Apple and Irish government collared over tax deal
Discussion
turbobloke said:
Another good reason for leaving the mother of all Munchausen by Proxy supranationals. Causing problems for those you are supposed to be looking after is endemic in the EU's zealotocracy.
A nation state should be able to do what it wishes to promote the relocation of businesses it wants to encourage, and to help such companies already present to stay put. This is after all a key part of what running your own country's economy is about. The EU is welcome to as many subsidy farmers as it wants, Ireland and the UK will be quite happy to take the real businesses. Or at least the UK will, as we've had the sense to vote Out.
I think the Irish will win this one. They've won every other such attempt by Brussels so far.A nation state should be able to do what it wishes to promote the relocation of businesses it wants to encourage, and to help such companies already present to stay put. This is after all a key part of what running your own country's economy is about. The EU is welcome to as many subsidy farmers as it wants, Ireland and the UK will be quite happy to take the real businesses. Or at least the UK will, as we've had the sense to vote Out.
Alpinestars said:
Eric Mc said:
You are still assuming that this is a tax case. It's not. It's an "unfair competition" case. In fact, the EU Commission has more or less ordered the Irish Revenue Commissioners to collect back tax of around £11 billion - but has not indicated how or whether it would be lawful for the Irish tax collectors to try to obtain this. The ironic thing is that, even if the Revenue Commissioners were able to collect this money, they would not be able to keep it nor would the Irish government be allowed to spend it.
Apple themselves have said that if any of this tax ever is collected, most of it would go to the US Internal Revenue Service (IRS), so the EU would see very little of it.
Apple may well say most of the tax would go to the IRS, but that's not true at this stage. As it stands Ireland needs to collect the tax. I understand the money has been put in ESCROW.
It's entirely possible that territories where Apple Ireland undertook sales have a claim out of this cash, and would need to make the relevant assessments which would reduce Apple Ireland's income and therefore profits.
The Commission has also stated that Apple Ireland's taxable profits could be reduced if it were to pay more "royalty" to Apple US (where it would be taxed at higher rates). It wouldn't make sense for Apple to do this.
Why don't you think Ireland can spend any tax it collects?
Because that is what has been said by political correspondents in the Irish media - principally RTE television and radio which I've been listening to over the past week or so.You are still assuming that this is a tax case. It's not. It's an "unfair competition" case. In fact, the EU Commission has more or less ordered the Irish Revenue Commissioners to collect back tax of around £11 billion - but has not indicated how or whether it would be lawful for the Irish tax collectors to try to obtain this. The ironic thing is that, even if the Revenue Commissioners were able to collect this money, they would not be able to keep it nor would the Irish government be allowed to spend it.
Apple themselves have said that if any of this tax ever is collected, most of it would go to the US Internal Revenue Service (IRS), so the EU would see very little of it.
Apple may well say most of the tax would go to the IRS, but that's not true at this stage. As it stands Ireland needs to collect the tax. I understand the money has been put in ESCROW.
It's entirely possible that territories where Apple Ireland undertook sales have a claim out of this cash, and would need to make the relevant assessments which would reduce Apple Ireland's income and therefore profits.
The Commission has also stated that Apple Ireland's taxable profits could be reduced if it were to pay more "royalty" to Apple US (where it would be taxed at higher rates). It wouldn't make sense for Apple to do this.
Why don't you think Ireland can spend any tax it collects?
Eric Mc said:
Because that is what has been said by political correspondents in the Irish media - principally RTE television and radio which I've been listening to over the past week or so.
In general, if nullius in verba applies somewhere more than anywhere elsewhere it's got to be MSM.turbobloke said:
Eric Mc said:
Because that is what has been said by political correspondents in the Irish media - principally RTE television and radio which I've been listening to over the past week or so.
In general, if nullius in verba applies somewhere more than anywhere elsewhere it's got to be MSM.Eric Mc said:
turbobloke said:
Eric Mc said:
Because that is what has been said by political correspondents in the Irish media - principally RTE television and radio which I've been listening to over the past week or so.
In general, if nullius in verba applies somewhere more than anywhere elsewhere it's got to be MSM.I translated it as "nothing in words" - which probably goes a long way to explaining a lot of what people say on PH.
However, it's a bit difficult to get through life if you disbelieve everything.
And I'd certainly put more credence on experienced Irish political commentators and economic correspondents than some "expert" on a motoring forum.
However, it's a bit difficult to get through life if you disbelieve everything.
And I'd certainly put more credence on experienced Irish political commentators and economic correspondents than some "expert" on a motoring forum.
Eric Mc said:
Because that is what has been said by political correspondents in the Irish media - principally RTE television and radio which I've been listening to over the past week or so.
Which gets into the area of what the recourse is if Ireland doesn't collect the tax.If the US taxes the income, tax would be due at 35% plus. If Ireland taxes, it's at 12.5%, but with a deferred tax of 22.5% plus. Assuming the deferred tax liability is a) going to arise, and b) soon ish, it would make sense for Apple to tax in the income in the US, which benefits the US enconomy as opposed to the Irish economy. An interesting dynamic.
Eric Mc said:
The EU doesn't really care - as long as Apple are "punished". After Apple, who's next?
I wonder why Renault, Air France and Alitalia have not been penalised for the help they have received over the years from their respective governments.
The EU has "punished" Fiat, and with the Belgian ruling, lots of other Euro companies. I wonder why Renault, Air France and Alitalia have not been penalised for the help they have received over the years from their respective governments.
Alpinestars said:
Eric Mc said:
The EU doesn't really care - as long as Apple are "punished". After Apple, who's next?
I wonder why Renault, Air France and Alitalia have not been penalised for the help they have received over the years from their respective governments.
The EU has "punished" Fiat, and with the Belgian ruling, lots of other Euro companies. I wonder why Renault, Air France and Alitalia have not been penalised for the help they have received over the years from their respective governments.
paulrockliffe said:
Murph7355 said:
Mrr T said:
...
So what ever happens this may leave Apple between a rock and a hard place. Either pay tax in Ireland at lower rates or find lots of countries looking to change local taxes on the total sales revenue based on say the percentage of costs locally and in the Irish headquarters company.
You'd have thought other countries would already have moved against this sort of practice if they could/it made sense for them. No?So what ever happens this may leave Apple between a rock and a hard place. Either pay tax in Ireland at lower rates or find lots of countries looking to change local taxes on the total sales revenue based on say the percentage of costs locally and in the Irish headquarters company.
Yes it's open to abuse, but it's a lot more complicated than simple tax it where the sale is made.
Mrr T said:
paulrockliffe said:
Murph7355 said:
Mrr T said:
...
So what ever happens this may leave Apple between a rock and a hard place. Either pay tax in Ireland at lower rates or find lots of countries looking to change local taxes on the total sales revenue based on say the percentage of costs locally and in the Irish headquarters company.
You'd have thought other countries would already have moved against this sort of practice if they could/it made sense for them. No?So what ever happens this may leave Apple between a rock and a hard place. Either pay tax in Ireland at lower rates or find lots of countries looking to change local taxes on the total sales revenue based on say the percentage of costs locally and in the Irish headquarters company.
Yes it's open to abuse, but it's a lot more complicated than simple tax it where the sale is made.
paulrockliffe said:
I don't know if that's the case as I'm not aware of the detail in this case, but for the situation you describe the issue is the transfer of the IP at no cost out of the US. It's taxes in the US that are avoided in that situation. It still doesn't create a situation where the local entity is creating value.
Also...if that arrangement is available to all companies fitting the profile then whether it makes no sense to others is surely academic. The Irish government have decided it's how they want to run things, and what they will allow in terms of the treatment of structures like that. It's not "State Aid" toward one company and is therefore none of the EU's business.Eric Mc said:
Alpinestars said:
Assessments in the same way Apple has.
Did they appeal?Did they win?
The Lux/Fiat decision may be out next year.
I understand the Commission has won the vast majority of State Aid cases brought so far, but I'm not aware of any significant tax state aid cases being decided yet.
I think outright State Aid cases - i.e. where government money is physically given to a company - will be much more straightforward and "winnable" by the EU Commission.
It gets a lot trickier for them when they make claims that certain individual businesses are being given preferential tax treatment or are being charged less for government provided services.
It gets a lot trickier for them when they make claims that certain individual businesses are being given preferential tax treatment or are being charged less for government provided services.
Eric Mc said:
I think outright State Aid cases - i.e. where government money is physically given to a company - will be much more straightforward and "winnable" by the EU Commission.
It gets a lot trickier for them when they make claims that certain individual businesses are being given preferential tax treatment or are being charged less for government provided services.
I'd be surprised if most of the state aid criteria are not met;It gets a lot trickier for them when they make claims that certain individual businesses are being given preferential tax treatment or are being charged less for government provided services.
- there's a ruling
- it uses state resources (tax is well established as being a state resource)
- it looks anti competitive.
The points I don't think we have enough detail on are whether it was selective (probably), and if it is state aid, the amounts to be paid.
The decision is a bit confusing in that it is predicated an arm's length/substance type argument, but accepts that some of the profits could/should have been taxed elsewhere, which would mean on an arm's length basis, less tax should have been assessed by the commission.
paulrockliffe said:
I don't know if that's the case as I'm not aware of the detail in this case, but for the situation you describe the issue is the transfer of the IP at no cost out of the US. It's taxes in the US that are avoided in that situation. It still doesn't create a situation where the local entity is creating value.
The facts of the case are easily found on the commission web site.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff