Apple Must Repay Record EUR 13 Billion in Back Taxes Over Irish Deal: EU

Agence France-Presse ^ | 30 August 2016

[sukhoi-30mki]

The European Union on Tuesday said US tech giant Apple must repay a record 13 billion euros ($14.3 billion or roughly Rs. 95,910 crores) in back taxes after ruling that a series of Irish sweetheart tax deals were illegal.

"The European Commission has concluded that Ireland granted undue tax benefits of up to 13 billion euros to Apple. This is illegal under EU state aid rules because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid," a Commission statement said.

EU Competition Commissioner Margrethe Vestager said Apple's "selective treatment" in Ireland meant it paid an effective tax rate of just one percent on its European profits in 2003, which then fell to a bare 0.005 percent by 2014.

"The tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU single market."

Brussels launched an inquiry into Apple's tax arrangements in Ireland in 2014, one of a series of anti-trust cases targeting major US corporations that have angered Washington.

[fireman15]

No, fireman, ONCE AGAIN, you are distorting what I said. Here is my exact quotation:

“Neither Apple nor Tim Cook are among the listed donors to the Clinton Foundation, nor has Apple ever paid either of the Clintons to come and make a speech, nor were they among the major donors to the Democrats in the 2012 Election cycle. There were some small, minor donations from individuals associated with Apple and the Apple Employees Political Action Committee made donations, but NOT Apple.”

Look Swordmaker, I distorted nothing, your obvious intention with the statement was to convince people that Tim Cook and Apple are not closely associated to the Clinton Foundation. As with so many of your statements in this thread, this is simply far from the truth. Executive Vice President of Apple Lisa Jackson, is on the foundation's board. And Tim Cook, is close enough to Bill Clinton from his association with the Clinton foundation that he is the second person that he said that he called when he was subpoenaed by Congress to testify about Apples “unusual” tax avoidance strategies.

[Swordmaker]

I have not distorted anything that you have said; I quoted you and pointed out that you were being misleading for the umpteenth time during our discussion. You said, “All Apple products in Europe come from Ireland.” Any reasonable person would assume that you were implying that all Apple products were made in Ireland not that they were Chinese products that touched down in Ireland on their way to other parts of Europe so that they could fit into Apple's tax evasion schemes. It appears that you have taken a course in legalese directly from Bill and Hillary Clinton. If you lie about even the stuff that is easily verified it casts doubt on the rest of your lengthy obfuscations.I have not distorted anything that you have said; I quoted you and pointed out that you were being misleading for the umpteenth time during our discussion. You said, “All Apple products in Europe come from Ireland.” Any reasonable person would assume that you were implying that all Apple products were made in Ireland not that they were Chinese products that touched down in Ireland on their way to other parts of Europe so that they could fit into Apple's tax evasion schemes. It appears that you have taken a course in legalese directly from Bill and Hillary Clinton. If you lie about even the stuff that is easily verified it casts doubt on the rest of your lengthy obfuscations.

There you go again. . . Fireman. I DID NOT SAY JUST: "All Apple products in Europe come from Ireland." You cited that out of context. Here is the rest of the context:

"Ireland is Apple's European headquarters, manufacturing, and distribution center. All Apple products in Europe come from Ireland. Sales generated in Europe are taxed based on its laws."

By extracting a single sentence from a paragraph of connected sentences you have ONCE AGAIN constructed your moldy Strawman argument claiming I said something completely DIFFERENT than what I actually said. . . and have constructed an entire house of cards, no a castle with flying pennants, with absolutely NO FOUNDATION of lies because I did not say what you claim I did. THAT is the very essence of "distortion."

"Any reasonable person would" not need to assume anything because they would have read the words "distribution center" that I wrote and completely understood the meaning of the concept. But NOT YOU! No, you have to have your "tax evasion schemes" to scream about.

You are the one who has been lying "about the stuff that is easily verified" such as the 2011 tax returns and the Financial Reports agreeing. I showed you they did. You have not bothered to even look, have you? That's probably because you wouldn't understand what you were seeing or reading if you DID look, just as the idiot reporter did not understand when he wrote his article claiming that Apple had not reported honestly to their investors what they had reported to the IRS, unaware of the REPORTING differences inherent in the law, yet it was right there in the footnotes. I pointed it out to you, but you don't even acknowledge it. You go blythely on with your lie.

Another LIE of yours is the claim that what the EU Commission has ordered is a "Fine". It is not. They are just ordering the recapture of the tax difference between what was paid and what the EU Commisioners say SHOULD have been paid. I.E. Pay the balance of the back taxes you owe. No "fine," no penalty, for non-payment, just pay what we calculate would have been the tax rate we think you should have paid. A fine is a criminal penalty. This is the same as if the IRS merely recalculated your taxes and says we disagree with your figures. Pay this instead.

You keep using the criminal terminology of "Tax Evasion" when even the EU Commission is not using those terms. Apple paid the taxes the Irish government said the owed. Ireland is claiming that Apple did not violate the law. The US government's TREASURY DEPARTMENT is saying that Apple did not violate the law, and is going to argue in Apple's defense. Apple used the law as it was written, under the advise of both governments and tax attorneys. That is NOT criminal. At every step they checked what they were doing with the government's involved to assure what they were doing was acceptable. They were AUDITED by multiple governments. . . Including the European Union. It was only when an ACTIVIST SOCIALIST, who has an agenda, was appointed to the chair of this Antitrust commission was it suddenly changed.

As Michael O'Leary, CEO of RyanAir pointed out in an article I posted this morning, this commission has been the most REVERSED commission in history of the EU because of her cockamamie theories of what she can do using the Antitrust laws. . . Just like this over reach. O'Leary points out that nations in the EU by TREATY have tax law autonomy, but this Antitrust Commissioner seems to think she can DICTATE Ireland's Tax Laws and Rates based on a regulation. She has been reversed on this by the EU's courts before and will again. She keeps trying.

[Swordmaker]

Look Swordmaker, I distorted nothing, your obvious intention with the statement was to convince people that Tim Cook and Apple are not closely associated to the Clinton Foundation. As with so many of your statements in this thread, this is simply far from the truth. Executive Vice President of Apple Lisa Jackson, is on the foundation's board. And Tim Cook, is close enough to Bill Clinton from his association with the Clinton foundation that he is the second person that he said that he called when he was subpoenaed by Congress to testify about Apples “unusual” tax avoidance strategies.

Now you are using "guilt by association," one of the forms of the Argumentum Ad Hominem Fallacy. I did not know about that idiot Lisa Jackson being on the Board of the Clinton Foundation, although it does not surprise me, because I have not seen a list of the members of the Clinton Foundation board members. Concluding that because an Apple employee is on the Board of Directors of the Clinton Foundation does not equate to Tim Cook is closely associated with the Clinton Foundation. She is also on the Board of Directors of Tulane University, does that mean that Tim Cook is also associated with Tulane University?

You've distorted everything I have written.

You have STILL misquoted me every time you claim you are "quoting" me. Just stop claiming I say something and then erecting straw men based on your misquotations. I did NOT say that Tim Cook was not associated with the Clinton Foundation. I said he was not listed as a donor, and Apple is not donated either. Neither one is listed. But that may be understandable, as I explained.

We get it. You don't like Apple, you don't like Tim Cook. Just quit your over-the-top exaggerations!

[fireman15]

You have STILL misquoted me every time you claim you are “quoting” me. Just stop claiming I say something and then erecting straw men based on your misquotations.

I will try and look at what I have written that you feel were misquotes. Mostly I cut and pasted from your posts and put either italicized or put quote marks around your words... your words not mine. Your efforts to try and wiggle out from your exact original intended meaning when confronted by cold hard facts is more amusing than irritating.

The bulk of many of my posts have been direct quotes from the links that I have provided. These links have mostly been from highly respected publications. You have repeatedly attributed the words that came directly from these articles as coming from me. I am not particularly offended by this, but I do not wish to take credit for research and conclusions reached by others.

And as you know from our many previous interactions over the years... I do not have any particular animosity toward Apple products. I have even asked for your advice on many occasions. And I have enjoyed very much reading the threads that you have posted over the past dozen or so years that we have both been active on this forum.

I also do not believe that Apple's competitors are necessarily much better than Apple when it comes to politics or even ethics. I would and have criticized Microsoft, Google and others harshly when they have crossed the line.

I appreciate you, I have appreciated and learned from the posts you have made in this thread. You have shared a lot of good information after being challenged. I apologize when I pushed your buttons a little too hard but thank you for sharing again your deep knowledge and understanding of all things Apple.

[Cronos]

To be fair, these “no sweetheart deals to companies” rule was there before Ireland joined. You can’t choose to tax one company only 0.005% and tax the others at 12.5% — why not tax Apple at Ireland’s standard corporate tax rate?

[Cronos]

Note that Apple was holding the money in Ireland until the next “tax holiday” year in the USA (the last was in 2004 when it paid 5% on money repatriated). So, Trump’s 15% won’t sway apple.

[Cronos]

as I said above, the rules were clear when Ireland joined that it could not offer a sweetheart deal to one company (taxing it at 0.005%) not at it’s standard corporate tax rate (12.5%)

[Cronos]

well, Apple storing the money in Ireland hardly created half a dozen jobs (not including the sales jobs etc). Also, as I noted above, the problem is that the US double taxes money earned abroad.

[Cronos]

The thing is that Apple created two companies in Ireland -- one that does actual business (people, hiring, manufacturing, services etc) and the other called Apple Operations International -- the head of tax operations for Apple,Phillip Bullock, told a U.S. Senate committee in 2013 that “A.O.I. is incorporated in Ireland; thus, under U.S. law it is not tax resident in the U.S. A.O.I. is also not tax resident in Ireland because it does not meet the fact-specific residency requirements of Irish law.” It’s Irish, according to American law; not Irish, according to the Irish. A.O.I.

Ergo - it does not legally exist anywhere, but it holds the profits from Apple sales outside of the United States, holds until the US declares a tax holiday year (as it did in 2004 when repatriated amounts were taxed at 5% - that's when it brought back a lot of money)

[poinq]

.0005 is not the rate apple payed. They paid their full rate minus bonuses for employees. They are the largest tax payer in Ireland. .0005 is the rate they would get if you include the money that should be taxed in the USA if they brought the money back. That money is not taxable in Ireland. It would be taxable in the USA.

Ireland taxes are applicable to all economic activity in Ireland. Design and manufacturing is done elsewhere. Apple did not sell or service $14 billion dollars of cell phones in Ireland.

[Cronos]

There are two Apple companies in Ireland: One for services and manufacturing with employees as you correctly defined and the othe Apple Overseas International which holds billions of dollars from sales in other countries waiting until the US declares a tax holiday for repatriated money. This is where the 0.05% rate comes from

[poinq]

Yes, and by Irish law and the laws of most EU countries, income from another country is taxed in that country. This is the law of Ireland. And Apple does pay full taxes in every country in which it does business.

The EU body that is finding against the state of Ireland is not the regulatory body for taxes. That rests with every EU country. The EU body that has found against Ireland is the antitrust committee. They say its unfair for Apple to pay less taxes. But apple does not have a competitor in the EU. And other EU companies can do the same thing that Apple and several other companies do in Ireland.

This finding is clearly against the constitution (treaty) of the EU. And it will send companies out of the EU. If its upheld.