legal areas, like market
| competition regulations. They can always leave if they
| want.
| hnbad wrote:
| This depends, though. The EU does not have laws covering
| everything that national or local law might cover in its
| member states. In many cases the EU court of law is more
| like the US Supreme Court in that it is more about
| establishing whether a given legal decision is compatible
| with the basic law (e.g. human rights). It's more about
| setting the boundaries within which member states can
| make their own laws. So national law might say "X is
| illegal" and EU law might say "nations can say X is
| illegal" (or that they can't).
| alibarber wrote:
| Ireland cannot do that. That's literally the whole point
| of the EU (or specifically a single market)
|
| Effectively - your hypothetical proposed 'apple law'
| would, at some point in the Irish law passing process, be
| found to be incompatible with their commitments to being
| in the EU, and I assume it would be then an
| unconstitutional law. The price of admittance to the EU
| is basically having this process and constitution.
|
| Now - they could go ahead and do it anyway in which case
| the enforcement from the EU could range from anything to
| an angry letter to some large monetary penalty - as is
| the case with Hungary currently being withheld some
| funds.
| noirbot wrote:
| I mean, isn't that exactly the case here though?
| Ireland's law said they could do this. The EU says that's
| wrong, and Ireland is seemingly getting a reward for
| doing something illegal that the EU didn't decide was
| illegal for almost 30 years?
|
| Again, not disputing that this is legally accurate to how
| things work, but that definitely strikes me as an
| environment that a lot of businesses would find hard to
| work with. Other smaller startups I've worked with had
| Irish branches because it was a good way to hire devs and
| governments gave us some incentives. Finding out,
| potentially decades later, that the Irish government had
| screwed us over would be a lot more catastrophic than
| this fine will be to Apple.
| alibarber wrote:
| Absolutely agree - it's messy.
|
| Does it make the EU/Ireland a little less attractive to
| foreign investment? Maybe. Was it worth the gamble in the
| end for Apple and Ireland - probably.
| carlosjobim wrote:
| > Ireland is seemingly getting a reward
|
| They're not really getting a reward, because this makes
| them much less attractive for investment. Meaning less
| tax revenue in the wider and longer perspective.
| com wrote:
| No, not generally in federative states like the US or
| specifically for Union competencies in the particularly
| weird confederal entity that is today the European Union.
|
| The Union competency in question had been established by
| treaty - the establishment and protection of the Single
| Market, and as I understand it, specifically the
| provisions restricting state aid - where by being members
| of the Union, countries have delegated regulatory and
| judicial primacy to organs of the Union.
| marcosdumay wrote:
| If the government "offers" you a deal that you don't
| deserve, and you take it, that's a crime.
|
| It's pretty much everywhere. The government isn't a
| person that can make decisions autonomously.
| pyrale wrote:
| > It seems like Ireland did the thing that's against the
| rules by offering the deal, not Apple?
|
| Well, Apple accepted the illegal deal, didn't they?
|
| > That seems like a bit of a perverse incentive for
| countries to offer deals they may know will get
| overturned later because they'll get the money
| eventually.
|
| There's also a perverse incentive for companies to defer
| paying taxes for 20 years. Apple isn't getting fined,
| they're just paying what they owe 20 years late.
|
| edit: apparently the years were 1991 to 1997, so that's
| about 30 years actually.
| ensignavenger wrote:
| I read through the first part of the ruling to get a
| better idea of what happened. Apparently, Apple wrote to
| the Irish tax authorities, and said "this is how we plan
| to calculate our taxes" and the Irish tax authority said
| "okay, no problem, that works for us" and the EU
| commission investigated some years later, and said "wait,
| was that method of calculating taxes available to all
| Irish companies? We don't think so, so now Ireland has to
| collect taxes from all the way back many years." Ireland
| said "no bro, we're all good, they don't owe us
| anything", and Apple said "wait, we just did what we were
| told to do, and we already paid taxes on that income in
| the US instead of the EU, you can't retroactively change
| the rules" and the EU top court just said "Sorry, those
| tax rules go against EU law, and yes we can"
| nine_k wrote:
| > _you can 't retroactively change rules ... yes we can_
|
| Hence, fewer US companies will have significant
| production in the EU in general, and possibly Ireland in
| particular. Let's hope it will help native European
| industries flourish %)
| hnbad wrote:
| They didn't retroactively change the rules. They
| retroactively found a contract invalid. I'd file this
| under "play stupid games, win stupid prizes" as it sounds
| like Apple tried to talk Ireland into giving it special
| treatment that wasn't actually legally possible under EU
| law and the EU found out and told them they can't
| actually do that after Ireland agreed.
|
| If I get a tax agency worker to sign me a piece of paper
| that says I don't ever have to pay any taxes, I can
| insist that they said so all I want but I'll still owe
| the back taxes when someone finds out because that person
| had no authority to say I don't.
|
| Also capital flight doesn't actually work like that no
| matter how often people parrot it. Ireland is the
| European HQ for US tech companies because they need a
| European HQ to access the extremely lucrative market and
| Ireland is willing to go to great lengths (clearly
| including "agreeing to conditions they can't legally
| agree to) to attract them to go there in particular. If
| Ireland becomes less attractive that means they will be
| more likely to go elsewhere but their European HQ will
| still be in the EU/EEA because that's what it's for. This
| wasn't a case of Ireland competing _for_ Europe where
| Ireland losing is a loss to all of the EU, it was Ireland
| competing _against_ other EU countries.
| mandibles wrote:
| Seems like Ireland should have to pay the EU
| PaulDavisThe1st wrote:
| The EU isn't going to get the taxes (certainly not the
| vast majority of them). They just ruled that it isn't OK
| for Apple to have been given this tax break via specific
| accounting rules. It's Ireland that gets the windfall,
| whether it wants it or not.
| ensignavenger wrote:
| I kind of agree, but I'm not an EU citizen and don't have
| any say in EU laws, so whatever :) If I were Apple, I
| would be a little miffed at this situation, though. It
| certainly makes me question whether or not I want to ever
| expand into the EU. But tax laws are too damn complicated
| in most other countries too. so maybe just budget for
| government incompetence?
| tpm wrote:
| No, it's Ireland's money to collect and keep. The taxes
| don't go to the EU budget.
| hopsworks wrote:
| Other countries in the EU, however, can sue ireland for
| taxes they missed out on. Which is probably what will
| happen. The money will be divided up over many countries.
| NoboruWataya wrote:
| There is a general prohibition on EU member states granting
| state aid to companies, but there are exceptions to this
| where the aid is justified in order to promote economically
| underdeveloped regions. There are a lot of rules and court
| cases about when state aid will fall on one side or the other
| of that line. See eg https://competition-
| policy.ec.europa.eu/state-aid/legislatio...
| n_plus_1_acc wrote:
| You Seen knowledeble on this topic. What do you think of
| the numerous Deutsche Bank and Lufthansa aids?
| realityking wrote:
| I don't think Deutsche Bank has ever received direct
| state aid, they're quite proud of that fact. Though they
| have benefitted indirectly when institutions that owed
| Deutsche Bank money received state aid.
|
| Lufthansa did receive state aid during the pandemic. This
| is currently under investigation as the EU's approval was
| annulled by an EU court: https://ec.europa.eu/commission/
| presscorner/detail/en/ip_24_...
| hnbad wrote:
| To be clear: Germany also heavily subsidized a lot of
| other large companies, especially in the automotive
| industry during the pandemic but the politicians involved
| were mostly smart enough to hide this behind grants with
| tailor-made requirements that only incidentally happened
| to perfectly match those companies and few else.
| realityking wrote:
| At least VW and BMW have certainly received state aid in
| the past, mostly around opening new factories, but I
| can't find anything where they got specific aid during
| Covid. Of course they were able to use support that's
| open to all companies, e.g. Kurzarbeit, but that's not
| considered state aid in the EU context.
| systemtest wrote:
| The Dutch government is spending billions to keep ASML in
| The Netherlands. To circumvent these prohibitions, the
| money doesn't go directly to ASML but is invested in better
| infrastructure, housing and education in the local area.
| More trains and busses to bring people to the company,
| better energy grid to power all the ASML offices, more
| money towards STEM studies of the local universities so
| they are creating the new ASML workforce, building extra
| homes so the company can hire more people.
|
| Plus tax cuts for the employees of ASML, which is fully
| legal under EU legislation and prohibitions.
| pchristensen wrote:
| This seems like a pretty fair way to do it - the
| government invests in being a place worth staying in,
| rather than just subsidizing or lining the profits of the
| target business. If ASML left, it might blow up the
| economic model of tax + investment, but the constructed
| infrastructure and social assets would remain.
| actionfromafar wrote:
| It is kind of funny in way. :-)
|
| "Oh no, education and better infrastructure such as mass
| transit and a power grid, the horror!"
| systemtest wrote:
| Not complaining! It's wonderful that we are finally
| getting investments in a better environment. And ASML
| provides a big boost to the economy as well.
|
| But a bus line that goes from the train station directly
| to one company, together with housing that will be filled
| with the expats from ASML is obviously an (indirect)
| company subsidy.
| carlosjobim wrote:
| > There is a general prohibition on EU member states
| granting state aid to companies
|
| The EU hands out billions in direct aid to companies every
| year. Many times together with the country governments. So
| there's no such prohibition in practice. In the EU regions
| I am familiar with, at least 70% of companies live on
| getting subsidies from the EU mainly and income from actual
| customers as a secondary concern. And I'm not talking about
| agriculture, but every industry.
|
| Few businesses will even start any economic activity before
| they've received at least a hundred thousand in subsidies
| and investment grants. Not loans, which is a different
| matter.
|
| Just one example: https://commission.europa.eu/business-
| economy-euro/economic-...
| kranke155 wrote:
| The EU does that, yes. He's saying countries can't do
| that to their own industries, however, which I am led to
| believe is correct.
| qwytw wrote:
| I think it applies only to aids for specific companies?
| e.g. if all companies that satisfies some requirements
| (e.g. N number of employees/new jobs , specific
| geographic area, industry etc.) cam receive the aid it's
| legal.
| pyrale wrote:
| > Eg Ireland might give a tax incentive if a large Fortune
| 500 company hires X people in Ireland.
|
| If Ireland is willing to give the same tax incentive to _any_
| company hiring X people in Ireland, it 's fine.
|
| If Ireland only grants the rebate to Fortune 500 companies in
| a bid to lure specific US investment, it's the state creating
| a competitive distortion i.e. state aid.
| chrisdhoover wrote:
| Ireland was a poor country. They recognized low taxes would
| attract business. It worked. They then became a "tiger"
| vasco wrote:
| I think you make it seem like EU doesn't care at all about what
| member states do in regards to taxation but there's many
| limitations to what can be done by any member state in order to
| harmonize and prevent corruption etc. This in practice makes
| the EU have a lot of say in regards to taxation. Moreover the
| EU has special rules to limit moving funds to jurisdictions
| that have taxes that are deemed too low (read tax havens) -
| this directly implies no member state has agency to lower their
| own taxes as much.
|
| Here's some example limitations: https://eur-
| lex.europa.eu/EN/legal-content/summary/tackling-...
|
| I focused on direct taxation, but in indirect taxation I think
| there's even more examples.
| hinkley wrote:
| Maybe they should do it like Roth IRAs. You can move the
| money to a tax haven only after you've paid taxes on it.
|
| So if you're building hotels or factories in the haven that's
| fine. If you're hiding money we demand our pound of flesh.
| The_Colonel wrote:
| It's more difficult to determine where the value in
| software is being created. Still, big tech has a lot of R&D
| offices in Ireland.
| hinkley wrote:
| That is definitely a difficult paper trail. If you make
| valves in Ireland they at least have to be shipped. Code
| just moves on the network. As do commands.
|
| But wouldn't Ireland see their taxes as "working" if
| Irish coders are being hired to do the work?
| yunohn wrote:
| There's absolutely no employment requirement outside of
| any PR deals that IE may impose on Apple to satisfy their
| citizens. The tax evasion scheme they used does not
| necessitate any real humans in any jurisdictions - it's
| almost literally just documentation.
| epolanski wrote:
| That's not what really Apple did in Europe to pay little
| taxes.
|
| The scheme was essentially like this:
|
| - Apple Ireland bought iphones for 200$ or so (talking
| about pre X numbers, now they're likely slightly higher)
|
| - Apple Ireland sold iPhones to Apple Italy for 599EURs
|
| - Apple Italy sold iPhones for 599EURs + vat (thus
| avoiding to pay any corporate taxes in Italy while making
| billions)
|
| - Apple Ireland had a special agreement with Irish tax so
| they paid like sub 1% corporate taxes on the 400EURs of
| profit
|
| This way not only Apple wasn't paying any tax in the
| countries they were doing business with, but also paying
| extremely low taxes in Ireland.
|
| On top of that, which isn't illegal per se, it happened
| allegedly on top of preferential treatments (but I'm not
| much informed on the details here).
| hinkley wrote:
| That sounds like something Hollywood does when they want
| to cut out profit sharing with the cast.
|
| One of their affiliate companies makes an absolute
| killing on services rendered and the studio itself takes
| a bath on the movie.
| GeekyBear wrote:
| > avoiding to pay any corporate taxes in Italy
|
| This us a fairly common strategy not limited to tech.
|
| For instance, Starbucks in the UK:
|
| > Starbucks Coffee Company (UK) made a PS149m "gross
| profit" in the year to October 2023, up from PS129m the
| year before. But after "administrative expenses" of
| PS127m, its pre-tax profits were reduced to PS16.9m, on
| which it paid PS7.2m tax...
|
| In 2012, it was revealed that Starbucks had paid just
| PS8.6m in taxes on PS3bn in UK sales since 1998,
|
| https://www.theguardian.com/business/2024/apr/05/starbuck
| s-p...
| jrnx wrote:
| you're ignoring the 20% VAT on those 3bn sales, which
| provided 600m tax revenue. Why is it so important that
| they paid 7m in corporate tax instead of any other
| amount? Their business apparently has high cost of sales
| (like stores, personnel etc.), where by the way also
| taxes occur, e.g. for wages...
|
| So I suggest to think twice if you want to paint the
| picture that Starbucks does not contribute it's fair
| share to taxes in the UK.
| mvanbaak wrote:
| And where was this against the law?
| jay_kyburz wrote:
| A good argument for GST. With a 10% GST the Italians
| would have at least seen 10% of the 599.
| mcny wrote:
| I apologize if this is a stupid question but aren't GST
| and VAT (basically) the same thing? It is just an
| "advanced" sales tax, no? It still does not fix the
| problem of income tax...
|
| The big problem from what I remember from earlier is some
| companies like grocery stores operate on razor thin
| margins -- like they buy tomatoes for USD 0.90 per
| kilogram and sell for USD 1.00 or whatever so if we
| charge income tax on the whole USD 1.00, the rate would
| have to be RIDICULOUSLY low or the grocery store simply
| won't survive.
|
| Problem I want to see fixed with some kind of sales tax
| upgrade (VAT/GST/whatever) is if a company / conglomerate
| "sells" goods and services to itself, it should have to
| pay this tax on the pre-discount rate. For example, if
| Google web search has an advertisement for Google Chrome,
| Google should have to pay this tax on the market value of
| the ad placed, not on the actual money amount that
| changed hands (which is likely zero dollars). Same thing
| with Apple Music on iPhone. There are MAJOR ads placed
| when you first set up an iPhone and later continuing ads
| that show up saying "hey, how about now? do you want to
| pay for Apple Music EXTREME THUNDER edition now?" These
| are ads that have a lot of value and Apple should have to
| pay (upgraded) sales tax for displaying these ads.
| barrkel wrote:
| Value added tax is a tax on the difference between the
| purchase price of the inputs and the sale price of the
| outputs; that is, it's a tax on the value that company
| specifically adds.
|
| The way it works in practice is VAT is added to the the
| sale price, but the VAT actually sent by the business to
| the government is reduced by any VAT that was paid for
| inputs. This way, you don't end up with increasing
| amounts of tax just because a supply chain has lots of
| middlemen.
|
| This setup creates an incentive to report VAT at each
| level of the supply chain, reducing fraud. Because the
| tax doesn't compound with multiple steps, it's fairer.
| qwytw wrote:
| Aren't they already getting 22% of it?
| nodamage wrote:
| > Apple Italy sold iPhones for 599EURs + vat (thus
| avoiding to pay any corporate taxes in Italy while making
| billions)
|
| Isn't that the whole point of the European Economic Area?
| That you can freely sell your goods to other countries
| within the EEA without having to pay corporate taxes to
| each individual country?
| AaronFriel wrote:
| Sure, but I think it's the sort of "self-dealing" that's
| the problem.
|
| Suppose it were possible for a wholesaler in Ireland to
| purchase a product in bulk at around 1/3 of MSRP. Market
| equilibrium would drive the price of that product down,
| right? If any other company could do that, price
| competition would prevail and eventually the delta
| between the import cost (in Ireland) and the export price
| (to an Italian phone shop) would shrink. Likewise, the
| retailers that wholesaler sells to would want to have
| some margin as well. This would put pressure on the
| wholesaler - likely competing with other wholesalers - to
| have a small margin as their "value added" is
| insubstantial.
|
| But, crucially, this is not a case of three independent
| entities: a manufacturer, a wholesaler, and a retail
| business. This is one entity, with three subsidiaries and
| setting prices between them to minimize tax burden, and
| setting prices in ways that are simply nonsensical, like
| selling products from one subsidiary to another at or
| below cost, and then to another at full retail price. If
| they were three separate companies, the manufacturer and
| the retailer would go under. In this scheme, the
| wholesaler is somehow adding all of the value to the
| product, despite doing nothing more than acting as a
| shipping hub.
| detourdog wrote:
| The other weird part is that I beleive the situation had
| been resolved before any investigation.
| gunapologist99 wrote:
| .. thus removing a significant portion of income from these
| so-called tax havens, which generally tend to be poorer
| countries. No one has accused Germany of being a tax haven,
| for instance.
| aktenlage wrote:
| This list disagrees with "poorer countries":
| https://worldpopulationreview.com/country-rankings/tax-
| haven... 1 British Virgin Islands
| 2 Cayman Islands 3 Bermuda 4 Netherlands
| 5 Switzerland 6 Luxembourg 7 Hong Kong
| 8 Jersey 9 Singapore 10 United Arab Emirates
| qwytw wrote:
| > so-called tax havens, which generally tend to be poorer
| countries
|
| Smaller, not poorer.
|
| Unless you think that current or historical "tax havens"
| like Ireland, Luxembourg, Netherlands, Switzerland etc.
| were/are poorer than Germany.
|
| If you have less than a handful of million people even
| getting a few percent + several thousands of jobs from
| corporations like Apple is a huge deal. It would be a
| drop in the bucket for Germany so they have no incentives
| to make such deals.
| nine_k wrote:
| Specifically in Ireland, corporate taxes were being lowered
| from late 1980s until 2003, in a series of agreements with
| the EU regulators. It's not like Ireland lowered the taxes in
| a sneaky scheme, or grandfathered-in an abnormally low rate.
| ajross wrote:
| At the same time it's clear that Ireland has been "gaming
| the system" here, and the proof is the huge delta between
| the effective tax rates between member nations we're seeing
| in the judgement. I don't know that there's much of a moral
| or principled argument to be made here, every system gets
| gamed, and the European Commission is another such system.
| And Ireland absolutely agreed to be bound in that game as a
| price of joining the EU in the first place.
|
| Basically, from the other side of the ocean I don't see
| much to care about here beyond the microtactics of business
| development decisions. Let Europe sort out its business on
| its own.
| ribosometronome wrote:
| Punishing Ireland for gaming the system by paying Ireland
| 13 billion hardly makes it seem like the EU is super
| concerned about Ireland's transgressions.
| pmontra wrote:
| Apple having to pay those 13 B means that companies won't
| be as eager to have a headquarter in Ireland as they have
| been in the past. They could move somewhere else in the
| EU. That's a damage for Ireland and that's why Ireland
| sided with Apple for all this litigation.
| HWR_14 wrote:
| Brilliant of Ireland. They get the Apple (and Google and
| Microsoft, etc.) business with low tax rates, thus bringing a
| lot of money into Ireland. Worst case scenario, a decade later
| some 3rd party they cannot be blamed for gets them billions
| more.
|
| I agree with your recollection. AFAIK the rules were changed
| years ago.
| jwildeboer wrote:
| It's a final ruling. Not a current (over-)ruling as you paint
| it. This is a decision from the European Court of Justice. No
| appeal possible. The 13BEUR are already in an escrow account
| and will now be released.
| jkaplowitz wrote:
| The Google judgment was also released by the CJEU today, but it
| was a separate judgment. I've found it by going to the CJEU
| website https://curia.europa.eu/jcms/jcms/j_6/en/ (or
| https://curia.europa.eu/ and then click on "en" for English),
| where official CJEU press releases about both the Apple and
| Google judgments were linked on the left under "News".
|
| Here's the CJEU press release about the Google judgment:
| https://curia.europa.eu/jcms/upload/docs/application/pdf/202...
|
| Inside that PDF press release, there is a link to to the case
| docket, including the final judgment and an abstract of the
| judgment:
| https://curia.europa.eu/juris/documents.jsf?num=C-48/22%20P
|
| And here's the full judgment linked in the above docket:
| https://curia.europa.eu/juris/document/document.jsf?text=&do...
|
| The full judgment is available in English and French; the
| abstract is available in French but not English.
|
| I should also note that there were actually four CJEU judgments
| released today, not two. But the other two were unrelated to
| tech.
| TrackerFF wrote:
| It's a drop in the bucket and cost of doing business.
| postepowanieadm wrote:
| That will hit Irish economy really hard. Good.
| calmoo wrote:
| How's that exactly?
| verzali wrote:
| Maybe now the Irish government could do something about the
| housing crisis. Ah who I am kidding, they'll blow it all on fancy
| hats or some such.
| elAhmo wrote:
| Even if this sounds like a huge fine, this is effectively
| meaningless, even if they end up paying it. 13 billion, for a
| company with market cap of more than 3 trillion is around 0.4% of
| their cap.
|
| Until these fines become meaningful, companies will just continue
| breaking the law and asking for forgiveness later, as the changes
| to their market cap can offset this fine in hours.
| randmeerkat wrote:
| > Until these fines become meaningful, companies will just
| continue breaking the law and asking for forgiveness later, as
| the changes to their market cap can offset this fine in hours.
|
| Up until recent years the EU didn't even know if it could take
| action against U.S. based tech giants. Now that the EU has
| established wins in fines, usb-c, user replaceable batteries,
| and alternate app stores, I expect EU regulators to take even
| bolder action.
| sgu999 wrote:
| > Up until recent years the EU didn't even know if it could
| take action against U.S. based tech giants.
|
| What do you mean by that? Due to geopolitics? Or at a
| technical level of the current law?
| randmeerkat wrote:
| > What do you mean by that? Due to geopolitics? Or at a
| technical level of the current law?
|
| Geopolitics, but the technical level of law certainly plays
| a part. Europe had no idea what the effect of leveling
| lawsuits against a fortune one company would yield. However
| the EU has proven rather adept at identifying technological
| practices harming consumers and a strong capacity for
| rectifying them. Now that the EU is beginning to find its
| stride, I expect it to become more assertive in how
| international commerce is conducted.
| pembrook wrote:
| Market cap is the theoretical value of all the company's future
| growth/cash flows brought forward to today. It's speculative,
| and fluctuates with the stock price.
|
| Tax bills have to be paid in cash, not stock. A better analogy
| is to simply look at Apple's net profits, since that's where
| the money will come from.
|
| $13B is not nothing, even for Apple.
| darby_nine wrote:
| Note we also accept stock too if companies want to fork that
| over instead
| oblio wrote:
| It is nothing. Apple's profits over the period mentioned were
| probably hundreds of billions.
| Already__Taken wrote:
| top ai result just said apple has 47 billion cash so 27%
| sounds like quite a fine.
| Supernaut wrote:
| Read it again. The court has not imposed a fine. The EUR13
| billion represents taxation on many years of corporate profits,
| that the EU's competition authority asserted Apple should have
| paid to the Irish exchequer, but did not due to a favourable
| taxation agreement dating back to 1991.
| darby_nine wrote:
| Why would you compare to market cap? The company is going to
| sink or swim regardless of what the market pegs it at.
| tbrownaw wrote:
| It provides an excuse to believe the this is an example of
| the government not taking bad behavior by corporations
| seriously.
| igravious wrote:
| Apple didn't break the law, Ireland did.
| dtech wrote:
| they both did, as they made a deal that was illegal under EU
| law. I assume it's similar to a US state and corporation
| therein both falling under federal law.
| igravious wrote:
| 13bn is not meaningless for Ireland - that'd fund several major
| infrastructure projects - stuff the Irish people missed out
| because of these illegal tax shenanigans.
| e4325f wrote:
| Apple would have gone elsewhere if the scheme didn't exist,
| so it's not accurate to say Ireland has missed out on 13bn.
| igravious wrote:
| "The most recent projections for the final cost of Metrolink
| set a maximum outlay of EUR12.25billion, excluding VAT, though
| the rail link is not expected to go live before the middle of
| the next decade at the earliest."[1]
|
| 13bn would cover the cost of Dublin's first metro system,
| unlike most European capitals Dublin does not have a metro.
| This is what this ruling means for the Irish public. shame on
| the government putting corporate interests ahead of public
| finances.
|
| [1] https://www.irishexaminer.com/news/arid-41386906.html
| piltdownman wrote:
| Irish Corporation tax receipts for 2023 alone were valued at
| EUR23.8 billion. The ruling was for the benefit of the Irish
| public to indicate our willingness as a good faith and
| hospitable host for American MNCs now and in the future.
|
| Given the propensity for the EU to throw us under the bus
| when the Teutonic books don't balance, its a lot more
| important for us to maintain our special cultural, economical
| and political relationship with the USA.
|
| In any case, that money would never end up ringfenced for a
| Metro that has been in planning hell since the 80s. We're
| well able to afford white elephants (e.g. the new Children's
| Hospital).
| e4325f wrote:
| This take makes no sense. The whole reason the 13bn exists is
| because of the tax arrangement. Apple would have gone
| elsewhere if not for that.
| hyperpape wrote:
| Note that in the case of Apple, the fine is proportional to the
| benefit Apple gained from Ireland. So if the fine is
| meaningless, then so was the original value of the ill-gotten
| gains.
|
| (This is in addition to the other commentators, who have
| correctly pointed out that if you just divide market cap by the
| fine, you're producing a number that isn't useful for anything
| but misleading people).
| astaunton wrote:
| Just to clarify, the money has already been deposited to a
| holding account awaiting this ruling. So Apple will not be
| paying over any money, they will not be getting the money
| refunded to them.
| interludead wrote:
| Big tech companies can absorb these penalties without a major
| dent in their finances, and as you pointed out, sometimes the
| market value can rebound quickly, negating the effect of the
| fine.
| timomaxgalvin wrote:
| It's not a fine is it? They are just paying what they should
| have.
| ghusto wrote:
| > Apple, however, said in a statement: "The European Commission
| is trying to retroactively change the rules and ignore that, as
| required by international tax law, our income was already subject
| to taxes in the US."
|
| My understanding is that the U.S.A. double-taxes both
| corporations operating abroad, as well as it's own expats. If
| this is true, then it's quite the remark to say _the country
| you're actually in_ is the one double-taxing you.
|
| The fact that your "income was already subject to taxes in the
| US" isn't the fault of the hosting country.
| hayd wrote:
| Expats aren't double taxed but you need to file tax returns to
| offset taxable income that's already been taxed. There are
| specific agreements to avoid double taxation but it's
| unclear/unlikely the IRS are just going to hand back money
| Apple already paid (it likely falls outside of what's required
| in those international agreements).
|
| Companies, and people, make decisions based on the tax laws of
| the day eg deciding to work in the UK, Ireland or the US.
| States shouldn't be able to simply retroactively change the tax
| rules and take money already earned and already taxed.
|
| If they can do it to Apple, why not to regular citizens?
| timcederman wrote:
| Expats are absolutely double taxed, just less so (and to be
| clear - majority cases not at all) when a DTA is in effect.
| ghusto wrote:
| > Expats aren't double taxed but you need to file tax returns
| to offset taxable income that's already been taxed. There are
| specific agreements to avoid double taxation
|
| Glad to hear it, because what Americans told me (that they
| get taxed for the same money they paid tax on in their host
| country) is bonkers.
|
| EDIT: Seems there's some disagreement ;) The other commentor
| echoes what I've heard from Americans living in Europe.
| Absolute madness. I also heard it's very costly to try and
| give up your American citizenship, exactly to protect that
| juicy free tax America gets from it's expats.
|
| > If they can do it to Apple, why not to regular citizens?
|
| They already do. Knowledge worker migrants were promised
| eight years of tax breaks by the Dutch government, who later
| changed their minds after those people already moved to the
| Netherlands.
|
| This isn't even that though, this is the EU saying the
| agreement made by Ireland with Apple wasn't legal. It's like
| how they get people who avoid tax by finding loopholes to pay
| back-taxes once the tax office catches them (yes, this
| happens too).
| itake wrote:
| its complex..
|
| The USA has FEIE, (no federal taxes the first $120k/yr),
| but not all states (like Cali) honor that and may still
| charge you state income tax.
|
| and FEIE doesn't exempt you from self-employment taxes.
|
| and doesn't exempt non-earned income (dividends, etc.).
|
| Americans can come out ahead (if they earn less than
| $120k/yr and live in a 0% tax country). But a non-American
| (like Canadian) doing the samething, would have less
| restrictions.
| EduardoBautista wrote:
| > but not all states (like Cali) honor that and may still
| charge you state income tax
|
| Whoa, so before moving to a low tax country you should
| move to a state that is not insane for a while and then
| move abroad? Crazy.
| jandrewrogers wrote:
| Yes, this is a real thing. There are a few States like
| South Dakota that have kind of made a business of helping
| expats launder their State citizenship.
| ApolloFortyNine wrote:
| Yes, but from reading it sounds like California is a bit
| of a poison pill and will go at length to try and say you
| still live there. I've read of cases where even living in
| another state for 6+ months, drivers license moved over,
| no property in California, wasn't enough.
|
| Not sure how they get away with it really, small volume I
| guess.
| returningfory2 wrote:
| This isn't the full story though, because there is also
| the foreign tax credit. If your US taxes are lower than
| your foreign taxes (which they will be if eg you live in
| Europe) you won't pay US tax:
| https://www.irs.gov/individuals/international-
| taxpayers/fore...
| jandrewrogers wrote:
| There are myriad cases where this is not true, the
| details of how these tax credits are structured can lead
| to significantly adverse outcomes. It is quite possible
| to pay more taxes in aggregate than either country
| separately.
| PaulDavisThe1st wrote:
| It is certainly possible, but also implies a complex mix
| of different income types and very specific national
| pairing.
|
| The usual case where there is a tax treaty is that the
| expat pays taxes at the rate of the country in which they
| work. It's really that simple for most people.
| ysofunny wrote:
| > If they can do it to Apple, why not to regular citizens?
|
| because Apple is literally made from tens of hundreds of
| "regular citizens"
|
| or to keep it simple: Apple is a citizen made out of
| thousands of 'regular' citizens.
| jandrewrogers wrote:
| > Expats aren't double taxed but you need to file tax returns
| to offset taxable income that's already been taxed.
|
| This is not correct, it is only practically true in trivial
| cases. Excess taxation is a very real pain point for
| Americans living overseas, never mind the other indefensible
| things the US government does to its expats like FATCA.
|
| Many types of income cannot be offset nor or they covered by
| tax treaties. Every time there is an impedance mismatch
| between US tax code and foreign tax code, including basic
| things like classification of income, deductions, and
| exemptions, you can end up with liabilities in both
| countries. It is not uncommon to pay more taxes in aggregate
| as an expat than you would pay in either country separately.
|
| The way the US government, and some State governments, treat
| American expats is quite fucked.
| itake wrote:
| what is even crazier, is its not just Americans impacted by
| this. If you have a green card, but not working in the USA,
| you're impacted by this mess too.
| panzagl wrote:
| If you don't like then... uh... come back?
| TillE wrote:
| You're free to renounce American citizenship to escape
| future tax obligations.
|
| Anyway it's not an issue for non-rich expats, you just
| have to file a tax return which shows you owe $0.
| okwhateverdude wrote:
| > You're free to renounce American citizenship to escape
| future tax obligations.
|
| The hilarious thing about this statement is that it costs
| a few thousand dollars to renounce (as in a fee, paid to
| the embassy) and they reserve the right to come get you
| up to ten years later in tax cases.
| codethief wrote:
| And IIRC there is some law saying that if you renounce
| citizenship to avoid taxation, you might never be able to
| enter the US again.
|
| EDIT: https://en.m.wikipedia.org/wiki/Reed_Amendment_(imm
| igration) (Thanks, ChatGPT!)
| 1over137 wrote:
| You also have to be fully up-to-date with the IRS before
| you can renounce citizenship!
| jacobgkau wrote:
| You can spout off "my way or the highway" as long as you
| think US citizenship is valuable enough that people are
| going to put up with it. People not expatriating is
| obviously the desired outcome of those rules, and the
| alternative is people renouncing their US citizenship
| (which is becoming more reasonable as the US passport
| gets weaker, among other factors).
|
| You're missing part of the point, though. Almost no other
| country in the world has rules like this. The US
| government provides among the lowest level of services
| for its citizens out of any first-world government, so
| there's no reason it needs to be that much more strict.
| You should be asking why it's necessary if only from a
| competitive standpoint-- why are other countries able to
| treat their expats so much more respectfully?
| ClassyJacket wrote:
| God I hate this argument. This is such an unhelpful,
| useless thing to say. It doesn't provide any useful or
| practical suggestions, it's just a way of shutting down
| conversation.
| nox101 wrote:
| Can you give more specifics?
| gamblor956 wrote:
| _Many types of income cannot be offset nor or they covered
| by tax treaties._
|
| That's news to me and I've been doing international tax for
| 15 years. Please, tell me what types of income earned by a
| U.S. expat isn't covered by a tax treaty?
|
| _It is not uncommon to pay more taxes in aggregate as an
| expat than you would pay in either country separately._
|
| This is objectively false. For an expat, income taxes paid
| to a resident country are a dollar-for-dollar credit
| against your U.S. income taxes, and that's on top of the
| inclusion threshold that doesn't subject the first $X of
| foreign income to any U.S. taxation at all.
| koyote wrote:
| > Please, tell me what types of income earned by a U.S.
| expat isn't covered by a tax treaty?
|
| I am not a tax person, but selling a house can cause you
| to owe tax in the US even if you did not owe any tax in
| the country you are living in (and sold the house in).
|
| Famously one of the reasons Boris Johnson tried to give
| up his US citizenship (https://www.bbc.com/news/uk-
| politics-30932891).
| sparrc wrote:
| You are correct, but this only applies because:
|
| > Unlike the UK, the US levies capital gains tax on
| proceeds from the sale of a main residence.
|
| I understand why it can feel unfair but by definition
| this is not "double taxing". The gains on the house were
| not taxed by the UK which is why he had to pay US taxes.
| gleenn wrote:
| My understanding, despite the fact I'm definitely not an
| accountant, was that making over $100K abroad meant you
| would be double taxed on all of it over that amount. I
| believe I heard many wealthy Americans abandoning their
| citizenship just due to this fact.
| onlyrealcuzzo wrote:
| > If they can do it to Apple, why not to regular citizens?
|
| The regular citizen doesn't debate-ably owe billion in taxes.
|
| Sure, maybe if you're a centi-billionaire the Winds of Winter
| might change.
| chrismcb wrote:
| I don't understand why this is Apple's fine and not Ireland's?
| oblio wrote:
| It's not a fine. The EU is saying: "You know those taxes you
| didn't pay and Ireland looked the other way because it
| benefitted them? Ireland couldn't look the other way because
| they signed an agreement with 25+ other countries to not do
| that, so be a good sport and pay all those taxes we told you
| to".
| jacobgkau wrote:
| "I'm not making you pay me. My boss is making you pay me. So
| don't be mad at me, be mad at my boss while I get your
| money."
| skc wrote:
| Pocket change
| BiteCode_dev wrote:
| Well, you gotta balance all that tax evasion with something.
| dmitrygr wrote:
| This means that every company now needs a lawyer who understands
| the Treaty of Lisbon! Just in case some EU country tells them to
| do X, they now need to know if said country can actually say so!
| How is this a good thing?
| hirako2000 wrote:
| Nothing new there, companies better have lawyers to enter new
| markets the size of countries.
| faramarz wrote:
| Nice of them to announce it the day after a major launch. Barely
| any price action
| mvanbaak wrote:
| As a eu citizen, what is the impact of this to me? Will this
| money be used for us? Nope. Some club of politicians will have a
| nice bonus, FAANG will be more aggressive against the EU. Look,
| if rules are broken ppl will have to be held responsible. But
| thats not entirey clear in this case.
|
| Thanks again EU
| baxuz wrote:
| Isn't Ireland now effectively getting the penalty funds that
| their taxation malpractices caused in the first place?
| K3V1N_FLYNN wrote:
| Eventually Apple will pull out of Europe and I'll be sitting back
| laughing my ass off.
| nodamage wrote:
| An important point that seems to have been missed by most of the
| comments: the reason Apple lost this case is not because of the
| profit shifting scheme itself, but rather than they did not set
| up the scheme correctly:
|
| > _ASI 's 2014 structure was an adaptation of a Double Irish
| scheme, an Irish IP-based BEPS tool used by many US
| multinationals. Apple did not follow the traditional Double Irish
| structure of using two separate Irish companies. Instead, Apple
| used two separate "branches" inside one single company, namely
| ASI.[34] It is this "branch structure" the EU Commission alleged
| was illegal State aid, as it was not offered to other
| multinationals in Ireland, which had used the traditional "two
| separate companies" version of the Double Irish BEPS tool. Under
| the Double Irish structure, one Irish subsidiary (IRL1) is an
| Irish registered company selling products to non-US locations
| from Ireland. The other Irish subsidiary (IRL2) is "registered"
| in Ireland, but "managed and controlled" from a tax haven such as
| Bermuda. The Irish tax code considers IRL2 a Bermuda company
| (used the "managed and controlled" test), but the US tax code
| considers IRL2 an Irish company (uses the registration test).
| Neither taxes it. Apple's subsidiary, ASI, behaved like it was
| IRL2, it was "managed and controlled" via ASI Board meetings in
| Bermuda, so Irish Revenue did not tax it. But ASI also did all
| the functions of IRL1, making circa EUR110.8 billion[6] of
| profits from non-US sales. The EU Commission contest IRL1's
| actions made ASI Irish, and the functions of IRL1 over-rode the
| Bermuda Board meetings in deciding the "managed and controlled"
| test. The commission had not brought any cases against US
| multinationals using the standard double two separate companies
| Irish BEPS tool._
| (https://en.wikipedia.org/wiki/Apple%27s_EU_tax_dispute)
|
| In other words if they had actually set up two separate Irish
| companies instead of just using two separate branches of a single
| Irish company, their tax scheme would have been fully legal and
| not considered state aid. (Since many other companies availed
| themselves of such a scheme.)
| yunohn wrote:
| What a timeline we live in where the EU is basically telling
| Apple that they weren't smart enough with their tax evasion -
| "see if you did it like other FAANG you could've gotten away
| with it!"
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