4 ms·

But no taxes were due, according to the tax collectors themselves. Meanwhile the EU is not a tax collection body, it does not set tax policy and it does not is

But no taxes were due, according to the tax collectors themselves. Meanwhile the EU is not a tax collection body, it does not set tax policy and it does not issue tax rulings. It has no power to do this and I'm unaware of any countries that want it to have this power.

verinus 10y ago
oh they were. it's actually quite clear: if you exempt some corp from taxes you are paying them the exempted sum compared to another business not receiving the exemption. In my opinion it is highly unethical to construct such financial mechanisms with the only aim to reduce tax payments.
- zigzigzag 10y ago
  Not taxing someone is not the same as paying them! By that logic I am paid by the government every time I listen to Simply Red without them taxing me for the privilege? Why am I not rich then? Damn me, the linguistic backflips in this thread are amazing. Tax is the taking of something. Low taxes mean you take less, not that you are generously paying people!
  - sangnoir 10y ago
    > Not taxing someone is not the same as paying them! That is a terrible straw-man - no one ever claimed that in this thread. Additionally - your argument relies on word play: in practise, Walmart giving you a $10 bill after you buy a $100 item has the same effect as giving you a $10 discount on the item. When one corp (Apple) pays less taxes than others in the same jurisdiction (Ireland in this case), it is unfair - logically and according to European law. If Irish taxes were uniformly low to all companies (including the German, French & Greek ones), the EU would have no case.
    - zigzigzag 10y ago
      It's not a straw man: the EU itself is claiming it - that's what the entire thread is about. If the EU isn't claiming that low taxes are "state aid" then why are they using state aid rules to try and enforce a tax rise? in practise, Walmart giving you a $10 bill after you buy a $100 item has the same effect as giving you a $10 discount on the item I guess you meant a $90 discount? But regardless, the wordplay is on your side: if Walmart charge you $10 for an item then by definition that item costs $10. If they charge other people more, perhaps because they don't have a loyalty card, that doesn't mean they're giving you "aid" under any normal definition of the term as they're still charging you money. Aid would be if they gave away their products for free, or explicitly made a donation to some cause. Merely having differential pricing isn't "aid" for the same reason that an airline charging me less to fly economy isn't "aid", nor is it a discount.
      - deleted 10y ago
        [deleted]
      - abduhl 10y ago
        If the US government makes all Chinese business pay $50 in tax per item but does not impose this demand on domestic businesses, are they giving aid?
  - mcphage 10y ago
    When writing laws, it's best if they can't be circumvented by obvious semantic games. That's why our judges are humans, and not computers—if someone is trying to jump through a semantic loophole, having judges decide the case can prevent that. In this case in particular, describing the financial benefit as "lower taxes" instead of "giving money", when "giving money" is illegal, probably isn't a loophole that should be allowed, when the result is the same.
  - 7Z7 10y ago
    >...compared to another business not receiving the exemption. Are you intentionally ignoring this line?
- sveme 10y ago
  Can't reply to Zigzag, so I do it here: It's not about lower taxes in general, it is about lower taxes for a single specific company. And that constitutes state aid which is (mostly) forbidden under EU rules, as it is massively uncompetetive.
  - krona 10y ago
    You make it sound legally straight forward, but I can't see how this constitutes state-aid; the double-Irish and dutch-sandwich were/are completely legal tax-avoidance schemes, for instance. Apple isn't headquartered in Ireland, Apple Sales International and Apple Operations Europe are. The EU says these subsidiaries have been making untaxed profits, but it's not obvious that they've made any profits, ever (that's the whole point of the tax scheme in the first place.) The grey area seems to be that there has been a cash hoard in Ireland which legally is on the Apple Inc. balance sheet, but hasn't been taxed. Again, however, Apple Inc. is not domiciled in Ireland so it's not the Irish governments job to collect that tax. What am I missing?
    - criddell 10y ago
      > the double-Irish and dutch-sandwich were/are completely legal tax-avoidance schemes, for instance Are they completely legal or is this just a case of they are legal, until a court finds that they actually aren't legal. Even if they are legal, I would argue that convoluted schemes to avoid paying taxes is unethical in the same way that moving manufacturing to a place with lax environmental or labor laws in unethical. Apple might be able to make phones with what is effectively slave labor legally, but they shouldn't.
      - krona 10y ago
        > Are they completely legal or is this just a case of they are legal, until a court finds that they actually aren't legal. To the extent that things are generally legal until they aren't. The complaints from the US treasury are that the decision goes against pre-existing case law, and so shouldn't be applied retroactively. [1] A 'power grab' is an adequate description of what's going on; the EU commission is basically forcing member states to redefine their own arm's length principle and their application of it. They would call it 'tax harmonization.' 1] https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/White-Paper-State-Aid.pdf https://www.treasury.gov/resource-center/tax-policy/treaties...
friendzis 10y ago
There are two things to keep in mind: * Tax laws are (not theoretically) changed retroactively, i.e. even if no taxes were due at the time of filling, that may change. * Law interpretation and/or leading acts may change (again retroactively), i.e. taxable amount, various exemptions, etc.. Some countries may pat you on the back for finding loopholes in the law while other may simply order one to pay hopefully without calling that criminal offence. We have no idea how this will turn out
- zigzigzag 10y ago
  It is well understood that retroactive changes to the law are one of the worst things a legal system can do, which is why so many constitutions ban it and why other countries (like the UK) have a strong convention not to do it. The US Constitution bans them explicitly. Yes, of course countries routinely do bad things and ignore convention and constitutional principles, but that doesn't make it suddenly OK. The low rate of corporation tax in Ireland is not really a loophole, it is a specific strategy to attract employers to a country that might otherwise not have much to offer, and it has worked fantastically well for them. This policy has been in place for decades and it is (or was) popular - the Irish prefer the jobs to the corporation taxes. What is the EU is doing here is trying to ban tax competition between countries on the grounds that if you don't charge much tax, you're offering illegal "aid". Beyond a strange interpretation of the word "aid" this is really a very serious problem - if the EU successfully forces countries to pick a single corporation tax rate across the bloc under the doctrine of illegal "aid", despite having no mandate to set tax policies, then what comes next? What if the French start arguing that countries with laxer worker rights than France are providing illegal state aid to their corporations? Zero-rating corporation tax is a perfectly reasonable policy for a country to have, there are plenty of economic arguments for it, and even if other countries might feel the outcome is unfair, well, so what? Competition is about different people making different tradeoffs and seeing what happens: if the Irish prefer to prioritise employment over collecting corporation tax (one of the hardest taxes to collect anyway), why should they be prevented from doing so?
  - Xixi 10y ago
    The corporation tax rate in Ireland is 12.5%, and the rate applied to Apple was (eventually) 0.005%: it's the delta between Irish own tax rate and the one applied to Apple that is deemed illegal according to this EU ruling. If Ireland want a 0% tax rate for all corporations, as far as I know they are allowed to do it. They just cannot afford it.
yread 10y ago
The EU is not a tax collection body, but there is this: > The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission's first request for information in 2013. from the press release http://europa.eu/rapid/press-release_IP-16-2923_en.htm http://europa.eu/rapid/press-release_IP-16-2923_en.htm

verinus 10y ago

oh they were. it's actually quite clear: if you exempt some corp from taxes you are paying them the exempted sum compared to another business not receiving the exemption. In my opinion it is highly unethical to construct such financial mechanisms with the only aim to reduce tax payments.

zigzigzag 10y ago
Not taxing someone is not the same as paying them! By that logic I am paid by the government every time I listen to Simply Red without them taxing me for the privilege? Why am I not rich then? Damn me, the linguistic backflips in this thread are amazing. Tax is the taking of something. Low taxes mean you take less, not that you are generously paying people!
- sangnoir 10y ago
  > Not taxing someone is not the same as paying them! That is a terrible straw-man - no one ever claimed that in this thread. Additionally - your argument relies on word play: in practise, Walmart giving you a $10 bill after you buy a $100 item has the same effect as giving you a $10 discount on the item. When one corp (Apple) pays less taxes than others in the same jurisdiction (Ireland in this case), it is unfair - logically and according to European law. If Irish taxes were uniformly low to all companies (including the German, French & Greek ones), the EU would have no case.
  - zigzigzag 10y ago
    It's not a straw man: the EU itself is claiming it - that's what the entire thread is about. If the EU isn't claiming that low taxes are "state aid" then why are they using state aid rules to try and enforce a tax rise? in practise, Walmart giving you a $10 bill after you buy a $100 item has the same effect as giving you a $10 discount on the item I guess you meant a $90 discount? But regardless, the wordplay is on your side: if Walmart charge you $10 for an item then by definition that item costs $10. If they charge other people more, perhaps because they don't have a loyalty card, that doesn't mean they're giving you "aid" under any normal definition of the term as they're still charging you money. Aid would be if they gave away their products for free, or explicitly made a donation to some cause. Merely having differential pricing isn't "aid" for the same reason that an airline charging me less to fly economy isn't "aid", nor is it a discount.
    - deleted 10y ago
      [deleted]
    - abduhl 10y ago
      If the US government makes all Chinese business pay $50 in tax per item but does not impose this demand on domestic businesses, are they giving aid?
- mcphage 10y ago
  When writing laws, it's best if they can't be circumvented by obvious semantic games. That's why our judges are humans, and not computers—if someone is trying to jump through a semantic loophole, having judges decide the case can prevent that. In this case in particular, describing the financial benefit as "lower taxes" instead of "giving money", when "giving money" is illegal, probably isn't a loophole that should be allowed, when the result is the same.
- 7Z7 10y ago
  >...compared to another business not receiving the exemption. Are you intentionally ignoring this line?
sveme 10y ago
Can't reply to Zigzag, so I do it here: It's not about lower taxes in general, it is about lower taxes for a single specific company. And that constitutes state aid which is (mostly) forbidden under EU rules, as it is massively uncompetetive.
- krona 10y ago
  You make it sound legally straight forward, but I can't see how this constitutes state-aid; the double-Irish and dutch-sandwich were/are completely legal tax-avoidance schemes, for instance. Apple isn't headquartered in Ireland, Apple Sales International and Apple Operations Europe are. The EU says these subsidiaries have been making untaxed profits, but it's not obvious that they've made any profits, ever (that's the whole point of the tax scheme in the first place.) The grey area seems to be that there has been a cash hoard in Ireland which legally is on the Apple Inc. balance sheet, but hasn't been taxed. Again, however, Apple Inc. is not domiciled in Ireland so it's not the Irish governments job to collect that tax. What am I missing?
  - criddell 10y ago
    > the double-Irish and dutch-sandwich were/are completely legal tax-avoidance schemes, for instance Are they completely legal or is this just a case of they are legal, until a court finds that they actually aren't legal. Even if they are legal, I would argue that convoluted schemes to avoid paying taxes is unethical in the same way that moving manufacturing to a place with lax environmental or labor laws in unethical. Apple might be able to make phones with what is effectively slave labor legally, but they shouldn't.
    - krona 10y ago
      > Are they completely legal or is this just a case of they are legal, until a court finds that they actually aren't legal. To the extent that things are generally legal until they aren't. The complaints from the US treasury are that the decision goes against pre-existing case law, and so shouldn't be applied retroactively. [1] A 'power grab' is an adequate description of what's going on; the EU commission is basically forcing member states to redefine their own arm's length principle and their application of it. They would call it 'tax harmonization.' 1] https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/White-Paper-State-Aid.pdf https://www.treasury.gov/resource-center/tax-policy/treaties...

friendzis 10y ago

There are two things to keep in mind: * Tax laws are (not theoretically) changed retroactively, i.e. even if no taxes were due at the time of filling, that may change. * Law interpretation and/or leading acts may change (again retroactively), i.e. taxable amount, various exemptions, etc.. Some countries may pat you on the back for finding loopholes in the law while other may simply order one to pay hopefully without calling that criminal offence. We have no idea how this will turn out

zigzigzag 10y ago
It is well understood that retroactive changes to the law are one of the worst things a legal system can do, which is why so many constitutions ban it and why other countries (like the UK) have a strong convention not to do it. The US Constitution bans them explicitly. Yes, of course countries routinely do bad things and ignore convention and constitutional principles, but that doesn't make it suddenly OK. The low rate of corporation tax in Ireland is not really a loophole, it is a specific strategy to attract employers to a country that might otherwise not have much to offer, and it has worked fantastically well for them. This policy has been in place for decades and it is (or was) popular - the Irish prefer the jobs to the corporation taxes. What is the EU is doing here is trying to ban tax competition between countries on the grounds that if you don't charge much tax, you're offering illegal "aid". Beyond a strange interpretation of the word "aid" this is really a very serious problem - if the EU successfully forces countries to pick a single corporation tax rate across the bloc under the doctrine of illegal "aid", despite having no mandate to set tax policies, then what comes next? What if the French start arguing that countries with laxer worker rights than France are providing illegal state aid to their corporations? Zero-rating corporation tax is a perfectly reasonable policy for a country to have, there are plenty of economic arguments for it, and even if other countries might feel the outcome is unfair, well, so what? Competition is about different people making different tradeoffs and seeing what happens: if the Irish prefer to prioritise employment over collecting corporation tax (one of the hardest taxes to collect anyway), why should they be prevented from doing so?
- Xixi 10y ago
  The corporation tax rate in Ireland is 12.5%, and the rate applied to Apple was (eventually) 0.005%: it's the delta between Irish own tax rate and the one applied to Apple that is deemed illegal according to this EU ruling. If Ireland want a 0% tax rate for all corporations, as far as I know they are allowed to do it. They just cannot afford it.

yread 10y ago

The EU is not a tax collection body, but there is this: > The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission's first request for information in 2013. from the press release http://europa.eu/rapid/press-release_IP-16-2923_en.htm http://europa.eu/rapid/press-release_IP-16-2923_en.htm