Apple ordered to pay $15 billion USD for tax evasion

[senseamp]

If they were obeying Irish tax laws (even if it was in accordance with special arrangements the company made with the Irish government), why should Apple "pay up"? The EU should be acting against Ireland for not fulfilling whatever tax code obligations they're required to as an EU member.

Because these special arrangements are illegal under EU competition laws, and constitute an illegal subsidy to Apple. Ireland is subject to those laws, and so is Apple when operating in Ireland. You don't get to keep an illegal subsidy, because then what's the point of the law? You get an illegal subsidy, then by the time it's proven illegal, you get to keep tens of billions of Euros, and then get another illegal subsidy. Wash, rinse, repeat.

 

[Ns1]

Tim Cook really believes that paying virtually no taxes (0.005%-1%), setting up a non-existent entity that books most of the profits, etc, is not a special deal that Apple got because of it's leverage, but that it's available to all companies in Ireland?

that appears to be Ireland's calling card, actually.

 

[senseamp]

"A company’s profits should be taxed in the country where the value is created"
Tim Crook pretending that value that Apple generated in Europe was created, not in US via R&D, but in an offshore company with no employees. This guy really thinks everyone else is a moron.

 

[glenn1]

Because these special arrangements are illegal under EU competition laws, and constitute an illegal subsidy to Apple. Ireland is subject to those laws, and so is Apple when operating in Ireland. You don't get to keep an illegal subsidy, because then what's the point of the law? You get an illegal subsidy, then by the time it's proven illegal, you get to keep tens of billions of Euros, and then get another illegal subsidy. Wash, rinse, repeat.

Then fine Ireland for providing the illegal subsidy. And if Ireland wants their $15B back they can sue Apple. It's a company's obligation to follow the laws of the jurisdiction they're operating in, not ensure those laws are in compliance with the other agreements that nation may be party to. Ireland not being compliant with its EU obligations is Ireland's problem, not Apple's problem.

 

[Gardener]

Still refusing to answer my questions.

What Irish laws were broken?

Ireland is an EU member state, they signed a legally binding contract to play by a set of rules that supersedes local authority. Therefore the EU charter is Irish law.

If they don't like it, they can put on their big-boy pants and Article 50 out of the EU.

 

[senseamp]

Then fine Ireland for providing the illegal subsidy. And if Ireland wants their $15B back they can sue Apple. It's a company's obligation to follow the laws of the jurisdiction they're operating in, not ensure those laws are in compliance with the other agreements that nation may be party to. Ireland not being compliant with its EU obligations is Ireland's problem, not Apple's problem.

Do you understand that EU treaties not just agreements, but are part of member states Constitutions, meaning they take precedence over local tax laws, and apply to companies operating in member states? I think once you understand that, things will clear up. Apple received a tax subsidy that was in violation of EU treaties and thus also Irish law at the time it was received.

 

[Fanatical Meat]

Do you understand that EU treaties not just agreements, but are part of member states Constitutions, meaning they take precedence over local tax laws, and apply to companies operating in member states? I think once you understand that, things will clear up. Apple received a tax subsidy that was in violation of EU treaties and thus also Irish law at the time it was received.

Yup and its exactly why I get the idea of Brexit.
Not saying I support this behavior from apple either. I get what the EU is trying to prevent. Similar to how States will race to the bottom to attract big employers.

 

[glenn1]

Do you understand that EU treaties not just agreements, but are part of member states Constitutions, meaning they take precedence over local tax laws, and apply to companies operating in member states? I think once you understand that, things will clear up. Apple received a tax subsidy that was in violation of EU treaties and thus also Irish law at the time it was received.

I was unaware that Apple was incorporated in "EU Treaties." Here I thought they were operating in Ireland and subject their laws, which in turn the Irish government had the obligation to reconcile with appropriate EU obligations and not Apple to ensure they were reconciled. Maybe going forward Apple and similar companies should just skip the middleman and submit their taxes to the EU instead and Ireland can sort it out with Brussels.

 

[senseamp]

I was unaware that Apple was incorporated in "EU Treaties." Here I thought they were operating in Ireland and subject their laws, which in turn the Irish government had the obligation to reconcile with appropriate EU obligations and not Apple to ensure they were reconciled. Maybe going forward Apple and similar companies should just skip the middleman and submit their taxes to the EU instead and Ireland can sort it out with Brussels.

Ireland did reconcile its laws with EU regulations when it adapted the EU treaty into its Constitution. Apple has responsibility to comply with all laws in the jurisdiction it operates, not just local ones, but also those that are part of EU treaty. If a EU member offers you a special deal, when the law says it is not allowed to, then you don't have a reasonable expectation to retain benefits of such an illegal deal. Apple may have an argument that it shouldn't pay a penalty on top of the unpaid taxes, and the EU, to its credit, didn't impose such a penalty, but it has no reasonable argument that it should be allowed to keep a subsidy that was illegal at the time it was given.
Apple can sue Ireland if it feels that Ireland mislead it by claiming that these subsidies would pass legal muster.

 

[senseamp]

Here is the EU law in question:
http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:12008E107

Article 107

(ex Article 87 TEC)

1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.

2. The following shall be compatible with the internal market:
(a) aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned;
(b) aid to make good the damage caused by natural disasters or exceptional occurrences;
(c) aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, in so far as such aid is required in order to compensate for the economic disadvantages caused by that division. Five years after the entry into force of the Treaty of Lisbon, the Council, acting on a proposal from the Commission, may adopt a decision repealing this point.

3. The following may be considered to be compatible with the internal market:
(a) aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment, and of the regions referred to in Article 349, in view of their structural, economic and social situation;
(b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State;
(c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;
(d) aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Union to an extent that is contrary to the common interest;
(e) such other categories of aid as may be specified by decision of the Council on a proposal from the Commission.

 

[HumblePie]

I was unaware that Apple was incorporated in "EU Treaties." Here I thought they were operating in Ireland and subject their laws, which in turn the Irish government had the obligation to reconcile with appropriate EU obligations and not Apple to ensure they were reconciled. Maybe going forward Apple and similar companies should just skip the middleman and submit their taxes to the EU instead and Ireland can sort it out with Brussels.

If you are a company operating out of any EU country then you are subject to all EU laws as they pertain to your operation as well.

Last I checked Ireland was part of the EU. Since Apple is operating out of the EU, then they are subject to EU laws and regulations.

 

[DrunkenSano]

Wonder if this will cause Ireland to consider exiting the EU as well, following the UK. If Apple pulls out of Ireland because of this, that country is going to hurt.

 

[Mai72]

The American public should be upset and send a message with their wallets and pocketbooks. But, they won't do this because many just don't care.

If we were to stop buying products from companies who skirt the tax laws to their advantage we would see a change.

 

[Fanatical Meat]

The American public should be upset and send a message with their wallets and pocketbooks. But, they won't do this because many just don't care.

If we were to stop buying products from companies who skirt the tax laws to their advantage we would see a change.

I agree and no apple products can be found in my household except a 2008 iPod nano.
I also feel the state department should stay out since its not US monies' but I know that will never happen.

 

[yllus]

Wonder if this will cause Ireland to consider exiting the EU as well, following the UK. If Apple pulls out of Ireland because of this, that country is going to hurt.

I don't think Ireland is likely to get better terms than what it gets within the EU. There is zero incentive for EU countries to give it better terms than what it currently gets as a member.

 

[thilanliyan]

The American public should be upset and send a message with their wallets and pocketbooks. But, they won't do this because many just don't care.

If we were to stop buying products from companies who skirt the tax laws to their advantage we would see a change.

QFT...companies only understand when they lose money.
I have never bought an Apple product...of course, that didn't stop them from making many billions

 

[hal2kilo]

QFT...companies only understand when they lose money.
I have never bought an Apple product...of course, that didn't stop them from making many billions

Yep. If apples success were tied to all of the Apple products I have bought (0), they would not exist. Shits always been way over priced. Why do I keep forgetting that button down there!!

 

[Smoblikat]

Tim Cook really believes that paying virtually no taxes (0.005%-1%), setting up a non-existent entity that books most of the profits, etc, is not a special deal that Apple got because of it's leverage, but that it's available to all companies in Ireland? He is either a liar or the most clueless CEO ever.

I did some mathing, and I know they made well over 15 billion last year. But lets assume they had a .005% tax on 15 billion that they paid, it comes out to 75 million dollars. Can you honestly tell me that you will ever give the government 75 million in taxes throughout your entire lifetime? Apple does at least that in 1 year. I guess I just dont understand why people are so mad that apple pays hundreds of millions of dollars a year in taxes yet they think it is somehow not enough. I paid like 10K last year, at that rate, it would take me about 75,000 years to reach 75 million in taxes.

 

[Phynaz]

Profit is good, and profit is taxed. Ireland is protesting because it knows that the main reason Apple is there is to dodge taxes, and it's fine with giving it a sweetheart deal. But that's against EU rules. Ireland is part of the EU. US Treasury is hoping this money will eventually be repatriated, so it wants to tax it instead of Ireland taxing it. Again, that's not EU's concern. Apple decided to claim these profits in Ireland. Ireland is part of EU, so Apple has to play by EU rules, not just special deals it cuts with Ireland.

https://en.wikipedia.org/wiki/Twenty-eighth_Amendment_of_the_Constitution_of_Ireland
EU rules are Irish law too.

My city is not in the EU. EU has their own rules.
Apple is free to argue to the EU competition commission that it deserved the special tax breaks because it's large. I am sure it will go over great.

Because these special arrangements are illegal under EU competition laws, and constitute an illegal subsidy to Apple. Ireland is subject to those laws, and so is Apple when operating in Ireland. You don't get to keep an illegal subsidy, because then what's the point of the law? You get an illegal subsidy, then by the time it's proven illegal, you get to keep tens of billions of Euros, and then get another illegal subsidy. Wash, rinse, repeat.

First you say rules, then you say laws. You're so tied up that you can't seem keep the two strait. Assuming you know they are different things?

 

[MovingTarget]

Its a good first step. Multinational corporations need to be reigned in. They already wield too much power in global affairs. Who's next?

 

[ivwshane]

The American public should be upset and send a message with their wallets and pocketbooks. But, they won't do this because many just don't care.

If we were to stop buying products from companies who skirt the tax laws to their advantage we would see a change.

And do what? Buy Android phones that are 100% made in China?

 

[StinkyPinky]

Just another example of the EC going after successful American companies. Even Ireland is saying this impugns on thier sovereignty.

I have no doubt that most here won't even read beyond the headline though.

You think it's acceptable for massive companies like Apple to pay virtually no tax despite making billions of profit within the EU? If you do business in a state, you should be paying the correct tax.

On top of that, it stifles competition because smaller tech companies can never hope to compete with such leniency.

 

[BurnItDwn]

The problem is that these corporations will get fined for stuff like this, but the people who made these decisions are not being punished, they have no liabillity here. There should be executions here, at the very least severe prison sentences. Tax evasion, and ripping off governments are crimes that hurt 100% all the residents of a country.

 

[pcgeek11]

If they were obeying Irish tax laws (even if it was in accordance with special arrangements the company made with the Irish government), why should Apple "pay up"? The EU should be acting against Ireland for not fulfilling whatever tax code obligations they're required to as an EU member.

This is the correct question...

 

[DrPizza]

Someone correct me if I'm wrong. As I understand it,

Country A (Ireland) - headquarters.
Country B (USA) - the "subsidiary."

The company in country A sells the company in country B a product for $500. The company in country B sells that product to the consumer for $501. Thus, Apple in the USA only made a dollar. Apple in Ireland made all the rest of the profit, without even needing a ton of employees.