Apple and Irish government collared over tax deal
Discussion
Hosenbugler said:
Leithen said:
A personal take posted on the Adam Smith Institute by Cillian Fleming.
Five Things To Know About The EU's Apple Tax Ruling
A very interesting read , and from my perceptions, bang on the nail. Just confirmation that it's a grubby money grab by the EU dictators. Five Things To Know About The EU's Apple Tax Ruling
But Ireland will be receive the money, so how will the EU itself be benefiting? I do see Ireland leaving the EU before chasing Apple for the money however.
EarlOfHazard said:
Hosenbugler said:
Leithen said:
A personal take posted on the Adam Smith Institute by Cillian Fleming.
Five Things To Know About The EU's Apple Tax Ruling
A very interesting read , and from my perceptions, bang on the nail. Just confirmation that it's a grubby money grab by the EU dictators. Five Things To Know About The EU's Apple Tax Ruling
But Ireland will be receive the money, so how will the EU itself be benefiting? I do see Ireland leaving the EU before chasing Apple for the money however.
To Quote: "3. The European Commission is being deeply political
The Commission stated on 31 August that Ireland is free to spend the €13bn of uncollected taxes how Ireland wishes. This, while being in direct contravention to European fiscal principles (which state that windfalls should be allocated to national debt reduction), was also political act designed to undermine the Irish government's reaction domestically.
The Irish government is currently a minority government composed of Fine Gael (a centrist Christian Democratic party) and mostly left-of-centre populist Independent MPs. The Commission’s statement could foment further unease domestically by providing pressure to the populist Independents not to support a cabinet decision to appeal the finding, which has potential to collapse the government. It is naturally very much within the Commission’s interests not to be challenged on this, and it appears that the Commission’s statement was designed to weaken the government’s political freedom to challenge it."
I'd quote more, but its all there in the link . The EU thinks it benefits by showing to everyone (nation states) that they can overturn the taxation rules of those nation states. Once again, a graphic illustration of how out of touch they are. They have certainly misjudged the mood of the Irish government.
If the EU can enforce this situation, they will then use it as justification to run around finding other cases where it can make excuses to make money grabs in the longer term. Wherever, and from whoever they see fit.
Edited by Hosenbugler on Friday 2nd September 18:58
MG CHRIS said:
If this doesn't get sorted or if Ireland do have to pay this money while apple leaves the country resulting in nearly 6000 jobs gone will Ireland want to have its own referendum to leave the eu. Im sure if apple do up sticks and leaves the country there are going to be a s
t load of angry people blaming the eu on this.
I addressed this on Wednesday. I'll repost it here.t load of angry people blaming the eu on this.don4l said:
A little bit of recent Irish history will helt to understand why the Irish government will fight this tooth and nail, and the Irish people will support them 100%.
In 1976, Ireland was very poor. There were bugger all jobs. The biggest industry was farming, but the average farm size was 4 acres. There was an NHS, but it was fairly limited.
In 1971 DEC, who were one of the biggest computer manufacturers, opened a factory in Galway. Galway was the main urban centre in Ireland's poorest province.
By the mid 80's, Galway had become a bustling cosmopolitan centre with some of the best restaurants in the country. What was realy impressive was that there was a 10 mile stretch of road with 5 and 6 bedroom houses on four acre plots north west of the city.
I think that this is the road in question:-
https://www.google.co.uk/maps/@53.3223997,-9.16237...
Bear in mind, that a decade earlier most of the homes on this road had only two rooms (NOT two beedrooms). The toilet was in a freezing shed.
The Irish know how important it is to attract international investment. They have seen what it has done. They know how their parents lived. They feel this in their bones.
My feeling is that Ireland would sooner leave the EU than force Apple to pay this fine.
In the grand scale of things, corporation tax isn't that important. Income tax, the Irish version of National Insurance and VAT are all much bigger. The Irish have seen this with their own eyes in a way that Other Europeans cannot.In 1976, Ireland was very poor. There were bugger all jobs. The biggest industry was farming, but the average farm size was 4 acres. There was an NHS, but it was fairly limited.
In 1971 DEC, who were one of the biggest computer manufacturers, opened a factory in Galway. Galway was the main urban centre in Ireland's poorest province.
By the mid 80's, Galway had become a bustling cosmopolitan centre with some of the best restaurants in the country. What was realy impressive was that there was a 10 mile stretch of road with 5 and 6 bedroom houses on four acre plots north west of the city.
I think that this is the road in question:-
https://www.google.co.uk/maps/@53.3223997,-9.16237...
Bear in mind, that a decade earlier most of the homes on this road had only two rooms (NOT two beedrooms). The toilet was in a freezing shed.
The Irish know how important it is to attract international investment. They have seen what it has done. They know how their parents lived. They feel this in their bones.
My feeling is that Ireland would sooner leave the EU than force Apple to pay this fine.
In a single generation they have gone from two roomed houses with soil floors to six bedroomed mansions.
There isn't a hope in Hell that the Irish will allow Apple to pay this tax.
Some people are daft enough to suggest that Apple would relocate if Ireland left the EU. This is utter nonsense. If Ireland leaves, then it is possible that Apple might get some import duties imposed by the EU under WTO rules. However, I believe that iPods and tablets carry the same tariffs that my products carry, which is 0%.
So, why would Apple relocate? They would simply end up making less money, or selling fewer products.
don4l said:
In the grand scale of things, corporation tax isn't that important. Income tax, the Irish version of National Insurance and VAT are all much bigger. The Irish have seen this with their own eyes in a way that Other Europeans cannot.
In a single generation they have gone from two roomed houses with soil floors to six bedroomed mansions.
There isn't a hope in Hell that the Irish will allow Apple to pay this tax.
Some people are daft enough to suggest that Apple would relocate if Ireland left the EU. This is utter nonsense. If Ireland leaves, then it is possible that Apple might get some import duties imposed by the EU under WTO rules. However, I believe that iPods and tablets carry the same tariffs that my products carry, which is 0%.
So, why would Apple relocate? They would simply end up making less money, or selling fewer products.
If Ireland did leave the EU, would Apple need to set up an office within the EU to deal with the profits/ corporation tax within the EU? Surely Ireland would then loose the additional EU profits/ revenue currently collected within the EU? And any benefit to Apple or Ireland is then lost..... I suspect the story may die on the vine and eventually in 18 months or so, there will be some legal/ fair agreement announced.In a single generation they have gone from two roomed houses with soil floors to six bedroomed mansions.
There isn't a hope in Hell that the Irish will allow Apple to pay this tax.
Some people are daft enough to suggest that Apple would relocate if Ireland left the EU. This is utter nonsense. If Ireland leaves, then it is possible that Apple might get some import duties imposed by the EU under WTO rules. However, I believe that iPods and tablets carry the same tariffs that my products carry, which is 0%.
So, why would Apple relocate? They would simply end up making less money, or selling fewer products.
The more we head towards Brexit (which as a remainer I am quite relishing now), the more I think we will leave the EU with free trade and freedom of movement still intact and absolutely no say in the autocratic process.... (or alternatively the whole EU collapses based on next years elections).... sorry I have digressed again.
mike9009 said:
don4l said:
In the grand scale of things, corporation tax isn't that important. Income tax, the Irish version of National Insurance and VAT are all much bigger. The Irish have seen this with their own eyes in a way that Other Europeans cannot.
In a single generation they have gone from two roomed houses with soil floors to six bedroomed mansions.
There isn't a hope in Hell that the Irish will allow Apple to pay this tax.
Some people are daft enough to suggest that Apple would relocate if Ireland left the EU. This is utter nonsense. If Ireland leaves, then it is possible that Apple might get some import duties imposed by the EU under WTO rules. However, I believe that iPods and tablets carry the same tariffs that my products carry, which is 0%.
So, why would Apple relocate? They would simply end up making less money, or selling fewer products.
If Ireland did leave the EU, would Apple need to set up an office within the EU to deal with the profits/ corporation tax within the EU? In a single generation they have gone from two roomed houses with soil floors to six bedroomed mansions.
There isn't a hope in Hell that the Irish will allow Apple to pay this tax.
Some people are daft enough to suggest that Apple would relocate if Ireland left the EU. This is utter nonsense. If Ireland leaves, then it is possible that Apple might get some import duties imposed by the EU under WTO rules. However, I believe that iPods and tablets carry the same tariffs that my products carry, which is 0%.
So, why would Apple relocate? They would simply end up making less money, or selling fewer products.
I buy stuff off some American companies. They are in America. They don't have offices here.
There are NO tariffs applied to these products.
mike9009 said:
Surely Ireland would then loose the additional EU profits/ revenue currently collected within the EU?
You will have to explain that to me. They are selling the same product at the same price. They will make the same money in the same place.I understand that if you haven't done something then it can seem very complicated. I will now try to explain the difference between exporting to the UK, EU and the rest of the world. If this doesn't make sense then I will freely admit that I didn't explain it correctly.
Here goes.
Customer in the UK orders something. I pack the goods into a cardboard box, with protection, and a despatch note, and Interlink collect it. I post an invoice to the customer, and a month later they pay it. Sometimes they take two months.
Customer in the EU orders something. I pack the goods into a cardboard box, with protection, and a despatch note, and Interlink collect it. I post an invoice to the customer, and a month later they pay it. However, this time I need to make a note of their VAT number.
Customer outside the EU orders something. I pack the goods into a cardboard box, with protection, and a despatch note and 5 copies of a commercial invoice, and Interlink collect it. I post an invoice to the customer, and a month later they pay it. Sometimes they take two months.
In NO case are any tariffs applied.
The more we head towards Brexit (which as a remainer I am quite relishing now), the more I think we will leave the EU with free trade and freedom of movement still intact and absolutely no say in the autocratic process.... (or alternatively the whole EU collapses based on next years elections).... sorry I have digressed again.
City dwellers don't understand that there are people who really value large empty spaces.
Interesting take on this from a former EU competition commissioner.
International corporate tax principles dictate that companies pay taxes where value is created. In the modern world, companies create value through design, marketing and intellectual creativity. It is where those activities take place that the profits really originate.
It is therefore no surprise that US companies with research and development and intellectual property developed in the US will pay most of their taxes there, and not where the products are made or sold. Of course, the same principles apply to innovative design-focused European companies that sell their products abroad...........But you cannot change the rules of the game through ad hoc state aid enforcement, and then seek retroactive recovery for unpaid taxes. Doing so would be fundamentally unfair and would harm competition, growth and tax income in Europe. And it raises serious questions about legal certainty and the rule of law.
Neelie Kroes said:
International corporate tax principles dictate that companies pay taxes where value is created. In the modern world, companies create value through design, marketing and intellectual creativity. It is where those activities take place that the profits really originate.
It is therefore no surprise that US companies with research and development and intellectual property developed in the US will pay most of their taxes there, and not where the products are made or sold. Of course, the same principles apply to innovative design-focused European companies that sell their products abroad...........But you cannot change the rules of the game through ad hoc state aid enforcement, and then seek retroactive recovery for unpaid taxes. Doing so would be fundamentally unfair and would harm competition, growth and tax income in Europe. And it raises serious questions about legal certainty and the rule of law.
Thanks, definitely interesting stuff from Neelie Kroes; however, it's telling that the narrative has terms such as 'international corporate tax principles' which simply reinforces the lack of internationally applicable tax laws. This means both sides of the tax game can try to change the rules as rules also aren't laws, but it also allows for competition between nation states to host the major providers of jobs and various non-corporate taxes. The EU is pushing for an EU-wide political tax cartel under the guise of 'harmonisation' and they may get one, it's entirely within the pattern of ideological self-harm which contributed significantly to the Brexit vote.
don4l said:
We won't leave with freedom of movement intact.
City dwellers don't understand that there are people who really value large empty spaces.
The Isle of Wight really is a densely populated metropolis! City dwellers don't understand that there are people who really value large empty spaces.
...and if the ex-head of OFSTED is to be believed we could do with some new genes from elsewhere entering the pool I think your explanations talk about VAT/ tariffs and not corporation tax?
Why won't we leave with freedom of movement intact? We voted to leave the EU....
Dr Jekyll said:
Interesting take on this from a former EU competition commissioner.
International corporate tax principles dictate that companies pay taxes where value is created. In the modern world, companies create value through design, marketing and intellectual creativity. It is where those activities take place that the profits really originate.
It is therefore no surprise that US companies with research and development and intellectual property developed in the US will pay most of their taxes there, and not where the products are made or sold. Of course, the same principles apply to innovative design-focused European companies that sell their products abroad...........But you cannot change the rules of the game through ad hoc state aid enforcement, and then seek retroactive recovery for unpaid taxes. Doing so would be fundamentally unfair and would harm competition, growth and tax income in Europe. And it raises serious questions about legal certainty and the rule of law.
This is exactly what transfer pricing and BEPS aims to do. The problem with that statement is that a lot of the US corporates with IP don't pay tax in the US on those profits in some cases. In other cases, it's deferred. So how does he propose that companies who manage to move IP to tax havens, where the IP is not developed are taxed?Neelie Kroes said:
International corporate tax principles dictate that companies pay taxes where value is created. In the modern world, companies create value through design, marketing and intellectual creativity. It is where those activities take place that the profits really originate.
It is therefore no surprise that US companies with research and development and intellectual property developed in the US will pay most of their taxes there, and not where the products are made or sold. Of course, the same principles apply to innovative design-focused European companies that sell their products abroad...........But you cannot change the rules of the game through ad hoc state aid enforcement, and then seek retroactive recovery for unpaid taxes. Doing so would be fundamentally unfair and would harm competition, growth and tax income in Europe. And it raises serious questions about legal certainty and the rule of law.
Under BEPS, the use of IP companies with no substance won't work. And without planning would mean more tax is paid in the US.
The ruling agrees with this. If tax had been paid in the US, it seems there would not have been an issue. What is egregious to the EU commission appears to be that no tax was paid on the "head office" profits, and it had no substance.
[quote=don4l
Customer outside the EU orders something. I pack the goods into a cardboard box, with protection, and a despatch note and 5 copies of a commercial invoice, and Interlink collect it. I post an invoice to the customer, and a month later they pay it. Sometimes they take two months.
In NO case are any tariffs applied.
[/quote]
I take it you do not export cars, peanuts or tobacco to the US, for example?
Customer outside the EU orders something. I pack the goods into a cardboard box, with protection, and a despatch note and 5 copies of a commercial invoice, and Interlink collect it. I post an invoice to the customer, and a month later they pay it. Sometimes they take two months.
In NO case are any tariffs applied.
[/quote]
I take it you do not export cars, peanuts or tobacco to the US, for example?
speedyman said:
Slight digression, but if your an Apple shareholder why would you want Apple sitting on 200 billion of off shore funds thats not being returned to shareholders ?????
If they used that 2bn, Apple would need to pay tax of over 700m, thereby diluting the amount available to distribute. It might be more efficient if they borrow to pay dividends, and in that way introduce debt into the US as well, interest on which offsets US profits.
speedyman said:
Slight digression, but if your an Apple shareholder why would you want Apple sitting on 200 billion of off shore funds thats not being returned to shareholders ?????
If they repatriate it they loose half of it. In the past the US has had repatriation holidays allowing corporates to bring their cash home at much reduced rates. In the mean time they just borrow onshore to pay divs and buybacks, offset the interest against us taxes and invest the offshore cash tax free. Ultimately if the US becomes more business unfriendly they can use the money to do a reverse takeover (tax inversion) and move their residency from the USmike9009 said:
don4l said:
Customer outside the EU orders something. I pack the goods into a cardboard box, with protection, and a despatch note and 5 copies of a commercial invoice, and Interlink collect it. I post an invoice to the customer, and a month later they pay it. Sometimes they take two months.
In NO case are any tariffs applied.
I take it you do not export cars, peanuts or tobacco to the US, for example?In NO case are any tariffs applied.
I trade in datacomms products. Most of them are fibre optic related. They seem to be tariff free around the world.
Alpinestars said:
This is exactly what transfer pricing and BEPS aims to do. The problem with that statement is that a lot of the US corporates with IP don't pay tax in the US on those profits in some cases. In other cases, it's deferred. So how does he propose that companies who manage to move IP to tax havens, where the IP is not developed are taxed?
Under BEPS, the use of IP companies with no substance won't work. And without planning would mean more tax is paid in the US.
The ruling agrees with this. If tax had been paid in the US, it seems there would not have been an issue. What is egregious to the EU commission appears to be that no tax was paid on the "head office" profits, and it had no substance.
1) Cash US companies hold in tax havens is liable for tax, and it's payable when the cash is moved to the US.Under BEPS, the use of IP companies with no substance won't work. And without planning would mean more tax is paid in the US.
The ruling agrees with this. If tax had been paid in the US, it seems there would not have been an issue. What is egregious to the EU commission appears to be that no tax was paid on the "head office" profits, and it had no substance.
2) What difference does it make to the EU when (or even if) the US gets it's money?
Dr Jekyll said:
1) Cash US companies hold in tax havens is liable for tax, and it's payable when the cash is moved to the US.
2) What difference does it make to the EU when (or even if) the US gets it's money?
We will have to wait for the details of the findings for why it mattered to the EU. In spirit, they don't like the fact that Ireland has allowed Apple to pay very little tax worldwide. 2) What difference does it make to the EU when (or even if) the US gets it's money?
The Commission has stated that if territories where sales were made now decide to tax some of those profits, or the US authorities were to require Apple Ireland to pay more costs (hence reducing profits), it would reduce tax due in Ireland.
This is bloody confusing, as far as I can work out Ireland has taxed apple it's standard 12.5% rate for sales WITHIN Ireland, and nothing is underhand or bent. No special agreement in place
The 13 billion bill, im assuming is a legal loophole within the Irish tax laws because they haven't taxed the operations outside of Ireland?
The 13 billion bill, im assuming is a legal loophole within the Irish tax laws because they haven't taxed the operations outside of Ireland?
Edited by dazwalsh on Saturday 3rd September 10:40
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff