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We often accuse authorities of going after the small, while leaving the big offenders free. The average individual working person has no negotiation when it co

• blub 10y ago
  It boggles my mind that there are people supporting Apple in this. There are so many of us that like to cheerfully screw themselves over to protect rich corporations. As an Apple customer I am not sure what to do in the future, if I should continue to support them by buying their products. I hope they lose in any case.
  • dagaci 10y ago
    People link their liking of Apple with what is right and wrong. They do not realise the extent of tax evasion, and they do not realise that it is they themselves and every working person who is subsidising tax evading corporations by paying higher taxes. For me personally, at this time it would _not_ stop me from buying from Apple. This is not a contradiction, the reality is that Apple isn't the only offender.
    • napworth 10y ago
      Yeah, I'm a defender of Apple because I don't think they should be asked to pay for taxes in the past. Instead, I would like to see all the evasion loopholes closed so Apple, and every other large company out there, can't do it for the future.
    • NetStrikeForce 10y ago
      I wouldn't stop just for the tax evasion, but Tim's open letter has been a direct insult to my intelligence. If he thinks I'm stupid I'm happy to prove him wrong by not buying his products ever again. This is coming from someone that has avoided flying Ryanair his entire life, no matter how convenient or cheap it could've been.
    • bko 10y ago
      Subsidizing means support financially or pay part of the cost of producing (something) to reduce prices for the buyer. Why is whatever you believe the appropriate tax rate should be the baseline for which you determine subsidies? Apple is paying taxes, not the other way around. Perhaps you believe they should be paying more taxes but that's not exactly subsidizing as the appropriate tax rate is not written in stone or decreed from the heavens. Perhaps you believe that the government needs $X to function and by Apple paying less, we have to pay more. But this isn't true either as I'm sure your tax bill won't go down if Apple loses this case. Perhaps spending will increase in some program or some new commission gets created from the funds but this will not come free, as any money transferred from Apple to the discretion of Irish politicians will come from Apple shareholders.
      • pawadu 10y ago
        and by Apple paying less, we have to pay more. Why would this not be true?
        • cmdrfred 10y ago
          It absolutely is, I don't understand how someone gets so brainwashed to not understand such a simple concept. A nation has a finite set of costs, those costs are paid by taxes. If I pay less, someone else needs to pick up my slack.
          • bko 10y ago
            I don't know how the European system works, but in the US taxes don't depend on proposed spending. The politicians don't get together and say we want to spend $X so let's see how much we get and then we'll adjust. I don't remember getting a tax rebate when the state pulled in billions from bank fees or some repatriation agreement. In fact, spending and revenue have diverged increasingly since the financial crisis. Around 50% of federal funds are either transfer payments to the elderly (Medicare or ss) and military. http://www.factcheck.org/2011/07/fiscal-factcheck/ http://www.factcheck.org/2011/07/fiscal-factcheck/
  • gambiting 10y ago
    As a business owner, I actually was in a situation where my local tax authority said one thing, then came back to me 2 years later, said they were wrong, and now I had to pay 2 years worth of taxes because of their mistake. It's BS and it can ruin your company totally. If a tax authority tells you how much you owe, it should be binding - so in this way, if Ireland charged Apple too little, they should be at fault here. If EC now rules that Ireland undercharged them and haven't collected 14BN in taxes, then Ireland should be to blame.
    • blub 10y ago
      Your case is very different and it sounds like you were treated unfairly. Re Apple: I am ok if Ireland gets the blame. Probably should be split though, since Apple knew very well what they were doing.
      • ensignavenger 10y ago
        Unfair, yes, but that is how tax law works in the US. Of course, he could challenge it in court and hope the judge sides with the original interpretation of the law. Also, there is limit to how many years back they can go in such a case.
    • dagaci 10y ago
      I have many times been in the situation of having paid to much tax (not my fault) and have received relatively large cheques automatically from the government as a result. This year they calculated that i have underpaid taxes (not my fault) for a year. The government have been automatically deducting a small amount over the year from me via the tax system. So i have been happy to receive cheques from the government years later for over paying, and actually nonchalant about the deductions. But what is important is that the rules to apply equally to everyone, and they should also apply to businesses large businesses and small businesses, and mega businesses.
    • tw04 10y ago
      If you jumped through all the hoops Apple did to try to evade paying taxes, you should know you're playing Russian roulette. Apple knew going into it that they were intentionally evading taxes - hell they hired several special tax accountants just to manage the cf required to make all this work. They were just assuming (hoping?)they had enough grease to keep the loophole open - they were wrong. I believe they even called the liability out in their s1 filings, but I can't currently check.
  • Angostura 10y ago
    I'll stick my head above the parapet and say that I partially support Apple in this. They negotiated particularly sweet deal with the Irish government and got it. The EU has now said tha the deal is incompatible with EU law. I don't particularly blame Apple for the attempt, if anything I rather think it is the Irish Government who were a bit naughty. I'm conflicted on whether Apple should pay back the sum - it would seem fairer to me to simply agree that 'This Stops Now'.
    • jbmorgado 10y ago
      Look, if I negotiate with the state of Texas that I will not pay taxes in the state of New York for doing business there and then get fined by the state of New York for not paying my due taxes there, you will say I was stupid and it suits me right. It's exactly the same with what Apple did.
      • sudhirj 10y ago
        More like the federal government telling you ten years later that you and Texas shouldn't have made that concession to you and asking you to retroactively pay back taxes for the last ten years.
        • yardie 10y ago
          That is exactly what the IRS does. Do you think businesses want to keep 7 years of transactions? No, they do not. And if they fail an audit it increases to 10 years.
      • ascorbic 10y ago
        It's not quite the same. The tax isn't owed to the EU, it is owed to Ireland. As far as I'm aware this sort of deal is not only legal, but common in the U.S. The rules broken here are the ones against excessive "state aid". These are defined as selective advantages given to companies. The treaties forbid these as anti-competitive. This mainly applies to subsidies to individual companies, but also covers sweetheart tax deals like these that aren't open to all companies. They're welcome to set low corporate tax rates, but not to approve convoluted structures like these. Stuff like Tesla's deal with Nevada would be illegal in the EU.
  • d_theorist 10y ago
    It boggles my mind that so many people immediately and forcefully side with the EU in what seems to me a pretty complicated and arcane question of tax law. I'm honestly not sure which side is correct in this, but jumping violently to the defence of either side seems unwarranted.
    • Freak_NL 10y ago
      Once you've seen the diagrams explaining how this specific bit of tax evasion works it becomes hard to attribute it to an oversight or misinterpretation of arcane tax laws on Apple's side. These complicated structures take a lot of know-how and effort to set up correctly, and exist only for the purpose of minimizing the taxation on their services. Apple reportedly paid a negligible 0,005% in taxes in 2014, where 12,5% is normal (in Ireland). So when people agree with the EU findings on this subject, it isn't just out of spite or dislike of Apple. Some feel strongly about tax evasion, as it enriches those who practice it to the detriment of ordinary citizens (taxes pay for public works and institutions). Some may find that huge corporations benefit unfairly from these convoluted tax evasion schemes compared to ordinary citizens, and small and medium sized corporations, and they seem to get away with it too (unfair competition). Apple knew they could get caught, that risk has been assessed when they implement this scheme and found to be low enough to warrant it at the time. If anyone else gets caught not paying their dues in taxes, you can bet the local revenue service will be knocking on your door for the amount owed. Corporations are no different. Also this isn't just about Apple. The EU has been going after a bunch of mega-corps the past year, including Starbucks. Apple is just one of the bigger fish amongst the big fish.
      • d_theorist 10y ago
        I certainly would not attribute it to oversight or misinterpretation of arcane laws. Obviously they knew what they were doing. And, I'll leave aside moral considerations because they are not strictly relevant to the point of whether the EU's ruling is correct. My point was that I don't see that either side of the legal argument is blindingly compelling. Certainly not without hearing a lot more argument and research from both sides. It comes down to a disagreement over whether Apple's use of a particular loophole in Irish law constitutes Ireland giving Apple a special deal that is unavailable to other companies. Apple/Ireland argue that the loophole existed in law and was available to anybody. EU argues that even though the loophole may technically have existed in Irish law, it still constitutes a special deal with Apple because (I think) it takes a lot of money to hire the tax experts necessary to exploit it. What is the knockdown blow that makes either one of these either totally compelling or totally uncompelling? I don't see why people are so certain on either side of this.
  • charlesdm 10y ago
    1. Regardless of Apple, states should make good + compliant laws. Ireland clearly messed up here. 2. If Ireland would've done a good job, Apple wouldn't be having this problem today. Which probably means Apple will recover the tax payable from Ireland, through damages. 3. There's plenty of tax optimising any business owner can do.
    • peteretep 10y ago
      > There's plenty of tax optimising any business > owner can do But there's also a lot that companies that aren't Apple-sized can't do, as per the article.
      • charlesdm 10y ago
        Of course, but a lot of it has to do with scale as well. There's a lot of non tax stuff that Apple can do, that smaller companies can't either, e.g. negotiating procurement deals on certain electronics forcing the supplier to work on razor-thin margins.
  • bko 10y ago
    As I am part of the 50+% of Americans with investments in the stock market, I would prefer the money stay with the shareholders rather than transferred to European politicians. It's okay if you disagree and think that politicians would make better use of the funds than an individual, but it shouldn't really be inconceivable why someone else would disagree
    • keithb- 10y ago
      Thank you for invoking the newly evolved Godwin's law by suggesting that politicians are a class of people without merit. It's okay if you disagree and think that you meant to directly invoke images of fascists but it shouldn't be inconceivable why someone would ignore your ill-conceived argument.
      • bko 10y ago
        They're not without merit but I don't buy into this whole "government is simply the name we give to the things we choose to do together" romanticization. Government is run by politicians and much of the administrative state (in the US at lease) is delegated to unelected officials.
    • whack 10y ago
      If Apple was similarly accused of wrongdoing by the IRS, and told to backpay taxes that they were supposed to have paid, would you still feel similarly? I'm trying to figure out if you're taking Apple's side because of the Shareholders vs Government angle, or the America vs Europe angle.
      • bko 10y ago
        Yes, I would. I am not particularly happy with what US politicians do with windfalls. It's not a US vs Euro issue for me. I'm talking about individual vs collective body. Just as an example, NYC recently sued BNP and used the money partly to buy iPads and iPhones for the police force. Even if a wrong is done, the primary victims are rarely the main beneficiaries and the funds just increase the ever growing administrative state and encourages future shake-downs > The city has already pledged some of the money toward equipping police officers with 41,000 iPads and iPhones, part of a joint, $160-million initiative with Mr. Vance’s office. [0] http://blogs.wsj.com/metropolis/2015/05/01/french-bank-settlement-to-fund-nyc-criminal-justice-initiatives/ http://blogs.wsj.com/metropolis/2015/05/01/french-bank-settl...
  • ramblerman 10y ago
    > It boggles my mind that there are people supporting Apple in this. Boiling the argument down to "who" do you support is the 2 line news-byte version of it. This is about the law, and has some pretty big implications. 1) The EU is essentially attacking a law made in 2003 in 2016. To do this retroactively for 13 years is far too long (imo). 2) If the EU wins the case, the money flows back to Ireland, in essence rewarding the country who was out of line to begin with.
    • objclxt 10y ago
      > If the EU wins the case, the money flows back to Ireland, in essence rewarding the country who was out of line to begin with. Not entirely - any monies returned can legally only be used to pay back Ireland's national debt. The UK, Germany, and France are the biggest holders of Ireland's debt, so effectively the money is going back to them, albeit with Ireland benefiting by reducing its debt marginally.
      • BenElgar 10y ago
        I don't believe that's true. It's merely a recommendation. Source: http://www.irishtimes.com/business/economy/european-commission-says-ireland-not-obligated-to-use-apple-tax-cash-for-national-debt-1.2774229 http://www.irishtimes.com/business/economy/european-commissi...
    • humanbeinc 10y ago
      1) No it's not. If it's a break of contract with the EUs playbook of economic fairness amongst its members and therefor can be prosecuted forever. 2) Doesn't matter who gets the money. It's forcing corporations to not use Ireland as a tax haven anymore (there are others like Luxembourg, etc., but it's a step in the right direction)
      • Silhouette 10y ago
        If it's a break of contract with the EUs playbook of economic fairness amongst its members and therefor can be prosecuted forever. This creates a system where even information from the national government charging taxes in its own jurisdiction can't be relied upon, and where literally billions of euros of tax can be retrospectively demanded indefinitely. That is a toxic environment for anyone running a business, even someone trying to do so honestly. If the EU wants to wade in after this much time and claim this much damage has been going on, it's going to strain credibility and the EU is going to deserve all the contempt that businesses will hold it in as a direct result. I write this, BTW, as someone who runs small businesses in the UK that very much are at a disadvantage compared to the arrangements available to large multinationals. I'm all in favour of having a tax system that is transparently fair, where the same rules apply to everyone. But I'm not in favour of officially saying one thing, letting businesses carry on accordingly for a very long time, and then retrospectively changing the rules. I think it's also worth mentioning that the EU's track record on tax issues and dealing with the large multinationals and their complex arrangements is awful. Just look at the hash they made of the VAT changes last year, which were supposedly going to have a beneficial effect by reducing multinational tax avoidance, but in fact did almost exactly the opposite, causing far more damage to smaller businesses than larger ones. Apple's tax arrangements may be ethically questionable, and the system that permits those arrangements has plenty of room for improvement. However, if you think this specific move isn't a politically motivated cash grab by an EU that is in trouble and has several key elections coming up, I heard there are some Nigerian princes who have some great investment opportunities to offer you.
  • wdr1 10y ago
    > It boggles my mind that there are people supporting Apple in this. There are so many of us that like to cheerfully screw themselves over to protect rich corporations. Are you staying there isn't a principled stand to take here? Or that there is reason to object on principle but one shouldn't because it's not self-serving?
  • soneil 10y ago
    There are two sides to it. I live in Ireland. I work at a multinational - pretty much everyone I know does. And I know that on one hand, most MNCs aren't paying their "fair share" - most of them are here for the same reason. On the other hand, I know our jobs probably wouldn't be here otherwise. MNCs paid 80% of all corporate tax in Ireland, in 2015. The top 10 payers paid 40% of all CT between them. It's really one of those "quantity vs quality" things, and Ireland has opted for quantity. A rather than extracting a lot from MNCs, we extract from a lot of them instead. And it does balance out - CT forms about the same % of govt revenue as the european average. We're not actually losing out this way - but we are gaining jobs and investment. And for a country where "getting a job" used to mean the ferry to the UK, that's huge. And MNCs hoarding cash here does have other benefits. eg, Apple are building a datacenter not far at all from me, because it's cheaper to build it here, than repatriating the funds to the US to do so there. We create more jobs, more investment, more value by being friendly. I also have to be a bit realistic - the moneys funneled through Ireland without being taxed, wouldn't have come this way at the full rate. That is - "our fair share" is a bit revisionist; if we taxed them 12.5%, we would have received 12.5% of nothing. They would have sent it somewhere even cheaper instead (eg, Intel are building out in Israel because they were able to offer 5% instead). Of course I can see the other side, that corporations need to play fair. And that what we're doing is costing someone somewhere else instead. But I do see the day-to-day duality - that people here, in Ireland, will bounce between complaining that Apple don't pay enough, and being excited that they're building a few hundred more jobs 4 miles down the road, within the same conversation. (and to be clear, it's not just Apple - the primary concern at the moment is that while Apple may concede and pay what the EU demands, the next investor, employer to move here, might have second thoughts.)
  • CamperBob2 10y ago
    When April 15 rolls around, do you instruct your CPA not to take advantage of every tax rule and loophole that's legally available to you? No? Then you're holding Apple to one standard and yourself to another.
• lifty 10y ago
  I agree. I am a small business owner in Europe and it pains me to see the big guys getting away scot free without paying taxes while we are scrutinised over every cent. Even the NS, the Dutch national railway (semi-public) is using Ireland to dodge taxes. I would love if big companies that have resources and more leverage in the legislative process to push for a more simplified and standardised tax code across Europe.
• raldi 10y ago
  Is your position that Irish tax law did require Apple to pay more, or that it should have, but didn't?
  • dagaci 10y ago
    EU trading laws speak about unfair subsidies which sounds like a good approach to viewing what i would call state sponsored tax evasion. But since i'm not a lawyer so i can't speak about Irish law though ...
• bko 10y ago
  > The average individual working person has no negotiation when it comes to what taxes they pay. I'm not sure this is true. It's not a coincidence that many small businesses often pay their employees under the table, ignore minimum wage and overtime laws, and often prefer cash payments. The IRS chooses to go after the individuals where there is the biggest spread between how much they can collect and how much it costs to go after that person. If a small business is reporting suspiciously low income, the cost of going after them won't be worth it. > Every individual should support the EU. If the EU is defeated here it will be a loss to the small man and small business "Apple" doesn't pay these fees. The shareholders do. You're taking away that money from investors (401k, pension funds, ordinary investors, hedge fund investors, Tim Cook) and giving it to Irish politicians. This may be a good or bad thing, but you cannot argue that this money is coming from some giant black pit called Apple.
  • sharemywin 10y ago
    Apple has a big pile of cash from not paying taxes and they don't know what to do with it anyway. That's why their stock didn't move much because large pile of cash(tax shelter cash) - 15B still equals large pile of cash doing nothing for investors.
    • bko 10y ago
      The value of that cash is baked into the stock price. It's tied up for now but investors have some expectation that they will ultimately benefit from the cash. Right now I believe they are using that money as collateral for debt which is being used to pay dividends. I can't spell out exactly how this will impact debt and equity valuations but to assume that a $14 billion tax hit will have no impact whatsoever is a bit naive.
      • sharemywin 10y ago
        it's P/E is 12 how much lower would it go?
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