Apple and Irish government collared over tax deal
Discussion
It's going to be very interesting to see what the exact wording of the tax ruling is/was. Unless/until we see that it's impossible to conclude.
But what is clear is that for Apple and the Irish government it's a PR/political disaster
Either Apple cough up €13bn and admit they've evaded tax or they successfully win a legal battle that drags on for years and put themselves out there as winners in the great international tax avoidance competition. Which should go down well with the right-oners who lap up their products.
And the Irish government have a choice between capitulating in front of the Commission and thus making it clear that actually they don't control their own country or explaining to the Irish public how they've been bearing the pain of the post-crisis adjustment whilst Apple laughed all the way to the bank. I'm not sure your average Irish voter's going to be too concerned about some of the more arcane points of the Irish tax code with respect to Head Offices and profit allocations.
I'm no fan of the EU but that's an epic piece of trolling and, even if they lose eventually, they've at least got tax departments all over the continent reviewing any rulings they've agreed.
But what is clear is that for Apple and the Irish government it's a PR/political disaster
Either Apple cough up €13bn and admit they've evaded tax or they successfully win a legal battle that drags on for years and put themselves out there as winners in the great international tax avoidance competition. Which should go down well with the right-oners who lap up their products.
And the Irish government have a choice between capitulating in front of the Commission and thus making it clear that actually they don't control their own country or explaining to the Irish public how they've been bearing the pain of the post-crisis adjustment whilst Apple laughed all the way to the bank. I'm not sure your average Irish voter's going to be too concerned about some of the more arcane points of the Irish tax code with respect to Head Offices and profit allocations.
I'm no fan of the EU but that's an epic piece of trolling and, even if they lose eventually, they've at least got tax departments all over the continent reviewing any rulings they've agreed.
Edited by basherX on Wednesday 31st August 12:16
bobbylondonuk said:
yep...same effect. all profits will stay in UK. If I was a multi national, i would choose the UK over any other jurisdiction for 15%. there are smaller tax havens out there, but nothing the size of the UK consumer market plus low rates of taxation.
If only we could lower employer NI as well and it would appear like the red carpet without even talking about it!
The rate for CT on trading income in Ireland is only 12.5% for normal companies, much less for Apple, and as a member of the EU companies based in Ireland have free and unfettered access to the single market, who knows what the terms of access would be if Apple relocated to a post-Brexit UK.If only we could lower employer NI as well and it would appear like the red carpet without even talking about it!
johnfm said:
Corporation tax. Paid by shareholders, employees and customers really.
Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
I agree. The only taxes should be on consumption and personal income/self employed profit/dividends/capital gain.Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
Consumption taxes alone wont be enough to keep the welfare of the population of a country like the UK & the infrastructure going. A generous tax free personal allowance and a flat rate across all income should do the trick.
Simple and effective.
RYH64E said:
bobbylondonuk said:
yep...same effect. all profits will stay in UK. If I was a multi national, i would choose the UK over any other jurisdiction for 15%. there are smaller tax havens out there, but nothing the size of the UK consumer market plus low rates of taxation.
If only we could lower employer NI as well and it would appear like the red carpet without even talking about it!
The rate for CT on trading income in Ireland is only 12.5% for normal companies, much less for Apple, and as a member of the EU companies based in Ireland have free and unfettered access to the single market, who knows what the terms of access would be if Apple relocated to a post-Brexit UK.If only we could lower employer NI as well and it would appear like the red carpet without even talking about it!
bobbylondonuk said:
not exactly working out well for them now sitting in a low rate EU country is it?
Worst case, they'd still be paying less CT than in the UK, and their market access is secure. Intra-EU trade is very easy, there are no customs, no VAT and little if any paperwork for the customer and supplier.Dr Jekyll said:
Or just scrap corporation tax full stop. The money will end up being paid to shareholders who pay income tax.
Recent UK rule changes are pushing towards that eg less corp tax as %age then greater personal tax. Govt etc need to be careful what they wish for here though imho.TX.
jjlynn27 said:
johnfm said:
Corporation tax. Paid by shareholders, employees and customers really.
Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
Sounds like a vote winner. Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
"If you elect us we will stop taxing the evil corporaty corporationists and tax you (hard working families) instead"
At least you'd get the vote of all the corporations. Oh ...
ATG said:
jjlynn27 said:
johnfm said:
Corporation tax. Paid by shareholders, employees and customers really.
Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
Sounds like a vote winner. Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
"If you elect us we will stop taxing the evil corporaty corporationists and tax you (hard working families) instead"
At least you'd get the vote of all the corporations. Oh ...
johnfm said:
ATG said:
jjlynn27 said:
johnfm said:
Corporation tax. Paid by shareholders, employees and customers really.
Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
Sounds like a vote winner. Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
"If you elect us we will stop taxing the evil corporaty corporationists and tax you (hard working families) instead"
At least you'd get the vote of all the corporations. Oh ...
It needn't be a case of taxing other people more; as always, the option to waste less and borrow less and spend less is available.
As a starter, ministers are struggling to spend the overseas aid budget, the diagnosis is obvious.
johnfm said:
ATG said:
jjlynn27 said:
johnfm said:
Corporation tax. Paid by shareholders, employees and customers really.
Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
Sounds like a vote winner. Do away with it, simplify the tax code and make up the shortfall with consumption taxes.
"If you elect us we will stop taxing the evil corporaty corporationists and tax you (hard working families) instead"
At least you'd get the vote of all the corporations. Oh ...
As with many aspects of an international organisation such as the EU: taxation raises complex questions. Countries can set there own rates, except for VAT where there are restriction, however to maintain a level playing field all countries must accept some limitation in their actions.
The Commission press release is below and worth reading before commenting.
http://europa.eu/rapid/press-release_IP-16-2923_en.htm
It would seem the Irish allowed Apple to operate a transfer pricing model which was different to those generally agreed by other countries.
The Commission press release is below and worth reading before commenting.
http://europa.eu/rapid/press-release_IP-16-2923_en.htm
It would seem the Irish allowed Apple to operate a transfer pricing model which was different to those generally agreed by other countries.
turbobloke said:
Maintaining a level playing field is artificial. In addition it's administered by incompetent politicians and their bimbling agents, can be ignored variably with variable results etc.
Competition delivers better results.
I am a great supporter of competition but some should be avoided because it causes confusion. Some examples are accounting standards set by the IASB, bank regulatory capital set by the BIS. Tax does not have equivalent bodies but there are still general understandings which avoid the Apple position.Competition delivers better results.
I am not sure if you read the press release I highlighted above. If you did you will see the Irish Tax authorities allowed income to be allocated to an Apple Irish, non resident company, which did not have any costs. This means Apple was selling product to it European subsidiaries, I assume on a cost plus basis, but the company did not have any costs. I can see tax authorities in a number of European jurisdiction looking very closely at the Apple tax returns. I would suggest there is a prima facia case Apple where evading tax (not avoiding) in the UK.
Mrr T said:
turbobloke said:
Maintaining a level playing field is artificial. In addition it's administered by incompetent politicians and their bimbling agents, can be ignored variably with variable results etc.
Competition delivers better results.
I am a great supporter of competition but some should be avoided because it causes confusion. Some examples are accounting standards set by the IASB, bank regulatory capital set by the BIS. Tax does not have equivalent bodies but there are still general understandings which avoid the Apple position.Competition delivers better results.
Level playing fields outside the incompetence and bimbling of the political domain which I referred to earlier is known as price fixing. An association of manufacturers or service providers is known as a cartel and as such is rightly pursued - not in a good way - for restricting competition. An association of political 'leaders' fixing a level playing field ought to be treated the same way otherwise prices and taxes will be higher than they would be. Unless you're the only person on the planet
who thinks that EU tax harmonisation means "how low can we go".turbobloke said:
Mrr T said:
turbobloke said:
Maintaining a level playing field is artificial. In addition it's administered by incompetent politicians and their bimbling agents, can be ignored variably with variable results etc.
Competition delivers better results.
I am a great supporter of competition but some should be avoided because it causes confusion. Some examples are accounting standards set by the IASB, bank regulatory capital set by the BIS. Tax does not have equivalent bodies but there are still general understandings which avoid the Apple position.Competition delivers better results.
Level playing fields outside the incompetence and bimbling of the political domain which I referred to earlier is known as price fixing. An association of manufacturers or service providers is known as a cartel and as such is rightly pursued for restricting competition. An association of political 'leaders' fixing a level playing field ought to be treated the same way otherwise prices and taxes will be higher than they would be. Unless you're the only person on the planet
who thinks that EU tax harmonisation means "how low can we go".Edited by turbobloke on Wednesday 31st August 15:25
This is not about harmonising tax rates across the EU. If you finally do read the link the Commission clearly states Ireland is entitled to set its own corporation tax rates. It is not entitled to agree its own unique version of transfer pricing which is applicable only to a small number of international companies
A Government assisting tax evasion is not acceptable.
Mrr T said:
Rather than reading my posts you seem determined to find an anti EU slant to this story.
It would be exceedingly difficult to find a pro-EU slant, and this thread has the EU all over it.I read your posts, rest easy on that score, but any replies are along the lines I prefer; like your replies which I suspect meet your preferences - that's how it works.
turbobloke said:
Mrr T said:
Rather than reading my posts you seem determined to find an anti EU slant to this story.
It would be exceedingly difficult to find a pro-EU slant.I read your posts, rest easy on that score, but any replies are along the lines I prefer; like your replies I suspect - that's how it works.
A state assisting tax evasion by a resident corporation is not the best form of international cooperation.
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