5 ms·

It wasn't legal though, it was illegal state aid in contravention to the laws of the single market Ireland was signed up too.

by Marazan 10y ago

cloudjacker 10y ago
using case law that didn't even exist at the time You know its bad when the US Treasury department even disagrees with the EU commission
- icebraining 10y ago
  Fiscal State Aid has been explicitly illegal since the 90s. Why would case law be needed?
- hackuser 10y ago
  > You know its bad when the US Treasury department even disagrees with the EU commission The US Treasury may be biased in favor of their constituent, whose CEO recently claimed is the largest taxpayer in the country,[0] and other constituents in similar circumstances. [0] http://www.washingtonpost.com/sf/business/wp/2016/08/13/2016/08/13/tim-cook-the-interview-running-apple-is-sort-of-a-lonely-job/ http://www.washingtonpost.com/sf/business/wp/2016/08/13/2016...
  - mpweiher 10y ago
    Not just that. Once the income has been taxed outside the US, it can no longer be taxed by the US. And so far, the US Treasury considered this income as "not taxed", meaning it would have been taxed at the corporate US tax rate when and if moved to the US. Which is why Apple hasn't moved that money to the US, and has something like $190 billion sitting outside the US. So the treasury is being extremely disingenuous here, they just want to be the ones to tax this income.
    - cloudjacker 10y ago
      Which is their prerogative.... You can't be on the side of "pay taxes for the sake of paying taxes because..... society and fairness!" without having an opinion on who and what your expropriated productivity is supporting Nobody at Apple or the Treasury Dept said that pledge for 13 years of their life to support roads in Ireland
      - mpweiher 10y ago
        This is income that was generated in the EU and taxed in the EU, except at ludicrously low rates due to a vehicle the Irish government came up with for Apple: a headquarter of their Irish operation that (for Irish tax purposes) is located nowhere in the world. So, no, it is most definitely not their prerogative, just as it isn't the prerogative of the German or Irish government to tax Apple on their US income.
    - nodamage 10y ago
      > Not just that. Once the income has been taxed outside the US, it can no longer be taxed by the US. Just to clarify, money that is taxed outside the US gives you a credit towards your US taxes. So if the money is taxed at 2% in Ireland, and then repatriated into the US, they would still be taxed on the difference between the 35% US corporate tax rate and the 2% they've already paid. Now if Apple has to pay Ireland 12.5% instead of the 2% it's paying now, the US would still get the remaining 22.5%.
jpollock 10y ago
Then fine Ireland.
- kartan 10y ago
  Ireland though that it was legal. It was not. If Ireland now fails to get that money, then it will be fined (like Greece http://www.dw.com/en/fine-frenzy-in-greece-over-illegal-state-aid/a-19421437 http://www.dw.com/en/fine-frenzy-in-greece-over-illegal-stat...) The down side of this approach is that some times big corporations don't pay taxes and then citizens have to put money for the fines. So the final result depends on how corrupt is the government, how much it wants to protect the corporations and how much hate it will accept from their citizens.
  - anonymousDan 10y ago
    There is no way it wasn't legal. It's complete politically motivated bullshit that will be thrown out on appeal to the European courts, mark my words. The EU commission is not supposed to have any say over tax issues, they are overstepping the mark here.
    - Oletros 10y ago
      Can you source how many illegal state aids rulings have been overturned on appeal?
      - anonymousDan 10y ago
        There are some relevant examples given in this article based on a case involving Spain: http://m.rte.ie/news/2016/0902/813591-santander-apple/ http://m.rte.ie/news/2016/0902/813591-santander-apple/
    - toyg 10y ago
      > There is no way it wasn't legal. Well, that's like, your opinion, man. The EU Commission usually doesn't put the hammer down because of trivialities, especially when they are as politically hot as this is. If they push, it's because they're pretty certain that they have grounds (and political support across the Union) for it. In addition, EU directives are often relatively generic, giving grounds for 1) different national approaches and 2) flexible interpretation by the courts. When courts are called to have their say, they usually follow the political climate pretty faithfully. I can tell you the appetite for a tax shakedown of multinationals is huge in Europe at the moment. Should Ireland weasel out of this ruling they will face ostracism elsewhere, at a time when they can ill afford it (being one of the countries that will suffer the most if Brexit is not resolved in an amicable manner). They will try (they have to, to save face), but it's unlikely that they will succeed. The party is over. > The EU commission is not supposed to have any say over tax issues Au contraire: rules against industrial state-sponsoring have been on the books since Maastricht, I believe. One of the main critiques of the EU is exactly that this straight-jacked national governments, which found themselves without powerful levers to manage their economies. In practice, these rules have been selectively applied, depending on the political climate. Such climate is now very unfavourable towards "onshore tax havens".
JoshTriplett 10y ago
That depends heavily on whether Apple received clarifications and information about the existing tax code, or whether they received special-case tax breaks that didn't apply to everyone. The latter might violate EU requirements.
- revelation 10y ago
  Yes, indeed, the legality of something depends on the facts on that something. As the first paragraph notes, the European Commission deemed it illegal state-aid, or a special-case tax break. Facts established.
  - oh_sigh 10y ago
    The facts are what happened, not an interpretation of what happened.
- Marazan 10y ago
  Apple have publically admitted to getting special treatment.
  - anonbanker 10y ago
    source?

It wasn't legal though, it was illegal state aid in contravention to the laws of the single market Ireland was signed up too.

by Marazan 10y ago

It wasn't legal though, it was illegal state aid in contravention to the laws of the single market Ireland was signed up too.

cloudjacker 10y ago

using case law that didn't even exist at the time You know its bad when the US Treasury department even disagrees with the EU commission

icebraining 10y ago
Fiscal State Aid has been explicitly illegal since the 90s. Why would case law be needed?
hackuser 10y ago
> You know its bad when the US Treasury department even disagrees with the EU commission The US Treasury may be biased in favor of their constituent, whose CEO recently claimed is the largest taxpayer in the country,[0] and other constituents in similar circumstances. [0] http://www.washingtonpost.com/sf/business/wp/2016/08/13/2016/08/13/tim-cook-the-interview-running-apple-is-sort-of-a-lonely-job/ http://www.washingtonpost.com/sf/business/wp/2016/08/13/2016...
- mpweiher 10y ago
  Not just that. Once the income has been taxed outside the US, it can no longer be taxed by the US. And so far, the US Treasury considered this income as "not taxed", meaning it would have been taxed at the corporate US tax rate when and if moved to the US. Which is why Apple hasn't moved that money to the US, and has something like $190 billion sitting outside the US. So the treasury is being extremely disingenuous here, they just want to be the ones to tax this income.
  - cloudjacker 10y ago
    Which is their prerogative.... You can't be on the side of "pay taxes for the sake of paying taxes because..... society and fairness!" without having an opinion on who and what your expropriated productivity is supporting Nobody at Apple or the Treasury Dept said that pledge for 13 years of their life to support roads in Ireland
    - mpweiher 10y ago
      This is income that was generated in the EU and taxed in the EU, except at ludicrously low rates due to a vehicle the Irish government came up with for Apple: a headquarter of their Irish operation that (for Irish tax purposes) is located nowhere in the world. So, no, it is most definitely not their prerogative, just as it isn't the prerogative of the German or Irish government to tax Apple on their US income.
  - nodamage 10y ago
    > Not just that. Once the income has been taxed outside the US, it can no longer be taxed by the US. Just to clarify, money that is taxed outside the US gives you a credit towards your US taxes. So if the money is taxed at 2% in Ireland, and then repatriated into the US, they would still be taxed on the difference between the 35% US corporate tax rate and the 2% they've already paid. Now if Apple has to pay Ireland 12.5% instead of the 2% it's paying now, the US would still get the remaining 22.5%.

jpollock 10y ago

Then fine Ireland.

kartan 10y ago
Ireland though that it was legal. It was not. If Ireland now fails to get that money, then it will be fined (like Greece http://www.dw.com/en/fine-frenzy-in-greece-over-illegal-state-aid/a-19421437 http://www.dw.com/en/fine-frenzy-in-greece-over-illegal-stat...) The down side of this approach is that some times big corporations don't pay taxes and then citizens have to put money for the fines. So the final result depends on how corrupt is the government, how much it wants to protect the corporations and how much hate it will accept from their citizens.
- anonymousDan 10y ago
  There is no way it wasn't legal. It's complete politically motivated bullshit that will be thrown out on appeal to the European courts, mark my words. The EU commission is not supposed to have any say over tax issues, they are overstepping the mark here.
  - Oletros 10y ago
    Can you source how many illegal state aids rulings have been overturned on appeal?
    - anonymousDan 10y ago
      There are some relevant examples given in this article based on a case involving Spain: http://m.rte.ie/news/2016/0902/813591-santander-apple/ http://m.rte.ie/news/2016/0902/813591-santander-apple/
  - toyg 10y ago
    > There is no way it wasn't legal. Well, that's like, your opinion, man. The EU Commission usually doesn't put the hammer down because of trivialities, especially when they are as politically hot as this is. If they push, it's because they're pretty certain that they have grounds (and political support across the Union) for it. In addition, EU directives are often relatively generic, giving grounds for 1) different national approaches and 2) flexible interpretation by the courts. When courts are called to have their say, they usually follow the political climate pretty faithfully. I can tell you the appetite for a tax shakedown of multinationals is huge in Europe at the moment. Should Ireland weasel out of this ruling they will face ostracism elsewhere, at a time when they can ill afford it (being one of the countries that will suffer the most if Brexit is not resolved in an amicable manner). They will try (they have to, to save face), but it's unlikely that they will succeed. The party is over. > The EU commission is not supposed to have any say over tax issues Au contraire: rules against industrial state-sponsoring have been on the books since Maastricht, I believe. One of the main critiques of the EU is exactly that this straight-jacked national governments, which found themselves without powerful levers to manage their economies. In practice, these rules have been selectively applied, depending on the political climate. Such climate is now very unfavourable towards "onshore tax havens".

JoshTriplett 10y ago

That depends heavily on whether Apple received clarifications and information about the existing tax code, or whether they received special-case tax breaks that didn't apply to everyone. The latter might violate EU requirements.

revelation 10y ago
Yes, indeed, the legality of something depends on the facts on that something. As the first paragraph notes, the European Commission deemed it illegal state-aid, or a special-case tax break. Facts established.
- oh_sigh 10y ago
  The facts are what happened, not an interpretation of what happened.
Marazan 10y ago
Apple have publically admitted to getting special treatment.
- anonbanker 10y ago
  source?