Apple gets away from paying back taxes in Ireland

[Sir Asvald]

 

Apple has been told it will not have to pay Ireland €13bn (£11.6bn) in back taxes after winning an appeal at the European Union's second highest court.

It overturns a 2016 ruling which found the tech giant had been given illegal tax breaks by Dublin.

The EU's General Court said it had annulled that decision because the Commission had not proved Apple had broken competition rules.

It is a blow to the European Commission which brought the case.

However, it has 14 days to appeal the decision at Europe's top court, the European court of Justice.

 

Spoiler

What was Apple accused of?

The European Commission brought the action after claiming Ireland had allowed Apple to attribute nearly all its EU earnings to an Irish head office that existed only on paper, thereby avoiding paying tax on EU revenues.

The commission said this constituted illegal aid given to Apple by the Irish state.

 

But the Irish government argued that Apple should not have to repay the back taxes, deeming that its loss was worth it to make the country an attractive home for large companies.

Ireland - which has one of the lowest corporate tax rates in the EU - is Apple's base for Europe, the Middle East and Africa.

In Wednesday's ruling, the Luxembourg-based General Court sided with that position, saying there was not enough evidence to show Apple had received illegal state aid or minimised its tax bill.

 

 

Quotes

Quote

What did Apple say?

"This case was not about how much tax we pay, but where we are required to pay it," Apple said in a statement. "We're proud to be the largest taxpayer in the world as we know the important role tax payments play in society."

The Irish government - which had also appealed against the ruling - said it had "always been clear" Apple received no special treatment.

"The correct amount of Irish tax was charged... in line with normal Irish taxation rules."

EU Competition Commissioner Margrethe Vestager, who brought the case, said she would "study the judgment and reflect on possible next steps".

She added that the Commission stands "fully behind the objective that all companies should pay their fair share of tax".

 

 

 

 

Spoiler

What does this mean for Ireland?

One rather curious feature of this case is that if the ruling had gone the other way, and Ireland had been on the losing side, its "punishment" for breaching EU law would have been to receive a large amount of money; taxes the Commission said were owed by Apple.

That did not happen so the ruling - subject to any appeal - means Apple doesn't in law owe the money so Ireland won't get it.

In some quarters of Ireland there will be relief that an agreement that helped encourage Apple to invest has not been overturned after the event.

But the sentiment is far from universal. A Sinn Féin spokesman called it a bad day for the Irish taxpayer that would draw negative attention to the country's international tax reputation.

 

By Andrew Walker Economics Correspondent

 

 

My thoughts

Of course this happens big companies getting away with not paying taxes it is a shame that if a smaller company does this they will get a bigger punishment...

 

Sources

http://bbc.co.uk/news/world-us-canada-53412407

[Korben]

Well, any company, big or small can use these tax evasion tactics. But of course only bigger companies are represented in multiple locations/countries and can actually take advantage. It's not an issue of company size but of european tax laws. The European Union is not "Union" enough to close these tax holes. Small countries try to attract big companies  to get jobs and (some) money by making special tax deals. I think in the US it's often done the same way with cities/states?

[Zodiark1593]

25 minutes ago, Sir Asvald said:

 

 

My thoughts

Of course this happens big companies getting away with not paying taxes it is a shame that if a smaller company does this they will get a bigger punishment...

 

Sources

http://bbc.co.uk/news/world-us-canada-53412407

They’ve probably got some crack shot tax accountants pouring through every nook and cranny of whatever tax codes apply. Kind of part of the job as a tax accountant is to make sure the client/employer pays as little in taxes as legally possible, and much like we have people that are good at finding bugs in code, tax accountants are quite good at finding exploits within the applicable tax code. 

[ILiterallyHaveNoFriends]

3 minutes ago, Zodiark1593 said:

They’ve probably got some crack shot tax accountants pouring through every nook and cranny of whatever tax codes apply. Kind of part of the job as a tax accountant is to make sure the client/employer pays as little in taxes as legally possible, and much like we have people that are good at finding bugs in code, tax accountants are quite good at finding exploits within the applicable tax code. 

This may sound stupid, but I remember watching a Polymatter video discussing this and take it with a grain of salt but I remember how in the video, he states that Apple doesn't pay taxes in Ireland because it helps creates jobs

[RejZoR]

1 hour ago, Korben said:

Well, any company, big or small can use these tax evasion tactics. But of course only bigger companies are represented in multiple locations/countries and can actually take advantage. It's not an issue of company size but of european tax laws. The European Union is not "Union" enough to close these tax holes. Small countries try to attract big companies  to get jobs and (some) money by making special tax deals. I think in the US it's often done the same way with cities/states?

Big companies can because they can make HQ in any country this moment. How many small companies can do that? Hardly any. And because they have bunch of offices all over the world they pour finances around in ways that they are still legal, but are ultimately only there for tax evasion. I see no reason why they should be allowed to evade ANYTHING. If you do it they'll go after you with full force and it's peanuts compared to piles of cash corporations shuffle around.

 

@ILiterallyHaveNoFriends

And other companies that have to pay taxes somehow don't create jobs... This is the lamest excuse I've heard in a while. Great, so you make jobs. You still have to pay taxes just like everyone else. Otherwise you're not really making jobs, you're just "restructuring" jobs.

[Commodus]

Big companies should pay more taxes than they do, but I do agree that officials have to prove violations to make things like this stick. Either show that a company broke the law or change the laws.

[RejZoR]

2 minutes ago, Commodus said:

Big companies should pay more taxes than they do, but I do agree that officials have to prove violations to make things like this stick. Either show that a company broke the law or change the laws.

Not "more", them just paying taxes they were suppose to pay would be something.

[dalekphalm]

So here's my take:

 

Is it terrible that Apple, one of the largest and wealthiest companies in the history of mankind, can get away with stupid tax breaks? Yes. Yes that sucks.

 

But it's not Apple's fault. Apple, like literally every company, big and small, ultimately has one goal: To make money. As much of it as possible. There may be other, lesser goals. There may be particular owners or shareholders that have certain ethical restrictions they place upon themselves for how they can make as much money as possible, but ultimately that's the goal.

 

So who's fault is this? There are 2 places of blame:

 

1. Ireland - they're the ones who gave Apple the stupidly large tax break. They had a not-terrible reason for it: encouraging businesses to move into Ireland. But it does hurt the rest of the EU.

2. The EU itself is also to blame. If they don't want this kind of thing happening, then EU law needs to forbid such practices. The court ruled that what Ireland allowed Apple to do tax wise was legal.

 

So do I blame Apple for this? No. On a personal level, I use every available tax break and credit that I legally can. I still pay a lot of taxes though, and I'm okay with that. But we need to close things people perceive as loopholes, if we want to end these practices.

[Commodus]

Just now, RejZoR said:

Not "more", them just paying taxes they were suppose to pay would be something.

I suppose that's what I meant, really. No using loopholes to pay a fraction of what they technically should.

[dalekphalm]

1 minute ago, RejZoR said:

Not "more", them just paying taxes they were suppose to pay would be something.

In this case, Apple wasn't supposed to pay those taxes, Ireland specifically allowed them not to.

 

If you don't want that happening, get Ireland to change it's laws, or get the EU to force Ireland to change it's laws.

[CTR640]

EU and Ireland are both the biggest bitches on the entire planet. Nuff said.

[RejZoR]

Just now, dalekphalm said:

In this case, Apple wasn't supposed to pay those taxes, Ireland specifically allowed them not to.

 

If you don't want that happening, get Ireland to change it's laws, or get the EU to force Ireland to change it's laws.

Well, taxes in USA as they shuffle shit around so they barely pay anything there. Compared to what they would have to under circumstances where they aren't doing this money shuffling...

[dalekphalm]

17 minutes ago, RejZoR said:

Well, taxes in USA as they shuffle shit around so they barely pay anything there. Compared to what they would have to under circumstances where they aren't doing this money shuffling...

Here's the thing, if the money shuffling is legal, this is not Apple's problem. This is a congressional or state level (depending on which taxes) problem.

 

If the "shuffling" is illegal, then prove it and charge them.

[leadeater]

45 minutes ago, dalekphalm said:

But it's not Apple's fault. Apple, like literally every company, big and small, ultimately has one goal: To make money. As much of it as possible. There may be other, lesser goals. There may be particular owners or shareholders that have certain ethical restrictions they place upon themselves for how they can make as much money as possible, but ultimately that's the goal.

This sort of company mindset is only a recent thing though, you go back to say pre 70's or a bit further and many many businesses had very different philosophies compared to today. Executive pay wasn't as disproportionate, company profits and success was distributed down to the workers, employees that build the products and distribute them were some of the most valued employees to the company.

 

It's not actually businesses and corporations that are unethical or not considerate it's actually the rise of the finance industry that was the cause of the corporate culture shift. Now businesses are filled with people that don't actually do anything or contribute towards what the business actually does e.g. build cars. Now we also have giant financial firms that honestly don't do anything. The only purpose and existence they serve is to move around money and create wealth, sometimes out of nothing and we know where that has lead to a few times.

 

The sooner this illusion that the finance industry contributes positively to the economy the better the world will be. Sure what they do is actually necessary and should exist but nowhere to the level and esteem they are held at today, this is something that should be in service of something else, to allow what actually contributes to the economy to exist and function.

 

The notion that companies exist and purpose is to make money is the narrative of the financial sector and them alone, natural human greed is what allows it to spread and keep hold but you take away that voice and it will subside. No (almost) business owner starts a business for the sole purpose of making money, no (almost) business owner starts a business with the intent to pay their workers the least amount legally possible, no (almost) business owner starts a business with the intent to exploit every tax law possible.

 

Every great company held with high esteem by the public was started to create something or provide a service. Apple was not founded to make money.

[DrMacintosh]

I knew this would happen. What authority does the EU have to make Apple pay taxes to a country who explicitly made them exempt from said taxes? 

[DrMacintosh]

7 minutes ago, dalekphalm said:

Here's the thing, if the money shuffling is legal, this is not Apple's problem.

Don’t hate the player, hate the game. 

[williamcll]

I guess "taxation is theft" only when you are a corporation big enough to influence nations. 

[Zodiark1593]

1 hour ago, dalekphalm said:

In this case, Apple wasn't supposed to pay those taxes, Ireland specifically allowed them not to.

 

If you don't want that happening, get Ireland to change it's laws, or get the EU to force Ireland to change it's laws.

Question: If the EU forbade the practice, and Ireland still allowed substantial tax breaks anyway in violation, would Apple be responsible for the back taxes, or Ireland for violating the law?

[Ciano]

Yeah misged signal in Ireland curretlybut hopefullyi can add some content for some people 

 

"Mony always folloes the flow of least resistance" 

 

Ireland before the early 90(pre the implementation of this low tax approx) has a capital problem . A consequence of independents in the early 20s is that Britain pulled all its resources out of the country, but after that Ireland was still relyed on them for many parts of ther economy, hence decades of fligh of talent to the US Uk and what not. After a this and a sting of mis management from some less than grate Taoiseachs(irish for primister) Ireland went down the approce of attracting forem derect investment 

 

Without this "foren derect investment Ireland would be Albania with shitty weather" (David mc Williams a well regarded Irish econimist) 

This foren derect investment has brought huge money into the Irish economy link to central statistics office with some brake downs of the flow of capital

 https://www.cso.ie/en/releasesandpublications/ep/p-ia/internationalaccountsq22019/foreigndirectinvestment/

 

Considering Ireland is a country of just over 4 million it is a decent amount of money 

 

Now considering the context, Ireland has cosied up to the multinationals and have a veste intrest in keeping them sweet un orderer to protect what fraction of the pie they have 

 

Heres another article kinda explains the law parts is dose 

https://www.irishtimes.com/business/economy/eu-s-second-highest-court-has-found-apple-money-was-never-the-state-s-to-tax-1.4305104?mode=amp#.Xw8lNrcs4TY.twitter

 

 

And by all means im no economist bit if this sort of stuff intrests you David mc Williams has a fantastic podcast on economics! He brings economics to a level thats not as convoluted as kt seems ill like one from a while ago taking about the furst ruling before it was overturned today 

[Ciano]

4 minutes ago, Ciano said:

Yeah misged signal in Ireland curretlybut hopefullyi can add some content for some people 

 

"Mony always folloes the flow of least resistance" 

 

Ireland before the early 90(pre the implementation of this low tax approx) has a capital problem . A consequence of independents in the early 20s is that Britain pulled all its resources out of the country, but after that Ireland was still relyed on them for many parts of ther economy, hence decades of fligh of talent to the US Uk and what not. After a this and a sting of mis management from some less than grate Taoiseachs(irish for primister) Ireland went down the approce of attracting forem derect investment 

 

Without this "foren derect investment Ireland would be Albania with shitty weather" (David mc Williams a well regarded Irish econimist) 

This foren derect investment has brought huge money into the Irish economy link to central statistics office with some brake downs of the flow of capital

 https://www.cso.ie/en/releasesandpublications/ep/p-ia/internationalaccountsq22019/foreigndirectinvestment/

 

Considering Ireland is a country of just over 4 million it is a decent amount of money 

 

Now considering the context, Ireland has cosied up to the multinationals and have a veste intrest in keeping them sweet un orderer to protect what fraction of the pie they have 

 

Heres another article kinda explains the law parts is dose 

https://www.irishtimes.com/business/economy/eu-s-second-highest-court-has-found-apple-money-was-never-the-state-s-to-tax-1.4305104?mode=amp#.Xw8lNrcs4TY.twitter

 

 

And by all means im no economist bit if this sort of stuff intrests you David mc Williams has a fantastic podcast on economics! He brings economics to a level thats not as convoluted as kt seems ill like one from a while ago taking about the furst ruling before it was overturned today 

https://open.spotify.com/episode/5lm7OaZbRw7cgP7UGILiZs?si=UJl0oUdNQhiYuH5RApJgfQ 

 

Apologies thats the podcast 

And sorry for any spelling mistakes im hella dyslexic

[dalekphalm]

Just now, Zodiark1593 said:

Question: If the EU forbade the practice, and Ireland still allowed substantial tax breaks anyway in violation, would Apple be responsible for the back taxes, or Ireland for violating the law?

Both, kind of.

 

Apple would be responsible for the taxes themselves in that case. Ireland would likely face some kind of charge or fine for violating EU Law.

 

Ireland isn't responsible for paying taxes that weren't paid (since they'd be paying themselves, not the EU - the EU doesn't collect corporate taxes as far as I'm aware).

[SpaceGhostC2C]

3 hours ago, Zodiark1593 said:

They’ve probably got some crack shot tax accountants pouring through every nook and cranny of whatever tax codes apply. Kind of part of the job as a tax accountant is to make sure the client/employer pays as little in taxes as legally possible, and much like we have people that are good at finding bugs in code, tax accountants are quite good at finding exploits within the applicable tax code. 

This is not what this case is about, though. There is no exploitation of a hidden loophole; what Apple is paying is a direct result of a tax break agreement with the Irish government. That's why this is not a case against Apple for tax fraud, but a competition case against the deal itself.

 

2 hours ago, dalekphalm said:

2. The EU itself is also to blame. If they don't want this kind of thing happening, then EU law needs to forbid such practices. The court ruled that what Ireland allowed Apple to do tax wise was legal.

Well, the EU already forbids such practices, and the Commission's stance on this case is that it falls within the set of forbidden practices. They won the first instance, now lost the appeal, but they may still win at the top Court. Hence, whether the current rules are sufficient is yet to receive its final answer (on teh Apple/Ireland side they would argue that the rules are fine even if they win, because not blocking such deals is the right thing to do).

 

 

33 minutes ago, Zodiark1593 said:

Question: If the EU forbade the practice, and Ireland still allowed substantial tax breaks anyway in violation, would Apple be responsible for the back taxes, or Ireland for violating the law?

Both. This case is about EU competition law. In order to have a unified, competitive market across the EU, a number of national government practices are forbidden, as they would result in unfair advantages to some firms over other when competing in the EU-wide market, and potentially cause a "race to the bottom" in which all firms get "fiscal doping" and states go bankrupt. Such rules have been enforced a number of times already, including state aid to football clubs (which are, or compete with, for-profit companies).

Because the objective is to ensure fair competition, while it is the state giving this handouts that is liable for them, the effects of its actions must be undone as well. In this case, the unfair competitive advantage would take the form of a tax break, and therefore to undo it Apple would have to paid the unduly forgiven taxes. Notice that this is not a sanction or a fine to Apple, just a requirement that they pay normal taxes in Ireland as opposed to benefiting from special rules. That's also why it isn't Apple, but Ireland that appealed the initial ruling

[soldier_ph]

Quote

"We're proud to be the largest taxpayer in the world as we know the important role tax payments play in society."

Yeah yeah apple back at it again, they would prefer to not pay any taxes at all. 

[Sauron]

2 hours ago, dalekphalm said:

So who's fault is this? There are 2 places of blame:

 

1. Ireland - they're the ones who gave Apple the stupidly large tax break. They had a not-terrible reason for it: encouraging businesses to move into Ireland. But it does hurt the rest of the EU.

2. The EU itself is also to blame. If they don't want this kind of thing happening, then EU law needs to forbid such practices. The court ruled that what Ireland allowed Apple to do tax wise was legal.

Too bad every time someone proposes more stringent tax law a... certain side of the political spectrum whines and malds as though someone was ripping their nails out. A huge part of Brexit literally came down to "we don't want to pay EU taxes".

 

But also I'm not going to let Apple off the hook for taking advantage of this. It should be impossible but just because it's possible doesn't make it moral. Valuing money over everything else is not moral in my book.

[RejZoR]

2 hours ago, dalekphalm said:

Here's the thing, if the money shuffling is legal, this is not Apple's problem. This is a congressional or state level (depending on which taxes) problem.

 

If the "shuffling" is illegal, then prove it and charge them.

Of course it's not, but I've been implying that system is broken to allow something this fucked up that just makes the richer even more rich. And because they are so big they just get even more rich on top of being more rich. Your small business or even you personally can't evade taxes like that on any level and they'll hunt you down and slap every last coin out of your pockets if you don't pay all of it when they demand their cut. But one of the richest companies in the world pays hilariously small taxes. It just stinks of pure rot. It's why rich are rolling in cash and everyone else is basically fucked. Just look at society in general, not just USA. Unless you're really loaded you can't really afford anything. Buying that 5000€ gaming PC is nothing and can't even be set as an example since we kinda understand that the best over here. Try building your own house or some shit. You'll piss away 5000€ just when you step into the county office to get the papers that would just start the process of making the land ready for construction. For which you'll pay ridiculous price per m2 unless it's in some nowhere where it's worth nothing. And then everyone wonders why people live with parents and don't have kids. Gee, I wonder why... Go 50 or 70 years back in time and everyone built own house basically as they left school, had cool jobs without a problem, own car, bunch of kids. Yeah...